The Greeneville Energy Authority Board agreed to amend their Power Purchase Agreement with Silicon Ranch for their 3rd solar site in Greene County, which states that GEA will purchase $49 a megawatt hour from Silicon Ranch for a period of 35 years.
GEA has two solar projects with the company based out of Nashville and purchase 5% of their power, while still purchasing the majority of their power from the TVA. The GEA board met last Tuesday and discussed negotiating the agreement for their 3rd site located on Reed Road. The original agreement made on May 10th, 2022 stated GEA would purchase $46 a megawatt hour over the next 30 years with the solar site completion date of December 31st, 2024. This would mean around $10.2M in savings for GEA and customers. But Vice President of Business Development with Silicon Ranch Matt Brown said the project has not been making them money and to break even they’d have to charge $60 a megawatt hour.
The solar project is not buildable under the current agreement due to inflation, labor costs, equipment, and interest rates, according to Brown. Silicon Ranch has had to meet with several other companies to renegotiate their contracts as well but said none of the companies agreements are contingent upon another and have different rates for a variety of reasons.
Brown said Silicon Ranch was negotiating the best price they could offer Greeneville and the lowest price compared to about 10 other utility companies who also have an agreement with Silicon Ranch. Although it was just a $0.03 difference, that is $800,000 less in savings throughout the 30 year period. Even so, the drastic amount of savings was too good to let go, because that’s still about $10.9M in savings over 35 years for GEA and customers.
The amended purchase agreement to be written by Attorney Ron Woods would include language stating that Silicon Ranch would have to be locked in for the next 35 years for $49 a megawatt hour and could not back out of the agreement, it will also include language stating if there is another contract that gets approved with Silicon Ranch for a rate of $46 a megawatt hour, that GEA has the right to renegotiate the contract for that same rate.
Now that the agreement has been approved crews can get started on construction for the project as Brown said everything is ready to go. Four acres of trees got cleared just in time for the approval. The project should be completed by the end of this year.
