Springfield electric co-op adding Arkansas plant

Associated Electric Cooperative Inc. has reached a $75 million deal with Tampa, Fla.-based TECO Energy Inc. (NYSE: TE) to purchase an unfinished power plant in Dell, Ark. TECO halted construction in September 2003, citing volatile natural gas prices.

The purchase is expected to finalize in the third quarter and is subject to regulatory approval.

Nancy Southworth, communications manager for AECI, said the purchase fills a hole the co-op had in its future power-generating capability.

“We will have a need for some additional power in 2007, and this was a moth-balled power plant that TECO owned and was interested in selling,” she said. “The plant was partially completed, so the timing was right; the plant can be completed and available to generate power in that 2007 time frame.”

If approved, the purchase would add between 500 and 600 megawatts of energy production to AECI’s 4,031-megawatt capacity.

TECO, an integrated energy holding company with regulated utility businesses, is using the sale as an opportunity to get out of the merchant power business, according to company Chairman and CEO Sherrill Hudson.

“We continue to execute our strategy and to focus on our strong regulated businesses in Florida and our profitable unregulated businesses,” Hudson said in a news release. “The cash from this sale will help us meet our objective of retiring 2007 debt maturities and having additional cash for investing in our businesses – primarily our regulated utilities.”

Southworth added that the purchase price was very agreeable for AECI because of TECO’s eagerness to sell.

AECI engineers are assessing the co-op’s cost to finish building the plant, Southworth said, adding that the plant would employ about 20 once it is operational.

AECI is a co-op that serves more than 800,000 customers, mostly residential, in rural Missouri, southeast Iowa and northeast Oklahoma. It provides electricity wholesale to several utility companies that, in turn, supply energy to their customers.

The co-op also recently announced plans to build a new $1 billion coal-powered generating plant by 2011 in rural Carroll County, in northwest Missouri.

[[In-content Ad]]