UTC's sustainability initiatives UTC energy costs* $3.1 million: Total electric cost in 2009* 7.5: Percentage of state appropriations* 23: Percentage increase in electric costs in three yearsSource: UTC
Energy costs are bleeding a cash-strapped UT system, and trustees say TVA needs to cut universities a deal on utility costs if they are going to weather a $100 million budget shortfall in 2012.
"Some of the biggest increases we see in overhead costs are utility costs," said Doug Horne, chairman of the UT efficiency and effectiveness committee. "We have got to work on it. We are a big institution, and we want TVA to treat us as such. We want a better rate."
University of Tennessee administrators, with the support the UT board, said they want to meet with Tennessee Valley Authority executives to try to negotiate a lower energy rate.
TVA has 50 large industrial customers and eight federal entities that are under individual contracts and receive power directly from TVA instead of distributors, Mr. Horne said. They include the Oak Ridge National Laboratory in Oak Ridge, Tenn., which is tied to the University of Tennessee. All UT campuses currently are served through local utility companies, he said.
"I am saying let us suggest a long-term contractual agreement to buy power from TVA at a lower price," said Mr. Horne. "We would ask for it in the name of efficiency and effectiveness."
John Trawick, senior vice president of commercial operations and pricing for TVA, said that once an entity enters the system and signs on with a designated provider, it stays with that provider.
Both TVA and its distributors would have to agree to any changes, Mr. Trawick said.
"TVA has not been approached by the University of Tennessee board of trustees about the university's power rates," he said. "Since UT is not a direct-serve customer of TVA, the local power distributor for UT, UTC, UT Martin and UT Memphis provides power to these individual campuses."
University of Tennessee at Chattanooga officials said lowering energy bills would curb tuition increases and help keep state universities financially accessible.
"The UTC campus supports the board and the president's initiative," said Richard Brown, vice chancellor of finance and operations at UTC. "Utility costs continue to challenge the budget."
Even with an enhanced energy plant and campuswide sustainability plans in place, UTC's electricity costs rose 23 percent in the last three years. The 2009 bill was 3.1 million, 7.5 percent of state appropriations, he said.
"That is pretty significant when we are challenged with budget cuts," he said. "I would love to see some control over large exponential increases on an annual basis."
Officials with the Tennessee Board of Regents said they will be interested to see the results of the conversations between UT and TVA.
The board manages such four-year schools as Middle Tennessee State University, the University of Memphis and East Tennessee State University, the state's 13 community colleges, including Chattanooga State Community College, and its 28 technology centers.
So far, the Board of Regents has not approached TVA about becoming a direct-serve customer, said Dick Tracy, executive director of facilities at the Board of Regents.
"There are different programs that TVA has offered, but they are offered through the local utility," said Mr. Tracy. "We have never gone as a system and sat down with TVA. That would be interesting, if we could."