Huntsville Utilities will build a $2.6 million substation to connect with a new solar development, which is expected to be completed in February 2024.
will purchase electricity from a provider other than TVA. The new project will be part of a green initiative for the utility company while providing what’s expected to be a cost savings, according to CEO Wes Kelley.
The agreement with Toyota Tsusho, which is part of the Toyota group, was made possible in 2020 when the city council approved a power supply flexibility agreement with TVA. That agreement allowed Huntsville Utilities to purchase up to 5% of its electricity from a source other than TVA. Huntsville Utilities will also build a $2.6 million substation to connect with the solar development, which is expected to be completed in February 2024. The agreement approved by the council authorizes Huntsville Utilities to purchase power from the Toyota solar development at $43.85 per megawatt hour with a 1.5% escalator annually for 30 years.
“If TVA were to raise its base rate an average of half a percent a year and increase the fuel cost adjustment by half a percent, the project would provide nearly $500,000 in savings for HU each year,” Kelley’s letter said. “If TVA rates only increase by one-tenth of a percentage point each year over 30 years, then the project would provide less than $200,000 in savings each year.
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