Electric utility Duke Energy Corp. (DUK: Quote) said Monday that it has agreed to purchase certain generating assets from the North Carolina Eastern Municipal Power Agency or NCEMPA for $1.2 billion.
NCEMPA consists of 32 cities and towns in eastern North Carolina. The power agency's 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.
NCEMPA currently maintains partial ownership interest in several plants of Duke Energy Progress plants. These include Brunswick Nuclear Plant Units 1 and 2 in Brunswick County, Mayo Plant in Person County, Roxboro Plant Unit 4 in Person County, and the Harris Nuclear Plant in Wake County.
NCEMPA's ownership interest in these plants represents about 700 megawatts of generating capacity. However, NCEMPA members' distribution assets will not be part of the deal and will continue to be owned as well as maintained by those members.
Under the agreement, Charlotte, North Carolina-based Duke Energy's subsidiary Duke Energy Progress and NCEMPA will also 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.
Duke Energy Progress provides electricity and related services to nearly 1.5 million customers in North Carolina and South Carolina. The utility is headquartered in Raleigh, North Carolina, and serves a territory encompassing more than 34,000 square miles.
Paul Newton, Duke Energy president of North Carolina said, "This agreement provides positive benefits to Duke Energy Progress customers including long-term fuel savings that help keep rates affordable."
Graham Edwards, chief executive officer of ElectriCities said, "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."
Under the terms of the deal, approvals must be received and the transaction completed by the end of 2016. The timing of the transaction will be determined by the approval process.
DUK is trading at $74.05, up $0.85 or 1.15 percent on a volume of 760,713 shares.
by RTT Staff Writer
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