Duke deal could lower power bills in eastern NC towns
Posted July 28, 2014
Raleigh, N.C. — A Duke Energy unit has agreed to buy out the North Carolina Eastern Municipal Power Agency's interests in power plants formerly owned by Progress Energy for $1.2 billion, officials said Monday.
NCEMPA has partial ownership interests in several plants, including the Shearon Harris Nuclear Plant in Wake County, the Brunswick Nuclear Plant Units 1 and 2 in Brunswick County and the Mayo Plant Unit 1 and Roxboro Plant Unit 4, both in Person County.
Thirty-two municipalities belong to NCEMPA, including Apex, Wake Forest, Louisburg, Clayton, Smithfield, Rocky Mount and Wilson, and customers have complained for years about high electric rates because of they are still paying off debt incurred from building the power plants.
Officials said the sale, which still must be approved by state and federal regulators, could reduce NCEMPA's debt by 70 percent, which could then lead to lower power bills.
“That’s a significant decrease in our costs, and the savings would be directly passed along to NCEMPA members,” Graham Edwards, chief executive of ElectriCities, which manages NCEMPA, said in a statement.
The exact impact on rates for each community would be different, officials said, and would depend on factors such as each community’s share of the outstanding debt and the specific load characteristics and customer mix of the community.
"The board’s overarching goal is to strengthen public power’s future in North Carolina," John Craft, chairman of the NCEMPA Board of Commissioners and town manager of LaGrange, said in a statement. "Reducing NCEMPA’s debt and, therefore, reducing our overall costs will provide the opportunity for more competitive rates in the 32 member communities. Although we have a long road ahead of us with regulatory approvals, today is a good day for N.C. Public Power and eastern North Carolina.”
NCEMPA's stake in the power plants represents approximately 700 megawatts of generating capacity, officials said. The municipal distribution lines and other assets aren't part of the proposed buyout.
As part of the deal, Duke and NCEMPA entered into a 30-year wholesale power contract to continue meeting the needs of the 270,000 customers who get their electricity from the municipal power agency.
“This agreement provides positive benefits to Duke Energy Progress customers, including long-term fuel savings that help keep rates affordable,” Paul Newton, Duke's president for North Carolina, said in a statement. “We have been providing electric service to NCEMPA members for more than 100 years, and we look forward to beginning this new chapter in our ongoing commitment to the communities of eastern North Carolina.”