Raleigh, N.C. — The state Senate quickly gave tentative approval Wednesday to a deal that should lower power bills in 32 cities and towns in eastern North Carolina.
Senate Bill 305 would give the green light to a deal worked out between the North Carolina Eastern Municipal Power Agency and Duke Energy.
In the 1990s, the cities and towns banded together as NCEMPA to buy shares in four power plants for $2.5 billion. They believed at the time that the deal would provide them with cheap, plentiful and reliable power. But the debt for the deal ended up spiking power bills as much as 30 to 50 percent above surrounding areas. The debt stands at $1.8 billion today.
Under the deal, NCEMPA would sell its power plant shares back to Duke for $1.2 billion. The legislation gives NCEMPA the authority to reissue bonds for its remaining $600 million in debt, hopefully at a better rate than the original bonds.
The result, sponsors say, will be lower power bills in most of the towns and cities served. Customers could see some relief as soon as this fall if the bill becomes law quickly.
Sponsor Sen. Buck Newton, R-Wilson, held up a home power bill that, he said, "fortunately was only 650 some dollars last month."
"It has been a back-breaker to so many working families. It has the been the difference as to whether small businesses even stay in business," Newton said. "Quite literally, it has a been a boot on the neck of the economy in eastern North Carolina, and with this bill today, we have the opportunity to change that."
Co-sponsor Sen. Don Davis, D-Greene, said that, for years, low-income people in his district have sought help from churches just to keep their lights on.
"They’re paying power bills that are higher than the rent or their mortgage," Davis said. "This is real. It’s been extremely real to us in these communities."
No one spoke against the bill, which passed 47-1. The lone senator voting against it was Sen. John Alexander, R-Wake.
After the vote, Alexander pointed out that the buyback will raise rates about 22 cents a month for customers of the Duke units that formerly was Progress Energy, including those in his district.
Duke says the deal will actually save its customers money by 2020 because it will allow the utility to save money on fuel purchases. But Alexander said that's based on a projection of the energy market five years from now.
"I could not in good faith vote for this bill, knowing it will mean a rate increase for every one of my constituents," Alexander told WRAL News. "But it will be great for eastern North Carolina."
The bill must pass one final Senate vote Thursday, and it will then move to the House.