Albemarle supports power sale agreement

At its Aug. 21 meeting, Albemarle City Council heard a presentation by Andy Fusco, chief strategic officer of ElectriCities of North Carolina, regarding a proposal by the agency to enter a power purchase agreement with Central Electric Power of South Carolina, an alliance of several South Carolina electrical cooperatives.

Albemarle is one of 19 cities that comprise the North Carolina Municipal Power Agency 1 (NCMPA 1), and is one of two municipal power agencies ElectriCities manages on behalf of cities and towns that operate their own electric utilities. NCMPA 1 owns 75% of Unit 2 of the Catawba Nuclear Station, and the proposed power purchase agreement would provide Central Electric with 150 megawatts of excess nuclear capacity. The agreement is subject to the unanimous approval of the agency’s 19 member cities and would go into effect at the start of 2024.

“This is not a straight sale,” said Fusco, in explaining the agreement. “It’s actually more of a contractual arrangement that mimics what a sale would be…we will transfer 18% of the cost to Central Electric.”

Fusco’s presentation to the council provided information on pros and cons of the proposed sales agreement, including projected outcomes should the sale be approved.

“Part of the proceeds of the transaction would be used to defease some of the debt that we have for NCMPA1,” he said. “Other parts (of the proceeds) would be to the benefit of the individual participants (municipalities), who can use them for upgrades, rate reductions and other purposes.”

Over the term of the sale, wholesale rates could also drop, said Fusco.

“If the agreement is approved, the probability of reduced wholesale power costs in the near term (2024-2025) are likely. Reduced wholesale power cost provides immediate benefit to members of NCMPA1 which could translate to lower rates to retail customers.”

Following Fusco’s presentation, Councilman Benton Dry moved, with a second by Councilman Bill Aldridge, to support the proposed sale agreement. Council voted unanimously (5-0, with two members absent), in favor of the motion.

According to information provided by Albemarle Public Information Officer David Fath, past reductions in wholesale cost have been passed on to the city’s customers in the form of lower electric rates.

“Historically, when wholesale power cost has been reduced from NCMPA1, Albemarle has passed a majority of those savings on to its customers by lowering retail electric rates up to 15% over the past five years,” he said.

Toby Thorpe is a freelance writer for The Stanly News & Press.