Groundbreaking for the UT Martin Electrical Generation Facility is slated for 10 a.m., April 27, at the site on Derryberry Lane near the Livestock Demonstration Farm, just north of campus. The public is invited to attend.

The idea for the facility 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 (TVA) 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, planned in an isolated area on the university demonstration farm, is expected to function 30 years and the debt to be repaid in 10 years.

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 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.”