The facilities, which have a combined 18.7-megawatt generation capacity, are Bryson, Franklin and Mission hydro stations in the Nantahala area, and Tuxedo and Gaston Shoals hydro stations in the Green/Broad River Basin.
DEC will purchase all of the energy generated by these facilities for five years through power purchase agreements with Northbrook Energy.
“This sale will deliver long-term benefits for our customers and shareholders,” said Randy Herrin, Duke Energy Vice President, Carolinas Regulated Renewables. “Over the past few years, the cost to operate these facilities has risen significantly. Through this transaction, the plants will continue to serve our customers with clean renewable energy, but at a lower cost.”
“Northbrook is pleased with the opportunity to supplement its renewable hydroelectric portfolio in the Carolinas and leverage its local operating efficiencies,” said Chuck Ahlrichs, President of Northbrook Energy. “Nearly 22 years after our first purchase of hydropower assets from Duke Energy, we are excited to build on our success in the region by expanding employment opportunities and proffering hydropower’s baseload capabilities in support of the region’s demonstrated desire to deploy intermittent renewables such as wind and solar.”
Northbrook Energy is a privately-held, independent power producer that has been in the hydroelectric business for more than 30 years. The company operates hydro assets in 12 states, including the Carolinas. Northbrook partnered with New Energy Capital Partners, LLC to finance the acquisition of these hydroelectric plants.
Based on the upkeep investments needed over time, DEC determined it was in the best interest of customers to sell the facilities. Financial terms of the transaction, which will result in net savings for customers over time, are not being disclosed presently. DEC will seek approval from state regulators to establish a regulatory asset for the retail portion of the difference between sales proceeds and net book value.
The completion of the transaction is subject to approval from the Federal Energy Regulatory Commission (FERC) to transfer the hydroelectric licenses to Northbrook Energy, as well as other state regulatory approvals.
Northbrook Energy will be required to comply with all FERC license requirements as well as existing agreements entered into by DEC, which Northbrook will assume.
Closing is expected to occur in the first quarter of 2019.