TVA sign at Hyde Park, NY, By Billy Hathorn - Own work, CC0

The History of the Tennessee Valley Authority (TVA)

The History of the Tennessee Valley Authority (TVA)

TVA’s history is really interesting, especially given how much things have changed from its original mission. TVA was established in 1933 as part of President Franklin Delano Roosevelt’s New Deal. TVA was created for economic development and environmental conservation. And yes, energy too. 

TVA was created not just to help electrify the south. TVA was tasked with modernizing the Tennessee Valley, one of the most impoverished regions of the country. Goals included improving the navigability of the Tennessee River, providing flood control, and developing agriculture, industry, and commerce in the seven-state area of the Tennessee Valley. Along with providing electricity to many rural areas for the first time, TVA would also bring jobs and economic development.

TVA played a major role in the World War II effort, especially making fertilizer. For decades, TVA was progressive,open to unions, and was responsible for some of the earliest movements in the South for desegregating and opening the workforce to everyone. They really pushed the envelope from an environmental, economic, and social justice perspective long before it was accepted in much of the South. That’s not to say TVA was without issues that can be papered over. The creation of TVA dams displaced thousands of families, taking an especially difficult toll on black communities.

Because it was a public utility, TVA could typically generate power at lower costs than investor owned utilities, which are usually more concerned with shareholders rather than the local community.

The Transition Away from Public Power Values

The TVA is now the largest public utility and one of the largest providers of power in the country. Unfortunately, in recent decades TVA has transitioned from operating as a public utility to operating much more like a private investor-owned utility, with a CEO that makes $8.61 milion/year. CEO Jeffrey Lyash’s high salary has drawn the ire of President Donald Trump. 

Why has TVA moved away from public power values? Some place the blame as far back as President Reagan, whose conflict with TVA appears to have stemmed from the early 1960s. Reagan had called for the privatization of TVA.

Some place the blame at the feet of the previous CEO, Bill Johnson. Johnson had a background in investor-owned utilities, rather than public power, and instituted many policies from private business. Those policies have resulted in the lack of transparency and many of the problems that we see today.

Regardless of the specific date, TVA has been on a decades long march away from the values of public power. 

The Problems with TVA

As we at Energy Alabama see it there are several major issues with the TVA. While they don’t all have easy answers, TVA can and should improve the situation.

Lack of transparency and public input

Given that TVA is a public utility, it is surprising the public has very little say in what they do. While they do provide occasional opportunities for the public to speak on specific topics, the public is largely ignored. We at Energy Alabama, as well as other great groups from around Valley, make every effort to speak out and publicly comment as much as possible. However, TVA tends to follow the typical federal rule-making process. They create a plan, collect public comments, then follow-up by telling the public how they already addressed the public’s concerns in their plan (whether they have or not).

TVA is a member of the Utility Air Regulation Group (UARG) and Utility Solid Waste Activities Group (USWAG), off the books collaboration of utilities that sue the EPA, DOE, and federal government to roll back and destroy environmental regulations. TVA uses public money (that means money from your electric bill) to fund these groups to fight the regulations that they are subject to. Basically, a federal agency using our money to sue another federal agency. 

Apparently, this has been happening despite being against the directives of the board of directors. The board had written a policy about how the TVA is supposed to use public money when it comes to lobbying and litigation, but UARG and USWAG expenditures seem to be in complete contradiction to that. They are spending our money against the public benefit; and in many cases, it appears the board doesn’t even know what’s happening.

TVA has gotten really good over the last few years of going through the motion of accepting public comments. They make sure that people like us, their customers, have the opportunity to speak up, but have no real intent of doing anything with the feedback. Basically, they will say just enough to placate and give the appearance that we’ve been heard. We, for one, cannot remember a time in which public comments we sent in to TVA were adopted or addressed substantively.

Equity and Justice

Persistent poverty is a problem in the Tennessee Valley. TVA was created to bring people out of poverty and alleviate it, not make it worse. But there are so many places in the valley where we have completely unsustainable electric bills. Those high, unsustainable electric bills only serve to keep people in these areas in poverty. 

There is no focus from the TVA on helping people save energy. In fact, TVA recently cut almost all its funding for energy efficiency and its new long-range planning magically says energy efficiency is not cost-effective. After years of pressure, TVA has run limited pilots for low-income energy efficiency but it has yet to expand these across the Valley at the scale needed. As usual, they look good on a press release but fail to fully address the problem.

By helping people solve the issue of high electric bills at the source, and fix these issues for people first, we can work towards solving the larger issues.

Customers are paying high electric bills for three main reasons.

We are paying for uncontrolled high consumption. Electric use is high in the Tennessee Valley for natural reasons. We have warmer weather which increases the need for air conditioning in the summer and when heat is needed, we are more likely to use electric heat. TVA has been historically woeful on helping people lower their consumption. In fact, they take steps to ensure that we use more energy instead of less.

We are paying for bad decisions of the past. TVA was built to create affordable energy for the people. However, unwise decisions made in the 1970s and 1980s created an undue burden on the ratepayers that will exist for many years to come.

In the early 1970’s the TVA began building 17 nuclear facilities to meet increased power demands. However, after several years the build-out for 10 of those reactors was cancelled due to lack of need. Unfortunately, the costs had already been largely incurred and continue to be passed on to the customers.

So, we now have billions of debt on the books for power plants that were never finished. That debt gets passed to the customers in the form of higher utility bills.

We are paying to maintain uneconomic power plants. Many existing coal and gas power plants around the country are losing money. Some of these are running despite a lack of need, and those that are needed could be replaced by efficient energy sources, such as solar and wind.

Despite this, TVA wants to add even more unneeded natural gas!

 

Communities in Transition

Attention also needs to be paid to how we deal with communities in transition. In areas where there were coal plants that are closed/closing, or areas where TVA has simply decided to outsource jobs. How do we take care of those people and make sure they are not hurt in this transition? This energy transition needs to take place but we need to make sure people aren’t hurt in the process. When people are being hurt, we can’t be surprised when they are resistant to the transition that needs to take place.

If we fix the problems that would help people the most, it would be easier for other things to fall into place after that. If policies are centered around people then our priorities will be in the right place.

TVA has little to no published information or planning about helping communities in transition. Will it be retraining workers? Will TVA and local power companies build renewable energy and invest in local energy efficiency in these communities? By now, you probably know the answer to date. 

 

TVA’s Lack of Ambition Regarding Renewable Energy

We’ve seen a lack of ambition from TVA regarding moving towards renewable energy, or any focus on energy storage and electric transportation. You’d think that electric companies would be out hawking electric cars as it would generate more revenue for them under the current structure. Much as they did with refrigerators and appliances in the 1940’s. However, what we’ve seen from TVA is the opposite. Their efforts seem focused on removing incentives for renewable energy and largely standing on the sidelines of the electrification discussion.

TVA’s Green Power Providers Program, launched in 2003, allowed regular people and businesses to sell excess energy from solar/renewable energy at a predefined rate. When it launched it was one of the most progressive programs in the country. It was very aggressive and provided above retail rates for renewable energy sources to stimulate economic growth. There was always an intention that those rates wouldn’t continue forever, and over the years the price of their buyback went down to around retail rates as expected.

Along the way, however, TVA decided distributed generation was a threat, not an economic driver. They got more aggressive and slashed the buyback below retail and then took it even further, paying a fraction of retail. What started as a reasonable reduction of the buyback rate, turned into a way for TVA to gut competition to their monopoly. Gutting buyback rates to the point where there was no economic incentive to participate; so, no one wanted to participate. When no one participates in a flawed program they had the justification to kill the program instead of just fixing it. While this was all happening, they were also trying to raise grid access fees (charging people more to even connect to the grid), basically decimating small scale solar in the process. Energy Alabama is currently challenging the “Grid Access Charge” in federal court.

TVA may market like it’s doing wonderful things with renewables but it is mostly hype. At the end of the day, they are doing slightly more utility scale solar that they own and operate but eliminating any options for the average person, small businesses, and communities. They can’t claim they are going to all this effort for renewable energy when they are planning a massive unneeded gas build-out.

 

TVA’s relationship with local power companies

When TVA was created and much of the south was being electrified, TVA grew quickly, much to the alarm of neighboring power companies like Southern Company. They didn’t like TVA growing into their territory. So when a private company doesn’t like something, they call their lobbyists. Federal legislation passed to put a fence around the TVA limiting where they could operate… and also limiting the ability of other utilities to operate inside that area.

TVA has long-term contracts with its local power companies. This is not uncommon in the utility industry and often referred to as “all-requirements” contracts. TVA has massive power plants that generate and sell power to local power companies that they then sell to their members. Contracts were typically 5-10 years, but today TVA is increasing the length of those contracts to 20 years with rolling contracts that require a 20-year notice to cancel. This makes it virtually impossible to get out of the contract.

This still wouldn’t be a totally terrible thing if TVA was responsive to the people. The new contracts claim to allow local power providers 3-5% choice in generation, giving them the option to choose things like rooftop solar and battery storage. It’s an improvement over the complete lack of choice they have now; but, as we see with other power providers across the country, 5% is just unsustainable. Other areas, like Colorado, have tried similar things and found that, given the abundance of cheap, renewable energy, you can hit the cap very quickly. Oh, and it turns out that what TVA said was 5% local choice, was really more like 1-2%. Chalk it up to fuzzy math.

The current setup only benefits TVA; not you and not local communities. It guarantees their revenue in perpetuity and hoses the rest of us, making sure we are always on the hook for TVA’s decisions regardless of how good or bad they are.

 

How can we get out from underneath TVA?

After understanding TVA’s long march away from public power values, there is a desire to just get out from underneath the TVA or to enact serious reforms. To some degree this is more possible now than ever before due to advances in technology. There are options for regular people or businesses to install renewables and energy storage, or for local power companies to substantially generate their own power and not necessarily rely on TVA.

For instance, Memphis is looking at leaving TVA, becoming their own independent utility, and saving a lot of money. That could be great for them. But it could also have a huge effect on any remaining members of the TVA as those costs are passed back.

There is no good answer here. Memphis has an obligation and a responsibility to take the possibility of hundreds of millions in customer savings seriously, and by all accounts it is. The rest of Valley must be concerned about the impact of Memphis leaving TVA. If Memphis did leave TVA, one could only hope it is a sizable enough event to wake TVA out of its slumber.

Memphis is a perfect example of the potential consequences of the failure to adhere to the core principles of public power. To be clear, Energy Alabama does not generally support privatization of public utilities. 

If only there were another way….

What you can do: Tennessee Valley Energy Democracy Movement

The Tennessee Valley Energy Democracy Movement was founded to return TVA to its roots, bring back good paying jobs, and benefit communities. In other words, put the public back into public power.

The largest objective is to bring the people power back to the TVA. It was founded as a public agency but has become less and less responsive to the needs, wants, and demands of the people who are supposed to be in charge of it. That’s you! 

We at Energy Alabama have joined the TVED Movement because we are excited about bringing that voice back.

The movement is about listening to the people and learning what they want their public power to do for them besides just sending them a bill.

Tennessee Valley Energy Democracy Movement is focused on:

  1. Efficient and renewable energy
  2. Local and decentralized generation – economic development opportunities, helping to ensure support of coal communities as those transition, making sure that the transition is equitable and fair for all.
  3. Democratic control – people want to know that their voice matters.
  4. Bills and equitable access – a lot of people don’t think about these issues beyond seeing their bill and struggling to pay it. We have extremely high poverty rates and people often struggle to decide whether to pay their electric bill or feed their family or pick up medicine. This is an unacceptable choice.
  5. Healthy communities and environment – making sure we aren’t just generating electricity but are also feeding the health of the people and the environment.  Here in the south we all have a very strong connection to the outdoors and nature. TVA should continue looking after those aspects as well.
  6. Safe, high quality jobs

How you can help:

  • Visit EnergyDemocracyYall.org and follow them on social media to learn more about the policy platform
  • Talk to your representatives about making sure that TVA is listening to the people. We are starting to see reps at the federal level starting to listen more and understand that we do want to preserve the public power and we need to be acting holistically to avoid privatization.
  • Talk to your local power company – local utilities are usually sub-units of the local government. They should be responsive to local leaders, to local residents.
  • If you are a member of a local electric cooperative, get involved. Run for office, vote, campaign to push these cooperatives to get involved in making change.
  • Keep an eye out for and join us at town hall meetings starting this summer.

It takes people power from the bottom up. 

 

TVA sign at Hyde Park, NY, By Billy Hathorn - Own work, CC0

Sources:

Energy Alabama among groups calling for stop to electricity shutoffs during pandemic

Energy Alabama is among a dozen organizations that have called on the Tennessee Valley Public Power Association (TVPPA) to urge its member utilities to immediately halt service disconnection and late fees for families during the coronavirus pandemic.

 

 

TVPPA’s members include the electric cooperatives and municipal electric utilities who serve 9 million people across seven states in the Tennessee Valley Authority’s service area. In the letter, the groups identified five of TVPPA’s large utilities that had taken these kinds of actions to protect their customers, adding that many TVPPA members may still be charging customers late fees and cutting off service for non-payment.

 

 

TVA has authorized deferred wholesale power payments in its service area, according to the groups’ letter, and increased federal funding to help low-income households with energy bills was included in the recent federal stimulus package. TVPPA members should not cut off service or add late fees onto the bills of families who, through no fault of their own, find themselves in dire economic straits for the foreseeable future.

This tool from Appalachian Voices allows you to find out if your local utility has implemented a Covid-19 policy, and provides information for who to call if they have not done so.

Energy Alabama Recommendations for Huntsville Utilities Electric Fixed Fee Increase

The following recommendations regarding Huntsville Utilities proposed electric fixed fee increase were delivered to the Huntsville City Council in person.

On Sept. 17, 2018, we submitted an Open Records Request to Huntsville Utilities, to which they have failed to respond. On Sept 26, Huntsville Utilities representatives promised to have documents returned by end of day on Oct. 1. As of this letter on Oct. 4, Energy Alabama still has not received a response to the open letter request. Huntsville Utilities has only provided two additional charts from last week’s public meeting.

Energy Alabama opposes fixed fees because:

  • Fixed fees hurt low-income customers and apartment dwellers most
  • Fixed fees discourage energy efficiency and renewable energy
  • Fixed fees do not align the costs of the grid to who is causing the cost of the grid
  • Grid costs are primarily driven by peak demand such as hot summer days and cold winter mornings. Fixed fees encourage people to inadvertently make this problem worse.

In response, Energy Alabama makes the following recommendations:

  1. Increase public notice and participation.
    • HSV Utilities provided less than two weeks’ notice of the first public meeting, which was advertised poorly and, consequently, poorly attended.
  2. Delay the final City Council vote currently scheduled for Oct. 11, 2018.
    • HSV Utilities has requested less than one month between the first public notice and the proposed final vote by the City Council.
    • No vote should be taken until all requested documents have been released to the public and ample time has been given to study such material.
  3. Decline the increase to fixed fees for the reasons stated above.
  4. Retain the inclining block rate for residential customers.
    • Inclined block rates charge customers more money with increased usage. This encourages energy conservation, efficiency, and renewable energy use.
  5. Remove the declining block rate for small commercial customers.
    • Declining block rates charge customers less money as their usage increases. This discourages energy conservation, efficiency, and renewable energy.
  6. If additional revenue is still needed after the above recommendation have been met, Huntsville City Council should only approve an increase to the energy charge, not the fixed charge, and require HSV Utilities to pilot a “time of use” rate when smart meters are deployed in the Huntsville/Madison County area
    • Huntsville Utilities’ costs are in large part driven by consumption during times of congestion. If customers are allowed to choose rates that avoid consumption during these times, they save money and the whole system saves money.

 

Read the full letter: Energy Alabama Recommendations to Huntsville City Council

Energy Alabama Requests HSV Utilities Justify Rate Hike

Below is the Freedom of Information Act letter that Energy Alabama submitted to Huntsville Utilities requesting that they provide information that justifies their upcoming rate hike.

Information we have requested includes:

  1. Cost of service studies from fiscal year 2016 to present
  2. Any and all analysis and calculations to show the impact of the upcoming rate increase to each customer class
  3. Number of participants, by customer class, in each energy efficiency program offered by Huntsville Utilities or affiliates
  4. Actual weather adjusted energy savings and cost savings by all energy efficiency programs offered by Huntsville Utilities (or affiliates).

Read the full letter (submitted by email) below:

Mr. Joe Gehrdes
Director, Communication and Public Relations
Huntsville Utiltiies
PO Box 2048
Huntsville, Alabama 35804

Joe.gehrdes@hsvutil.org

RE: Open Records Request – September 2018

Dear Mr. Gehrdes,
Pursuant to the Alabama Open Records Act, we hereby request the following records:

1. Any and all cost of service studies on file with Huntsville Utilities from FY2016 to the date of this
filing;
2. Any and all analyses and calculations that show the impact of the upcoming rate increases to each
customer class;
3. Numbers of participants, by customer class to include residential, commercial and industrial, in
each energy efficiency program offered by Huntsville Utilities and/or its authorized affiliates;
4. Actual weather adjusted energy savings and cost savings by all energy efficiency programs offered by Huntsville Utilities and/or its authorized affiliates.

As used above, the term “records” includes, without limitation, all communications, correspondence, records of phone conversations, text messages, encrypted messages, transcripts of testimony, minutes or
notes of meetings, electronic mail, PowerPoint or other similar presentations, memoranda, reports, maps, photographs, drawings, data, tables, spreadsheets, formulas, notes, observations, impressions, contracts, and policies or directives, whether in an electronic or print medium, original or copy, or draft or final form.

The timeframe of this public records request is between January 1, 2016 and the date of this filing.

You may exclude news articles, press clippings, and duplicate emails.
The requested documents will be made available to the general public, and this request is not being made for commercial purposes. Therefore, we are requesting a waiver of any fees.

We are, however, prepared to pay reasonable costs for these documents. In the event that there are fees, we would be grateful if you would inform me of the total charges in advance of fulfilling my request. We
would prefer the request filled electronically, by e-mail attachment if available or USB drive if not. We are also available to obtain the documents via an on-site visit should that be most efficient for Huntsville
Utilities.

If you deny any or all of this request, please cite each specific exemption that justifies the refusal to release the information and notify us of the appeal procedures available to us under the law.

Thank you in advance for your anticipated cooperation in this matter.

Sincerely,

Daniel Tait
Technical Director
Energy Alabama

Letter to Huntsville Utilities

As of this writing, HSV Utilities has failed to respond to this letter. As such, we have provided these recommendations to the Huntsville City Council.

How does solar work?

How Does Solar Work?

Solar, Solar, Everywhere!

But, how the heck does it work?

I admit it, this is a question I’ve had since long before I began working with Energy Alabama. I know that somehow the panels trap the energy from the sun then there’s some wires and stuff that convert that energy to something that is usable, but how?

So, I decided to do a little research and see what I could find out…. then I thought I’d share it with you, because while I’m sure some of you could explain it better than I ever will, others are probably going to appreciate my 5-year old level of comprehension on the subject.

Each solar panel is made up of many smaller units called photo-voltaic cells (because they make energy from the sun), usually made of silicon.

But how?  Says the 5-year old in me.

Ok, so let’s back up and start from the top.

First, we have the sun, which makes an unlimited supply of energy (until the sun eventually blows up but that’s a different story). That energy lands on the ground and buildings and just dissipates, often being wasted. Well, not really wasted, I mean that energy did just warm us up and keep us from staring at a dark and gloomy day. But, when sunlight hits a solar panel, the PV cells inside the solar panel break the sun’s energy up.

Light from the sun hits the solar panel, knocking the electron off the atom, and this somehow creates a flow of electricity. But how? (I really do sound like a 5-year old).

Each cell has a positive layer (made by adding phosphorous) and negative layer (made by adding boron) creating an electric field in the middle. As photons are absorbed in the cell, electrons are released and pushed through that electric field. The electrons then move to the bottom of the cell and exit through connected wires, creating direct current electricity. The solar system inverter then converts that electricity to the same electricity that you would get from the power company.

Most systems are set up to feed the electricity from solar back into the main power grid system. In many cases the owner of the solar sells back the electricity they are making to the power company, purchasing only what they need, in many cases making a profit to help pay for their solar installation.

I hope you have a better understanding of how solar panels work, I know I do!

Want more? Check out this TedEd video