Advocacy group says consumers hurt by ruling on TVA transmission lines

Advocacy group says consumers hurt by ruling on TVA transmission lines

Wes Tomlinson, The Decatur Daily, Ala.

October 27, 20214 min read

Oct. 27—A federal agency's denial of a request by three power companies to use Tennessee Valley Authority transmission systems for delivery of electricity generated by other suppliers will stifle competition and hurt consumers, an advocacy group says.

The Federal Energy Regulatory Commission voted last week to deny the petition from Athens (Tennessee) Utilities Board, Gibson Electric Membership Corp. in west Tennessee, and Volunteer Energy Cooperative in east Tennessee. Joe Wheeler Electric Membership Corp., which has customers in Morgan and Lawrence counties, had been one of the petitioners but withdrew in August.

"We are disappointed in the FERC decision and hope that it is appealed," said Stephen Smith, executive director of Southern Alliance for Clean Energy (SACE). "TVA's self-regulated monopoly is an antiquated regressive system that is bad for competition, customers, clean energy, and the environment."

TVA spokesman Scott Fiedler said the local power companies' request "is fundamentally unfair, and it goes against the foundation of public power."

The petition was filed Jan. 11. In addition to wanting to use the transmission systems while purchasing outside power, including from solar power providers, the local power companies (LPCs) complained about the Valley Program, which involves 20-year contracts that bind local power companies to TVA.

Fiedler said that the contracts address the needs that all power companies have.

"Offering a 20-year partnership option helps both TVA and LPCs better plan for the future and offer increased flexibility to serve customers," Fiedler said. "Plus the agreement gives local power companies the flexibility to generate their own power."

TVA operates the nation's largest public power system, partnered with 153 local power companies — including Decatur Utilities and others in north Alabama — that serve almost 10 million residents in seven states.

"We believe TVA's public power is superior to any other utility model in the world," Fiedler said. "Public Power gives our region a (competitive) advantage."

Maggie Shober, director of utility reform at SACE, said her organization "intervened in this case because TVA was originally founded to be a public power utility, but TVA leadership has managed the utility like an unregulated private corporation that saddles its customers with high costs while failing to invest in low cost clean energy sources like solar, battery storage, and energy efficiency."

Joe Wheeler EMC withdrew from the petition after negotiating a deal with TVA.

"We ended up signing the 20-year contract," said Michael Cornelison, spokesman for Joe Wheeler EMC. "At the end of the day, we care about the interests of our consumers and we found this to be the most cost-effective."

Cornelison said the reality behind a local company building its own transmission system is way too financially demanding.

When the petition was first filed in January, Cornelison said the contracts were "never-ending" and said Joe Wheeler EMC wanted "to have other options open as we continue to seek what is best for our ratepayers."

Smith said in January that TVA didn't want the four utilities to buy from other suppliers because then other TVA customers "will have to pay more."

The lone dissenter in the FERC ruling, Commissioner Allison Clements, said that her agency should acknowledge and respect public interest.

"I dissent because the commission has the authority to grant the petitioners' request ... and because granting their request would be in the public interest," Clements said.

The utilitydive.com website reported that FERC Chairman Richard Glick supported the agency's decision but said Congress should change restrictions on utilities in TVA's footprint to open up the market to competition.

According to a press release from SACE, the next step for the petitioning LPCs would be to file for a rehearing with the FERC.

If the same decision is reached, that decision can be appealed to the D.C. Circuit Court. Whatever the court decides, it could then be appealed to the U.S. Supreme Court.

—wesley.tomlinson@decaturdaily.com or 256-340-2438.