Democrats: TVA blocking renewables, raising rates

Democrats: TVA blocking renewables, raising rates

By Kristi E. Swartz

01/14/2022 07:15 AM EST

Leading House Democrats have accused the Tennessee Valley Authority of blocking renewable energy development and asked the federal agency to explain why it hasn't changed its carbon-cutting goals to align with those of the Biden administration.

In a letter released yesterday, leaders of the House Energy and Commerce Committee also pressed TVA to justify previous rate increases and reductions in energy efficiency programs, arguing that both have led customers across its seven-state Southeastern territory to "pay too much" for electricity.

The letter to the nation's largest public utility may be the first time in decades a congressional committee has weighed in on TVA's rates and electricity mix with such force. Aside from pointing out concerns, committee members asked the utility to respond to 16 questions about its rates, energy efficiency programs and decarbonization efforts by Feb. 2.

TVA is an independent federal agency that provides wholesale electric power across seven Southeastern states. The electric utility is governed by a board and must follow the TVA Act, the 1930s law that created the entity and requires it to provide reliable electricity at the lowest feasible cost. This includes energy conservation, energy efficiency and renewables.

"The committee is concerned that TVA's business practices are inconsistent with these statutory requirements to the disadvantage of TVA's ratepayers and the environment," said the letter from Energy and Commerce Committee Chair Frank Pallone (D-N.J.), Energy Subcommittee Chair Bobby Rush (D-Ill.), Oversight and Investigations Subcommittee Chair Diana DeGette (D-Colo.) and Environment and Climate Change Subcommittee Chair Paul Tonko (D-N.Y.).

The letter comes at a time when the Biden administration has made clean energy, carbon reduction and energy justice the cornerstone of many of its policies. Much of TVA's territory is rural and poor, with many residents paying significantly more for electricity.

Much of the Southeast faces what's called a high energy burden, where a disproportionate amount of household income goes to heat, light and cool homes. This is because the region generally has an older housing stock, lax building codes and loose energy efficiency (Energywire, Aug. 6, 2020).

In the letter, committee members point out that the utility has cut energy efficiency programs, significantly reducing the amount of electricity it saves each year.

TVA also tacked on fixed monthly charges, making it challenging for customers to save money if they conserve energy (Energywire, May 11, 2018).

"The committee finds it troubling that the foregoing policies appear contrived to maintain TVA's load, often at the ratepayers' expensive," the letter states.

For its part, TVA said its rates are lower than those of 80 percent of the nation's largest electric utilities. It also has maintained flat rates for the past 10 years despite increased fuel costs.

In an email to E&E News, the utility wrote: "Even with TVA's low energy costs, we recognize the challenge of high-energy burden in our region." TVA delivers electricity to 153 local power companies and said it works with those utilities and other organizations to help address that challenge, it said in the email. Those efforts include weatherizing and implementing energy efficiency measures in buildings and housing.

Rep. Steve Cohen (D-Tenn.), issued a news release praising the committee's request for information, citing the "heavy financial burden" placed on his constituents. Cohen, who is from Memphis, has long criticized TVA's environmental stewardship, particularly when it comes to coal ash (E&E Daily, April 13, 2021).

Clean energy advocates have often accused TVA of operating more like a regulated, investor-owned utility that is disconnected from the directives of the federal government. The Biden administration has issued several executive orders directing the federal government to transition to clean energy sources.

"I am hoping that this kind of oversight can be a reality check for TVA," said Maggie Shober, director of utility reform for the Southern Alliance for Clean Energy, an advocacy group that has been a watchdog of TVA for decades.

"They do have people to answer to ... and what they do matters, particularly to the Tennessee Valley but also to the federal government, which has clearly stated goals, around climate and decarbonization."

Amy Kelly with the Sierra Club also praised the committee for "taking a hard look" at TVA's operations, arguing that the federal utility should be leading the nation in delivering clean, affordable electricity.

"There is a climate emergency, and TVA must develop more of its electricity from clean energy sources," said Kelly, the Tennessee representative for the Sierra Club's Beyond Coal campaign.

The Energy and commerce Committee members praised TVA for its efforts to cut carbon emissions. Indeed, the electric utility has cut carbon emissions 63 percent from 2005 levels and has set targets to reach 70 percent by 2030 and 80 percent by 2035.

Like many other major electric companies, TVA has a net-zero carbon target by 2050.

While acknowledging those steps, the letter pointed out the 2030 target is a "comparatively unambitious goal of achieving only a 7 percent further reduction" in emissions. What's more, TVA has not revised its carbon-reduction targets to align with those of the Biden administration. In an executive order, Biden called for the power sector to decarbonize by 2035.

TVA also plans to add more natural gas to its fleet, a move that drew the ire of environmentalists and now has captured the committee's attention.

"The Committee would therefore like to understand whether TVA plans to update its decarbonization goals and next integrated resource plan (IRP) to comply with President Biden's executive order and to reflect TVA's statutory role as a national leader in technology and environmental stewardship," the letter states.

TVA plans to start its next IRP process this year, its CEO told E&E News last year (Energywire, April 29, 2021).

"At TVA, we are committed to our role as a national leader in energy generation, innovation, and carbon reduction as part of our mission to serve the 10 million people of this region," the utility said in a statement.

This story also appears in E&E Daily.