By The Associated Press
BATESVILLE — Panola County could lose as much as $4.4 million in future property taxes if South Mississippi Electric Power Association succeeds in its bid for LSP Energy.
South Mississippi Electric Power Association (SMEPA) has entered into a purchase agreement in Federal Bankruptcy Court in Delaware to buy all assets of LSP Energy for $249 million. It’s not yet a done deal.
Officials tell the Panolian that if SMEPA succeeds the assets of LSP will come off future years’ tax rolls.
Laws made early in the last century to enhance rural electrification gave a property tax exemption to nonprofit rural electric power associations, such as SMEPA. The law affects counties and schools. But that law didn’t include municipal taxes which would mean the city of Batesville would still receive about $800,000 annually if SMEPA is successful.
SMEPA is the leading bidder for LSP’s natural gas-fired electric generating plant at Harmon Industrial Park in Batesville that filed Chapter 11 bankruptcy.
An auction scheduled Aug. 13 in New York will allow remaining bidders an opportunity to outbid SMEPA. SMEPA would have the opportunity to match any better bid.
Ten bidders initially qualified to purchase the bankrupt facility according to court papers. Several bidders later withdrew from the sale.
Local officials said Panola County and South Panola School District are each owed about $1.8 million.
Panola County’s tax consultant Bill Bryant said the county and schools will get payments for back taxes and taxes owed this year the power plant is finally sold. Bryant said the current year’s taxes would be prorated if a nonprofit, rural electric association, like SMEPA, is the successful bidder.