First Posted: 7/25/2014
RALEIGH — Duke Energy could announce as soon as next week whether a deal has been reached to help reduce high electric bills for customers in Red Springs and Lumberton and 30 other eastern North Carolina municipalities.
Those close to the negotiations said Duke Energy may be close to finalizing its deal with the North Carolina Eastern Municipal Power Agency to potentially purchase ownership interests in four power plants that serve Red Springs and Lumberton, which both operate their own electric systems.
Still Duke officials declined on Friday to discuss “a timetable” for a possible announcement on negotiations.
“Discussions are continuing and continue to go well,” said Jeff Brooks, a Duke Energy spokesman. “We hope to be able to provide additional information in the near future.”
Red Springs Mayor John McNeill said Friday that he also could not discuss the details of a possible sale because those involved in the negotiations are bound by confidentiality.
“Everything is still very confidential, but I will say that it is very positive at this time,” McNeill said. “Hopefully a public statement will be released very soon.”
McNeill, Town Manager James Bennett and Commissioners Ed “Chub” Henderson and David Shook attended a meeting of the board of the North Carolina Eastern Municipal Power Agency on Wednesday in Wilson to get an update on the negotiations with Duke Energy.
The North Carolina Eastern Municipal Power Agency previously shared ownership of the power plants — Shearon Harris nuclear plant in Wake County, the Brunswick nuclear plant in Brunswick County and two coal-burning power plants in Person County — with the former Progress Energy. Duke Energy bought Progress Energy in 2012.
Red Springs and Lumberton invested decades ago into building the power plants only to see costs — and their debt — escalate beyond projections, raising electrical prices for customers.
McNeill said the deal, if approved, would benefit local utility customers. The two Robeson County municipalities and 26 others adopted resolutions earlier this year in favor of the process that could lead to a sale.
Wayne Horne, Lumberton’s city manager, could not be reached for comment but has previously said a deal between Duke Energy and the power agency could have “a positive effect” on the city’s electrical rates.
The deal, which includes North Carolina Eastern Municipal Power Agency’s ownership share in several power plants, is expected to significantly lower electric rates for the 32 cities because the sale will reduce the agency’s $1.8 billion debt. Close to 35 percent of every electric customer bill goes directly toward paying the debt.
“If accomplished the electrical rates in Red Springs and the other towns and cities that are a part of the NCEMPA will be very competitive with all other utilities and the citizens of Red Springs will see a large reduction in their electrical rates,” McNeill said.
If an agreement is reached, an application would be filed with the N.C. Utilities Commission and the Federal Energy Regulatory Commission for approval to sell the assets.
Legislation would also need to be passed in the General Assembly, McNeill said.
The structure of North Carolina Eastern Municipal Power Agency, a public power agency, and the cities’ ability to form the agency years ago was established by the General Assembly. At the time, cities were trying to find a way to meet the long-term electric needs of residents in eastern North Carolina.
“If Duke Progress Energy and NCEMPA reach an agreement, a long list of public agencies and the General Assembly must approve of the agreement or adopt special legislation,” McNeill said. “Though there is no assurance that this will be accomplished, the target date of this being accomplished is hopefully less one year away.”