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Duke Energy Carolinas to sell 5 hydro facilities

Duke Energy Carolinas LLC is seeking approval from the North Carolina Utilities Commission to sell five hydroelectric generation facilities below their current net book value.

The Duke Energy Corp. subsidiary agreed to sell the Bryson, Franklin, Mission, Tuxedo facilities in North Carolina and the Gaston Shoals facility in South Carolina to Northbrook Carolina Hydro II LLC and Northbrook Tuxedo LLC for $4.75 million. The facilities, totaling 18.7 MW, have a current net book value of $42 million, according to a filing with the NCUC.

Northbrook Carolina Hydro II LLC and Northbrook Tuxedo LLC are owned by a partnership between Alliance Fund II LP and privately held independent power producer Northbrook Energy LLC.

The facilities have been in operation for more than 90 years. Combined, they only contribute to less than 1% of the company's hydroelectric generation, but require significant maintenance cost.

"[D]ivesting of the Facilities by [Duke Energy Carolinas] is more economical than continued ownership and will result in net savings for customers over time," the company said.

In its July 5 application, the company also requested a declaratory ruling from the NCUC that upon ownership transfer, the facilities will be considered as new renewable facilities. By having these facilities qualify as such, Duke Energy Carolinas may use any renewable energy credit purchase for compliance with the state's Renewable Energy and Energy Efficiency Portfolio Standard.

Duke Energy Carolinas agreed to purchase all energy and renewable energy credits generated by the facilities for five years, following the deal. The company expects to close the transaction in the first quarter of 2019, subject to the approval of the NCUC, the South Carolina Public Service Commission and the Federal Energy Regulatory Commission. (NCUC Docket Nos. E-7, Sub 1181, SP-12478, Sub 0 and SP-12479, Sub 0)