06 Transmission lines Fayetteville’s Public Works Commission is North Carolina’s largest independent electricity distribution agency. PWC manages, operates and supervises electric, water and wastewater utilities in Fayetteville. It owns and operates the Butler-Warner Generation Plant, a gas-turbine-based electric generation facility. But Public Works purchases most of its power from energy suppliers, including Duke Energy Progress.

PWC has reached an agreement with Duke Energy that is expected to result in over $300 million in savings for its customers. The new deal modifies the current wholesale power supply agreement, which began in 2012 and runs through June 2042. But PWC has an option to end the agreement in June 2024. Amending the contract early provides both savings and long-term power supply stability for the next 22 years.

The parties expect to submit the revised agreement to the Federal Energy Regulatory Commission for approval by February 2020. Through renegotiations, the change is expected to save PWC $313 million. Over the past two years, the commission has examined various options and alternatives for PWC’s power supply after 2024. The amendment to the contract with Duke Energy is the only one that provides PWC and its customer’s savings before July 2024. 

“Long-term power supply is the most significant decision PWC has to make because it is the No. 1 factor in providing our customers reliable electric service at a reasonable cost,” said David Trego, PWC CEO and general manager. “Purchased energy is our largest single expense for PWC, and there are many factors and risks, in addition to cost, that had to be taken into consideration.”

When compared to other options, DEP offered the best combination of competitive rates and low risks, including PWC maintaining the highest level of delivery reliability. Duke Energy agreed to continue giving PWC the same service priority as Duke’s own retail customers. In addition to savings and reliability, the amended agreement allows PWC to promote additional conservation and zero impact on PWC’s bond rating.

“Our Board of Commissioners is very pleased that the leadership team has negotiated a mutually advantageous, long term, energy agreement with Duke Power on behalf of our customers,” said Evelyn Shaw, PWC Chairwoman. “For many years into the future, this agreement will undergird PWC’s goal of reliable, sustainable, low cost energy for our customers.” The terms of the amended agreement run through 2042 and PWC has the option to end the contract in 2032.

In a separate agreement, DEP agreed to continue leasing the Butler-Warner Generation Plant. Under the existing lease contract, Duke Energy allows PWC to operate the plant as needed for $12 million annually. New terms extend the contract through June 2024 for an additional $5 million in PWC revenue. PWC may be able to achieve additional savings beyond 2024 if operational requirements are met. The Public Works Commission provides electric service to more than 82,000 customers in Fayetteville and Cumberland County. The local utility is the largest public power provider in the state and the 36th largest in the United States.

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