NASHVILLE, Tenn. (AP) — The Tennessee Valley Authority has taken steps toward its first large-scale purchase of solar electricity.
The TVA board on Thursday voted to authorize CEO Bill Johnson to enter into a 20-year contract with NextEra Energy for an 80 MW solar power facility in northern Alabama that officials said offers the most competitive solar pricing they have seen.
The facility will be built near TVA's Colbert Fossil Plant, which TVA is retiring in 2016. Johnson said the location would allow the solar facility to take advantage of the existing transmission system.
The vote was taken in Chattanooga at the TVA's quarterly board meeting. During a public comment period before the meeting, several people asked the board to move away from fossil fuels and toward renewable energy. One of them was Stephen Smith, executive director of the Southern Alliance for Clean Energy.
After the meeting, he issued a statement calling the vote for the solar purchase a positive development.
"Solar is an important resource for our region's economic and job growth and it needs to be more fully incorporated into TVA's system," he said.
The nation's largest public utility currently has 128 megawatts of operating solar installations, but those are mostly small operations. The NextEra facility will be the utility's first solar installation producing more than 20 megawatts.
Director Marilyn Brown questioned the 20-year duration of the contract, saying the most recent data indicates that solar installations can operate for 35 years.
Chief Operating Officer Chip Pardee said no one knows how long an installation on this scale will remain viable, but longer-term contracts could be possible in the future.
Pardee said the utility will pay about $61 per megawatt-hour over the 20-year life of the agreement. He said that's competitive with the $59 per megawatt-hour the utility expects to pay for energy at a Quantum Choctaw natural gas power plant in Mississippi.
The board on Thursday agreed to authorize Johnson to purchase the gas plant at a cost of about $340 million. Pardee said the utility already is purchasing power from the plant and it will be cost-effective to own it.
The board voted unanimously in favor of the gas plant purchase, but Director Virginia Lodge voted against the solar purchase. Lodge said she's a "huge supporter of solar" but would have liked to see a process of competitive bidding for the contract.
In a conference call with the media after the meeting, Johnson said many companies have approached TVA with solar proposals, so officials have a good idea of what constitutes a competitive price.
Earlier, at the meeting, Director Lynn Evans had expressed some misgivings about the solar contract but said, "the fact that the pricing is competitive overrides my other concerns."