TUPELO, Miss. — TVA helped attract $9.2 billion in projected new investments in its seven-state region with an estimated 58,000 jobs from the announcements of new and expanding businesses in the 12-month period ended Sept. 30, according to the public power provider.
Although down from the previous year, the business announcements in fiscal 2023 totaled the third highest year on record for the Tennessee Valley Authority.
John Bradley, vice president of economic development at TVA, said rising interest rates and slower global economic growth have slowed the pace of new investment and the pipeline for new projects in the region from the torrid pace in recent years.
"We're running about 20% below what we were at this time a year ago, but we still have a lot of prospects in the pipeline," Bradley said in an interview. "But we're seeing a lot of interest from the suppliers of the major EV (electric vehicle) and battery companies we have already landed. The projects aren't as big, but we're staying busy and I think we'll have another good year for jobs and capital investments."
The Congressional Budget Office projects business investment will grow less than 2% this year and next but should rise again to 3.5% by 2025.
At one point a few years ago, TVA economic recruiters were pursuing 30 different projects valued at more than $1 billion, Bradley said.
"That was unprecedented," he said. "We'd never seen anything like it."
Two years ago, Tennessee landed its biggest business project ever when Ford Motor Co. and SK Innovation announced plans to build a $5.6 billion "Blue Oval" city to make electric vehicles and batteries.
Ford's EV announcement is among more than $90 billion of new investments in Tennessee during the past decade, including more than $10 billion of investments in electric vehicle, battery and other EV-related plants. Collectively, such projects have added or retained an estimated 682,476 jobs.
'Buckle of the battery belt'
In Chattanooga, Volkswagen of America invested $800 million to begin production of its all-electric ID.4 sport utility vehicle, boosting its Chattanooga plant size to more than 5,500 employees. The battery maker Novonix has invested $160 million in the former Alstom factory in The Bend to make its synthetic graphite material and the Novonix is looking at building another $1 billion plant in Chattanooga.
In Etowah, Tennessee, Piedmont Lithium Inc. is investing $582 million to produce battery-grade lithium hydroxide to serve the growing electric vehicle market.
Tom Waters, a University of South Florida professor who studies growing industries, predicts Chattanooga could become "the buckle of the battery belt" growing across the Southeast.
Charging up TVA
TVA, the nation's biggest public power utility, is promoting the shift to electrify the transportation sector, including its support for the "Fast 50" program to provide recharging stations every 50 miles on highways across the Tennessee Valley.
TVA President Jeff Lyash said TVA also offers both affordable and reliable power for the growing and energy-intensive battery and EV industry.
"One of the major reasons that businesses and industries are moving into our region is that our power is affordable and reliable," Lyash said in an interview. "TVA has some of the lowest priced industrial rates in the country and that is helping to fuel our industrial growth. Not only is TVA open for business, we are developing solutions to accelerate growth."
By next October, TVA plans to commission a new 500-kilovolt substation — one of the largest in the TVA system — and add 9.9 miles of new transmission lines to serve the new Ford plant. TVA is also building 3,800 megawatts of new generation by 2028 and investing $3.7 billion in transmission system improvements to serve its growing power demand.
Lyash said TVA's power load is now growing by about 1,000 megawatts a year, or enough power for about 500,000 homes.
"We expect that to continue for at least the next three years with in-migration and electrification of new and expanding businesses," he said. "Many of these projects (landed by TVA) are the jobs of the future."
Bradley said the Tennessee Valley has ready-to-build sites and TVA offers industrial rates averaging more than 16% below the U.S. average, according to the U.S. Energy Information Administration.
"Electricity to battery makers is like a raw material, and I think we have a real advantage," Bradley said.