The Tennessee Valley Authority (TVA) is a unicorn in the electricity industry, meaning there is no other utility like it. TVA started as a benevolent vision: a public agency that would prioritize a region struggling to gain an economic foothold in the midsouth, harnessing the natural resources of the vast Tennessee River valley through flood control, enhanced river navigation, erosion control, land management and selling surplus electricity from the hydroelectric dams to aid in rural electrification. These goals supported industries that were key to national defense and regional economic development. Today, with the river watershed fully exploited, the TVA has morphed into a bureaucratic hybrid monopoly, a far cry from the vision of its creators and unaccountable to the public it was enacted to serve. 

As Tennessee Valley citizens who have worked closely with and against TVA, we would argue that today’s version of TVA is out of step not only with the founders’ original vision but also with the critical needs of our region and the larger national interest.

Throughout different reform efforts, most recently in the congressional reforms of 2005, TVA has been restructured to increasingly serve the private interest, more like a private or investor-owned electric utility (IOU) than a federal agency founded to enhance the public good. While the vast monopoly service territory TVA controls rivals other private regional utilities, TVA lacks one key element that true IOUs are subject to in exchange for their unique monopoly markets: independent oversight and accountability. State-level public utility commissions exist to provide oversight of monopoly industries like electricity. TVA’s Board of Directors has been tasked with the conflicting dual roles to both guide TVA’s corporate interests and simultaneously regulate their activities. Unsurprisingly, this flawed configuration has failed. We now have a twenty-year track record of TVA’s part-time board members, rather than providing real, independent oversight, sheepishly rubber-stamping TVA executive leadership on critical decisions. 

This lack of oversight of TVA is starkly apparent when looking at how the federal utility conducts its long-term resource planning. We have previously pointed out that TVA has one of the least public planning processes, has been using NEPA as a stand-in for public engagement in its planning process, and has, most recently, presented us with a draft IRP that is so broad that it is meaningless. These critiques are also relevant to TVA’s transmission planning. In fact, TVA’s transmission planning process is less transparent than that of its generation planning process.

For too long, TVA has used its transmission system as a weapon of oppression to hold its 153 local power companies hostage, limit independent power development within the TVA’s monopoly system, exempting itself from open access, and thus preventing lower cost, cleaner, and more reliable power to be provided within TVA’s “fence.” In today’s expanding energy needs, this weaponized transmission system is out of step with our regional and national interests. All options for reforming the TVA should be on the table as the Federal government explores aligning TVA with the regional and national interests of the 21st century.

The American Council on Renewable Energy (ACORE) and the Southern Renewable Energy Association (SREA) have a history of advocacy for effective transmission planning. It is in this context that the two organizations put together a report outlining reforms to TVA that would improve its transmission planning. SACE also supports proactive and integrated transmission planning for a decarbonized future grid. We encourage you to read the full report. Below are a few key recommendations from the report and our insights.

• Independent staff for the TVA Board: The TVA Board would be more empowered and engaged if it had its own resources, and in particular if it had independent staff.
• Require more comprehensive evaluation of transmission, including interregional transmission: The TVA Act is clear that TVA’s long-term planning has to consider the “lowest system cost.” While minimizing system cost is a key part of long-term planning, reforms to this section should allow TVA to consider other benefits when evaluating generation, transmission, and demand-side options. Additionally, TVA had to institute rolling blackouts on December 23 and December 24, 2022, during Winter Storm Elliott, at the same time parts of Oklahoma had excess wind power. Inter-regional transmission, like the intertie with SPP that TVA announced late last year, could have helped TVA and other Southeastern utilities keep the lights on despite widespread gas system outages.
• Take down the fence or open a gate: The TVA Act currently limits the way that TVA and its utility customers can buy or sell power outside of TVA’s service territory. This part of TVA has remained untouched since the 1950s and is a legacy of a time when TVA’s IOU neighbors like Southern Company were concerned about TVA taking their customers. Revisions to the TVA Act and Federal Power Act could bring TVA’s relationship with larger electricity markets into the modern age. All of TVA service territory could benefit from TVA having to work to earn its customers instead of keeping them captured purely because of federal legislation. And if TVA is a model electric utility, it should be allowed to expand to other parts of the region or country.
• NEPA concurrent to interconnection: This is a reform focused on getting generation projects connected to the grid faster by directly TVA to conduct National Environmental Policy Act (NEPA) reviews at the same time that it studies projects for impacts to the transmission system. This reform may not require federal legislation.
• Bring TVA under FERC jurisdiction: TVA has claimed that it does not fall under the jurisdiction of FERC because it has its own regulator, the TVA Board, that, like FERC, is appointed by the President and approved by the Senate. However, IOUs have both a Board of Directors with a fiduciary responsibility, AND a public utilities commission that regulates in the interest of the public. The TVA Board and FERC could similarly share regulatory oversight of TVA if such a breakout of responsibilities was put into the TVA Act.
• If TVA is to be privatized, do it in a way that does not hurt clean energy: Neither the authors of the report nor SACE are advocating for privatization of TVA, but since this topic has come up under previous administrations, the report outlines that the sale of TVA to an IOU would not necessarily improve its transmission planning or pace of decarbonization, but that such a sale could be made conditional on the new owner of TVA assets to join or form an independent Regional Transmission Organization (RTO) that would bring transparency and competition to the region.

The reforms outlined in the report would indeed improve transmission planning, and additionally, many of them would go beyond transmission planning and could result in a more transparent TVA. While it is no simple, easy, or quick matter to change federal legislation, the need for reforms to TVA is clear. Policymakers and advocates would do well to study this report and start work on plans to put federal legislation that reforms TVA on the table.

The post Clean Energy Groups Outline TVA Reforms to Improve Transmission Planning, Transparency, and Oversight appeared first on SACE | Southern Alliance for Clean Energy.

Clean Energy Groups Outline TVA Reforms to Improve Transmission Planning, Transparency, and Oversight