TVA agreed to purchase a three-unit, 810 MW combined-cycle combustion turbine facility owned by Southaven Power LLC located in Southaven, Miss.
The utility will pay $461.3 million, or $570/kW, for the natural gas-fired plant that was valued at $490 million, or $605/kW in 2001. They will also pay $5 million to Southaven in connection with the termination of an operation and maintenance agreement currently held by a Southaven affiliate. Southaven is a wholly owned indirect subsidiary of Cogentrix Energy LLC.
The agreement to purchase the natural gas-fired power plant was reached at the conclusion of a bankruptcy auction process and was presented for approval by the U.S. Bankruptcy Court in Charlotte, N.C. where Southaven is undergoing Chapter 11 bankruptcy proceedings. The closing of the transaction is subject to its approval by the court, which is expected within the next few days and approval by the Federal Energy Regulatory Commission.
Last summer, TVA met its all-time peak demand of 33,482 MW and TVA forecasts that the growth trend will continue with peak demand growing about 1.9 percent each year.
TVA owns or leases 83 combustion turbine peaking units and three combined-cycle units located on nine separate sites across the Tennessee Valley.
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