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Board approves long-term natural gas supply agreement with Tennessee Energy Acquisition Corp.
Summary
The board approved a resolution authorizing a long-term fixed wholesale natural gas supply agreement with Tennessee Energy Acquisition Corporation (TEAC), presented as a multi-decade contract to mitigate market volatility.
The Board of Mayor and Aldermen voted to authorize a long-term fixed wholesale natural gas supply agreement with Tennessee Energy Acquisition Corporation, approving the resolution by voice vote.
City staff said the current 20-year contract with TEAC expires next year and recommended renewing the agreement to secure lower, more reliable gas rates and to hedge against short-term market spikes. Ryan, a city staff member, said the recommended agreement “helps us get lower reliable gas rates” and provides hedging that “helps mitigate some of that risk.” He said the contract length discussed in the meeting was described as “not to exceed 30 and a half years” (366 months) as stated in the transcript. Alderman Hubbard moved the resolution and Alderman Gregg seconded; the board approved the measure 6 to 0.
Why it matters: the contract is intended to stabilize gas supply costs for municipal utility customers by locking in long-term pricing and hedging strategies. The board’s approval authorizes city staff to proceed under the terms presented in the meeting record.
Details recorded in the meeting note the recommendation, the intended multi-decade term as stated by staff, and the unanimous board vote to approve the resolution.
