11,500 kilowatts – the amount of power Tennessee Valley Authority can suspend within five minutes of picking up the phone to call Murray State.
In a 4-year-old contract, TVA?outlines the conditions of a “5 MR Agreement” with the University. The contract was signed in 2010 by former Vice President of Finances and Administrative Services Tom Denton, who retired in 2013.
The contract states that zero kilowatts of Murray State’s power is considered “protected demand.” It also lays the grounds of how much credit the University would receive for signing such an agreement.
Check out the contract here.
Jackie Dudley, interim vice president of Finances and Administrative Services, said Murray State has received cumulative credits of $1.3 million since the contract was signed.
“Prior to a contract extension or new contract, I would expect the University to closely review the cost savings, the probability of significant power outages and the impact of such an outage on our students and campus,” Dudley said.
Dudley and Interim President Tim Miller said the contract was not reviewed by the Board of Regents. However, Dudley said she isn’t sure if any informal communication was made on the subject.
She said the vice president of Finances and Administrative Services has the power to sign operational agreements.
“Contracts which are not routine are reviewed by legal counsel and authorized by the president before signing,” Dudley said.
Former President Randy Dunn said he knew what the agreement entailed in 2010.
“Decision supported by everyone involved in it administratively—it provided a means for major savings on energy costs with little potential downside risk for disruption given our campus generating capacity,” Dunn said.
Dudley said other universities have similar contracts in place to save on utility costs.
The contract states: “Such availability of 5 MR may be suspended at any time that TVA determines, in its sole juedgement, that such a suspension is necessary or appropriate to address the reliability of the TVA system or the reliability of any portion of the TVA system.”
The suspension must happen within five minutes of notification from TVA, or Murray State could be charged.
If the University cut off power, but only between 10,350 and 11,500 kW in a suspension, Murray State would be charged $36 per kW, according to the contract.
If the University cut off less than 10,350 kW, TVA would charge $60 per kW. If Murray State didn’t comply with TVA at all within the five-minute period, the University would be charged $690,000.
The contract also states that the “company assumes all risk of loss, injury or damage to company resulting from such interruptions or curtailments.”
Dunn said Youngstown State University in Ohio, where he is currently president, has a similar agreement in place to help YSU save money.
“These agreements are not unusual, they offer significant cost savings, and they’re what many places do as part of an energy management program,” Dunn said. “The savings actually benefit the campus as you can plow that money into increased generator capacity—which adds to safety and security overall. Think about the 2009 ice storms. You just gotta make sure the generators work.”
Story by Lexy Gross, Editor-in-Chief
