HED: Firm to build $400 million power plant in Batesville

Read-in: TVA to buy power for the first time

By Marty Russell

Daily Journal

BATESVILLE - The Tennessee Valley Authority and LS Power of St. Louis announced plans Tuesday to construct a $400 million, gas-fired power-generating plant in Batesville.

LS Power would build and operate the plant and TVA would buy its output under an agreement yet to be signed but which officials insisted Tuesday was a done deal. It would mark the first time in TVA's 63-year history that the federal utility has purchased power from outside its own network of power plants.

"This decision is of historical significance in that it represents the first time that TVA has entered such an agreement," said TVA Chairman Craven Crowell in making the announcement at the offices of the Tallahatchie Valley Electric Power Association.

Crowell was joined at the news conference by fellow TVA board member Johnny Hayes, who was recently reappointed to a shortened term pending the outcome of the November presidential election.

Tuesday's announcement culminates a process begun in July 1994 when TVA indicated it was searching for purchase agreements with private suppliers, a new concept in the utility business, TVA officials said.

LS Power was chosen from among 138 proposals and set out to locate a site for the plant, said Bob Brooks, vice president for marketing for the firm.

"We looked at a very extensive list of sites," Brooks said, including some in western Tennessee. "But the pipelines are fairly abundant in this area and the bottom line is TVA thought Batesville was the place."

Crowell said the Batesville site had everything TVA was looking for.

"We needed a facility someplace in our western service area," he said. "This was a good location because it was near a fuel source and was very well situated for our transmission lines."

Batesville is on the western edge of TVA's seven-state service area and most of the Knoxville-based federal agency's power generating plants are located in Alabama and Tennessee.

Meeting future demand

In addition to bolstering reserves on the western edge of the TVA power grid, Crowell said the new energy source also fits into the agency's projected needs in its Energy Vision 2020 plan.

"We were projecting 3 percent growth a year," Crowell said of energy demand in the next few years. "We're now experiencing close to 4 percent ... That only makes it more likely that we're going to exercise this option" to buy the Batesville plant's power.

The plant would be located in the Batesville Industrial Park and would be fueled by natural gas to produce 750 megawatts of electricity, comparable to a medium-sized TVA coal-fired plant. Brooks of LS Power estimated it would take 300 workers to build the Batesville plant and "30 to 40 highly skilled technicians" to operate it.

He said he expects the permitting process to take about a year and another 30 months to construct the facility. TVA is expecting to start buying power from the plant in the year 2000.

While Brooks could not say what air and water pollution control systems would be in place, he said the facility would comply with all regulations.

"LS Power is committed to developing this in harmony with the environment and with the local community," he said.

Brooks also indicated his company will be looking to state and local officials for assistance. The state Legislature this year approved $30 million for infrastructure improvements around a proposed lignite coal-fired plant to be built in either Webster or Choctaw counties. TVA also is expected to participate in that project by agreeing to buy power.

A tour of the proposed sites in Webster and Choctaw counties is scheduled for Thursday by TVA officials. If built, that plant and an adjoining mine would cost an estimated $500 million and produce 400 megawatts of electricity.

Crowell said TVA's decision to buy power from the Batesville plant would not affect its decision on the lignite plant.

"These two projects are completely unrelated," he said, adding, "(The lignite plant) is coming along very well. I'm very optimistic about it."

A decision on TVA's participation in the lignite plant and the choosing of a site are expected this month.

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