Southern Environmental Law Center

RELEASE: Clean Energy Advocates Call On TVA to Halt Its Plans for New Gas, Align with Federal Goals

March 16, 2021
Contact:
Maggie Shober, Southern Alliance for Clean Energy, maggie@cleanenergy.org865-235-1448
Daniel Tait, Energy Alabama, dtait@alcse.org256-812-1431
Jonathan Levenshus, Sierra Club, jonathan.levenshus@sierraclub.org202-590-0893

Knoxville, Tenn. — Clean energy groups, in public comments submitted on March 13, are calling on the Tennessee Valley Authority (TVA) to halt its plans for a massive build-out of gas-fired power plants that are inconsistent with President Biden’s call for net zero emissions in the power sector by 2035. The Southern Environmental Law Center on behalf of Sierra Club, Southern Alliance for Clean Energy, and Energy Alabama argue that new gas is costly, adds significant risk to customers and that TVA failed to analyze any alternatives such as energy efficiency or renewable energy should it need new capacity.

In February, TVA released an Environmental Assessment containing plans to build 1.5 gigawatts of new peaking gas-fired power plants, three new combustion turbines in Alabama totaling 750 megawatts, and three in Kentucky totaling 750 megawatts. President Biden signed a series of executive orders in late January, days before TVA announced its gas additions, to help achieve a “carbon pollution-free power sector by 2035” and the President called on the federal government to leverage its footprint and buying power to “lead by example.”

“The environmental, public health and economic impacts of gas aren’t going away, and there’s little chance of our nation affordably meeting President Biden’s achievable carbon reduction goals if we increase our reliance on fossil fuels,” said Jonathan Levenshus from the Sierra Club’s Beyond Coal Campaign. “TVA should be winding down its use of gas to power our homes and businesses, not ramping it up.”

“The decision by TVA to replace one fossil fuel with another locks the utility into gas for decades,” said Keith Johnston, Director of the Southern Environmental Law Center’s Birmingham office. “TVA did not properly consider other energy resources, such as energy efficiency, renewables and demand response programs, that could alleviate this need for more fossil fuels.”

TVA’s high wholesale power cost, driven largely by expensive coal plants, debt, and historic underinvestment in energy efficiency, has some local utilities considering a departure from TVA and potentially procuring power elsewhere. TVA’s lack of energy efficiency drives bills up for all customers.

“The TVA territory is home to some of the highest energy burdens – measured by the proportion of income spent on energy – in the country,” said Daniel Tait, Chief Operating Officer of Energy Alabama. “TVA’s failure to even consider energy efficiency, renewable resources, or demand response will exacerbate the problem rather than solve it.”

“At a time when TVA’s future customer base and business model are in question, we cannot afford to increase the risk for even more stranded assets,” said Maggie Shober, Director of Utility Reform for the Southern Alliance for Clean Energy. “TVA must get serious about modernizing its infrastructure rather than doubling down on the infrastructure of the last century.”

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About Energy Alabama
Energy Alabama is a nonprofit organization accelerating Alabama’s transition to sustainable energy. We accomplish our mission by educating at all levels, informing smart energy policy, building the next-generation workforce, and providing technical assistance to deploy more sustainable energy. We believe in sustainable energy for all. energyalabama.org

About Sierra Club
The Sierra Club is America’s largest and most influential grassroots environmental organization, with more than 3.8 million members and supporters. In addition to protecting every person’s right to get outdoors and access the healing power of nature, the Sierra Club works to promote clean energy, safeguard the health of our communities, protect wildlife, and preserve our remaining wild places through grassroots activism, public education, lobbying, and legal action. For more information, visit www.sierraclub.org.

About Southern Alliance for Clean Energy
Founded in 1985, the Southern Alliance for Clean Energy is a nonprofit organization that promotes equitable and responsible energy choices to ensure clean, safe, and healthy communities throughout the Southeast. Learn more at www.cleanenergy.org.

About Southern Environmental Law Center
For more than 30 years, the Southern Environmental Law Center has used the power of the law to champion the environment of the Southeast. With more than 80 attorneys and nine offices across the region, SELC is widely recognized as the Southeast’s foremost environmental organization and regional leader. SELC works on a full range of environmental issues to protect our natural resources and the health and well-being of all the people in our region. www.SouthernEnvironment.org

RELEASE: Groups challenge TVA’s plan to lock local power companies into perpetual contracts

Contacts:
Scott Smallwood | SELC | ssmallwood@selcga.org | 770-598-0111
Ward Archer| Protect Our Aquifer | ward@protectouraquifer.org | 901-355-0515
Brianna Knisley | Appalachian Voices | brianna@appvoices.org | 937-725-0645
Daniel Tait | Energy Alabama | dtait@alcse.org | 256-812-1431

 

MEMPHIS, TN – The Southern Environmental Law Center (SELC), on behalf of Protect Our Aquifer, Energy Alabama and Appalachian Voices, is challenging in federal court the Tennessee Valley Authority’s (TVA) monumental decision to implement never-ending contracts designed to keep local power distributors captive customers of the federal utility forever.

The contracts further entrench TVA’s control over a vast network of power systems across portions of seven Southeastern states. The never-ending contracts lock the federal utility’s local power customers into exclusive energy contracts likely to last forever which will forever deprive distributors and ratepayers the opportunity to renegotiate with TVA to obtain cheaper, cleaner electricity. The anticompetitive contracts also place harsh caps on the ability of local power companies to use renewable power from non-TVA sources, and they seek to guarantee that TVA’s customer base, made up of municipal and member-owned local utilities, never leaves the utility.

“TVA is using these eternal contracts to stamp out any competition for the next century,” said Amanda Garcia, SELC’s Tennessee office director. “These never-ending contracts threaten to prevent local distributors from ever renegotiating their contract with TVA, let alone consider leaving the utility if it continues to lag behind in transitioning towards cheaper, cleaner renewable energy. These contracts will take the public’s interest completely out of public power.”

Previously, the average length of the termination provision in the distributors’ contracts was under seven years, offering periodic opportunities for publicly- and member-owned utilities to revisit contract terms with TVA or seek cheaper, cleaner power elsewhere. The newly signed contracts, which require a 20 year notice to terminate, renew automatically each year so that the length of the contract term never ends. The complaint alleges that the contracts will have potentially significant effects on the environment, including, among other things, influencing TVA’s decisions to invest in energy resources, increasing greenhouse gases and other pollution, and increasing water usage across the Tennessee Valley.

“TVA’s continued reliance on fossil fuel resources has a lasting impact on Memphis’ primary drinking water source, the Memphis Sand Aquifer,” said Ward Archer, President of Protect Our Aquifer. “TVA has stored coal ash in a way that puts our drinking water aquifer at risk, and its use of billions of gallons of our clean drinking water to operate its gas plant for decades to come threatens the sustainability of our community. The public has a right for federal agencies to look at alternatives when making major decisions, and TVA deprived communities of that right before asking local distributors like Memphis Light, Gas & Water to sign these never-ending contracts.”

An important federal law requires TVA to analyze and disclose the consequences of major federal programs that may significantly affect the environment. That law also requires TVA to consider alternatives and seek public input about major proposals before TVA moves forward with the project. Conservation groups allege that TVA failed to meet the basic requirements of that law, called the National Environmental Policy Act, or NEPA, before its monumental move to lock 138 of its 153 power distributors into these never ending contracts.

“While TVA keeps the lights on across the Valley, our utility kept the public in the dark around its game-changing decision to essentially trap power distributors’ customers and members in these regressive contracts for the foreseeable future,” said Brianna Knisley, Tennessee Campaign Coordinator for Appalachian Voices. “Ultimately, TVA blocked an opportunity for the public to participate in a major policy decision that will likely stall our region’s critically needed transition to renewable resources.”

Last year, several of TVA’s distributors, including its largest customer, Memphis Light, Gas & Water, announced that they were evaluating whether to leave TVA in favor of cheaper, cleaner options. In response, TVA’s Board of Directors authorized the utility to restructure its relationship with its distributors by amending its power supply contracts to these never-ending contracts that automatically renew every year and include punitive 20-year notice of termination provisions.

“Over the past two years, TVA has taken a series of actions to further cement its monopoly status and shut down customers’ access to distributed energy resources, including solar power and energy efficiency programs,” said Daniel Tait, Chief Executive Officer at Energy Alabama. “As a result, TVA lags behind other utilities in our region, both in terms of renewable energy capacity and its overall commitment to decarbonize the grid. By locking in its customer base, TVA can dictate the pace of its energy transition from fossil fuels to renewable energy at whatever pace suits its own interests, rather than the interests of the communities it serves.”

The challenge also alleges that TVA violated the federal law that created the federal utility back in 1933 by entering into never-ending agreements with power distributors. That law, called the TVA Act, says that federal utility’s power supply contracts cannot exceed 20 years. By drafting the agreements so that they never expire, the conservation groups allege that TVA ran afoul of that limit on its monopoly power.

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Public Service Commission Sides with Alabama Power – Time to Move Forward on Renewables, Efficiency

UPDATE: This post was updated on Friday, June 12, 2020 at 12:40 Central Time to provide more context about the Public Service Commission’s vote on Tuesday and to correct an error so that the article states the proposed solar plus storage put downward pressure on customer bills.

 

Yesterday, the Alabama Public Service Commission, led by Twinkle Cavanaugh, capitulated to demands from Alabama Power to raise your utility bill in the midst of a pandemic and unprecedented economic stress.

 

The Commission voted unanimously allowing Alabama Power to:

  • Build Barry Unit 8 (a new 726-megawatt gas plant)
  • Buy Central Alabama (an existing 915-megawatt gas plant)
  • Enter into a power purchase agreement with Hog Bayou (to buy electricity from an existing 238-megawatt gas plant)
  • Acquire 200 megawatts of undetermined Demand Side Management and Distributed Energy Resources

 

The Commission did not approve the proposed solar + storage projects (400 megawatts).

 

We will be blunt. These Commissioners do not serve Alabamians. They serve Alabama Power. They serve their campaign donors. You deserve better.

 

It is has never been enough for the greedy executives like Mark Crosswhite at Alabama Power to be one of the most profitable utilities in the country on the backs of the one the poorest states in country.

 

No. They petitioned for unneeded and expensive new generation simply because they could. Their parent company (Southern Company) is reeling from years of bad decisions in Mississippi and Georgia. Alabama Power and the Alabama Commission keep on delivering shareholder value at your expense.

 

We intervened, along with Gasp, to protect Alabamians and we were represented in this case by the Southern Environmental Law Center. Alabama Power’s own data showed that solar-plus-storage was the least cost resource and would actually put DOWNWARD pressure customer bills. Not to mention the serious and significant flaws in its planning and forecasting methods. The Commission didn’t approve the cost-effective renewables.

 

Even the Alabama Attorney General’s Office had serious concerns about the request’s impact to Alabamians and wanted Alabama Power to bear some of the risk if this request didn’t deliver for consumers. Alabama Power, of course, does not take risks. It makes you take risks. It reaps the profits from your risks. The Commission didn’t blink an eye.

 

Don’t forget that advocates filed a petition to overturn Alabama Power’s solar taxes back in April of 2018! Has the Commission acted? No. But when Alabama Power demanded something, the Commission jumped.

 

Let us be as clear as we can. We strongly disagree with this Commission’s decision to saddle Alabamians with decades of costs and practically eliminate the benefits we should be enjoying from energy efficiency and renewable energy.

 

But, Energy Alabama does not participate in these issues to waste our breath. We do not exist simply to fight utility companies.

 

We want to move this state forward. We want the jobs. We want the savings. We want the cleaner air. We want the choices for consumers. All these things are possible with energy efficiency and renewable energy.

 

This is not and has never been a partisan issue. Alabamians of all stripes want more renewable energy, not less. Polling shows strong support for renewables in Alabama among conservatives AND liberals from the Saturn V in Huntsville to the Port of Mobile.

 

If the Public Service Commission is unable or incapable of handling this issue, it is incumbent upon the legislature to act. We have seen too many neighboring southern states grow massive amounts of renewable energy jobs. In light of the economic devastation from COVID-19, we will need every last one of those jobs created in Alabama and as fast as possible.

 

If you too are ready for growth rather inaction, it is time for YOU to take action.

  1. Become an Energy Alabama member – https://alcse.org/support-energy-alabama/energy-alabama-friend/
  2. Support Energy Freedom Alabama – http://energyfreedomalabama.com/