Duke Energy Progress announced on July 28 that it was buying out the interests owned by North Carolina Eastern Municipal Power Agency (NCEMPA) in two nuclear plants and two coal plants in North Carolina for $1.2 billion.

The sale between Duke Energy Progress, Duke Energy’s Carolina subsidiary, and NCEMPA represents all of NCEMPA’s generation assets. The agency owns about 700 MW of generation in four Duke plants: Brunswick Nuclear Plant Units 1 and 2 in Southport; the single-unit coal-fired Mayo Plant in Roxboro; Unit 4 of the Roxboro Steam Plant in Semora; and the single-unit Shearon Harris Nuclear Plant southwest of Raleigh.

“We’ve been investigating options to lower our costs for several years while preserving the benefits of public power,” said Graham Edwards, CEO of ElectriCities, which manages NCEMPA. “Selling our generation assets is a significant way we can achieve that goal and strengthen NC Public Power’s future in eastern North Carolina.”

The deal is projected to cut NCEMPA’s debt by about 70% and hopefully lower its customers’ bills. The debt has become a political issue in the state, and servicing it currently constitutes about 36% of NCEMPA’s total expenses, Edwards said.

As part of the agreement, Duke and NCEMPA will enter into a 30-year power purchase agreement to continue serving the NCEMPA customers currently getting power from the plants. NCEMPA serves about 270,000 customers in N.C. and will retain ownership of its transmission and distribution assets.

The deal is expected to close in 2016, pending approval by N.C. state regulators and the Federal Energy Regulatory Commission.

—Thomas W. Overton is a POWER associate editor.