More flexible nuclear decommissioning fund rules could lower rates for some N.C. cities
June 29, 2021
by Peter Maloney
June 29, 2021
The North Carolina General Assembly this month unanimously passed a bill that gives greater latitude on the investment of nuclear decommissioning funds and could result in lower rates for customers of the affected public power utilities.
Senate Bill 323 gives the 19 cities and towns that comprise N.C. Municipal Power Agency Number 1 (NCMPA1) the authority to invest its nuclear decommissioning fund through a combined fund managed by the North Carolina state treasurer.
“Today is a great day for the 19 cities and towns that participate in N.C. Municipal Power Agency Number 1,” Roy Jones, CEO of ElectriCities, said in a statement on June 23, the day the bill passed. ElectriCities is a membership organization of municipally owned electric utilities that includes the 19 NCMPA1 municipalities. “I want to thank House Speaker Tim Moore and Senate Leader Phil Berger, along with our bill sponsors, for making this legislation a priority and for their continued support of public power communities,” Jones said.
NCMPA1 has a 75 percent ownership interest in Unit 1 of the Catawba nuclear station in York County, South Carolina, and a 37.5 percent ownership interest in the support facilities for Catawba Units 1 and 2.
The new law allows NCMPA1 to invest the Catawba decommissioning fund in the existing Ancillary Governmental Participant Investment Program (AGPIP) managed by the state treasurer.
AGPIP allows the state’s treasurer to invest monies for governmental entities that are outside the North Carolina Retirement System, such as public hospitals, the North Carolina Conservation Grant Fund, the State Health Plan, the Disability Income Plan, and the State Educational Assistance Authority.
The expectation of the bill’s sponsors is that the expanded range of investment options available through AGPIP could provide NCMPA1 the opportunity to earn higher returns in the decommissioning fund, assuming current assumptions of revenue, cost, and projected and actual market returns hold true.
In a March 31 legislative update, ElectriCities said the change could lead to as much as an 8 percent decrease in wholesale rates for the 19 NCMPA1 communities.
The 19 member cities of NCMPA1 are Albemarle, Bostic, Cherryville, Cornelius, Drexel, Gastonia, Granite Falls, High Point, Huntersville, Landis, Lexington, Lincolnton, Maiden, Monroe, Morganton, Newton, Pineville, Shelby, and Statesville.