Why Santee Cooper Is Dying

Well, one reason …

There is a story in The Berkeley (S.C.) Independent this week about the town of Goose Creek, South Carolina holding a public referendum on whether to go into the electric utility business.

Wait a minute … what?

Is that even remotely a core function of government?

No, it isn’t. And if South Carolinians should have learned anything from the recent #NukeGate debacle – which saw a government-run utility and its crony capitalist partner botch a $10 billion nuclear reactor project – its that government has no business being involved in the utility business.

Particularly not in the results-challenged Palmetto State …

Nonetheless, Goose Creek – a town of around 43,000 located in Berkeley county, S.C. – appears to be interested in breaking into the industry, and is floating a plan to launch a municipal utility.

Naturally, we are recoiling at the suggestion …


Yes, of course … but buried within the rationale behind this ill-conceived referendum is some logic we cannot dispute. Specifically, Goose Creek is mulling this move because one of its top local employers – Century Aluminum – is tired of paying exorbitant power costs to Santee Cooper, the government-run utility at the heart of the #NukeGate scandal.

Consider this excerpt from reporter Joy Bonala’s story …

Century Aluminum buys 75 percent of its power on the open market and 25 percent from Santee Cooper. According to Century Aluminum, the power it purchases from Santee Cooper is nearly twice as expensive as the portion purchased on the open market on a per-megawatt hour basis.

Did you catch that line?

“Nearly twice as expensive …”

In fact, the exorbitant cost of power from Santee Cooper forced Century to cut production at its Mount Holly location by fifty percent back in December 2015 – laying off 300 employees in the process. U.S. president Donald Trump’s tariffs have helped Century bounce back to some extent, but not fast enough.

Century officials have said that obtaining cheaper power would enable them to reopen the portion of the facility they shuttered nearly four years ago – and bring back the 300 jobs that were lost.

Unfortunately for Century, its Mount Holly plant has a contract with Santee Cooper that runs through the end of 2020 … meaning it is stuck with the inefficient, abysmally managed utility until then.

Sadly, many other recipients of Santee Cooper’s inefficient power generation system are stuck with the utility for much longer than that.

Goose Creek says its proposed municipal utility would purchase power on the open market and charge Century that rate (along with any costs incurred by the city in transmitting it). The proposed utility would not seek to turn a profit, city leaders claimed.

(Click to view)

(Via: Goose Creek, S.C.)

They also insist any taxpayer money used to set up the utility would be “recovered.”

Ultimately, we do not care whether Goose Creek leaders place this question on the ballot this December – or whether Goose Creek residents vote in support of creating a municipal utility. We would advise against such a course of action, but that is up to them.

The real story, as far as we are concerned, is the extent to which Santee Cooper is simply not competitive compared to power providers on the open market. For all its “reform” rhetoric and “real facts,” the story of Century Aluminum is yet another compelling reminder that when it comes to providing affordable energy, Santee Cooper is not up to the job.

Just like it wasn’t up to the job of finishing those reactors … or telling the truth to ratepayers when it became abundantly clear they were not going to be finished.


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