UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13, 15(d), or 37 of the Securities Exchange Act of 1934
Date of
Report (Date of earliest event reported): September 30, 2008
TENNESSEE
VALLEY AUTHORITY
(Exact
name of registrant as specified in its charter)
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A
corporate agency of the United States created by an act of
Congress
(State
or other jurisdiction of incorporation or organization)
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000-52313
(Commission
file number)
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62-0474417
(IRS
Employer Identification No.)
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400
W. Summit Hill Drive
Knoxville,
Tennessee
(Address
of principal executive offices)
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37902
(Zip
Code)
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(865) 632-2101
(Registrant’s
telephone number, including area code)
None
(Former
name or former address, if changed since last report)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
[ ] Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[ ] Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
[ ] Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Item 8.01
Other Events.
On September
30, 2008, Seven States Power Corporation (“SSPC”) exercised an option to buy a
portion of TVA’s Southaven Power Plant, a combined-cycle electric generating
facility (the “facility”) located in Southaven, Mississippi. SSPC
bought this portion through its wholly-owned subsidiary, Seven States Southaven
LLC (“SSSL”). SSSL paid TVA approximately $325 million and purchased
an undivided 69.69 percent interest in the facility. Funding for the
purchase was provided through loans obtained by SSSL. The loans were
provided by JPMorgan Chase Bank, N.A., CoBank, ACB, and Branch Banking and Trust
Company.
SSPC has the
ability to acquire up to a 90 percent undivided interest in the facility
and may increase its ownership in the facility up to this amount on or prior to
May 9, 2009. SSSL and TVA have entered into a lease under which TVA
leases SSSL’s undivided interest in the facility and operates the entire
facility through April 30, 2010.
As part of
the transaction with SSSL, SSSL has the right at any time and for any reason to
require TVA to buy back SSSL’s interest in the facility at SSSL’s original
purchase price (plus SSSL’s share of any capital improvements) minus
amortization costs that TVA pays under the lease. As
part of any such buy back, TVA would pay off the remaining balance on SSSL’s
loan, with that amount being credited against the buy-back price that TVA would
pay to SSSL. A buy back may also be triggered under certain
circumstances including, among other things, a default by
SSSL. Finally, TVA will buy back SSSL’s interest in the facility if
long-term operational and power sales arrangements for the facility among TVA,
SSSL, and SSPC are not in place by April 30, 2010. TVA’s buy-back
obligation will terminate if such long-term arrangements are in place by that
date. TVA will recognize the buy-back obligation on its balance sheet
as a long-term liability.
SIGNATURE
Pursuant to the requirements of the
Securities Exchange Act of 1934, the registrant has duly caused this report to
be signed on its behalf by the undersigned hereunto duly
authorized.
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Tennessee
Valley Authority
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(Registrant)
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Date:
October 6, 2008
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/s/ Kimberly S. Greene |
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Kimberly
S. Greene
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Chief
Financial Officer and Executive Vice President, Financial
Services
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