BRADENTON, Fla. - The North Carolina Eastern Municipal Power Agency finalized a deal to sell its generating assets to Duke Energy Progress.
The boards of both organizations signed the $1.2 billion asset purchase agreement and a full requirements purchase power agreement on Sept. 5, according to a bondholders' notice posted Sept. 9.
Investor-owned Duke has also filed its required notice about the pending sale with the Securities and Exchange Commission.
The public utility plans to issue new debt and retire and defease its $1.87 billion of outstanding revenue bonds.
The deal remains subject to numerous approvals, including from the North Carolina General Assembly, which must authorize the NCEMPA's new bond sale. The bonds would be secured by asset sale proceeds, internal operating and reserve funds.
Eastern Municipal Power said the deal is expected to close in the next 12 to 18 months, but it remains dependent on authorization from all parties.
The North Carolina Utilities Commission and the Federal Energy Regulatory Commission are among the agencies that must consent to the transaction.
The sale is expected to lower burdensome power bills for Eastern Municipal's 32 member cities and towns, which must also approve the deal.
While NCEMPA has implemented strategies to reduce power rates, the agency began negotiating with Duke in February for the potential sale of its minority stake in three nuclear power units and two coal-fired units. Those assets are operated by Duke.
The preliminary sale agreement was announced in July.
North Carolina Eastern Municipal Power Agency's bonds are rated A-minus by Fitch Ratings and Standard & Poor's, and Baa1 by Moody's Investors Service. All have stable outlooks.
Moody's said the asset sale is credit positive because the related bond refunding will reduce outstanding debt by 70%, and lower the wholesale power rates charged to municipal customers.
