Lawmakers in the House and Senate introduced identical bills Tuesday to smooth the way for Duke Energy Progress to buy back power plant ownership shares from 32 debt-saddled municipalities in Eastern North Carolina.
Sen. E.S. “Buck” Newton, one of the sponsors, said the buyback will translate to rate cuts of 10 percent to 15 percent for the towns.
The Wilson Republican predicted officials in Wilson and other affected towns will cut rates this year if they “don’t want the pitchforks and the torches showing up on their front yards.”
The Progress deal would release the towns from crippling debt that results in their 270,000 power customers paying up to 35 percent more for electricity than Progress customers. Once the debt is erased, the saving should flow to residents and businesses in Apex, Clayton, Wake Forest, Wilson, Smithfield, Kinston and other towns.
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Local officials say the exorbitant power costs in those towns dissuade businesses from relocating or expanding in communities that are among the most economically distressed in the state.
“We have not been able to recruit any heavy users of electricity inside those municipal areas,” said Rep. Jeff Collins, a Rocky Mount Republican and a sponsor of the House bill.
The House and Senate legislation would allow Progress to pass on the costs of the planned $1.2 billion acquisition to its customers, spreading out the cost recovery over 20 to 30 years, like a home mortgage. By gaining greater share of nuclear power plant capacity, Progress expects to reduce its annual fuel costs by about $70 million a year.
The bills would also allow the municipal power agencies to issue bonds to pay for operations, an authority they lack under current law.
The Progress buyback was approved in December by the Federal Energy Regulatory Commission but still requires approval from the N.C. Utilities Commission as well as the 32 towns.
The debt is down to about $1.7 billion today, and will be further reduced to $480 million after Progress buys back the plants.
Staff writer Colin Campbell contributed.