Congress is finally asking TVA some hard questions… many of the same questions we’ve been asking for years.
Questions like what’s up with all these fixed fees and grid access charges? Why are TVA customers paying more for energy than the average customer across the country? Why does TVA make it so difficult to go solar? And, why isn’t the TVA making a stronger effort to decarbonize?
The TVA is not a private company, but rather a federally created public utility. TVA was established by the Federal government to assist in the economic and physical development of the Tennessee Valley. But these days it’s being run more like a private corporation, where profits matter more than customers. As part of its mission, TVA is legally required to be a national leader in technological innovation and environmental protection, while providing low-cost power to municipalities, citizen cooperatives, and farmers.
On January 13, members of the U.S. House Committee on Energy & Commerce wrote a letter to the CEO of the Tennessee Valley Authority (TVA) requesting information regarding business practices that are not in line with TVA’s legal requirement to provide low-cost power to the residents of the Tennessee Valley. The committee members also expressed concern that TVA is blocking the deployment of renewable energy.
The E&C Committee says that TVA is not upholding their statutory requirements on three points.
TVA is overcharging residents for electricity, causing particular suffering to the low-income households in the Tennessee valley.
Although TVA claims a commitment to low rates, in 2020 most of TVA’s customers faced electric bills above the national average, with many low-income households spending as much as 27% of their household income on energy. TVA believes this disparity may be connected to the TVA’s refusal to prioritize energy efficiency, while continuing to impose (and increase) fixed fees.
Although TVA admits that energy efficiency is critical to providing energy at the least cost to consumers, they cut energy efficiency programs by nearly two-thirds in the last eight years, and completely removed incentive programs that reward customers for choosing more efficient options. Additionally, TVA has added fixed fees, including grid access charges, to purposefully disincentivize customers from adopting energy efficient measures on their own. These fixed fees mean that customers are likely to face higher bills, even if they reduce their energy use.
TVA is blocking attempts by commercial and residential customers to adopt renewable energy.
In internal documents, TVA identified distributed energy sources (EG. a business/personal solar farm) as a threat to their business model. They also anticipated that their grid access charges would decrease the deployment of solar energy projects by 40 percent. Other documents show that they are allowing local utilities to add even more fees in an attempt to decrease adoption of solar energy.
TVA is not making proper efforts to decarbonize.
Although the E&C Committee commended TVA decarbonization efforts, the committee does not believe they are doing enough. The committee finds TVA’s goal to reduce carbonization only 7% by 2030 “unambitious.” The committee is concerned that the TVA continues to invest in new natural gas generation rather than deploying solar and wind energy. Almost a year after President Biden signed Executive Order 14008, which includes decarbonizing the electricity sector by 2035, TVA has yet to revise its plan for carbon emission reduction.
Congress has made efforts to protect TVA customers from predatory practices by requiring TVA explore all options and resources in their planning, including energy efficiency and renewable resources. Yet, as we’ve seen time and again, the TVA continues to prioritize high-cost fossil fuels and ignore the demand for cheaper alternative energy sources. We are happy to see that the E&C committee agrees and finds the TVA’s business practices are not in line with their statutory requirements, and this failure to comply is hurting not just the customers but the environment as well.
TVA’s response is due by February 2, 2022. Energy Alabama is looking forward to seeing it! And, of course, we’ll be here to keep you updated.