The Tennessee Valley Authority, faced with significant dissatisfaction among its 28 Mississippi power distributors, apparently has moved far enough from its original position about new , 15-year contracts to persuade most of them to support a major private-sector power generating plant.
The giant federal utility’s movement toward something less than a 15-year contract for its 28 Mississippi power distributors apparently is enough to convince an overwhelming majority to throw their (and their customers’) purchasing poower into plans for a $500 million, private-sector power generating plant.
Phillips Coal Co. and CRRS Capital are involved in the project to mine lignite coal in either Choctaw or Webster counties and then use the fuel to generate electricity at a nearby plant. TVA would be the plant’s sole customer so far as is known, but TVA only gave the project its full public support this week. That support came after 23 of the 28 distributors (distributors are autonomous entities like Tombigbee Electric Power Association and the Tupelo Water and Light Department) signed modified contracts. All the unsigned power distributors except Four County, headquartered in Columbus, are expected eventually to close ranks. Four County, much to TVA’s consternation, wants to withdraw from the authority’s service area.
The modified contract would retain a 10-year cancellation provision (the distributors must wait 10 years to sever ties after giving notice of contract cancellation), and add a five-year agreement, but not a binding contract, that distributors would not seek cancellation for five years before activating the 10-year provision.
Supporters of the new contract plan and the lignite plant believe the projects will mean an economic boon to an economically underdeveloped area. The state would pump in about $30 million for infrastructure improvement. The generating plant would employ about 100 people, the lignite mines about 200. Combined payrolls are projected at about $10 million per year. About $7 million annually would be generated in various local and state taxes.
The only big questions about the project’s desirability came from the power distributors, and those opinions needed to be fully discussed. The problems appear to have been resolved to the satisfaction of most.
Get on with the project, and track carefully its economic impact against expectations.