Entergy Mississippi, a subsidiary of Entergy Corporation, an electricity producer and retailer in the mid south US, has signed a Purchase and Sales Agreement to acquire a 480-megawatt power plant from Central Mississippi Generating Company for approximately $88 million.
Entergy Mississippi plans to invest approximately $20 million in facility upgrades at the Attala plant, which is a natural gas-fired, combined-cycle generating facility, with transaction costs estimated at $3 million, bringing the total capital cost of the project to approximately $111 million or $231 per kilowatt.
Built originally by Duke Energy North America, PG&E National Energy Group purchased the Attala plant in 2000. In early 2004, Central Mississippi Generating Company (CMGC) foreclosed on the plant’s assets and began negotiations with Entergy that eventually led to the purchase and sale agreement.
Entergy currently buys the output of the Attala plant through an agreement put in place in July 2004 with CMGC. The agreement is set to expire when the plant transfers to Entergy’s ownership or in March 2008. The deal will be completed by late 2005 or early 2006, the electricity utility said.
The acquisition of a high-quality, efficient, load-following generation resource such as Attala will help meet our regulated utility’s generating capacity needs and will provide fuel cost benefits, said Wayne Leonard, Entergy’s CEO. This transaction is well aligned with our disciplined, market point of view for capital deployment.