Duke Energy Progress has agreed to buy back certain power generation assets from the North Carolina Eastern Municipal Power Agency (NCEMPA) for $1.2 billion, according to a statement.
NCEMPA currently maintains partial ownership interest in several power plants of Duke Energy Progress, which include 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). These represent approximately 700 megawatts of generating capacity.
Apart from these plants, the purchase also includes fuel inventories and spare parts inventory, the statement said.
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, it said.
“This agreement provides positive benefits to Duke Energy Progress customers including long-term fuel savings that help keep rates affordable,” said Paul Newton, Duke Energy president – North Carolina, in the 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,” he added.
“We've been investigating options to lower our costs for several years while preserving the benefits of public power,” said Graham Edwards, chief executive officer of ElectriCities, which manages NCEMPA.
“Selling our generation assets is a significant way we can achieve that goal and strengthen NC Public Power's future in eastern North Carolina,” he added.
NCEMPA members’ distribution assets are not part of the agreement, and will continue to be owned and maintained by those members, according to the statement.
Completion of the deal will be subject to several closing conditions, including regulatory approval by various state and federal agencies. Duke Energy Progress is expected to file the asset purchase agreement (APA) for approval by early September with the Federal Energy Regulatory Commission (FERC).
Under the terms of the agreement, approvals must be received and the transaction completed by the end of 2016.
Duke Energy Progress is a subsidiary of Duke Energy. It provides electricity and related services to nearly 1.5 million customers in North Carolina and South Carolina.