TVA seeks Southaven Congentrix power plant
Utility makes $466.3 million offer for gas-fired site to meet demands

TVA has made a bid to buy the bankrupt Cogentrix gas power plant in Southaven for $466.3 million.

The deal to buy the plant, which does business as Southaven Power LLC, is expected to be approved by the U.S. Bankruptcy Court in Charlotte, N.C., in the coming days, said Tennessee Valley Authority spokesman John Moulton.

Cogentrix filed for Chapter 11 bankruptcy in 2005. This is TVA's fifth purchase of a distressed gas-fired plant in two years.

TVA officials said the deal will allow the company to meet its growing energy demand, which is increasing about 1.9 percent each year.

"Combined-cycle combustion turbines are an extremely efficient method of meeting power demand, and the purchase price of Southaven is much less than the cost to build comparable new generation (plants)," TVA chief operating officer Bill McCollum said.

Cogentrix opened its $490 million, 810-megawatt natural gas-fired plant, now shut down, at 2882 State Line Road in June 2003.

The combined-cycle plant, which produced power and at a lower cost, had the ability to supply power to 500,000 homes and employed 25 workers.

The company is also a big boon to the community. In its first decade of operation, it was expected to pour $36 million in tax revenue into city, county and school coffers in DeSoto County.

Southaven Mayor Greg Davis said he had just heard about the pending sale of the plant Friday afternoon.

"We get $500,000 in tax revenue from the plant a year, and the money goes into our general fund," he said. "I hope with the sale we will continue to get that revenue."

Moulton said he did not know when TVA would take over the operation of the plant, as the deal must also be approved by the Federal Regulatory Commission.