CORRECTION: This story was updated at 10:07 a.m. on Saturday, March 14, 2020, to correct the last paragraph. An earlier version incorrectly said that GDS Associates, rather than Siemens Corp., was conducting the Integrated Resource Plan for MLGW. In 2019, GDS Associates performed a study for MLGW related to the economics of an offer from Nuclear Development, LLC to provide capacity and energy.
One of the biggest customers of the Tennessee Valley Authority has signed a 20-year power agreement with the federal utility and will build another major solar farm in East Tennessee.
Knoxville Utilities Board voted Thursday to approve a long-term purchase power pact with TVA, bringing to 138 the number of municipalities and power cooperatives in TVA's 7-state region to sign the 20-year contracts since they were first offered last fall.
As part of the agreement, TVA will provide a 3.1% rebate to KUB, saving the city-owned utility $9.5 million a year, and will help support Knoxville's plan to build its own 212-megawatt solar farm projected to supply about 8% of KUB's annual electric load.
KUB will build its own solar generating facility under TVA's Green Invest program to help meet the renewable goals of private companies wanting to buy only renewable power. The program is modeled on similar agreements made in 2018 with Facebook and Google, which are buying power from the biggest new solar farms built so far in Alabama and Tennessee.
Vanderbilt University recently announced the first Green Invest project since the program was made available across the Valley in 2019 and has contracted with Silicon Ranch to build a 35-megawatt solar farm in Bedford County to supply its energy needs.
TVA and KUB leaders heralded the new 20-year contract, which was signed Thursday.
"As a leader in the development of cost-effective renewable energy, we are excited to partner with KUB to bring even more clean energy to the grid for their customers," TVA President Jeff Lyash said.
KUB President Gabriel Bolas called the agreement and solar farm project a "landmark purchase of renewable energy for our customers."
But some environmental leaders who urged Knoxville utilities not to commit to buying most of its power from TVA for so long denounced the decision. Stephen Smith, executive director for the Southern Alliance for Clean Energy, called TVA's claims "BS spin" and predicted "KUB leaders will curse this day."
"Never before has a utility given up so much for so little — a 20-year evergreen contract in this dynamic electric market is a fool's errand!" Smith tweeted.
The Southern Alliance for Clean Energy, Friends of the Earth and others are urging TVA distributors to consider buying more renewable power from independent solar and wind producers and not to continue to rely upon TVA for their all of their power. Although TVA generates most of its electricity from non-carbon sources including nuclear and hydroelectric power, only a tiny share of its energy now comes from either solar or wind power.
Maggie Shober, director of utility reform for the Southern Alliance for Clean Energy, said the KUB decision "locked its customers into TVA despite potential future savings and opportunities for clean energy."
Four of TVA's five biggest municipal power distributors, including EPB in Chattanooga, have signed the new contracts to buy most of their power from TVA over the 20 years in exchange for the 3,1% rebates and the more flexible Green Invest program options.
But TVA's biggest customer, Memphis Light Gas & Water, is considering a plan to split with TVA after more than 80 years of relying upon TVA as its sole power supplier.
MLGW has hired an independent consulting firm, Siemens Corp., to conduct an integrated resource plan to help inform the city-owned utility's decision about its future power supply. That study is supposed to be complete in late-April or early May.
Contact Dave Flessner at email@example.com or at 423-757-6340.