BATESVILLE — The U.S. Department of Agriculture is providing a loan for South Mississippi Electric Power Association (SMEPA) for work at a the Batesville generation facility according to a news release.

The federal agency Friday announced it is providing $181 million to SMEPA to purchase two natural gas-fired combined cycle units for the Batesville Generating Station. SMEPA bought the facility in bankruptcy court.

SMEPA’s purchase of LS Power last year was viewed as an unwelcomed purchase by local officials, because the non-profit electric cooperative is exempt from county ad valorem taxes and school taxes.

The former owner, LSP Energy, had enjoyed 10 years of tax exemptions and was on the county rolls for the first year, in 2010, prior to declaring bankruptcy in 2012. It was approximately $4.5 million in arrears for local taxes.

During the last legislative session District 10 State Senator Steve Hale authored Senate Bill 2251, which would have required SMEPA to pay ad valorem taxes in Panola County.

SMEPA opposed the unsuccessful bill because it would have created an annual tax liability of approximately $10 million, said a spokesman for the electric cooperative.

This year the electric cooperative paid $9.3 million in past-due ad valorem taxes and paid approximately $3.7 million to Panola Partnership to settle a contract.

SMEPA also made a one-time voluntary payment of $2 million, to  Panola County ($500,000) and South Panola Schools ($1.5 million) to help ease the burden of loss tax revenue for those entities.

The facility was on the county books for $200 million according to the county’s tax assessor’s office. With commercial and industrial property assessed at 15 percent of value, local entities lost a $30 million asset for taxing purposes and school district and county officials are scrambling to come up with the difference, even with a $2 million payment.

SMEPA had been buying a third of the 837-megawatt plant’s power under a long-term contract since 1998.

SMEPA generates and transmits power to 11 cooperatives in southern and western Mississippi, serving more than 400,000 customers combined.

Batesville Generating Station is located in the Harmon Industrial Park, where turbines utilize natural gas-heated water to produce electricity from steam.