Goose Creek expanded its budget by $1.4 million on Tuesday to cover the creation of a new municipal electric utility, but city leaders say taxpayers won't be footing the bill.
Nearly all of the costs associated with the city's planned entry into the power business is expected to be covered by Century Aluminum, the nation's largest aluminum smelter.
The Chicago-based company is the main reason a special referendum was held last month to get Goose Creek residents to approve the creation of a new city-run electric company.
Century's Mount Holly plant off U.S. Highway 52 would be the sole customer of the special-purpose utility. Goose Creek residents will continue to get their power from Berkeley Electric Cooperative.
Century believes a city-run utility will be able to purchase power at a lower cost than what it pays state-run Santee Cooper for the same service. The aluminum company has also suggested the switch could allow it to restart an idled production line at the Berkeley County plant.
In turn, Goose Creek leaders plan to annex the aluminum smelter into the city limits, with the expectation that it will boost tax revenue by about $1 million.
Mayor Greg Habib said the $1.4 million that was added to the budget this week was procedural and that Century has promised to pick up the tab for any current or future costs related to the new utility.
Dennis Harbath, plant manager for Century, declined to comment Wednesday. He referred questions about the ongoing costs of setting up the utility to city officials.
Those expenses, Habib said, will include a number of items, suhc as energy consultants who are advising City Council, fees for permits that are required to transmit electricity across the grid and legal costs.
The only expense city taxpayers are expected to pick up, Habib said, is the cost of the referendum that was held Dec. 3. That low-turnout election — with roughly 7 percent of eligible voters casting a ballot — cost $12,422.
The terms of the other financial agreements between Goose Creek and Century could not be independently verified.
The Post and Courier requested that Goose Creek release the finalized agreements it has in place with the company, but city officials said the documents are exempt from the S.C. Freedom of Information Act.
"The city’s negotiations with the company may result in significant investment and FOIA recognizes the importance of such efforts," said Frank Johnson, a spokesman for the city. "Thus, certain documents and materials — particularly those that involve efforts or activities to attract and induce businesses and industries to make investments in South Carolina — should be and are exempt from disclosure."
City Council met twice in January to discuss matters related to Century and the planned utility. Most of the discussions took place behind closed doors in so-called executive sessions.
The agendas for those meetings only noted that elected officials were discussing "Project Lightning Rod," the code name they gave to the proposed electric utility.
Habib says the council is trying to "be as transparent as possible," while also dealing with legally sensitive negotiations.
“We’re never in a hurry to do the wrong thing," he said. "We’re going to take our time and make sure the city is protected.”
The $1.4 million budget change now sets the city up to hold several key votes next month related to the municipal electric utility.
City Council is expected to certify the results of the referendum, vote on the annexation of the Mount Holly plant and surrounding property and finalize a new agreement with Century that will hold the city harmless if it is sued.
That is important because Santee Cooper, which currently supplies Century with electricity, argues it has a right under state law to provide power to the smelting plant.
Santee Cooper already won court fights in the past when Century attempted to buy its power from other sources.
This time, Century's executives and Goose Creek officials think the results will be different.