TVA stood behind its emissions goals, renewable plans and rates in responding to questions from the U.S. House of Representatives’ Committee on Energy and Commerce.

The federal utility earlier this month responded to a January letter from the committee that posed several questions regarding TVA’s electricity affordability and investment in renewables and energy efficiency. The committee suggested the agency’s current business practices might be at odds with its statutory requirement to provide low-cost power to Tennessee Valley residents. (See TVA Comes Under Congressional Spotlight.)

“Unlike investor-owned utilities, we do not seek to make a profit each quarter or year,” CEO Jeff Lyash wrote in the agency’s Feb. 2 response to the committee. “TVA’s business model is based on generating the revenue needed to manage our system costs while keeping rates low for our customers — all without receiving federal appropriations.”

Lyash said plans to cut carbon 70% from 2005 levels by 2030 and 80% by 2035 won’t affect energy costs, reliability or resiliency.

“Beyond 2035, we aspire to achieve net-zero emissions by 2050 and are actively pursuing and researching the technologies needed to get there,” he wrote.

TVA said it plans to add 10 GW of solar generation by 2035. It also said it would “review and consider” wind generation opportunities. Lyash said the utility will continue growing renewable energy “regardless of our inability to take advantage of renewable energy credits.”

Currently, wind and solar generation account for 3% of TVA’s generation mix, “significantly less than comparable utilities,” the committee said.

TVA CEO Jeff Lyash | TVA

But Lyash said TVA’s transformation to clean energy must be carefully planned, given many of its 10 million customers subsist on low incomes and live in old, energy-inefficient homes. He also said the seven-state footprint deals with harsh summers and winters and severe weather.

The utility said it’s discussing ways it can accelerate carbon reductions “while maintaining safe, reliable and low-cost power.”

Lyash said residential rates remain lower than 80% of the nation’s large utilities and he said TVA will keep base rates flat until 2030. He also said the agency has shrunk its debt to its lowest level in 30 years.

During TVA’s Thursday Board of Directors meeting, Lyash repeated his congressional response’s talking points. He also announced the addition of a GE Hitachi small modular reactor by 2032 at the Clinch River Nuclear site.

TVA’s response letter backed the grid access charge it rolled out in 2018, calling it “modest” and necessary so that local power companies with distributed energy resources didn’t leave other power companies with higher rates. It said the charge “mitigate[ed] the effects of uneconomic development in DER.”

The utility said the charge has had “essentially no or very limited impact on the adoption of distributed solar installations.”

TVA also defended its energy efficiency efforts and the pace of its coal fleet’s retirement.

From 2014 to 2021, TVA reported annual energy needs served by energy efficiency programs grew from 0.9% to 1.4%. It said all its local power companies participate in at least one of its four energy efficiency programs.

TVA said new building codes and more efficient appliances and products have impacted energy consumption more than “market-driven efforts.” It also said results from a study on energy programs potential, due out later this year, will help determine how it modifies or fashions new programs for energy efficiency, demand response and electrification.

The utility’s response stood behind its 2035 timetable to retire all its coal units. It pointed out that it will have retired 60% of its coal capacity when it shuts down its Bull Run coal plant near Knoxville, Tenn., next year. TVA said it is weighing future retirement announcements for its Cumberland and Kingston coal plants and might replace them with onsite gas units or offsite solar and storage assets.

In response to a question about how it plans to reduce its reliance on natural gas, TVA said that natural gas “currently remains the best available resource that allows TVA to backstop the intermittency of solar generation.”

The authority said it had no ill intentions when it participated in the now-dissolved Utility Air Regulatory Group (UARG), a lobbying organization that fought environmental standards. (See TVA Sued Over Contributions to Trade Groups; FERC Questions Ratepayer Funding of Trade Association Dues.)

It also explained that when it when it hired former UARG attorneys after the lobbying group disbanded in 2020, it intended that they would keep TVA apprised of Clean Air Act regulatory developments, not to engage in litigation.

“TVA contractually restricts its external membership organizations from using TVA funds for lobbying and litigation, unless specifically authorized by TVA,” the utility said.

SACE: Purposefully Misleading Replies

The Southern Alliance for Clean Energy (SACE) lambasted TVA’s response and said the answers “dodge some of the committee members’ key concerns and provide misleading information on several issues.”

SACE said TVA skirted details on reducing its energy efficiency programs and was intentionally vague on its plans to reduce reliance on fossil fuels.

“TVA attempts to dismiss the committee’s concerns about its pullback of energy efficiency by claiming utility energy efficiency programs are no longer needed because building codes and appliance standards have taken over as energy efficiency tools. This argument is problematic on many levels,” SACE Research Director Maggie Shober said. “Better codes and standards do not reduce the customer benefits of the utility incentivizing customers to be more efficient than that baseline.”

Shober said other utilities face the same stepped-up codes and standards yet still create energy savings programs “that put TVA’s to shame.” She said it’s “beyond obvious” that the authority could be doing more for energy efficiency.

Using information obtained from the U.S. Energy Information Administration, SACE put TVA’s cumulative energy savings from a peak of 0.31% in 2014 down to 0.02% in 2019; TVA claims a 0.9-1.5% range since 2014.

The clean energy advocate said TVA’s savings performance was among the worst in the nation. “There’s a lot of room to increase from near zero,” Shober said.

She said TVA is engaging in “some seriously Orwellian math” when it paints its carbon reduction plans as in sync with President Biden’s call for 100% carbon reductions by 2035.

SACE said by its count, TVA’s target of 10 GW of solar by 2035 needs to at least double to achieve completely clean energy.

The organization also said the utility wasn’t upfront about its grid-access charge being a means to suppress distributed solar adoption. “TVA brings up the old boogeyman myth that distributed solar on homes and businesses shifts costs to customers without solar, and yet it doesn’t present any evidence of such a cost shift,” Shober said.