Duke Energy Progress has agreed to buy for $1.2 billion the interests eastern North Carolina municipal power systems own in four Duke power plants.
The agreement will ease debt that for decades has forced 32 cities and towns to charge more for electricity than Duke charges its retail customers.
The seller, North Carolina Eastern Municipal Power Agency, owns stakes in Duke’s Brunswick nuclear plant in Brunswick County, the Harris nuclear plants in Wake County, and its Mayo and Roxboro coal-fired plants in Person County.
The agency’s interest in the plants represents about 700 megawatts of generating capacity. The municipal systems will continue to own their distribution lines that send electricity to homes and businesses.
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Duke and the agency agreed to a 30-year wholesale power to supply the 32 cities and towns represented by the agency.
“This agreement provides positive benefits to Duke Energy Progress customers including long-term fuel savings that help keep rates affordable,” Paul Newton, Duke Energy’s president for North Carolina, said in a statement.
Graham Edwards, chief executive of ElectriCities of North Carolina, which manages the municipal power agency, said it had investigated options to reduce its costs for several years “while preserving the benefits of public power.”
The agreement needs approval by state and federal agencies. Its terms say the transaction has to be approved and closed by the end of 2016.
Many North Carolina cities began buying interests in power plants in the 1970s, as wholesale electricity rates skyrocketed. But lingering debt from those purchases have forced the municipalities to charge more for power.