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Federal court dismisses antitrust suit against Santee Cooper

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Federal court dismisses antitrust suit against Santee Cooper

A federal court in South Carolina dismissed an antitrust lawsuit brought against state-owned utility Santee Cooper by large industrial customer Century Aluminum of South Carolina Inc.

U.S. District Judge Richard Gergel on Oct. 4 granted Santee Cooper's motion to dismiss the antitrust claims filed by Century Aluminum related to tying and essential facilities.

The Century Aluminum Co. unit in 2016 reached an agreement with Santee Cooper under which it would get 25% of the smelter's electricity needs from Santee Cooper and the remainder from third-party sources at market-based rates. The Mount Holly facility needs up to 200 MW.

Century Aluminum, in its Jan. 27 lawsuit, alleged violations of the Sherman Antitrust Act, the South Carolina Antitrust Act and the South Carolina Unfair Trade Practices Act.

"Century alleges Santee Cooper requires it to purchase electric service at a supra-competitive rate as a condition for purchasing the service of wheeling power from out-of-state utilities — that access to the Santee Cooper transmission grid is a service 'tied' to the sale of Santee Cooper-supplied electricity," the court's order states. "Century alleges the transmission and distribution lines surrounding its Mount Holly facility are an essential facility controlled by the monopolist Santee Cooper, that Century cannot practically duplicate that facility, and that it is feasible for Santee Cooper to provide the facility (i.e., it has the necessary unreserved transmission capacity)."

Santee Cooper, known legally as the South Carolina Public Service Authority, filed its response and motion to dismiss March 14, citing that "as a matter of law, the authority is immune from antitrust suit and liability under the state action immunity doctrine."

The district court agreed, saying in its Oct. 4 order, "Because the Court holds Santee Cooper does enjoy immunity under that doctrine, it does not reach the merits of Century's antitrust claims."

The case is Century Aluminum of South Carolina, Inc., vs. South Carolina Public Service Authority, Case No. 2:17-cv-274-RMG, in the U.S. District Court for the District of South Carolina, Charleston Division.