Feds: Congress should amend TVA Act
Regulator declined request of utilities to exit & use transmission lines
A federal regulator is not going to let three local power companies receive electricity from outside of the Tennessee Valley Authority through TVA’S transmission lines, leaving a barrier to local utilities that want to exit TVA.
The Federal Energy Regulatory Commission denied the request of three Tennessee local power companies to use TVA’S transmission lines if those utilities were to exit TVA. The decision keeps what is known as TVA’S “fence” — a fixed coverage area where it is not subject to competition in place.
The three local power companies want to access the transmission lines and leave TVA, purchasing power elsewhere and generating electricity independently. Much of those plans to leave TVA had hinged on whether the utilities could access those transmission lines.
That transmission issue was of particular interest to Memphis, Light, Gas and Water, which is considering leaving TVA. The decision from FERC means that MLGW would have to build its own transmission lines in order to leave TVA. The utility is currently asking the private sector to bid on its power supply and building transmission lines.
In a statement at the beginning of the meeting, FERC Chairman Richard Glick explained the board’s decision but then added some thoughts of his own on the TVA fence.
Glick called the fence an “anachronism” and noted that it prohibited competition within TVA’S borders, which is almost all of Tennessee and parts of six other states. He noted that it would take an act of Congress to amend the TVA Act and said, “...The time has come for Congress to bring down the TVA fence.”
Glick also noted a claim made by the three local power companies in a filing with FERC last week — TVA CEO Jeff Lyash reportedly told officials affiliated with one of the local power companies TVA was holding off investing in faulty transmission infrastructure until the federal power provider knew if the local power companies would remain with TVA.
Glick said he had asked FERC’S enforcement arm whether the claims should be investigated.
TVA has denied it is holding off on investment due to the possible departure of the three local power companies. Three of the four FERC commissioners concurred with the denial. Allison Clements, an appointee by former President Donald Trump, dissented.
After the FERC decision, TVA touted its power supply model.
“FERC’S action is consistent with our view that the public power model created by Congress best serves the public interest.. .the public power model works. We look forward to continuing to work with all of the local power companies to advance our unique, shared mission of service,” the company said in a statement.
Environmental advocates expressed disappointment with the decision.
“This is a deeply disappointing decision and a slap in the face to millions of TVA customers,” Gaby Sarri-tobar, a campaigner at the Center for Biological Diversity, said in a statement . “FERC just blew an opportunity to set an important precedent and give TVA power companies options for cheaper, renewable power and lower rates for customers, and begin breaking our fossil-fuel addiction. This makes it all the more important for TVA’S new board nominees to steer our country’s largest federal utility toward climate action and energy justice.”
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.