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Cayce passes new power utility fee on industrial customers

Cayce City Council meeting Nov. 17 (copy)

Cayce Council passed a fee on on industrial energy in a June council meeting. File/Staff/Casey Darnell

CAYCE — Cayce City Council has voted to add a 5 percent fee to the city's industrial customers' energy bills.

The fee, which is capped at $200,000 a year, acts like rent that industrial companies will pay in exchange for use of city streets and land, Cayce Mayor Elise Partin said. 

The ordinance, which went into affect after the council voted to approve it in June, comes while Cayce is attempting to revise its 30-year-old franchise fee agreement with Dominion Energy.

After months of negotiation, the parties were not able to come to a resolution, and Cayce passed the ordinance in response.

The ordinance acts as a default, which will stay in effect if Dominion and Cayce are unable to come to an agreement on franchise fees. 

Dominion Energy and Cayce are still negotiating. 

A default franchise fee is valuable to utility companies like Dominion because without the use of those, utility companies would have to pay private property owners for easements, Partin said. 

The new ordinance will not change fees for residential and commercial customers, who already pay a 5 percent franchise fee. Instead, it will begin charging franchise fees to industrial companies, who were previously exempt.

Commercial Metals Company South Carolina, an industrial company based in Cayce, objected to the ordinance during a June meeting. The company will be disproportionately affected by the fee, said Brett Kunce, the company's director of operations.

"Energy is by far out highest component in our cost structure," Kunce said. "We use it to melt 700,000 tons of recycled scrap metal per year and transform it into new steel products."

Kunce asked the council to reject the ordinance or lower the cap to be proportionate with the size of the city's industrial companies. 

Cayce City Council passed the $200,000 cap on the fee in an attempt to make the ordinance fair for all, Cayce Councilman Hunter Sox said in an interview. The yearly limit cut the fee for Commercial Metals Company South Carolina by about one-fifth, Sox said. 

Cayce City Council delayed passing the ordinance for months in hopes of coming to an agreement with Dominion, but passed it at the end of June after amending the agreement to include the $200,000 yearly limit.

Reach Leah Hincks at 843-830-2555. Follow her on Twitter @LeahHincks