A $350 million Battery Electricity Storage System (BESS) proposed at the Phipps Bend Industrial Park may be delayed by a five-year lead time on purchasing large transformers.
Hawkins County Industrial Development Board Chairman Larry Elkins told the IDB last week that he’d been notified by Tenaska Inc. of a nationwide problem with large transformer lead time, which is running not months but years.
“The lead time on a 500kV transformer is over five years,” Elkins told the IDB. “That’s not acceptable with us or TVA, so they’re going back and looking at the 161kV side.”
Utilizing the 161kV side of the property creates a complication, Elkins noted, because it’s on the far east end of the Phipps Bend substation and would require the construction of a 161kV line and right-of-way.
That right-of-way would involve the 100-acre property under contract for the proposed construction of a silicon manufacturing plant for solar panels.
Elkins said TVA and Tenaska are currently working together to resolve this issue.
“We’ll keep you informed as this project moves forward, hopefully sooner rather than later,” Elkins told the IDB. “They did pay us their first payment of $25,000 (land purchase options) toward this project, and as you know it steps up every six months for total payments — if the project doesn’t go through — of $250,000. Either way we get a little money out of the deal.”
Tenaska proposes to build the $350 million BESS at Phipps Bend by 2026. In February, the IDB approved an option up to four years for Tenaska to purchase 30 acres at the industrial park for the purpose of constructing a BESS.
Tenaska paid $25,000 for the first year and can renew that option annually for another three years at a cost of $50,000, $75,000 and $100,000 for each respective year.
Those payments are nonrefundable, but if Tenaska does eventually purchase the property those payments will be applied to the sale price, which is $3.5 million, or about $116,000 per acre.
The Phipps Bend Industrial Park is a prime location for a BESS facility because of the infrastructure installed in the late 1970s and early 1980s as part of a TVA nuclear power plant project that was started there before being canceled in 1981.
Although it won’t generate many new jobs, the projected $350 million cost of the facility would mean approximately $2.3 million in new property tax revenue the first year.
Over a 20-year period, which is the projected life of the facility under the initial contract with TVA, it would generate approximately $20 million in new county revenue.
WATER BOTTLING PLANT
The board heard a report from IDB Coordinator Rebecca Baker that a proposed premium drinking water distilling and bottling plant, which has an option to buy 5 acres at Phipps Bend, is seeking the use of an old water pump on that property.
The IDB has code-named the unidentified company as “Project Elixir.”
Baker said she put the business owner in contact with the people needed to get the pump house refurbished and ready for use.
“It does need quite a bit of work,” Baker said. “We did put a new roof on it a few years ago. … But it really needs a lot of work.”
Baker said the business owner was in the process of having business plans drawn up, and as soon as those plans are completed he will present them for approval through the Phipps Bend Joint Venture Committee.
The company uses a process to convert tap water into high-end water. The water plant will perform a process on tap water to create “light water” wherein it removes heavy water ions.
The plant is expected to employ 45 people.
The company purchased an option for six months through a $10,000 payment for 5 acres at a price of $22,500 per acre. The company does have the option of extending that for another six months with a payment of another $10,000.
Those option payments are nonrefundable, but if the company purchases the land the option amount paid would be applied to the cost of the land.
SEVEN-ACRE SALE
Baker also gave a report that said the owner of an unnamed business identified as “Project Seven” was ready to close on the purchase of 7 acres at Phipps Bend.
IDB attorney Joel Conkin was contacted to begin the closing process on the land sale.
“We have received some preliminary building plans from him, but we still need the latest version of it,” Baker told the IDB. “I am going to get in touch with him and have him send us the latest version of his plans to get them approved at our next Phipps Bend Joint Venture Committee meeting in a couple of weeks. He is moving forward with this. Hopefully we can get this finished up in just a few weeks from now as far as getting the property sold. He has already paid his $5,000 option payment.”
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