North Carolina Gov. Pat McCrory (R) announced April 2 that he had signed legislation (SB 305) that grants final state approval to the Duke Energy (NYSE:DUK) purchase of certain generating assets held by the North Carolina Eastern Municipal Power Agency (NCEMPA).
The proposed purchase has the approval of the Federal Energy Regulatory Commission (FERC), the North Carolina Utilities Commission (NCUC) and the Nuclear Regulatory Commission (NRC).
The 32 cities and towns that make up the NCEMPA must also vote to approve the sale.
Utility subsidiary Duke Energy Progress had first announced in February 2014 that it was in talks to buy 700 MW of generating capacity that NCEMPA now holds in several Duke Energy Progress plants.
McCrory, who worked with Duke while in the private sector, said the move should lower electric rates for consumers in eastern North Carolina and slash the debt load held by the municipal power agency.
The new law will allow Duke to purchase generation assets from the 32 localities that make up NCEMPA. The $1.2bn purchase will significantly lower the agency’s debt load from $1.9bn to approximately $480m, the governor said.
The new law also allows NCEMPA members to issue bonds to refinance approximately $480m of debt after this purchase is complete. It also allows NCEMPA power agencies to enter into purchase power agreements to replace the electricity previously provided by the generation assets they are selling.
NCEMPA has partial ownership interests in several Duke Energy Progress plants, including Brunswick Nuclear Plant Units 1 and 2 (in Brunswick County, N.C.), Mayo Plant (Person County, N.C.), Roxboro Plant Unit 4 (Person County) and the Harris Nuclear Plant (Wake County, N.C.).
NCEMPA is governed by a Board of Commissioners (BOC), which consists of 14 members elected from throughout North Carolina.