The Seven States Power Corp. has secured loans to buy a majority interest in TVA's combined-cycle combustion turbine plant in Southhaven, Miss., Knoxville-based TVA told the Securities and Exchange Commission.
Seven States will pay $325 million for a nearly 70 percent stake in Southhaven, an 810-megawatt plant capable of supporting about 473,000 homes. TVA, created in 1933, has never shared asset ownership before.
But Seven States is no ordinary investor. It is a nonprofit creation of the Chattanooga-based Tennessee Valley Public Power Association, which represents TVA's 159 distributors in Tennessee, Alabama, Mississippi, Kentucky, Georgia, North Carolina and Virginia.
TVA's distributors have long sought an ownership role in the operations of the nation's largest public utility to protect their own interests, share in decision-making on new power plants and potentially lower the cost of electricity by making their tax-exempt financing available to TVA.
TVA began taking this seriously a few years ago when several distributors threatened to leave the TVA system. Most decided to stay, but three Kentucky distributors secured ownership stakes in other power suppliers in their state and still plan to break away when their current TVA contracts end.