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West Memphis Utilities Commission approves purchase option on Independence plant share, will pay about $100,000 for 2% stake
Summary
The commission voted to exercise its right of first refusal to buy a 2% share of Oola’s 8 MW interest in the Independence power plant; staff said West Memphis’s share would cost about $100,000 and cautioned owners remain responsible for decommissioning liabilities under existing agreements.
The West Memphis Utilities Commission voted Feb. 19 to exercise its co‑owners’ right of first refusal on an 8‑megawatt interest being sold by the city of Oola in the Independence power plant.
Staff described that Oola accepted a $5 million bid for its 8 MW share and that municipal co‑owners — including Jonesboro, Conway and West Memphis — can buy their pro rata share at the same price per kilowatt. The presenter said the purchase price works out to about $2,100 per kilowatt, and West Memphis’s 2% allocation would cost roughly $100,000.
“AECC is electing not to exercise their right,” the presenter said, explaining that some co‑owners determined the amount was not material to their portfolios and would allow the municipals to take the allocation. The presenter asked the commission to approve a resolution authorizing the city to exercise the right; commissioners approved the resolution and staff said it will ask the city council to pass an ordinance to complete the purchase.
Staff framed the transaction as a cost‑saving alternative to building new capacity: purchasing this allocation would be around a 35% reduction compared with constructing a replacement plant, the presenter said. At the same time, staff warned that existing owners remain responsible for decommissioning costs under the original co‑owner agreements.
“We are still financially responsible for decommissioning,” the presenter said, noting the agreements require owners to decommission to a brownfield standard and that long‑term environmental liabilities remain possible. The presenter referenced the White Bluff and Independence timelines as part of those obligations and said some environmental risks — for example, buried asbestos or other legacy materials — could represent future costs.
Commissioners moved, seconded and approved the resolution at the meeting. The presenter said next steps include a city council ordinance to permit the purchase and potential follow‑up negotiations with other co‑owners (Jonesboro and Conway) for any additional allocation that remains available.
The commission’s action consolidates municipal ownership in Independence and gives West Memphis a modest near‑term capital outlay while preserving its pro rata access to generation capacity as coal‑fired units retire and the combined‑cycle gas plant comes online.
