Virginia Electric and Power Co. yesterday announced an agreement to sell about a 7 percent share in six nuclear power plants to two groups of rural electric cooperatives.
The buyers are Old Dominion Electric Cooperative, a group of 15 co-ops serving most Virginia residents who do not get their power from Vepco, and North Carolina Electric Membership Corp., another co-op group.
The sale, a $150 to $200 million deal, will for the first time give the co-ops ownership of the facilities that generate their electricity. At present the co-ops buy their power from Vepco. In effect the co-ops are buying the share of Vepco's plants which generates the power they now purchase at wholesale rates.
The sale will have no effect on electric rates paid by Vepco's customers, an official of the Richmond-based utility said. It will, however, free Vepco's capital for investment in other projects.
But it will mean lower wholesale electric prices for the co-ops, said Ernest Jordan Jr., executive vice president of Old Dominion. Because of inflation it is doubtful the deal will bring lower retail rates, but it will slow the increase in electricity bills, he said.
The reasons for the sale are "primarily economic," Jordan added. "We can own plants cheaper than an investor-owned utility," because co-ops don't pay income taxes or dividends to shareholders and can borrow money to finance plants at lower rates than private companies pay.
The sale involves interests in the Surrey 1 and 2 nuclear plants in the North Anna units 1, 2, 3 and 4. The Surrey plants are already producing power, the North Anna units will go into operation over the next six years.
The exact purchase price and the precise share of the plants involved in the deal will not be known until the closing of the sale, sometime next year.
The transaction requires the okay of state and federal regulators and financial institutions that hold mortgages on Vepco's facilities.
The co-ops will acquire their interest in the Vepco plants over a 19-year period, using funds borrowed through federal agencies or guaranteed by the government.
The Virginia co-ops, who will take an 85 percent interest in the generating capacity being bought by the two groups, serve about 234,000 customers.