Goose Creek residents to decide whether city should create municipal electric utility
- Nov 11, 2019 11:47 pm GMT
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City leaders in Goose Creek are hopeful about creating a municipal electric utility but it will be voters who decide whether their idea becomes a reality. In a referendum vote set for Dec. 3, residents will choose yes or no for the city's proposal to operate an electric utility system that furnishes power to roughly 5,000 acres within the city.
Should the referendum pass, Goose Creek will contract with an existing utility already generating electricity to purchase power and transmit it along lines owned by other utilities and then sell it to customers starting with Century Aluminum's Mt. Holly Plant.
Goose Creek City Administrator Jake Broom, along with Mayor Greg Habib and city council members, have been working on this project for almost one year. The idea to establish a municipal electric utility came about after Century Aluminum's Mt. Holly aluminum smelter, located in Berkeley County, cut the smelter's production in half and laid off 300 employees due to the high cost of electricity.
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.
Goose Creek officials said establishing their own electric utility is a solution that provides more affordable electricity to Century Aluminum, restores those 300 jobs, and raises the city's revenue; all of this without increasing taxes.
"It's really a win win for Goose Creek, Berkeley County and Century Aluminum," Habib said.
One important step in this process is the annexation of the 5,000 acres on which Century Aluminum operates. After annexation, the Mt. Holly plant will be required to pay city property tax and a business license fee. Goose Creek officials have calculated Century Aluminum will then pay approximately $1 million in taxes to the city each year. Additional revenue that Habib said can fund public safety and parks and quality of life improvements.
Habib maintains that taxpayers won't be covering any of the costs related to the project. According to Habib, all of the costs of providing electric service to Mt Holly will be fully covered by the rates that the city charges Mt. Holly - rates that will be cheaper than what the company now pays to Santee Cooper.
According to the Municipal Association of South Carolina, there are 21 municipal electric utilities in the state, however, Habib said Goose Creek's situation is not like any of the other cities that have a municipal electric utility.
"This is very unique, nothing like this has happened before," Habib said. "The idea to create a utility to serve one customer is pretty new, but it also makes it very simple; infrastructure is already in place, it is a cut and dry, buy and sell arrangement."
Officials from Santee Cooper said the city's proposal to serve only one existing Santee Cooper customer - Century Aluminum - is currently unlawful.
During a public hearing on the referendum in September, Ray Pinson, a community relations manager for Santee Cooper, said the council had been previously presented with "numerous reasons why this proposal is untenable in our view."
"Becoming an electric utility is not a prospect to be taken lightly. It comes with great liability to your citizens in terms of reporting penalties, regional transmission constraints, lack of your own generation sources, lack of your own transmission facilities, and a host of other legal complications that have been relayed to you already," Pinson said.
Santee Cooper did not offer further comment on the proposal since September.