Duke Energy Progress and the North Carolina Eastern Municipal Power Agency (NCEMPA) announced that both companies’ boards of directors have approved an agreement for Duke Energy Progress to purchase the Power Agency’s ownership.
NCEMPA currently maintains partial ownership interest in several Duke Energy Progress plants, including Brunswick Nuclear Plant Units 1 and 2 (Brunswick County), Mayo Plant (Person County), Roxboro Plant Unit 4 (Person County) and the Harris Nuclear Plant (Wake County). NCEMPA members’ distribution assets are not part of the agreement.
The Power Agency’s ownership interest in these plants represents approximately 700 MW of generating capacity. The purchase price for NCEMPA’s ownership interest in the plants, fuel inventories, and spare parts inventory is US$1.2 billion.
Under the agreement, Duke Energy Progress and NCEMPA will enter into a 30-year wholesale power supply agreement to continue meeting the needs of NCEMPA customers currently served by the Power Agency’s interest in Duke Energy Progress’ plants.
Paul Newton, Duke Energy president – North Carolina, stated:
This agreement provides positive benefits to Duke Energy Progress customers including long-term fuel savings that help keep rates affordable. 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.
Graham Edwards, ElectriCities chief executive officer, commented:
We’ve been investigating options to lower our costs for several years while preserving the benefits of public power. Selling our generation assets is a significant way we can achieve that goal and strengthen NC Public Power’s future in eastern North Carolina.
Completion of the transaction will be subject to several closing conditions, including regulatory approval by various state and federal agencies. Duke Energy Progress is expected to file the APA for approval by early September with the Federal Energy Regulatory Commission (FERC). Duke Energy Progress is required to provide advance notice to the North Carolina Utilities Commission (NCUC) at least 30 days prior to the FERC filing. Notification with the NCUC will be made later today.
Both parties will work diligently to close the transaction as quickly as possible. Under the terms of the agreement, approvals must be received and the transaction completed by the end of 2016. Ultimately, the timing of the transaction will be determined by the approval process.