New York (AP) Duke Energy is building a new coal-fired power plant in Tennessee that will generate electricity for consumers by buying electricity from natural gas plants that are being shut down due to climate change.
The company plans to use $15.5 billion in taxpayer dollars to build the new $6.5-billion Kemper Power Station in Chattanooga, Tenn., and to purchase natural gas from a Tennessee utility.
The project, first reported by The Associated Press, is part of a broader push by the utility to become more efficient and save money in the face of the warming climate.
The new plant will produce up to 5.7 million kilowatt-hours of electricity a year, according to the state’s utility commission.
The company is also purchasing an additional 3.5 million kilowsatt-years of electricity for its Tennessee and Ohio coal-burning plants, which are being converted to natural gas for use in the Tennessee power grid.
It will generate more than 100 million kilovolts of electricity per year, and will have a capacity of 690 megawatts, which is more than two-thirds the capacity of the plants already operating in the U.S.
The plant, which was first approved in 2012, will be the largest of its kind in the country, with a capacity to generate more power than all the coal plants in the United States combined, according a Duke spokesman.
Kemper Power Plant in Chattanooga is being built to generate electricity.
(Photo: Duke Energy)The Tennessee utility commission approved the project after a two-year study and a $4.6 billion contract award from the state legislature.
The commission is currently seeking to make $1.3 billion in payments under the state utility’s long-term contracts to the company.
The state’s $1 billion payment includes $2.2 billion in upfront costs for the plant and the remaining $2 billion would be payable in 2028 under the Tennessee renewable energy program.
Duke is also buying electricity at lower prices in the years ahead as it seeks to cut its carbon footprint.
In 2015, the company announced a deal to buy coal-powered power plants for about $3.5 trillion, according the AP.
The $3 billion contract was the largest in history at the time.
In Tennessee, Duke is building new power plants in several states and a new $2-billion facility in Tennessee, which will be used to generate power for residents of the state.
The new Kemper plant is located in Nashville, where Duke operates two power plants.
The Tennessee power plant, the largest project in the state, is expected to produce nearly 7.4 million kilonewatt-hour of electricity annually.
Duke will purchase electricity from Tennessee-based Gas Natural Resources, which operates four plants in Tennessee.