Town leaders have approved a deal that would allow Duke Energy Progress to buy back power plant ownership, marking the final steps in a years-long process that could lead to lower electricity rates in Wake Forest.
“Our goal is to provide reliable power at the lowest cost,” said Tim Tunis, chief financial officer for ElectriCities, a group that provides management services to public power towns in the Carolinas and Virginia.
Wake Forest is among 32 municipalities that make up the N.C. Eastern Municipal Power Agency. Each of the 32 municipalities that make up the agency must agree to sell its share of the plants. Federal and state regulators have to approve the deal as well.
The towns get their electricity from four power plants they partly own, including the Shearon Harris Nuclear Plant in New Hill.
The debt has often led to higher utility bills for customers.
On average, the group’s 270,000 customers pay $240 to $600 more a year for electricity than Duke customers.
Wake Forest customers might see a change in their electricity rates, said Roe O’Donnell, interim town manager. The town will bring in an outside group to conduct a rate study over the summer.
Wake Forest provides electricity to customers through Wake Forest Power and will continue to do so in the same capacity after the sale.
Some residents in town get electricity from Wake Electric, a separate power cooperative not involved with the Duke sale.
As part of the sale, the municipalities will be required to pay off the remaining balance still owed to Duke for the original purchase of the electric interests.
Wake Forest’s share will be about $6.4 million over 10 years, or about $640,000 a year, Tunis said.
Under the current setup, Wake Forest pays $1.89 million a year in power-related debt.
The deal will make Wake Forest and the other N.C. Eastern Municipal Power Agency municipalities Duke customers, Tunis said. It relieves towns of any liabilities related to the plants.
“I think the risk we have in owning these facilities is greater than we tend to think of,” Mayor Vivian Jones said.