Aug 4, 2014
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 in certain generating assets.
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).
The Power Agency's ownership interest in these plants represents approximately 700 megawatts of generating capacity.
The purchase price for NCEMPA's ownership interest in the plants, fuel inventories, and spare parts inventory is $1.2 billion, subject to certain adjustments as set forth in the asset purchase agreement (APA).
NCEMPA members' distribution assets are not part of the agreement, and will continue to be owned and maintained by those members.
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.
"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. "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."
"We've been investigating options to lower our costs for 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."
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 July 28.
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.
About North Carolina Eastern Municipal Power Agency NCEMPA consists of 32 cities and towns in eastern North Carolina, including some of the largest cities in the region. NCEMPA participants own and operate their electric systems and serve nearly 270,000 retail customers. NCEMPA was formed in 1978 and is managed by ElectriCities of North Carolina, headquartered in Raleigh.
About Duke Energy Progress
Duke Energy Progress, a subsidiary of Duke Energy (NYSE: DUK), provides electricity and related services to nearly 1.5 million customers in North Carolina and South Carolina. The utility is headquartered in Raleigh, N.C., and serves a territory encompassing more than 34,000 square miles including the cities of Raleigh, Wilmington and Asheville in North Carolina and Florence and Sumter in South Carolina. More information is available at www.duke-energy.com.
Headquartered in Charlotte, N.C., Duke Energy is a Fortune 250 company traded on the New York Stock Exchange under the symbol DUK.
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