July 7, 2011, KNOXVILLE, Tenn., (Coal Geology) – The staff of the Tennessee Valley Authority has negotiated an agreement to buy, subject to TVA board of directors’ approval, the 968-megawatt Magnolia Combined Cycle Gas Plant in northern Mississippi from Kelson Limited Partnership, a wholly owned subsidiary of Kelson Energy Inc.
The three-unit, natural gas-fired electric generating plant is located on a 374-acre site in Benton County near Ashland, Miss., and has been a source of purchased power for TVA since the plant began operation in 2003. Kelson has owned the facility since 2005.
The closing of the transaction is also subject to approval of the Federal Energy Regulatory Commission, among other conditions.
“TVA continually evaluates our options to ensure a reliable, competitively priced supply of power for the people of the Tennessee Valley,” said Bob Irvin, senior vice president for TVA Strategy & Planning.
“The Magnolia plant offers a strong strategic, operational and financial fit for TVA and its vision to be a leader in low-cost and cleaner energy by 2020,” he said. Terms of the deal were not disclosed for competitive reasons. The purchase price will be less than half the cost of new construction.
The Magnolia plant is a modern, fully permitted generating facility with a proven operational history, located in the TVA service area and connected to the TVA grid. Combined-cycle gas plants efficiently use waste heat from the generation process to turn additional turbines to make additional electricity. They can provide intermediate generation to fill the gap between continuous and peak power needs. Magnolia will be TVA’s third combined-cycle gas plant, joining the new Lagoon Creek plant and the Southaven plant, which is jointly owned with Seven States Power Corp. A fourth plant, John Sevier, is under construction and scheduled to begin operation in 2012 in northeast Tennessee. TVA also operates a fifth plant, Caledonia, which is under a long-term lease agreement.
Kelson Energy, based in Columbia, Md., is an independent power producer engaged in the business of owning and operating electric generating facilities.
The Tennessee Valley Authority, a corporation owned by the U.S. government, provides electricity for utility and business customers in most of Tennessee and parts of Alabama, Mississippi, Kentucky, Georgia, North Carolina and Virginia’.
(This release may contain forward-looking statements relating to future events and future performance. Although TVA believes that the assumptions underlying these statements are reasonable, numerous factors could cause actual results to differ materially from those in the forward-looking statements.)
SOURCE Tennessee Valley Authority
CONTACT: Duncan Mansfield, Knoxville, +1-865-632-4660, TVA Media Relations, Knoxville, +1-865-632-6000, www.tva.com/news, or Investor Relations: Ann Storberg, Knoxville, +1-865-632-4425, TVA Investor Relations, Knoxville, +1-888-882-4975, www.tva.com/finance
Web Site: http://www.tva.com