North Carolina Gov. Pat McCrory signed Senate Bill 305 clearing the way for the Eastern Municipal Power Agency's asset sale to Duke Energy Progress.

BRADENTON, Fla. — North Carolina Gov. Pat McCrory cleared the way for one of the state's largest municipal energy providers to sell its assets to Duke Energy Progress Inc.

McCrory signed Senate Bill 305 authorizing the sale, the North Carolina Eastern Municipal Power Agency told bondholders in an April 8 notice.

SB 305 was passed unanimously by both chambers of the Legislature. McCrory signed the measure April 2.

"The legislation authorizes NCEMPA to borrow money to pay the remaining outstanding debt to complete the transaction, and allows Duke Energy Progress to recover costs associated with purchasing the generation power plants," said the notice posted on the Municipal Securities Rulemaking Board's EMMA filing system.

The next step is obtaining approval for the sale from all 32 member cities and towns in eastern North Carolina. They have 90 days from the bill's passage to authorize the sale.

NCEMPA owns a portion of five generating units. The power agency plans to sell its position in the generating assets to lower wholesale electric costs for members, and has inked a $1.2 billion asset purchase agreement with Duke. The agency anticipates the transaction will close on or after July 1.

The exact impact on retail rates will vary for each community depending on a number of factors, including each member's share of outstanding debt.

NCEMPA had $1.87 billion of outstanding revenue bonds as of Dec. 31. The bonds are rated A-minus by Fitch Ratings and Standard & Poor's, and Baa1 by Moody's Investors Service.

The utility plans to issue new debt and retire the outstanding bonds in order to complete the sale to Duke.

The proposed purchase has been approved by Federal Energy Regulatory Commission, the North Carolina Utilities Commission, and the Nuclear Regulatory Commission, according to McCrory.

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