TVA is moving to buy more natural gas and solar power generation as the federal utility continues to move away from coal-fired generation.
The Tennessee Valley Authority today approved a plan to buy the 760-megawatt Quantum Choctaw combined-cycle power plant near Ackerman, Miss. for $340 million.
TVA directors also approved a plan to enter into a power purchase agremeent to buy the power from a new 80-megawatt solar farm to be built near TVA's Colbert Fossil Plant in North Alabama.
"This allows us to be greener and cleaner at low cost," TVA Director Lynn Evans said.
Charles "Chip" Pardee, TVA's chief operating officer, said the delivered price of power from both plants will be comparable to TVA's current generation costs of about 6 cents per kilowatthour. Both plants help TVA reduce its carbon emissions to help meet pending new EPA rules, Pardee said.
TVA has previously contracted to buy the power generated at the Choctaw plant, which was built seven years ago. The plant is owned by an affiliate of Quantum Utility Generation, which bought the plant about three years ago from GDF Suez North America.
Pardee said TVA budgeted $400 million to buy the gas plant, "but we were successful in our negotiations" to be able to acquire the plant at a lower price.
"We want to own rather than rent -- that's the story," TVA Director Peter Mahurin said.
Since 2007, TVA has built or bought five combined-cycle gas plants with 3,900 megawatts of capacity. In the past year, the agency has approved construction of two more gas plants to replace aging coal-fired plants.
Next Era Energy Resources, formely Florida Power and Light, will build the new solar facility, which TVA will lease for the next 20 years.