An update on Jackson Energy Authority’s contract agreement with the Tennessee Valley Authority highlighted JEA’s Board of Directors monthly meeting.
“Several months ago, JEA was notified by TVA of an option to sign a new contract that would provide some rate incentives but would also require a longer term,” said Monte Jones, JEA’s chairman of the Board of Directors, “As this is an important decision for JEA, we have talked with other utility companies as well as consultants to determine the best course of action for JEA rate payers.
“In review of the potential savings, JEA has also realized that reliability is a key factor in any decision regarding power supply and TVA does provide very reliable service to the JEA system.
“JEA will continue to review options for savings through TVA and the board plans to discuss next steps in the contract review at upcoming meetings.”
Monte Cooper, senior vice president of the electric division of Jackson Energy Authority, led the discussion.
“A little over a year ago, Jackson Energy Authority and all other local power companies (LPC) were offered a long term contract by TVA that provided a 3.1% discount on standard service power and allowed for 5% flexibility for each LPC to generate or purchase other locally generated power,” Cooper said, “Many will be using this flexibility on solar projects to increase renewable energy in their footprint while saving money on purchased power. The long term contract came with a 20-year notice provision that renews annually. In other words, any time an LPC decides they want to stop buying power from TVA, they will have to give a 20-year notice to leave.”
The 20-year notice provision would change JEA’s present contract notice period, which is five years, substantially.
“So JEA decided to issue RFP’s (Request for Proposal) to other power suppliers to see what the open market cost of power could be, assuming TVA would wheel that power to Jackson over its transmission lines,” Cooper said, “RFP results did show that JEA could save around 8% annually by purchasing power from the market.
“However, with TVA’s transmission system closed for wheeling and Jackson “being inside the fence,” getting that power to our substations is a challenge.””
Cooper said at this point, JEA has decided to stay – in the short term – with the contract it has in hand with TVA – a five-year notice provision – while continuing to monitor transmission developments and consider all power supply options.
“This includes continuing to work closely with TVA on its offering,” Cooper said, “Ultimately, our goal is to ensure that power supply to Jackson Energy Authority customers remains affordable and reliable for years to come.”
(PHOTO: Monte Cooper)
