North Carolina power agency sells stakes in reactors
29 July 2014
Duke Energy Progress will assume full ownership of the Brunswick and Shearon Harris nuclear power plants as part of a $1.2 billion agreement to buy certain generating assets from North Carolina Eastern Municipal Power Agency (NCEMPA).
.jpg "Brunswick NPP 460 (Duke Energy Progress)") |
| Duke is to take full ownership of the Brunswick plant (Image: Duke Energy Progress) |
The board of directors of both companies have approved the agreement under which Duke will acquire NCEMPA's 18.3% stake in the two-unit Brunswick plant and its 16.2% stake in the single-unit Shearon Harris plant. Together, NCEMPA's ownership interest in these plants totals some 487 MWe of generating capacity. In addition, Duke will buy NCEMPA's stakes in two coal-fired plants, at Mayo and Roxboro, which represent about 209 MWe of generating capacity. NCEMPA's distribution assets are not part of the agreement.
With the purchase of NCEMPA's stakes, Duke assumes full ownership of the 1875 MWe Brunswick plant and the 900 MWe Shearon Harris plant, as well as the coal-fired plants.
The purchase price of $1.2 billion includes NCEMPA's stakes in the plants, fuel inventories and spare parts inventory. Under the agreement, Duke and NCEMPA will enter into a 30-year wholesale power supply agreement.
Completion of the transaction will be subject to several conditions, including regulatory approval by various state and federal agencies. Under the terms of the agreement, approvals must be received and the transaction completed by the end of 2016.
NCEMPA was formed in 1978 and consists of 32 municipalities in eastern North Carolina which own and operate their own electric systems, serving almost 270,000 customers. NCEMPA supplies wholesale power to its participants. The majority of its electricity requirements has previously been provided through its ownership shares in the four power plants, with the remainder bought through long-term contracts with Duke.
Another public power agency operates in the state - the North Carolina Municipal Power Agency Number 1 (NCMPA1) - which consists of 19 towns and cities in central and western North Carolina. This agency owns a 75% stake in unit 2 of Duke's Catawba nuclear power plant in South Carolina. Both NCEMPA and NCMPA1 are managed by ElectriCities of North Carolina. The three organizations are collectively known as NC Public Power.
NCEMPA debt reduction
ElectriCities CEO Graham Edwards 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."
The sale of its generation assets to Duke is expected to significantly reduce NCEMPA's debt, which currently stands at some $1.9 billion. After selling the assets for $1.2 billion and liquidating certain bond reserve funds, NCEMPA members would share responsibility for outstanding debt of about $480 million.
ElectriCities CEO Graham Edwards said, "When we entered these negotiations, we knew it wasn't feasible to expect to completely eliminate the debt by selling our assets. But this agreement has the potential to reduce our current debt by more than 70%. That's a significant decrease in our costs and the savings would be directly passed along to NCEMPA members."
Researched and written
by World Nuclear News