WAKE FOREST The town s public power customers could benefit under a bid by Duke Progress Energy to buy out 32 eastern North Carolina towns share of power plants valued at $1.2 billion.But it likely will be more than a year before town officials can evaluate for sure whether Wake Forest Power customers will see lower electricity bills and just how much they ll save.Federal and state regulators must approve the deal, a process that could take well into 2015 or longer. After that, the 32 municipalities that form the N.C. Eastern Municipal Power Agency each will vote to accept the agreement as well. Until the deal is sealed and we see all the final numbers we re not going to be able to tell how much of a reduction we ll be able to give our retail customers, said Town Manager Mark Williams.Williams said that if things move quickly, customers could see changes to their bills in 18 months.Under the terms of the deal announced last week, Progress would take full ownership of the Shearon Harris nuclear plant in Wake County along with four other power plants that local governments have partially owned since 1982 as a misguided investment.Several other Triangle municipalities, including Apex, Smithfield and Clayton, are part of the group of 32 municipalities that serve 270,000 customers. On average, they pay $240 to $600 more a year for electricity than Progress customers. Wake Forest Power serves 6,100 residential and 300 commercial customers, primarily in older parts of the town. While a Progress customer pays $109.27 each month to use 1,000 kilowatt hours of electricity, a Wake Forest Power customer pays $130.69, an annual difference of $257.04, according to the municipal power agency network.In other towns, the debt burden has caused far steeper rate differences.Hobgood,Ray Ban Clearance, a small town about 80 miles east of Raleigh, has the highest prices within the group, charging a household $182 for the same amount of power that costs $109.27 for a Progress customer.Williams said population growth in Wake Forest has mitigated the rate pressure, as have efforts to manage electricity loads at peak times and changes in the distribution system s voltage levels that we put in place more than two decades ago. We haven t had quite as hard a time as some of the smaller communities, he said.Under the terms of the deal, the towns will be able to keep their municipal utility departments,Black Ray Ban Wayfarers, which include utility poles, line crews, bucket trucks and customer service departments.Biggest winnersApproval would be required from the Federal Energy Regulatory Commission and from the N.C. Utilities Commission. Charlotte-based Duke Energy, the corporate parent of Progress, expects to file an application with federal regulators in September.North Carolina regulators will review the deal s costs and benefits to Progress s 1.3 million customers in the state, including businesses and heavy industry. The $1.2 billion acquisition cost and other details will also be scrutinized by the N.C. Public Staff, the state agency that represents customers of regulated utilities. Certainly we don t want them entering into a deal that s going to unreasonably impact the retail customers, said James McLawhorn, director of the Public Staff s Electric Division. We don t want retail customers to pay for something they don t need and they re not using. Progress spokesman Jeff Brooks said the deal would be structured so that Progress customers would come out ahead, too. If approved, the purchase will provide long-term fuel savings, which will ultimately benefit customers by keeping fuel rates lower over time, Brooks said. The N.C Utilities Commission will ultimately determine how costs associated with the purchase of these assets are handled. Duke s 1.9 million customers in North Carolina would not be affected by the deal between Progress and the N.C. Eastern Municipal Power Agency.Under the deal,Ray Ban Aviators Gold, the towns collective debt of $1.9 billion, at 5.1 percent interest, would be paid off, and the towns would borrow $480 million at an interest rate between 3.75 and 4 percent, said Graham Edwards, chief executive of ElectriCities, the Raleigh-based management services company for the municipal power agency.The agency negotiates wholesale power contracts for the 32 towns. As part of the deal, Progress would supply electricity to the towns, through the power agency, under a 30-year wholesale power contract.Timing finally rightThe deal announced Monday follows years of frustration and fault-finding over the high power bills that small-town residents have been forced to endure. But in recent years two factors aligned that made the deal possible, Edwards said.Duke s 2012 merger with Progress created the nation s largest electric utility that today has a market value of nearly $53 billion and a huge balance sheet to back up major acquisitions. At the same time, the towns chipped away at their combined debt over the years so that they were within striking distance of paying off the obligation. We have an asset that they want they need more generating capacity, said Clayton Town Manager Steve Biggs. We have a liability that is the debt load that we need to get some relief from. The towns collectively own 18.33 percent of both nuclear reactors at the Brunswick power plant and 16.17 percent of the reactor at the Harris nuclear plant in southwestern Wake County. They also own portions of two coal-burning units at the Roxboro and Mayo power plants. They acquired the ownership shares in 1982 as a hedge against unpredictable energy costs, but the wager backfired when nuclear costs skyrocketed in the wake of the 1979 nuclear accident at the Three Mile Island plant in Pennsylvania.The towns had borrowed $3.6 billion; the debt wasn t scheduled to be paid off until 2026. Biggs, the Clayton town manager, said the debt and interest of the towns ownership share of the power plants was greater than the market value of the assets. It s just like when someone is upside-down on their house, he said.
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