Many cities in the south have started exploring means of expanding their renewable energy but some are facing challenges that could cost than not to achieve this mission. The largest National public utility has started engaging its customers to sign long-term contracts to ensure they use their goods. These contracts will leave the states with tough times and may lead to many years of using fossil fuel.
The federal government, Tennessee Valley Authority serves more than 10 million people in these seven southern states through distribution to local companies. This company has the lowest carbon footprint than many others utilize now and it has plans to reduce its carbon footprint in the next 20 years.
Since October 2019 more than 80% of TVA customers have signed a 20 years, contract to receive electricity from this company. This period of service is greater than the previous agreements period.
There are some largest companies in the TVA systems, which have not been named, and they include and they hold half the TVA accounts. These companies are those that serve Memphis, Knoxville, Chattanooga, and Huntsville, Alabama.
“The distributors who have not signed the contract are the larger municipal and co-ops,” Gracia Amanda said. She added, “local firms and power companies serve the community but they are having pressure from their customer to use renewable energy”
The issuance of contracts that bind companies to TVA in the next 20 years is not ideal compared to the previous contracts that allowed them to bridge the contract after 5 or10 years of service. This contract will limit the ideal of the local firms to develop or bargaining power or electricity that will boost the renewable energy sector, which is demanded by many customers
”The major issue is that the abrupt change of the contract between local companies and TVA,” said Maggie Shober, The Director of power market Analytics with the Southern Alliance For Clean Energy, a Knoxville-based advocacy group. She added, “Local power companies have no control of what TVA uses to produce electricity, but their new contract is more binding than expected.”
TVA officials the companies they are working with partners to ensure they have created a long-term commitment are the fast-changing electricity markets. TVA spokesperson said, “There are plans to reinforce Tennessee valley public power structure to soot the interest of the people we serve,” and “closely checking long-term investment needs to enhance reliable energy at the cheapest price ever in the future.