Identical bills were introduced in the North Carolina General Assembly Tuesday, in both the Senate and the House, to allow Duke Energy Progress to buy back plant ownership shares now owned by Wake Forest and the 31 other towns and cities that are part of the North Carolina Eastern Municipal Power Agency (NCEMPA).
The bills are part of the steps to assure the municipalities can shed the heavy debt burden, or at least most of it, and be able to offer competitive rates.
The towns and cities, or at least Wake Forest, will continue to operate their wholly-owned electric distribution facilities, which is Wake Forest Power here. They incurred the debt in 1986 when they were told there would be a heavy surge of demand for electricity and owning part of the plants built by what was then CP&L would lower their costs. Instead, the cost of building plants such as Shearon Harris Nuclear Plant rose sharply after the Three Mile Island accident.
The debt for the 32 municipalities is now $1.7 billion and will be reduced to $480 million after Duke Progress buys back the shares of the plants. Wake Forest owns a 0.7262 share in each of five plants: Brunswick Nuclear Plant Units 1 and 2, Mayo Plant Unit 1, Roxboro Plant Unit 4, and Shearon Harris. The Mayo and Roxboro plants burn coal.
The debt reduction for each of the towns and cities depends on its ownership share. The towns and cities would still owe the $480 million but each will be able to sell bonds to spread the debt over 10 or 20 years. Last spring the Wake Forest Town Board approved a resolution saying they agree to borrow money to pay off the debt left after the sale.
Wake Forest has not seen rates as high as some of the other members of NCEMPA because the town’s growth has allowed it to absorb a great many of the many wholesale rate increases from NCEMPA. Wake Forest Power, operated as a separate enterprise fund, has to pay all its costs, including the debt repayment, from its revenues.
Town Manager Mark Williams, who has struggled with the debt burden all his years as first assistant manager (1987) and manager (1993), said Wednesday, “It’s still too early to really assess the impact on Wake Forest customers’ rates, but they will go down. You are correct, places like Apex and Wake Forest, who have been growing all this time, will not see as significant reductions as some of the cities down east who have been suffering all these years.”
He also said that “everyone is hoping for a July 2015 conclusion. So that will be after I go.” His retirement is effective April 30.
In February, the town had 6,103 electric customers, an increase since December when the Gazette reported 6,057 customers in an article about the Federal Energy Regulatory Commission approving the sale of the shares to Duke.
