A congressional committee is questioning the cuts to energy efficiency and renewable incentives offered by the Tennessee Valley Authority, claiming that many electricity users in the seven-state TVI region are still suffering from an undue energy burden even with electricity rates lower than most of the country.
Democratic leaders on the House Energy and Commerce Committee and three of its TVA subcommittees also want it to do more to decarbonize its power portfolio to align more with President Joe Biden’s climate action goals. In a nine-page letter to TVA Chairman Jeff Lyach, House Energy Committee Chairman Frank Balloni Jr., DNJ, said TVA’s “business practices are inconsistent” with its broader mission to help reduce energy costs and protect the environment.
“Specifically, we are concerned that Tennessee Valley residents are paying too much for electricity, which is particularly affecting low-income families in Tennessee,” the Energy Council leaders said in their letter. “The committee is also concerned that TVA is interfering with its commercial and residential customers’ adoption of renewable energy, and as it makes progress on decarbonization, it must do more this decade.”
TVA, the country’s largest public utility, provides power to nearly 10 million people. Utilities maintain residential rates below about 80% of the top 100 utilities in the United States, and industrial TVA rates below 95% of the nation’s largest utilities, according to the U.S. Energy Information Administration.
Speech from the Energy and Home Trade Committee
Despite recent increases in the fuel portion of electric bills, TVA rates are still lower than they were a decade ago, and federal utilities have pledged to keep their base rates steady over the next decade.
But because more homes and businesses are not well insulated and a greater portion of customers rely on electricity rather than natural gas for heating, electricity consumption and electricity costs are higher in the Tennessee Valley than in most parts of the country. With below-average incomes in the US, many Tennessee households end up spending a larger share of their income on electricity than other parts of the US, even with lower TVA power rates.
Studies cited by Congress show that clients residing in Memphis spent as much as 27% of their annual income on energy, one of the highest energy burdens in the country.
The House Energy Committee letter raises some of Congress’s strongest criticism of TVA in decades and directs TVA to answer a set of 16 questions about its future power plans by February 2. Representative Steve Cohen, D-Memphis, praised the investigation into TVA policies.
“I commend my colleagues for pointing out the high electricity rates that the Memphians pay and echo their concerns about the heavy financial burden that these rates place on my friends, neighbors and residents,” Cohen said in a statement.
Unlike most of the Tennessee congressional delegation that has expressed support for TVA in recent years, Cohen urged Memphis Light Gas & Water, TVA’s largest customer, to consider purchasing from other, cheaper sources of wholesale energy to help reduce energy costs in Memphis. The Memphis utility now reviews offers from wholesale suppliers, including TVA and Midcontinent Independent System Operator Inc. and other suppliers.
Balloni, the New Jersey congressman, questioned why TVA is cutting back on its incentives to conserve energy given the high energy use of many homes.
“Despite TVA acknowledgment that energy efficiency is critical to achieving a lower cost energy mix, public reports indicate that federal utilities reduced funding for their energy efficiency programs by about two-thirds between 2014 and 2018 and eliminated energy efficiency customer stimulus programs,” he said in His letter to TVA. As a result, TVA’s annual energy savings from energy efficiency decreased from 512,084 MWh in 2014 to just 101,138 MWh in 2020.”
Balloni said residential taxpayers in Tennessee, on average, use the second largest percentage of electricity for any state’s residents.
TVA has maintained its support for free energy audits for home and business customers and helps fund programs targeting low-income neighborhoods for energy efficiency, including the Chattanooga Home Energy Upgrade Program.
“We are committed to our role as a national leader in power generation, innovation and carbon reduction,” Buddy Eller, TVA’s vice president of communications, said in a statement, noting that TVA has reduced its carbon emissions nearly twice as much as the national average while maintaining low rates and supporting conservation programs. TVA said it is trying to target its energy efficiency assistance to low-income families who need it most.
“Since 2005, TVA has reduced carbon emissions by 63% and currently saves nearly 60% of the region’s energy from carbon-neutral sources in one of the country’s most clean, robust and most diverse energy systems,” said Eller. “The impact of a reliable, low-cost clean energy supply is directly linked to the region’s economic development successes. Over the past five years, TVA has worked to help bring $45.9 billion in investment and 350,000 jobs to the valley.”
Eller said that TVA is working with 153 local energy companies to address the root causes of the region’s high energy burden through weathering and other energy audits and programs. TVA has invested more than $14.5 million in Home Uplift programs since 2018, resulting in an average of 30% energy savings in more than 2,300 homes involved.
The TVA’s Strategic Plan for the Future, adopted last year, calls for TVA to reduce carbon emissions below 2005 levels by at least 70% by 2030 and by 80% by 2035. But Biden has set a goal of making the power grid net-free. Carbon by 2035, some environmental groups are pushing TVA as a federal corporation to become carbon-neutral by 2030.
Stephen A. said: Smith, executive director of the Southern Alliance for Clean Energy, says TVA needs to do more to decarbonize power generation and help consumers with energy efficiency.
“TVA has lost contact with its essential service mission,” Smith said in a statement this week. “We welcome Congress’ renewed oversight of this unregulated federal monopoly that serves the elite at the expense of the masses.”
Contact Dave Flessner at email@example.com or at 423-757-6340