US Capitol Building

Congress is asking TVA some hard questions

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.

Read the full letter from the Committee.

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.

New Survey Results: Alabama Voters Want Energy Freedom in a BIG Way

In Alabama, we are all about freedom and market choices, and that’s as true of our energy use as anything else.

Alabama Wants Renewable Energy Choices

Recent results from a survey of 600 likely Alabama voters show that Alabamians want freedom of choice, a competitive marketplace, and the right and opportunity to choose where their energy comes from – and the right to produce their own electricity if they want.

That means more energy providers and more renewable energy sources – which is exactly what Alabamians are asking for: 81% support the development of clean energy like solar and wind. 79% say it’s important to them to have the choice to buy power from a company that uses more renewable energy sources such as wind and solar.

An even higher total of 83% agree that increasing our use of renewable energy sources in Alabama, such as wind and solar, will create jobs and encourage economic development throughout the state.

More choices, more renewable energy AND more jobs and a stronger economy? It’s a no brainer!

What About Our Utilities?

Specifically, Alabamians want to see more development from their public utilities. A whopping 90% of respondents think we should accelerate the growth of clean energy so that we can produce more of our own electricity in Alabama and rely less on importing from other states and countries. 87% think the public electric utilities should lead the way in developing renewable energy options for customers. Unfortunately, most Alabama utilities have been doing the exact opposite.

A big motivator for this stance appears to be a desire for Alabama to be independent. 90% support the acceleration of the growth of clean energy so that we can produce more of our own electricity in Alabama and rely less on importing from other states and countries.

The Politics of Renewable Energy in Alabama

Clean energy is good politics, too. Alabama voters across the political spectrum say it is important that a candidate share their opinion on energy issues. And as we’ve seen in these results, a significant majority across party lines support the development of clean energy in the state.

Alabamians know that more renewable energy = more jobs, stronger economy, more choices, and a more competitive energy market.

There is a lot more to these survey results, like what Alabama voters think of the solar tax (spoiler alert: they don’t like it). Read more and see the data for yourself.

 

Header image source: Unsplash

Alabama Rural Electric Cooperative Scorecard

Rural electric cooperatives (RECs) were established in the 1930s to provide power rural areas not seen as profitable to large investor-owned utilities. In Alabama there are 22 rural electric cooperatives (RECs) providing power to over a quarter of Alabama residents (and over 70% of Alabama’s land mass).

Rural electric cooperatives are member-owned (ie. customer owned), and return excess profits to the members. As such, members have certain rights to transparency and equity; to be able to attend board meetings and have input into the decisions the board is making on their behalf.

In addition to understanding their rights, members need to be able to see that their co-op is serving them well. It’s easy to say you are satisfied with your service when you have nothing to compare that service to. That’s where the Alabama REC Scorecard comes in.

Our team has evaluated all 22 Alabama RECs and scored them on over 40 different variables across three key areas. These scores allow you to do a side-by-side comparison of your REC with others in the state (or even those in other states), to see how what you have now compares to what you could have.

Of course, it’s not that simple. We spent months reaching out to every Alabama REC, with too many refusing to answer our questions or even return our many calls and emails. Many of these same RECs offer little to no information online for their members, making it even more difficult to properly assess them.

Three key areas evaluated

Democratic governance includes the ability for members to access bylaws, attend board meetings, vote on bylaw amendments, and generally have a say in the way the cooperative is run.

Financial Transparency & Compensation include things like the number of board members, CEO/board compensation, ratio of CEO salary to median household income.

Member programs include things like on-bill financing, energy efficiency financing programs, community solar, and broadband internet.

 

Summary of Alabama REC Scores:

Only 18% of Alabama RECs regularly inform their members of the date and time of upcoming board meetings.

64% of Alabama RECs allow members to attend and address board meetings.

No Alabama RECs ensure that all members have access to (via website, mail, or other means) their incorporation documents, bylaws, meeting minutes, IRS compensation forms, general financial and operational data, and strategic plan summary.

Only half of Alabama RECs have their bylaws published on their website. This lack of access to cooperative bylaws significantly reduces the ability of members to participate in the cooperative’s electoral process, engage in the bylaw amendment process, and hold their co-op accountable for possible corruption or misconduct.

Alabama Rural Electric Cooperative Scorecard author Q&A

Alabama Rural Electric Cooperative Scorecard author Q&A

Individual Alabama Coop Scores

Arab Electric Cooperative (AEC) seems to be making efforts to increase the ability for member-owners to understand and participate in the decision-making process. They are one of only four RECs that provide meeting minutes on their website, and one of only two co-ops that has the right for members to attend board meetings (without prior written approval) written into the bylaws. AEC is the only co-op in Alabama to have term limits for board members. In August 2020, amidst the Coronavirus pandemic, AEC proposed a bylaw amendment to eliminate mail-in voting.
Overall score: 43/122

Arab Electric Cooperative is the only co-op in Alabama to have term limits for board members

Baldwin EMC
Overall score: 24/122

Black Warrior EMC 
Overall score: 30/122

Central Alabama Electric Cooperative held virtual meetings with sign-language interpretation during Covid-19 to ensure accessibility. At least half of current board members were appointed rather than elected.
Overall score: 39/122

Cherokee Electric Cooperative 
Overall score: 27/122

Clarke-Washington EMC
Overall score: 13/122

Coosa Valley Electric Cooperative
Overall score: 42/122

Covington Electric Cooperative has recently began development on a community solar garden (the first Alabama co-op to do so). This development is a direct result of their efforts towards democratic governance. Additionally, CEC is the only Alabama REC that allows members to vote early, by mail, in-person, and online. CEC has demonstrated a commitment to gender equality through bylaw amendments relating to pronouns. CEC is one of only three Alabama RECs to offer regular loan-based on-bill financing program.
Overall score: 59/122

Covington Electric Cooperative serves as a spectacular example of intentionally promoting member-owner engagement. Not only are they the only Alabama co-op to allow voting by all four means possible (in-person, early voting, by mail, and online), their move to allow online and mail-in voting resulted in their largest voter turnout ever.

Cullman Electric Cooperative is one of the clear winners when it comes to promoting electric vehicles. At their 2020 virtual annual meeting they held an EV information session and demonstration of the the EV and charger owned by the co-op. CEC provides information on their website regarding upcoming board meetings, as well as meeting minutes, and instructions on how members can propose bylaw amendments. However, members can only attend or speak at board meetings with prior approval.
Overall score: 55/122

Dixie Electric Cooperative offers heat-pump rebates and an off-bill financing program, and allows their members to vote both in-person and by mail.
Overall score: 37/122

Franklin Electric Cooperative
Overall score: 36/122

Joe Wheeler EMC
Overall score: 50/122

Marshall-Dekalb Electric Cooperative displayed troubling financial discrepancies between their public tax documents, resulting in inability to properly score them on compensation questions.
Overall score: 15/122

North Alabama Electric Cooperative
Overall score: 38/122

Pea River Electric Cooperative is one of only three Alabama RECs to offer regular loan-based on-bill financing program and water-heater rebates.
Overall score: 19/122

Pioneer Electric Cooperative held virtual meetings during COVID to ensure accessibility.
Overall score: 45/122

Sand Mountain Electric Cooperative
Overall score: 30/122

South Alabama Electric Cooperative (SAEC) displayed troubling financial discrepancies on their public tax documents, resulting in inability to properly score them on compensation questions. SAEC is one of only three Alabama RECs to offer regular loan-based on-bill financing program.
Overall score: 19/122

Southern Pine Electric Cooperative has a Member Task Force composed of 48 couples, 12 from each of the co-op’s four service areas. Task Force membership rotates annually giving members a chance to not only learn how their co-op works, and the needs it serves, but give feedback and serve in an advisory capacity.
Overall score: 26/122

Tallapoosa River Electric Cooperative
Overall score: 21/122

Tombigbee Electric Cooperative
Overall score: 46/122

Wiregrass Electric Cooperative (WEC) offers loan programs to provide seed money to generate economic development. WEC is one of only two co-ops that has the right for members to attend board meetings (and to do so without prior written approval) written into the bylaws. WEC further shows a dedication to transparency by providing an extensive FAQ on their website. WEC has demonstrated a commitment to gender equality through bylaw amendments relating to pronouns.
Overall score: 59/122

Wiregrass Electric Cooperative serves as a positive example of what transparency and accessibility should look like. They welcome members to attend meetings, and clearly inform members of upcoming elections and proposed bylaw amendments.

Some low scores may be due to lack of information. These RECs refused or failed to respond to requests for information: Arab Electric Cooperative, Baldwin EMC, Black Warrior EMC, Central Alabama Electric Cooperative. Clarke-Washington EMC, Pea River Electric Cooperative, Sand Mountain Electric Cooperative, South Alabama Electric Cooperative, and Tallapoosa River Electric Cooperative. These RECs did provide some information requested but failed/refused to respond to other requests: Franklin Electric Cooperative, Joe Wheeler EMC, Marshall-Dekalb Electric Cooperative, and Southern Pine Electric Cooperative. Scores of zero were given when information was not available/provided to us. These failures to provide information likely resulted in lower scores than would have been earned had they provided accurate information.

VIEW THE FULL SCORECARD

There is room for improvement at all of the Alabama RECs, and we hope that this Scorecard serves to provide information to all about what improvements are possible and needed.

 

Have questions about the REC Scorecard? Drop them in the comments below.

Alabama PSC Should Release Analysis on Alabama Power’s Excessive Profit Formula

Today, Energy Alabama sent a letter to the Alabama Public Service Commission (PSC) asking it to commit fully to transparency and fairness by allowing regular Alabamians to review and submit questions about an overdue report examining Alabama Power’s Rate Stabilization and Equalization (RSE), a key factor in how the utility’s excessive profits are determined.

Read the letter here

Alabama Power’s RSE utilizes a formula that over-rewards the company at the expense of its customers. Hard-working Alabama Power customers deserve to know why they pay some of the highest electric bills in the country. The Alabama PSC owes an explanation to the people of Alabama and should find a way to virtually open this meeting to the general public.

There are major questions about the workings and results of the RSE formula which should be answered by a report required by a 2013 PSC order authorizing the rate. Publicly available data shows that Alabama customers are overburdened by the PSC’s formula, which hides the usual measure of return on equity (ROE) used by other utility regulators.

However, the “hidden” ROE can still be calculated from other sources. Such a comparison from 2014 through 2018 shows that Alabama Power customers paid more than $1 billion in excess profits than they would have if the PSC had instead awarded Alabama Power the national average ROE.

COVID-19, and the economic hardships it created, have further exacerbated the excess profit Alabama Power has pocketed. Instead, the PSC continues to over-reward Alabama Power at the expense of its customers.

Allowing a monopoly utility to retain profits that are far above those necessary to provide mandated services is not equitable nor economical for customers. The long overdue RSE report should provide the important information necessary for all stakeholders to discuss the unique formula and the profits it supports­­.

“If this Commission cares about creating jobs, it should put Alabama Power’s excessive profits back into the hands of regular folks and small businesses,” said Daniel Tait, Energy Alabama’s Chief Operating Officer. “The time for monopoly handouts is over.”

By any objective standard, the case is clear. The Alabama PSC must support transparency and #ReleaseTheRSE.

Groups Ask PSC to Reconsider Alabama Power’s Unprecedented Gas Expansion

Gasp and Energy Alabama have formally asked the Alabama Public Service Commission to reconsider its June decision to approve the single largest capacity increase ever proposed by Alabama Power, including including almost 1,900 MW of gas generation. We requested a rehearing to consider updated testimony in light of economic forecasts showing lessened electric demand due to the coronavirus pandemic (COVID-19).

Last year, Alabama Power filed a “Petition for a Certificate of Convenience and Necessity” with the Alabama Public Service Commission. That proposal initially sought to add nearly 2.4 gigawatts of new generating capacity — which would cost customers over $1.1 billion. Energy Alabama and Gasp, represented by the Southern Environmental Law Center, intervened in the docket to question Alabama Power’s lack of evidentiary support to build and buy such a significant amount of new gas resources.

In March, just before COVID-19 brought the world as we know it to a halt, the Alabama Public Service Commission held a series of hearings on the petition. Witnesses for Gasp and Energy Alabama exposed exposed significant flaws in Alabama Power’s planning and justification processes. After those hearings concluded, we made several key points in our proposed order filed with the Commission:

  • Alabama Power failed to produce the evidence necessary to support its request to increase electric generation capacity by almost 20%. The utility had previously asserted it wouldn’t need new generation sources until 2035.
  • Without a showing of need, Alabama Power’s request amounts to an effort to build rate base and enrich shareholders at the expense of its customers, who will pay for expensive, unnecessary generation for decades.
  • Alabama Power’s own analysis showed that the proposed solar plus battery storage projects were the cheapest options for customers.

The pandemic and subsequent economic downtown have cast even more doubt on Alabama Power’s supposed need for new capacity. In early June, we filed additional information regarding anticipated economic effects of COVID-19, arguing that the economic downturn precipitated by the pandemic called into question the magnitude and timing of Alabama Power’s claims about needing additional power sources. Alabama Power relied on outdated projections from more than two years ago, well before the economic devastation wrought by COVID-19. We argue those projections can no longer serve as the basis for a making a $1.1+ billion investment with customer dollars.

Despite all of that, the PSC in June unanimously voted to approve everything in Alabama Power’s proposal, including almost 1,900 MW of gas generation, except Alabama Power’s proposed solar plus battery storage projects. The PSC said they were not well-suited to meet Alabama Power’s reliability needs, despite the overwhelming evidence that supported their approval. However, the Commission refused to ask for supplemental information from Alabama Power as to whether its petition was still warranted.

Alabama customers already pay some of the highest electric bills nationwide. (A recent report found that people in Birmingham have the highest energy burden in the nation.) COVID-19 has only worsened the plight of customers struggling to pay monthly bills. If they want to move forward with these monumental investments, Alabama Power should not be allowed to put the entire financial burden on customers. Utility shareholders should bear the risk that the projects may become stranded assets before the end of their useful lives.

We also hope the Commission will reconsider its denial of the solar-plus-storage projects, which were the most economic options according to Alabama Power’s own analysis. That was just the latest in a long line of anti-solar decisions from the Commission. In September, the Alabama Public Service Commission dismissed our challenge against Alabama Power’s discriminatory solar charge, instead approving an increase in the charge.

By denying Alabama Power’s proposed solar-plus-battery storage projects in this docket and then approving an increase to Alabama Power’s unjust solar fee on rooftop solar customers in another, the PSC continues to deny Alabamians the benefits of clean, renewable energy like solar. Alabama has less solar capacity than other states in the sunny South, and far fewer jobs as a result of the PSC’s decisions.