 
What are the Power Agencies?
North Carolina has two municipal Power Agencies, North Carolina
Municipal Power Agency Number 1 (NCMPA1) and North Carolina Eastern
Municipal Power Agency (NCEMPA).
In the Piedmont and foothills region of North Carolina, 19 municipalities
are members of NCMPA1. The agency has 75 percent ownership interest
in Catawba Nuclear Station Unit 2 located in York County, S.C.,
which is operated by Duke Power. It also has an agreement with Duke
that provides for electric power through McGuire Nuclear Station
and Catawba Unit 1 should Catawba 2 be unavailable for service.
 In
the eastern part of the state, 32 cities and towns are members of
NCEMPA. The agency owns interest in five generating units built
and operated by CP&L. These facilities include three nuclear
units, Brunswick Units 1 and 2 in Brunswick County and Shearon Harris
Nuclear Plant in Wake County, and two coal-fired plants, Mayo Plant
and Roxboro Unit 4 in Person County.
Both agencies purchase supplemental power above their ownership
allotment as they need it in the wholesale market generally from
the investor-owned utilities and federally owned hydro-electric
systems.
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Why were the Power Agencies formed?
In the late 1970s and early 80s, the electric utilities and state
legislators became concerned that there would not be enough electricity
to meet the state's future needs. The state’s two IOUs had plans
to build more plants, but high interest rates and rising fuel costs
put the companies in a financial bind. They were concerned they did
not have the capital to complete the projects.
In its October 1981 inaugural edition, Business North Carolina's
cover story focused on this issue and quoted CP&L's Sherwood
Smith as saying, "Utilities are facing their greatest crisis"
in more than 25 years. The article, predicting a possible electricity
shortage in the state by 1990, stated that construction of new generating
plants had come to a near standstill because the state's IOUs did
not have enough money to build the generating plants, this at a
time when rates had increased 300 - 400%.
The cities, which then purchased wholesale power from Duke and
CP&L, were equally concerned that those utilities would not
be able to supply enough power for the cities ’ citizens.
The municipalities were significant providers of electricity and
had an obligation to serve their customers. In an effort to ensure
an adequate, reliable and economic supply of electric power and
energy to the citizens of the state, the NC voters approved a 1975
legislative amendment to the state constitution which authorized
the municipalities to jointly build, finance, own and operate electric
generation and transmission facilities with the IOUs. Fifty-one
cities chose to form Power Agencies and issued electric revenue
bonds to help finish construction of the plants.
The Legislature, the State Treasurer, the North Carolina Utilities
Commission, and the voters of North Carolina all approved the cities'
actions to create the Power Agencies. At the time, demand for electricity
was projected to increase at a rate high enough to allow the cities
to pay off debt, service their electric systems and provide for
other municipal services. Because the municipalities helped build
the plants, the state of North Carolina has enjoyed a plentiful
and reliable source of power to spur economic growth.
ElectriCities of North Carolina, Inc., believes that economic growth
will continue in the future. To ensure this continued economic health,
however, the state legislature must carefully consider any plan
to deregulate the industry here. This must include protecting the
cities’ ability to repay debt associated with plant investments.
How do the participants receive electric power?
The Power Agencies’ ownership interests in the generating
facilities and contractual arrangements with Duke and CP&L ensure
that the power needs of participants will be met. Under the contracts,
the investor-owned utilities are paid a fee to be responsible for
constructing, maintaining, fueling and managing the generating facilities.
The investor-owned utilities send the power to the municipalities
over high-voltage transmission lines. Once the power reaches a city
or town, the municipality distributes power to its customers.
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