Duke seeks approval to buy generating assets
13 October 2014
Duke Energy Progress has filed with the Federal Energy Regulatory Commission (FERC) for approval to purchase the North Carolina Eastern Municipal Power Agency's (NCEMPA) generating assets.
Duke Energy Progress is required to receive approval from FERC for the asset purchase agreement to acquire NCEMPA's ownership interest in the utility's plants, as well as associated fuel inventories and spare parts. In addition, FERC approval is required for Duke Energy Progress to enter into a 30-year wholesale power supply agreement with NCEMPA to continue meeting the needs of NCEMPA customers currently served by the latter's interest in Duke Energy Progress' plants.
Duke Energy said the FERC filing, made on 10 October, is "an important milestone" of the $1.2 billion transaction with NCEMPA, announced in July.
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 filing with FERC details the terms of the transaction, as well as an economic analysis of the purchase price and benefits to Duke Energy Progress customers. Those benefits include long-term energy-related cost savings and increased fuel diversity, as well as expanded wholesale load being served by the utility through the new wholesale agreement with NCEMPA. "All of these benefits can help to keep Duke Energy Progress customers' bills lower over time," it said.
In addition to the FERC review, additional filings and reviews will be required with the North Carolina Utilities Commission, the Public Service Commission of South Carolina and the Nuclear Regulatory Commission.
Duke Energy Progress and NCEMPA will work diligently to close the transaction as quickly as possible, Duke Energy said. 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, it said.
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, North Carolina.
Duke Energy Progress, a subsidiary of Duke Energy, provides electricity and related services to nearly 1.5 million customers in North Carolina and South Carolina. The utility is also head-quartered in Raleigh.
Researched and written
by World Nuclear News