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Wednesday, June 12, 2024

Electricities selling small stake in Catawba nuclear plant

Electricities, a Raleigh-based consortium of cities that own electricity assets, has agreed to sell about 17.5% of the power it gets from the Catawba Nuclear Station to a consortium of South Carolina electric cooperatives.

N.C. Municipal Power Agency No. 1, or NCMPA1, and the Columbia-based Central Electric Power Cooperative was announced in June and remains subject to the unanimous approval of the agency’s 19 member cities.

If approved, the sale would go into effect at the start of 2024, Electricities says.

The Electricities and NCMPA1 boards have signed off, while the member cities “will be considering the deal later this summer,” Electricities spokeswoman Elizabeth Kadick says.

NCMPA1 owns 75% of the Catawba station’s Unit 2, which like Unit 1 is capable of generating more than 1.1 gigawatts of power. As the 75% owner, NCMPA1 is entitled to almost 859 megawatts of the unit’s generating capacity.

The deal with Central Electric Power calls for it to receive 150 megawatts of that allotment. The consortium serves 20 South Carolina cooperatives, which power such communities as Aiken, Gaffney, York and Myrtle Beach.

For NCMPA1, the transaction is expected to provide a “5% savings in wholesale power supply costs over the term of the contract,” or about $254 million in net present value, Kadick says.

The Catawba station is in South Carolina, just across Lake Wylie from Mecklenburg County. Both reactors went into commission in the mid-1980s and are licensed to continue operating until late 2043. The deal between NCMPA1 and Central is scheduled to run for “the life of the plant,” Kadick says.

NCMPA1 is one of two agencies Electricities manages on behalf of North Carolina cities and towns that have their own electric utilities, rather than leaving the supply of power to private-sector companies like Duke Energy.

The other, the N.C. Eastern Municipal Power Agency, serves 32 communities, most of which are Down East. It also owned shares of various power plants nuclear, but sold those interests to Duke in 2015.

NCMPA1’s 19 members are in mostly in central North Carolina, with High Point and Gastonia owning the largest stakes. High Point owns 18.96% of the agency (and a commensurate share of its debts), while Gastonia owns 17.12%, Lexington has 12.93%  and Monroe 10.04%.

The agency’s 2022 annual report indicates that it ended the year with a net position of $274.4 million, a $71.2 million increase from a year earlier.

It made most of its money by selling $363.6 million of power to its members and $141.4 million to other utilities. Duke operates the Catawba units in concert with those at its McGuire Nuclear Station on Lake Norman near Huntersville.

NCMPA1 has an “energy-only deal” with Southern Power Co., a subsidiary of Atlanta-based Southern Co., “for excess energy on a day-ahead basis, and also sells excess energy “on a daily basis, as available,” to the PJM Interconnection “to bring down member power supply costs,” Kadick says.

In contrast, the deal with Central is “a firm long-term sale of capacity and energy.”

Central gets most of its power through long-term deals with Duke Energy, Santee Cooper and the Southeastern Power Administration.

Santee Cooper, its biggest supplier, is planning to phase out its coal-fired Winyah Generating Station near Georgetown, though the timeline remains uncertain.  Central officials signaled last year they want to diversify their supply sources, the trade publication Power Engineering reported.

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