Huntsville Utilities maps out the future of local power
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Huntsville Utilities is looking to make some big moves. Photo: Derek Lacey/Axios
Huntsville Utilities wants to change its governance structure, upgrade its infrastructure and increase local power generation with natural gas.
Why it matters: Huntsville wants to add natural gas generation to its profile as it aims to keep up with the area's economic and residential growth, looking to a new pipeline and gas-fired power plants.
Context: Huntsville Utilities' community energy resource plan, released last month, was presented to the Huntsville City Council on Jan. 22 after "a tremendous amount of work" from the city's Energy Task Force, Huntsville Utilities president and CEO Wes Kelley told the council.
- It recommends increasing local power generation and demand-side management, modernizing the grid and changing the utility's governance structure.
Catch up quick: The council passed a resolution for Huntsville Utilities to join the North Alabama Public Energy District in July 2025, joining Athens and Scottsboro in a coalition to explore infrastructure and energy needs for the region, focused mainly on natural gas.
- "This is not a decision tonight on whether to build pipelines or other things," Kelley said at the time. "This is an opportunity to form the entity that will undertake that work."
Zoom in: NAPED is working to secure funding for engineering services for the pipeline — a step that would generate construction estimates and allow the district to pursue capacity agreements, HU spokesperson Joe Gehrdes told Axios.
- Each utility will sign its own capacity agreement for the pipeline, which will firm up revenue so they can borrow money for construction, he said.
State of play: The current agreement with TVA only allows Huntsville Utilities to generate up to 5% of its total electricity, a cap that — along with wholesale power prices — factors into negotiations.
- Nearly all of that 5% is already used by a 130-acre solar operation under an agreement with HU, Toyota Motor Manufacturing Alabama and Toyota Tsusho, Gehrdes said.
- On demand-side management, the plan looks at measures like rooftop solar, battery storage, smart thermostats and water heater controls to mitigate HU's trend toward more intensive peak demand.
Case in point: Upgrading transmission infrastructure from a 46kV grid to 161kV, which would allow the utility to carry more electricity over longer distances and accommodate larger industrial customers, would be a "many-decade-long investment," Kelley told the council Jan. 22.
- On governance, Huntsville Utilities currently has separate boards for gas, water and electric utilities, and is seeking to consolidate those into a single board, appointed by the council.
- Per the report, the move would "allow for a more effective governing structure," which the report says is "critical to reduce the legal, financial, and operational complexity."
What we're watching: Huntsville City Council has a work session on the plan scheduled for Feb. 27 with Huntsville Utilities.