Officials with Duke Energy Progress and the N.C Eastern Municipal Power Agency announced a $1.2 billion deal Monday morning that could result in lower electric bills for Rocky Mount residents.
“We’ve been investigating options to lower our costs of several years while preserving the benefits of public power,” said Graham Edwards, ElectriCities chief executive officer. “Selling our generation assets is a significant way we can achieve that goal and strengthen NC Public Power’s future in Eastern North Carolina.”
The deal has been in negotiations for several months now, but the board of directors with both companies reached an agreement for Duke to purchase the Power Agency’s ownership in five electricity generating assets, which represents approximately 700 megawatts of capacity. If approved by the North Carolina Utilities Commission and the Federal Energy Regulatory Commission, Duke would pay $1.2 billion for the ownership interest in the plants, fuel inventories and spare parts while entering into a 30-year wholesale power supply agreement to meet the needs of residents in 32 cities across Eastern North Carolina. The distribution assets are not part of the agreement and will continue to be owned and maintained by cities in the power agency.
If approved, the deal would reduce the Power Agency’s deby from approximately $1.9 billion to $480 million. By doing so, customers rates would be reduced to varying degrees depending on the city’s share of the outstanding debt and more.
“When we entered these negotiations, we knew it wasn’t feasible to expect to completely eliminate the debt by selling our assets,” said Edwards. “But this agreement has the potential to reduce our current deby by more than 70 percent. That’s a significant decrease in our costs and the savings would be directly passed along to NCEMPA members.”
According to a release, notification with the state will be filed Monday and with the federal commission in early September. Under the terms of the agreement, approvals must be received and the transaction completed by the end of 2016.