SACE grades TVA draft Plan, calls for public input to move TVA to the head of the class

Make your voice heard. Tell TVA we must prioritize efficiency and renewable energy.

Make your voice heard. Tell TVA we must prioritize efficiency and renewable energy.

The Tennessee Valley is at a critical crossroads for its energy and economic development. Whether our future is one where efficiency and renewable energy drive a strong clean energy economy or one where the Valley continues to struggle with the environmental and economic consequences of traditional energy sources may be decided over the next couple months.

Today TVA released its draft Integrated Resource Plan (IRP) for public comment, and SACE has graded the Plan in five key areas.  TVA’s current grades are average . . . but on the rise. The final grades aren’t in yet, and Valley residents have the opportunity to move TVA to the top of the class.

Jobs, economic development, protecting our natural treasures — it’s all on the line, and it’s critical that Valley residents tell TVA that a clean, renewable energy future is the path we need to take.

TVA’s “Mid-Semester” Report Card

tva-irp-grades

We are pleased that this opportunity for public engagement is finally here:  SACE advocated for TVA to undertake an IRP process for many years. (For example, see Dr. Smith’s written testimony to a US Senate committee, p. 30.)  For too many years, TVA operated based on time-worn, insular assumptions. The IRP has brought new ideas and a fresh perspective into TVA, but initiating the process is only the first step to ensuring the Valley has a safe, clean energy future.

How TVA produces electricity impacts our economy, environment and community health.

How TVA produces electricity impacts our economy, environment and community health.

For the past 18 months, SACE, as been part of the Stakeholder Review Group (SRG), has been advocating TVA to properly value its energy efficiency and renewable energy resources, to begin retiring its dirty coal-fired generation fleet, and to reconsider its decision to move forward on costly and dangerous nuclear expansion. TVA’s draft Plan represents some significant steps in the right direction.  But TVA can do better, and Valley residents must demand better.

Whether TVA takes the leadership role in transitioning to a clean, renewable energy future is, to a large degree, within the control of Valley residents.  With strong public input, we can take TVA’s average grades and make them honor-roll material. And the opportunity to weigh in on these critical choices is now. TVA’s draft plan reviews several different strategies to meet future energy demand, essentially narrowing the options to three that will receive additional scrutiny over the next several months before a final recommendation is proposed to the TVA Board is Spring 2011. The three preferred strategies are: the “Diversity Focused” strategy, the “EEDR and Renewables Focused” strategy (EEDR stands for energy efficiency and demand response), and TVA’s Baseline Plan.  Together they represent a wide range of possible coal retirements, energy efficiency and renewable energy.

Aggressively pursuing efficiency and renewable energy will allow TVA to transition away from its old, dirty coal-fired power plants.

TVA must permanently transition away from its old, dirty coal-fired power plants.

Considering Coal Plant Retirements

Current grade: B+

TVA’s possible strategies call for the layup of a minimum of 2,000 and a maximum of 5,000 megawatts (MW) of coal-fired generation by 2017.  This represents a major shift for TVA, the beginnings of which we saw at  TVA’s August 20th Board meeting when the Board approved the layup of 1,000 MW of coal-fired generation.  If TVA pushes towards the high end, this would represent one of the largest transitions away from coal power in the country. However, the devil is in the details, and TVA’s use of the word “layup” is why TVA didn’t get an “A.”

According to the draft Plan, “the goal of a long-term layup is the preservation of the asset so that it could be re-integrated into TVA’s generating portfolio in the future if power system conditions were to warrant it.”  This a far cry from the permanent retirement that makes economic and environmental sense for the Tennessee Valley.  These dirty, inefficient power plants need to be shut down once and for all.

What’s at stake? The difference between 2,000 MW of coal-fired layups and 5,000 MW of coal-fired retirements is the difference between a clean, healthy energy future and the possibility that we continue to suffer from the economic, environmental and human health costs of coal fired generation.

Reaching for Leadership on Energy Efficiency

Current grade: B-

Regarding efficiency, we’ve recently seen some progress with the hiring of Bob Balzar and TVA’s August 20th commitment to help customers reduce energy use by 3.5% by 2015. While these are welcome changes, it is in the interest of TVA customers that they be expanded dramatically over the next three to five years.

TVA’s draft plan does consider an expansion of energy efficiency. The range of options being recommended range from 5,900 to 14,400 gigawatt-hours (GWh) of efficiency by 2020. However, none of these options represent what would be considered a national leadership plan.

The nation’s leading utilities are helping customers save twice as much or more, reducing costs to both the utility and participating customers. The TVA states have lagged the nation in energy efficiency efforts, and a recent study suggests that “energy-efficiency initiatives in the South could prevent energy consumption … from growing over the next twenty years.”

Fortunately, one of the authors of that study, Dr. Marilyn Brown, has just been confirmed to the TVA Board of Directors. The TVA leadership is in place to help its customers save energy and help increase the efficiency of the Tennessee Valley economy.

What’s at stake? Energy efficiency is the cheapest, cleanest and most rapidly available energy resource that we have, and TVA should be striving to be a national leader in developing this resource.  Developing this resource means reduced costs, creating local jobs, strengthening local economies and reducing greenhouse gas emissions.

Developing Renewable Energy Resources

Current grade: C-

Tennessee workers installing Tennessee-made solar panels.  Renewable energy means economic growth and a healthy environment.

Tennessee workers installing Tennessee-made solar panels. Renewable energy means economic growth.

In-Valley renewable energy resources have the potential to contribute significantly to TVA’s generation portfolio.  Developing these resources creates local jobs and keeps money in local economies while stabilizing demand and improving grid stability.

TVA’s preferred strategies presented in the draft Plan range from 1,300 to 3,500 MW of new renewable energy.  Combine this with the ramped up Generation Partners program and the more than 1,400 MW that TVA has contracted for from outside the Valley, and it’s apparent that TVA is beginning to take these resource seriously.  And to TVA’s credit, these are significant steps that will reduce its greenhouse gas emission and positively impact on our environment.

Unfortunately, however, there are still serious concerns about TVA’s commitment to developing these resources. While efficiency and  coal retirement made up a significant part of the August 20th announcement of TVA’s new vision, renewable energy was noticeably absent.  Nor has TVA set goals or made the budget and staff commitment to renewable energy like it has with efficiency in recent months.  Finally, and perhaps most important, TVA has not explained to the public what percentage of these possible portfolios will come from within the Valley.

What’s at stake? Even TVA’s most aggressive renewable energy strategy falls way short of the Valley’s potential for solar, wind and biopower.  Because of their range of benefits, aggressively pursuing these resources means thousands of jobs, billions of dollars to our region’s economy, and million of tons of greenhouse gas emissions avoided compared to traditional energy resources.

Using Best Industry Planning Practices

Current grade: B

In its current preferred strategies, TVA does not seem to be fully valuing the range of benefits that develop the Valley's renewable energy resources would bring.

TVA does not seem to be fully valuing the benefits that developing in-Valley renewable energy resources would bring.

The planning process that TVA used to develop the draft Plan certainly fell within standard industry practices, and in most cases would put them in a leadership position among Southeastern utilities.  However, when compared to national leaders, TVA ‘s grade is a B. The areas for improvement relate to both the way the draft plan was developed and the levels of efficiency and renewable energy considered by the staff to be reasonably available. These shortcomings have been continuing evidence that TVA staff have yet to value efficiency and renewable energy on an equal basis with power generation.  Whether it’s reduced costs, increased reliability or healthier communities, these benefits need to be fully accounted for in the decisions made by the TVA Board of Directors.

What’s at stake? If TVA were to give full value to all of the economic, environmental and societal benefits of investing in efficiency and renewable energy, the Valley would quickly become a national leader in the development of these resources.  It’s up to us to make sure TVA gets this message!

Appropriate Assumptions for Energy Costs and Economic Opportunities

Current Grade: I

TVA’s “incomplete” is this category comes because TVA has yet to reasonably disclose the data necessary to effectively evaluate whether TVA’s assumptions about the costs and characteristics of it resource options is appropriate.  For example, the draft plan offers few positive comments about the Valley’s potential for solar energy even as we witness the rapid growth of both solar manufacturing and installations throughout the region. While TVA has been responsive to many of the requests from the Stakeholder Review Group, this critical information is necessary for SACE and others to develop confidence that the draft plan (the outputs) is built on a solid foundation (the inputs).

What’s at stake? Information is power, not just for SACE for all the residents of the Valley.  TVA is not subject regulation by a public service commission like power companies in other states.  In its role as a public agency, TVA must be responsive to requests for information so that its constituents can provide input, remain informed, and trust the planning process.

A word about nuclear power:

Given current trends in energy efficiency and generation, delaying a decision on new nuclear reactors could altogether avoid wasting billions of dollars on this dangerous energy source.

Given current trends in energy efficiency and generation, delaying a decision on new nuclear reactors could altogether avoid wasting billions of dollars on this dangerous energy source.

SACE chose not to give TVA a grade on the options it presented for nuclear development because the jury is still out, and, in reality, this comes down to an all-or-nothing (“A” or “F” if you will) situation.  Given the potential for energy efficiency and renewable energy to meet a significant part of the Valley’s future energy demand more cheaply and safely than nuclear, TVA current enthusiasm for constructing new reactors is misplaced.

Fortunately, and despite TVA’s commitment of nearly $250 million in its 2011 budget for maintaining the Bellefonte option, TVA still has the opportunity to earn an “A” by delaying the final decision on Bellefonte until there is actually a reason to consider this costly and dangerous energy option. Given current energy trends and the quickly emerging renewable energy industries, delaying the decision to construct new reactors may mean never having to invest another dollar in this ill-advised resource. It could save the Valley billions of dollars while avoiding the environmental and public safety issues that nuclear brings with it.

By aggressively pursuing energy efficiency and renewable energy, TVA will be able to retire its aging coal-fired generation while avoiding the need to build costly and dangerous nuclear plants.  Investing in efficiency and renewable energy will strengthen the region’s economy, protect our environmental treasures, and preserve the health of our communities.  It can be done, but it will take the voice of the people to convince TVA that it must be done.

For information in how to submit comments by mail, electronically or in person at one of the four hearings that TVA will be hosting around the Valley in October, click here.

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