The Tennessee Valley Authority has completed a lease-purchase transaction Friday that provides $400 million in financing to acquire a natural gas-fired power plant in Desoto County, Miss.
The transaction will give TVA sole ownership of the 774-MW Southaven Combined Cycle Plant, which the utility has operated under joint ownership with Seven States Power Corp. since 2008. TVA will lease a 90 percent interested in the plant to Southaven Combined Cycle Generation LLC for $400 million. Under the lease agreement, TVA will operate the plant for 20 years, will be responsible for all maintenance and fuel for the plant and will receive all electricity generated from the plant.
According to TVA Chief Financial Officer John Thomas, lease financing provides the utility with “a cost-effective way to pay for this long-term capital project.”
TVA operates 11 combined cycle natural-gas fired units at five sites, including three units at Southaven. The TVA has built, leased or acquired all 11 unites since 2007.
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