A POWER STRUGGLE
A federal regulator may energize the debate over whether Memphis should leave TVA
A federal regulator could upend how millions of people throughout the Southeast get their electricity.
The Federal Energy Regulatory Commission could weigh in this week on a dispute between the Tennessee Valley Authority, which provides power to almost all of Tennessee and parts of six other states, and three local power companies that want to leave TVA.
Those three Tennessee power companies want FERC'S board to say TVA should be forced to let the local power companies use TVA'S electric transmission lines even if the local power companies leave TVA and purchase power from a different supplier.
That decision would be of particular interest to Memphis, which is considering leaving TVA.
Use of power lines for noncustomers
The three companies in question are east Tennessee power companies Volunteer Electric Cooperative and the Athens Utilities Board, and Gibson Electric Membership Corporation, which is in West Tennessee and southwest Kentucky.
The companies filed a complaint with FERC in early 2021 asking the Commission to rule that TVA should have to bring power from outside the TVA footprint to the local power companies if the companies decide to leave.
TVA, unsurprisingly, has sought to protect what critics call its monopoly, and maintains that it should only have to wheel power to customers buying that electricity from TVA.
If TVA had to wheel power into its footprint to non-customers, that would open the door to widespread competition within the TVA footprint. And it
At present, MLGW is asking for bids on new transmission lines under the assumption it would not be able to use TVA’S.
removes a huge barrier for local power companies that would like to leave TVA — the cost of building and constructing transmission lines.
That construction cost and the difficult process of building the lines could make Memphis, Light, Gas and Water leaving TVA easier.
At present, MLGW is asking for bids on new transmission lines under the assumption it would not be able to use TVA’S. If that changes, it could further increase the projected savings MLGW ratepayers would get by leaving TVA, generating electricity locally and buying power elsewhere.
FERC is scheduled to hear the case this week, according to an agenda posted on the commission’s website. The agenda does not specify a vote will be taken, but advocates, such as the Southern Alliance for Clean Energy, are hailing it as a potential decision point. However, the item could be struck from the meeting agenda at any time.
Documents allege TVA holding off investment
In recent documents submitted by the power companies, various officials allege TVA and CEO Jeff Lyash are holding off investing in spotty transmission service in some areas of the TVA footprint.
The reason for that hesitancy, according to heavily redacted affidavits filed with FERC, is TVA’S unwillingness to invest in a region where it might not be providing power in five years.
In a meeting with two Athens, Tennessee area officials, Lyash gave his reasons for not investing in transmission upgrades.
“Mr. Lyash acknowledged that it was a real issue and that he would ‘like’ to invest millions in needed transmission infrastructure and equipment to remedy the situation, but that TVA is reluctant to invest in that area because of the [petition] proceeding and the possibility that Volunteer might give notice on its [power] contract as a result,” Eric Newberry, general manager of the Athens Utilities Board, said in an affidavit.
Newberry did not attend the meeting where Lyash made the comments. His affidavit said he was not invited, but heard what took place second-hand.
Environmental activists who are often critical of TVA seized on what Lyash reportedly said in the affidavit.
“The most recent filings submitted by the [local power companies] with FERC indicate another clear example of TVA attempting to operate as a monopoly and without public power values, despite being the nation’s largest public power utility,” Stephen Smith, executive director for Southern Alliance Clean Energy said in a statement. “Attempting to limit a local LPC’S ability to provide reliable service and have access to more affordable and cleaner energy sources is unfortunately typical of TVA leadership’s heavy-handed, anti-competitive behavior, further adding to the list of reasons why LPCS are seeking an alternative energy supply.”
TVA disputes that it is holding off on investment and maintains it is fulfilling all of its obligations to the three local power companies under the wholesale power contracts it has with those companies.
“TVA has honored and is honoring all of its commitments under that contract, and Volunteer has not claimed otherwise. TVA’S service to Volunteer already meets a high standard for reliability. TVA has recently made a number of investments in elements of the TVA transmission grid supporting service to Volunteer, with plans to make additional such investments in the near future. TVA has not sought and is not seeking to penalize Volunteer for filing the petition that began this case,” TVA wrote in a letter to FERC.
Samuel Hardiman covers Memphis city government, politics and energy for The Commercial Appeal. He can be reached by email at samuel.hardiman@commercialappeal.com or followed on Twitter at @samhardiman.