Thirty years ago, Washington was one of the 32 communities in North Carolina to invest in energy, purchasing shares in two nuclear plants and two coal-fired power stations. The pending sale of those assets to Duke Energy Progress (DEP) may bring lower utility rates to Washington Utilities customers in the future.

July 28, North Carolina Eastern Municipal Power Agency (NCEMPA) announced an agreement to sell NCEMPA generating assets to DEP for $1.2 billion, a move that would reduce NCEMPA’s debt from $1.87 billion to $480 million. The 70 percent reduction in debt would decrease overall costs for member communities, allowing the savings to be passed on to customers.

In January, Washington’s share of the debt — 5.89 percent of the total — amounted to $110 million. Should the sale to DEP take place, the city’s debt will be reduced to $28 million. Those savings, Washington’s City Council intends to pass along to the customers, according to City Manager Brian Alligood.

“What we know is that it’s going to make us a lot more competitive than we’ve ever been and it’s going to lower our rates,” Alligood said. “The extent to which the rates will be lowered — we don’t know that yet.”

However, those savings are at least a year away. Alligood said NCEMPA’s and DEP’s intent is to close on the deal by mid-2015.

“This is a complicated transaction that would require federal and state approvals. It won’t happen overnight,” ElectriCities CEO Chairman Graham Edwards said in a press release.

The first step was to provide 30 days advance notice with North Carolina Utilities Commission, giving the agency time for review, before DEP can file an Asset Purchase Agreement for approval with the Federal Energy Regulatory Commission, which company officials plan to do in early September, according to a DEP press release. The North Carolina General Assembly also must weigh in on the deal, approving NCEMPA’s defeasance bond — determining whether NCEMPA has the ability to finance the remaining $480 million.

“The goal is for it to close July 1, 2015. That’s the goal, but there are a lot of regulatory hoops on the federal and state level,” Alligood said.

Alligood said that the sale would essentially change nothing about the daily operation of Washington Utilities. According to the ElectriCities press release, each community would continue to own its own power lines, substations and transformers that carry electricity directly to consumers, as well as continue to employ their own utility staff and maintain responsibility for maintenance, customer service and billing. Washington, with the other 32 communities under the NCEMPA umbrella, will simply be part of a wholesale power contract with DEP.

Alligood said the proposed sale is in the best interests of both parties.

“People might say it’s some kind of buy out. It’s not a buy out. We have an asset. We’re selling that asset,” Alligood said. “Duke (DEP) wouldn’t do it if it didn’t benefit them. We wouldn’t do it if it didn’t benefit us. It’s going to benefit all the rate-bearers.”