My Mike Alexieff

March 24, 2019 - A Nevada man with roots in Kentucky coal has offered to buy the Paradise coal-fired power plant from the Tennessee Valley Authority.

The Kentucky plant, located on the Green River in Muhlenberg County, is scheduled to be closed next year in a decision that was opposed by many.

Coal is piled up at the Tennessee Valley Authority's Paradise power plant along the Green River near Drakesboro on Friday afternoon. The TVA plans to close the plant by the end of next year. 

Photo by Mike Alexieff, The Messenger 

Sam Francis, the 71-year-old owner of Kentucky Emerald Land Company LLC, made an offer of $129 million in a letter to the TVA board earlier this month.

"You can't give away all your secrets," Francis said Friday when asked where the money would come from. He did say it would involve other investors and likely some financing.

TVA spokesman Scott Brooks said Friday the agency was "reviewing" the offer and that any decision would be made by the board.

Brooks said should the TVA decide not to close the plant and instead to sell it, it would have to be through a public auction because of TVA's status as a federally owned corporation.

"I actually didn't know that," Francis said. "I'll get it at a lot lower price at auction."

Michael Gossum, spokesman for U.S. Rep. James Comer, R-Tompkinsville, said in an emailed statement: "Congressman Comer has been informed by TVA and other stakeholders there have been multiple inquiries on the Paradise Plant and he looks forward to learning more about these options. Congressman Comer strongly encourages TVA to consider whichever option is the best long-term for Muhlenberg County and the surrounding communities."

Brooks said the Francis' letter is the only offer in writing the TVA has received.

"I can't say there hasn't been other inquiries," he said.

Gary Jones, director of economic development for the Muhlenberg Alliance for Progress, said, "We're obviously in the business to create jobs and we never want to lose any. Anyway we can salvage those jobs, we'd like to see happen."

The closure of Paradise would mean the loss of about 130 jobs at the plant, and more as support businesses in the community and region closed.

"My love, other than my friends and family, is the coal industry," Francis said.

Accompanying his letter to the TVA was a list of investments that outline Francis' long history with coal. According to the information, Francis, who is from Taylorsville, bought Citizens Deposit Bank in Calhoun at the age of 29.

"The beginning of my financing career for the coal industry started with this bank having made loans for western Kentucky coal projects (e.g. terminal on the Ohio River east of Owensboro, Kentucky)," he wrote.

He owned or co-owned companies such as Pyramid Mining, Kindill Mining, Delta Resources, Western Leasing and Western Land Trust. In addition to mining, particularly in more recent years Francis' companies have owned coal reserves, not only in the Illinois basin but in Virginia and Colorado as well.

Also in the documents he asks that TVA board member Kenny Allen, of White Plains, recuse himself from consideration of Francis' offer. He refers to "a current board member" in the documents, but confirmed during Friday's interview that he is talking about Allen, who was an executive with Armstrong Coal Co. before it filed for bankruptcy in 2017. Francis said he sold his real estate holding companies, which controlled thousand of acres and millions of tons of coal in Ohio and Muhlenberg counties, to Armstrong affiliates for "valuable consideration" including coal and surface royalties.

Francis said he sued Armstrong in 2011 for non-payment of royalties, and that Allen filed a declaration with the court opposing Francis. The court found in Francis' favor on the two main issues, he said, and "because of this very bitter dispute," Allen should recuse himself.

Francis argues that his offer would save TVA the cost of shutting down the plant and, because he would sell the plant's power back to the utility, the cost of building a new plant to replace 1,000 megawatts the Paradise plant puts into the grid. Those factors, plus tax credits and other financial considerations should be worth at least $500 million to the TVA, he said.

The age of the plant does not worry him, Francis said, because TVA has spent more than $1 billion on it in the last 14 years.

"I'm looking at getting a good 10 years out of it," Francis said. "They just put millions into it to bring it up to EPA standards for the next six years. They spent $1 billion on that plant in 2005-2006, and they didn't spend it expecting to only run it for 12 years. I believe the plant's in good shape."

The next meeting of the TVA board is in May.