Plant Acquisition

6 Months Ended

Jun. 30, 2024

Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]

Plant Acquisition

Plant Acquisition. On June 28, 2024, we completed the previously announced acquisition of Walton County Power, LLC, which owns the Walton County Power Plant, located near Monroe, Georgia, from Mackinaw Power, LLC, an affiliate of the Carlyle Group, Inc. Walton is a three-unit 465 megawatt natural gas-fired combustion turbine facility.

The purchase price was $75,418,000 and other costs associated with the transaction were approximately $2,588,000 (consisting primarily of spare parts, legal and professional services). We accounted for the acquisition as an asset

acquisition. We financed the acquisition on an interim basis through the issuance of commercial paper and submitted a loan application to the Rural Utilities Service for long-term financing. For any amounts not funded through the Rural Utilities Service, we intend to issue first mortgage bonds. We expect that any financing from the Rural Utilities Service or through first mortgage bonds will be secured under our first mortgage indenture.

The following amounts represent the identifiable assets acquired and liabilities assumed in the Walton acquisition:

Classification
	(dollars in thousands)
Recognized identifiable assets acquired and liabilities assumed:
Electric plant in service, net	$	76,730
Other current assets	667
Other current liabilities	(1,979)
Total identifiable net assets	$	75,418

Some of our members elected to take service (scheduling members) at the date of acquisition and some members have elected to defer (deferring members) their share of output through a date no later than January 2027. Prior to the deferring members’ use of Walton, their share of output is being sold into the wholesale market. Residual net results of operations, including related interest costs of deferring members are deferred as a regulatory asset. This regulatory asset will be amortized over the then remaining life of the plant, estimated to be 25 years at January 2027. Amortization of a deferring member's share of the regulatory asset will begin upon taking service. Revenues and costs of output associated with scheduling members are being recognized in the current period.