Sales of 'green power' exceed TVA supply

Sales of 'green power' exceed TVA supply
Utility has plans to raise production

By Duncan Mansfield
Associated Press

KNOXVILLE, Tenn. — The Tennessee Valley Authority's renewable energy program, the largest in the Southeast, is selling far more premium-priced "green power" than it produces, according to an internal audit.

The nation's largest public utility sold 11.6million more megawatt-hours of renewable electricity last year than it made — a 42percent deficit from the 27.4million megawatt-hours generated, according to a TVA inspector general's report obtained by The Associated Press.

Fifteen wind turbines being erected on a former strip mine on Buffalo Mountain near Knoxville could turn that deficit into a huge surplus that would make renewable energy available to more consumers.

But without the windmills, the national accreditation of TVA's Green Power Switch program hangs in the balance.

"From day one we were in a deficit," program manager Gary Harris said. "We didn't have any facilities. But that was the design of our program."

At the program's start four years ago, the utility committed to supply Green Power Switch with homegrown energy — instead of buying credits for green power generated outside the sometimes smoggy Tennessee Valley. The authority would add generation as consumer demand grew, but an assortment of delays hampered the plan.

Fifteen solar collectors built around the valley provided more visibility for the program than power. Three small wind turbines on Buffalo Mountain were more of an experiment than power generators.

The main supplier was to be a landfill gas conversion project near Murfreesboro that never worked. A new source was found in Memphis, but it took time to develop — burning methane from the city's wastewater treatment plant at TVA's Allen plant.

Expanding the Buffalo Mountain wind farm with 15 larger turbines, owned by Chicago-based Invenergy LLC, could give Green Power Switch its first significant surplus.

But property negotiations and expiration of federal tax credits delayed the project more than a year. The windmills are now being hauled up the mountain and should be operating by early next year.

TVA has had its challenges in developing supply, but they are in good standing with us," said Dan Lieberman with the Center for Resource Solutions, the national green power accrediting group in San Francisco.

Under association rules, an accredited utility has one year to make up a supply deficit — a so-called "true up" period.

The Tennessee Valley Authority has "stayed within the `safe harbor,'" Lieberman said, "although we are definitely watching carefully."

The TVA program ranks seventh in power sales and ninth in the number of customers out of more than 500 utilities in 33 states offering green power, the Energy Department of reports.

Still, the utility's offering pales compared with the top programs. Austin (Texas) Energy has more than seven times TVA's sales, and Minnesota-based Xcel Energy has six times as many customers as TVA.

TVA has 7,241 residential and 332 business green-power customers. The program is offered to only 66 of TVA's 158 power distributors largely because of the lack of supply. Advertising has been limited for more than a year for the same reason.

Harris expects Green Power Switch will be offered to all distributors in TVA's seven-state region when the wind turbines come on line. Already, other utilities are vying to buy the surplus.

"TVA is constantly chasing the demand, and I think that is a good thing," said Steve Smith, director of the Southern Alliance for Clean Energy and a member of the advisory panel that oversees TVA's green power accreditation. "That shows people want it."

TVA charges a premium of $4 a month for a 150-kilowatt-hour block of green power — about 12 percent of a typical home's usage. Most consumers buy more than one block.

Harris said TVA has invested about $9million in Green Power Switch, which accounts for about one-tenth of 1 percent of the utility's total generation. It gets back about $1million in annual sales.

TVA serves about 8.5million people and several major industries directly in Tennessee and parts of Kentucky, Alabama, Georgia, Mississippi, North Carolina and Virginia.