Volkswagen Group of America Chattanooga Operations has signed an agreement with US-based electric utility EBP, under which the latter will become the energy provider for Volkswagen’s new plant in Chattanooga.

The agreement includes provisions for power service, operations and maintenance, substation construction and leased capacity for industrial growth.

Volkswagen predicts that it will spend approximately $11m a year over the next 20 years for electricity at the facility. In addition to the costs for energy use, there will also be an $11m investment in infrastructure, including $4.2m for sub-station development.

Additionally, the agreement includes provisions for additional growth at Enterprise South, with 10MW of electricity reserved for future customers.

With this agreement, more than $55m in local contracts have been awarded by the city, state and Volkswagen, which includes $10m for Volkswagen contractors and subcontractors, with another $230m over the next 20 years.

Frank Fischer, CEO of Volkswagen Group of America Chattanooga Operations, said: Volkswagen is pleased to partner with EPB in this significant endeavor and I appreciate the efforts of the Volkswagen purchasing team and EPB in finalizing this agreement.