Cities: switch off our debt for power plants.

• Position: Eastern

It's tough to recruit and retain businesses when your electricity costs are a third higher than the state average, so it's no wonder that some leaders of 32 Eastern North Carolina municipalities are willing to try what amounts to a Hail Mary pass to reduce them. But many, even within their own camp, say they don't have a prayer of getting Duke Energy Corp. and Progress Energy Inc. to swallow $2.4 billion in debt their cities and towns incurred 30 years ago, when they bought shares of power plants in an effort to obtain cheap electricity.

The initial reaction from Charlotte-based Duke, which is seeking regulatory approval for its acquisition of Raleigh-based Progress, wasn't favorable. "When we purchased Progress, it was a $26 billion transaction that included assuming about $12 billion of Progress debt," spokesman Tom Williams says. "It did not include acquiring debt that Duke or Progress didn't incur from the municipalities."

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Their problem goes back to 1981, when the 32 cities and towns, acting as the North Carolina Eastern Municipal Power Agency, bought shares in three nuclear and two coal-burning plants from Progress' forerunner. But the deal backfired when their share of the plants' costs soared in the decade following the 1979 accident at the Three Mile Island nuclear plant in Pennsylvania. The bonds won't be paid off till 2026. "I've seen citizens paying as high as $750 a month," says Roger McLean, mayor of Elizabeth City, which owes about $93...