When the new fiscal year begins July 1, Washington’s power customers will be paying the same rates they pay now.

Although a new state law clears the way for an agreement that should help lower electric rates for many eastern North Carolina residents, those lower rates likely won’t be implemented for several more months. Several steps must take place before the agreement takes full effect.

The $1.2 billion agreement would allow Duke Energy Progress to buy stakes in power-generation facilities now owned, in part, by the North Carolina Eastern Municipal Power Agency, which includes 32 cities and towns in eastern North Carolina. The Federal Energy Regulatory Commission has approved the agreement, however, approval by the General Assembly is needed for the agreement to take effect. The commission approved the agreement in December 2014. The N.C. Utilities Commission and federal Nuclear Regulatory Commission will need to approve the agreement.

The 32 NCEMPA members and the Greenville Utilities Commission will need to vote in favor of the sale, within 90 days after legislation is passed.

The new law allows NCEMPA members to issue bonds to refinance approximately $480 million of debt after this purchase is complete. It also allows NCEMPA power agencies to enter into purchase power agreements to replace the electricity previously provided by the generation assets they are selling.

If all NCEMPA members approve the agreement and it is implemented, electric rates for the members’ power customers are expected to decline, up to 20 percent in some cases.

Washington’s City Council wants to wait until the assets sale is completed so it can get a better idea of how the deal will affect the wholesale rates the city pays to purchase power. That wholesale rate will be factor in determining how much the city could reduce the retail rates it charges city power customers.

Accepting a suggestion by Councilman Doug Mercer, the council, during a meeting last week, decided to set the electric fund’s budget for the upcoming fiscal year at what it costs the city to buy power (about $27.7 million), operations and maintenance costs (about $8 million) and debt service (about $403,000). That budget (about $36 million) would be amended to reflect other revenues and expenditures once the city has a better understanding of how the agreement will affect the city’s electric fund and the city completes a cost-of-service study regarding its electric fund.

“In the fall, or whenever the assets sale is completed, we would sit down and amend the electric fund budget to reflect where we are at the point in time,” Mercer said.

Last month, Mercer, who regularly attends NCEMPA meetings, said he hopes the agreement will result in Washington’s power customers seeing their electric rates decrease by about 10 percent.

For many years, NCEMPA customers have paid as much as 35 percent more than power customers in other parts of the state for electricity, a result of the power agency carrying nearly $2 billion in debt for around 33 years. In 2010, the movement to do something about that debt took on new life when several NCEMPA members explored withdrawing from NCEMPA. They faced several contractual and fiscal challenges if they did so.

In Washington’s case, about 70 percent of the city’s wholesale electric bill goes toward retiring the city’s share of that debt, according to city officials.