04/14/2015 (3) - Laserfiche WebLink

Home Browse Search

4/9/2015 Duke Ener makes $1.2B deal for municipal shares in power plants - Charlotte Business Journal 18.3 percent share in the Brunswick 1 and 2 plants; a 16.2 percent share in the Mayo l Fant; and a 12.9 percent share in the Roxboro Plant. There will be cost savings for customers of the municipal power companies and Duke Energy Progress, the two sides say. There has been a long battle over what to do with the municipals' share of those plants — and the $2 billion or so in debt they carried. That dispute led several eastern N.C. cities to challenge Duke's purchase of Progress Energy Inc. in 2012. Merger delay That challenge, which took the form of questions about Duke's wholesale market dominance after the merger, delayed the merger by at least six months. The FERC rejected Duke's initial proposals to address those market issues, delaying the closing of the deal to July 2, 2012, from its original target of Jan. 1, 2012. �m A The big savings for the municipal power e6mpan es and their customers will be in savings on those interest costs. The purchase price will be applied to the debt, which currently totals about $1.9 billion. That will reduce the interest costs, which had been driving the rates for the eastern N.C. municipal power companies significantly higher than the utility prices. Varied impact The.. deal, would allow the agency to eliminate the "d yxas'''mucr s 70 percent. "We've been investigating options to lower our costs for several years while preserving the benefits of public power," says Graham Edwards, ElectriCities chief executive. "Selling our generation assets is a significant way we can achieve that goal and strengthen (public power's) future in eastern North Carolina." Agner says the impact on customers will vary from municipality to municipality. The agency has not yet been able to calculate exactly what those savings will be. But the savings are expected to be noticeable. Fuel costs The savings to Duke customers will not be as dramatic. But the fuel costs for the plant shares owned by the municipalities is lower than Duke's average fuel costs. That is because the vast majority of those capacity shares are in nuclear plants, which have very low fuel costs. If the 30 -year power purchase contract is signed, the municipalities will be paying the average fuel costs for the system. That will spread those fuel costs over a greater number of customers, making for fuel savings for Duke Progress' direct customers. "We have been providing electric service to NCEMPA members for more than 100 years, and http://www.bizjournals.com/charlotte/blog/energy/2014/07/duke-energy-makes-1-2b-deal-for-m uni ci pal-shares.htm I?s=print