Century Aluminum of South Carolina files antitrust lawsuit against Santee Cooper

File Graphic (MGN)

Century Aluminum of South Carolina has filed an antitrust lawsuit in federal court against Santee Cooper, accusing the power provider of breaching state and federal antitrust laws. In response, Santee Cooper has promised a "vigorous defense."

“We have filed this antitrust lawsuit against Santee Cooper as a last resort to save 600 jobs and the nearly $1 billion in economic contributions to the state of South Carolina made by the Mt. Holly plant,” said Michael Bless, Century Aluminum Company’s President and Chief Executive Officer. “We reluctantly made the choice to proceed with the lawsuit only after all else failed, including a recent final face-to-face attempt to reach resolution with Santee Cooper.”

According to Century Aluminum of South Carolina, Santee Cooper unlawfully pushed the Mt. Holly plant to purchase a quarter of its power for rates much higher than market prices. The costs of the price increase reportedly forced the plant to lay off half of its employees in order to stay in business.

In a statement released by Santee Cooper (published in full below), the power provider called the lawsuit disappointing and states Century continues to "avoid the real problem facing its Mt. Holly plant." That real problem Santee Cooper describes, is a big drop in aluminum prices.

RELATED: Century Aluminum's future dim after House subcommittee declines to take action

“We are not challenging the idea of public utility monopolies” Bless said. “But it is clear to us that unlike other utilities in South Carolina and elsewhere, Santee has willfully violated the laws governing monopolies. That includes acting as an unregulated, unaccountable monopoly without meaningful oversight by the state.”

The lawsuit rejects Santee Cooper’s repeated claim that it doesn’t have capacity to transfer third-party electricity through its facilities and that doing so could force Santee Cooper to forfeit future market purchases. Its complaint states that Santee Cooper used its monopoly power over transmission of electric power in the area to force Mt. Holly to pay the highest electricity prices of any aluminum smelter in the country.

Century's complaint says that cheaper power was readily available from third-party providers.

In response, Santee Cooper states Century is in a contract with the power provider and was given the best rate available. Santee Cooper argues it saved the plant more than $120 million prior to the 2015 contract and has industrial power costs about 30 percent lower than the national average.

The lawsuit seeks an order stopping Santee Cooper from continuing to exhibit "anticompetitive actions" and allow Century to purchase power on the open market. Also, Century seeks monetary damages from Santee Cooper.

Santee Cooper statement regarding Century lawsuit

Santee Cooper will review Century’s litigation and mount a vigorous defense. It is disappointing that Century continues to avoid the real problem facing its Mt. Holly plant, which is that the 2007 recession and global competition have driven aluminum prices 40 percent lower than they were a decade ago. Rather than spending money on a frivolous lawsuit, Century should develop a fair, legal and realistic plan for Mt. Holly that addresses the global aluminum marketplace. Mt. Holly’s loyal employees deserve that approach.

Century signed a three-year power agreement with Santee Cooper in December 2015. Santee Cooper has been adhering to those contract terms. Santee Cooper has worked for years to provide fair pricing to Mt. Holly and saved the plant more than $120 million prior to the 2015 contract. Santee Cooper’s industrial power costs are about 30 percent lower than the national average, and Century has our best deal.

The one thing Santee Cooper will not do is agree to terms with Century that require subsidy from our other customers, and yet that is what Century continues to demand. This litigation is simply Century’s attempt to obtain by frivolous lawsuit the same unreasonable financial concessions they have pushed before. Their charges are without legal merit, and their demands are still unfair to our other customers.

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