It's a fiscal agent's mission and an educator's dream: Power generation that can reduce energy costs by 46 percent and a generation facility that serves as a laboratory for students.

Merging on-site generation technology with education is the goal of a project taking shape at the University of Tennessee at Martin - the first of its kind in the state.

The idea was conceived as an offshoot of discussions aimed at controlling utility costs and channeling more funds to academics, said Al Hooten, UT Martin vice chancellor for finance and administration. The plan is to secure a lower electric rate from Tennessee Valley Authority in exchange for allowing the utility to remove the university from the power grid up to 72 hours a year during peak periods or emergency situations. The university also will enter into a 10-year contract with TVA.

The 46 percent savings in electric costs will, in turn, provide the university with funds to construct a $4.4 million power generation facility that will power the campus if and when TVA has to take UT Martin off-line. As an added benefit, TVA rates will be monitored hourly. When the rate exceeds UT Martin's cost of power production at the generation facility, the university can go off-line and save additional money. Power generated on campus in the eight megawatt facility may even be sold back to TVA in the future.

Hooten said the equipment in the facility is expected to function 30 years and the debt to be repaid in 10 years. He added, when deregulation of electric utilities occurs, the university "will be in good shape."

And, if that isn't good enough, students will utilize the equipment and data recorded for a laboratory. Engineering students will have access to and can analyze certain data from the generators, including one that will have full instrumentation. Business students will perform cost-benefit analysis related to facility operation during high-energy cost periods. The projections and associated financial analysis should result in additional savings for the university.

Dr. Tom Payne, Horace and Sara Dunagan Chair of Excellence in Banking and Professor of Finance, notes that the project will provide additional educational benefits as students can track and analyze both spot and futures prices in the electricity markets. "This facility will yield dividends beyond cost savings as students perform financial and risk analysis," Payne said. He indicated that the project will give business and engineering students the opportunity to work together just as they will in the "real world" after graduation. "This will give UT Martin students valuable experience and a competitive advantage in the job market."

Payne credited Hooten's leadership and the vision of Dr. Doug Sterrett, dean of engineering and natural sciences, for making the power generation project a reality. "They are to be congratulated for finding a way to save money and, at the same time, add value to our academic programs."

Hooten said Sterrett brought the discussions to fruition. "Doug was working on a lot of energy-related projects," said Hooten. "He said the idea looked good and we started investigating."

Engineering students will have access to and can analyze certain data from the generators, including one that will have full instrumentation. Business students will perform cost-benefit analyses related to facility operation during high-energy cost periods. The projections and associated financial analyses should result in additional savings for the university.

Dr. Tom Payne, Horace and Sara Dunagan Chair of Excellence in Banking and Professor of Finance, notes that the project will provide additional educational benefits as students can track and analyze both spot and futures prices in the electricity markets. "This facility will yield dividends beyond cost savings as students perform financial and risk analyses," Payne said. He indicated that the project will give business and engineering students the opportunity to work together just as they will in the "real world" after graduation. "This will give UT Martin students valuable experience and a competitive advantage in the job market."

Payne credited Hooten's leadership and the vision of Dr. Doug Sterrett, dean of engineering and natural sciences, for making the power generation project a reality. "They are to be congratulated for finding a way to save money and, at the same time, add value to our academic programs."

Hooten said Sterrett brought the discussions to fruition. "Doug was working on a lot of energy-related projects," said Hooten. "He said the idea looked good and we started investigating."