This blog post was written by Damon Moglen, SACE contractor.
In a widening scandal, President Trump fired the Tennessee Valley Authority (TVA) Board Chair, James “Skip” Thompson, and a Board Member, Richard Howorth, while calling on the remaining Board to fire TVA CEO Jeff Lyash over his decisions to lay off dozens of workers in Tennessee and outsource IT jobs to foreign-based companies.
This episode is an obvious example of how TVA, the nation’s largest public power system, has left behind its roots in serving the public interest and has instead become a bloated, monopolistic federal utility that pays its CEO a shocking $8 million a year.
While the public pressure caused Lyash to ultimately reverse direction on outsourcing the TVA jobs, Lyash and the TVA Board still need to be accountable to ratepayers and prioritize local jobs, as well as the clean and affordable energy TVA customers want.
And now it’s time for Memphis to hold TVA accountable for turning away from prioritizing affordable power for Memphians.
How Memphis has been neglected by TVA
This time of reckoning is not limited to the TVA Board. Well before the much-publicized Board firings, leaders in Memphis have been in the process of evaluating whether or not their local utility, Memphis Light, Gas & Water (MLGW) should continue to buy energy from TVA or leave the utility, a move that multiple studies have shown would save Memphis hundreds of millions of dollars annually.
It’s no secret that TVA has ignored the needs of Memphians for a long time. The utility has gone as far as to admit this failure when CEO Lyash said during a meeting with the Memphis City Council in July, “There are areas where we have not delivered for Memphis in the way that we could have, perhaps even should have.”
While TVA is supposed to provide affordable power for Memphians, it has instead continually raised its rates and under-invested in energy efficiency to the point that Memphians must now devote a larger part of their income to paying their utility bill than do folks in almost any other large city in the country.
SACE has been calling attention to TVA’s abandonment of public power principles through the #NotPublicPower campaign for several years. There are nearly 20 examples of how TVA’s actions have reflected anything but valuing the “public” in their responsibility to deliver public power, including but not limited to:
- Raising regressive fixed fees on customers
- Hiding regressive fixed fees on 85% of customer bills
- Blocking the public from speaking at TVA Board Meetings
- Withholding public information
- Spending customer dollars to undermine the Clean Water Act & the Clean Air Act
- Lobbying to kill public health protections
- Flying executives in luxury corporate jets and helicopters
- Paying executives excessive salaries
While TVA CEO Lyash is paid millions of dollars more than any other federal employee, folks in Memphis have to make tough decisions about paying their bill or paying for essential needs like food and medications.
Adding insult to injury, while Memphis represents approximately 10% of the TVA load, TVA gives back crumbs in terms of economic development and jobs for the city and county. TVA has about 10,000 employees throughout the valley, including 3,400 in Chattanooga and 1,300 in Knoxville, yet TVA employs only about 53 Memphians according to some estimates, despite Memphis being TVA’s biggest customer. So, while other cities in Tennessee reap economic benefits from TVA offices or large clusters of jobs around generating plants or services, Memphis has been left paying for the power and getting cents on the dollar for its decades of investments into the TVA.
New Report Confirms Savings and Economic Opportunities for Memphis By Leaving TVA
But now, Memphians are presented with an opportunity to create lasting change. Memphis leaders and its utility, MLGW, have been undertaking an analysis in its first Integrated Resource Planning (IRP) process to decide whether or not they should leave the TVA and build and/or procure an alternative power supply.
The IRP report is now complete and the results are dramatic: Memphis could save billions of dollars over the next two decades by ending its contract with TVA and going with a cheaper, cleaner alternative power supply. In addition, by spending its money wisely and locally, the report suggests that an alternative power supply could yield some $3 billion in local capital investments, building the local economy and providing much-needed, local employment.
Real Numbers Still Needed
So, what’s the next step? On August 19, the MLGW Board will meet to discuss the IRP and decide whether or not to recommend that Memphis issue a call for bids for an alternative power supply, or stay with the TVA. Under the circumstances, it is very clear that the Board, and in turn city and county leaders, should call for the immediate issuance of an RFP (request for proposals) where MLGW would get actual bids from alternative power providers and would form the basis for making a final decision on whether and how to break away from the TVA.
With Memphians wasting an estimated $1.3 million a day by staying with TVA when they could be getting less expensive power elsewhere, it seems like a no-brainer to issue the RFP. On August 19, the MLGW Board should immediately instruct the utility to work with city and county leaders in issuing an RFP. The people of Memphis deserve cheaper and cleaner power and the economic and jobs benefits that will come with a 21st Century alternative power supply.