For the first time in its 87-year history, the Tennessee Valley Authority is allowing the municipal power utilities and electric cooperatives that distribute TVA electricity to generate up to 5% of their own power to sell directly to their customers.
TVA announced Monday that it is offering a more flexible purchased power agreement to those local power companies such as Chattanooga’s EPB that have signed long-term contracts to buy most of their power from TVA. After an environmental assessment and public review this year, TVA said it will now allow its distributors to build their own solar farms or other power generating facilities to help serve part of their power load.
The contract flexibility is expected to spur more solar and other renewable power generation in local communities across TVA’s 7-state region, especially if solar panels and wind turbines continue to become more efficient and the power they produce becomes relatively cheaper. EPB, for instance, has budgeted $10 million in the next fiscal year to explore building some of its own solar generation or battery storage under the new contract provision.
“This option empowering local generation adds another avenue to grow distributed and renewable energy resources across the Valley,” said Doug Perry, TVA’s senior vice president for commercial energy solutions. “Working with our local power company partners, we continue to bring new solutions to market that reduce carbon, meet changing customer needs and attract jobs into our communities.”
The move reflects the growing trend toward smaller, distributed energy generation from solar, wind and other renewable sources located closer to where the power is used rather than the giant, base-load coal or nuclear plants wholesale utilities like TVA have built and operated for decades.