TVA chooses Choctaw County site for lignite plant

CATEGORY: TVA Tennessee Valley Auth.

AUTHMARTY

TVA chooses Choctaw County site for lignite plant

By Marty Russell

Daily Journal

The Tennessee Valley Authority, in conjunction with two private developers, has chosen Choctaw County as the site for a $480 million combination coal mine and power generating plant that could result in more than 9,000 jobs in the north central Mississippi area.

The announcement comes on the heels of a similar decision by TVA to purchase power from a privately owned, gas-fired power plant to be built in Batesville. A third power plant in the north Mississippi area has been proposed in Fulton but the developer of that project said he is still looking for investors.

TVA, along with Phillips Coal Co. and CRSS Inc., had been looking at two sites for the lignite coal project in Webster County and Choctaw County although, initially, Choctaw County appeared to be the preferred site. Speculation was that the Webster County site was proposed as a means of pressuring 4-County Electric Power Association, which serves Choctaw County, into signing a 15-year contract with TVA.

The federal agency had said it needed an additional five-year commitment over the normal 10-year contract from each of its 28 Mississippi distributors in order to make the power plant feasible.

The Natchez Trace Power Association, which serves Webster County, had already signed an agreement not to cancel its TVA contract for 15 years. But when 4-County relented and agreed to sign the contract extension, the Natchez Trace Power Association expressed second thoughts about its contract extension with TVA.

Now, however, all parties involved appear happy with the situation although two of the Mississippi power distributors still have not agreed to the five-year extension of their contracts.

“We went back this past Monday and reapproved our five-year extension,” said Pete Fortner, a vice president of the Houston-based Natchez Trace Power Association and mayor of Eupora in Webster County. “As far as I’m concerned, if they finally made the announcement, that’s the best news I’ve heard for a while. I think it will be good for the entire area.”

The two holdouts for contract extensions are the Northeast Mississippi Electric Power Association in Oxford and the North Central Mississippi Electric Power Association in Byhalia.

Robert Collier, manager of the Northeast Mississippi Power Association, could not be reached for comment Thursday.

Site selection

The announcement about the site for the lignite project was made after TVA Chairman Craven Crowell and board member Johnny Hayes met with 1st District U.S. Rep. Roger Wicker and Mississippi’s U.S. senators, Thad Cochran and Trent Lott, on Thursday. Crowell and Hayes said they had received a staff recommendation that the plant and mine be located in Choctaw County. A special meeting of the three-member TVA board has been scheduled for July 11 in Choctaw County to formally accept the recommendation.

According to TVA, the Choctaw County site was chosen over Webster County for three reasons. The location better supports plans to strengthen electricity transmission in the lower part of TVA’s Mississippi service area, particularly around Philadelphia, the agency said. In addition, the quality of the lignite coal is better in Choctaw County with less moisture, sulfur and ash than the reserves in Webster County, according to TVA. Finally, the coal is closer to the surface in Choctaw County and would require shallower mining and easier reclamation of the land afterward.

The power plant will generate 400 megawatts of electricity when it goes on line, tentatively set for the year 2000. During construction it is expected to employ about 700 for two years with an annual payroll of about $26 million. When completed, it will employ about 200 in the mining operation and another 100 in the power plant with an annual payroll of about $10 million. The state Legislature this year approved $30 million for infrastructure development around the site.

“The lignite plant will be the third largest construction project ever in our state,” said Lott.

A study by Mississippi State University indicates the project could generate more than 9,000 jobs in housing, commercial construction and support industries. The 13,000-acre lignite reserve on which the plant will be located is adjacent to a planned industrial park where a paper mill already has expressed an interest in locating.

“The potential for spinoff development is almost unlimited,” said Wicker. “The plant is going to produce tremendous opportunities for business, industrial and infrastructure development throughout the region.”

Earlier this month, TVA announced it had agreed to buy power from a natural gas-fired power plant to be built in Batesville by LS Power of St. Louis. That plant will generate 750 megawatts of electricity and cost $400 million to construct.

A smaller power plant that would generate 80 megawatts of electricity by burning waste wood from area chipping, milling and logging operations has been proposed on the Tennessee-Tombigbee Waterway at Fulton.

However Larry Howard of Twenty-First Century Energy Co. in Nashville, the company behind the proposed Fulton plant, said he is $1 million shy of the amount needed to move that project ahead. The estimated total cost of the project is about $180 million.