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E&C Leaders Request Information from Tennessee Valley Authority on Ratepayer Bills and Climate Action

Jan 13, 2022
Press Release
Members Express Concern over High Electric Bills, Underinvestment in Energy Efficiency and Renewable Power, and Inadequate Decarbonization Goals

Energy and Commerce Committee Chairman Frank Pallone, Jr. (D-NJ), Energy Subcommittee Chairman Bobby L. Rush (D-IL), Oversight and Investigations Subcommittee Chair Diana DeGette (D-CO), and Environment and Climate Change Subcommittee Chairman Paul Tonko (D-NY) wrote to the CEO of the Tennessee Valley Authority (TVA) today requesting information regarding business practices that appear inconsistent with TVA’s statutory requirement to provide low-cost power to residents of the Tennessee Valley and out of concern that TVA is interfering with the deployment of renewable and distributed energy resources. 

The TVA was created by federal statute through the Tennessee Valley Authority Act and is required to “give preference to States, counties, municipalities, and cooperative organizations of citizens or farmers, not organized or doing business for profit” and to maintain national leadership in technology innovation, low-cost power, and environmental stewardship. Congress has safeguarded TVA ratepayers from predatory practices by requiring the federal electric utility to engage in “least cost planning” that accounts for the “full range of existing and incremental resources” including energy conservation and efficiency and renewable energy resources.   

“The Committee is concerned that TVA’s business practices are inconsistent with these statutory requirements to the disadvantage of TVA’s ratepayers and the environment. Specifically, we are concerned that Tennessee Valley residents pay too much for electricity, which particularly impacts low-income households in Tennessee,” the four Committee leaders wrote to TVA CEO Jeffrey Lyash. “The Committee is also concerned that TVA is interfering with the adoption of renewable energy by its commercial and residentials customers and, while it is making progress on decarbonization, it must do more this decade.”

According to one analysis, hundreds of thousands of low-income households in Tennessee face an elevated energy burden, with some spending as much as 27 percent of their annual income on energy, while low-income residents of cities such as Memphis face some of the highest energy burdens in the nation.

The Committee leaders are concerned that the high electric bills result, in part, from TVA’s decision to reduce its funding for its energy efficiency programs by nearly two-thirds between 2014 and 2018 and from its imposition of fixed fees that get passed along to ratepayers in the Tennessee Valley. 

The Committee leaders also expressed concern over internal documents showing that TVA’s fixed charges may be intended to interfere with the deployment of renewable energy. They likewise pointed to TVA’s unambitious carbon emission reduction goals, which fail to meet the Biden Administration’s objective of achieving a carbon-pollution free electricity sector by 2035.

The letter comes after a Committee investigation last Congress, which questioned – among other things – whether TVA was using ratepayer dollars to fund the Utility Air Regulatory Group (UARG), a secretive front group devoted to rolling back Clean Air Act regulations. UARG was subsequently disbanded in the face of this scrutiny, but questions remain as to what safeguards TVA has adopted to ensure that ratepayer funds are not spent on lobbying or litigation that opposes public health and welfare protections.

To better understand TVA’s activities, the Committee requested information related to a series of questions, including:

  • The rationale for annual changes in energy efficiency funding; 
  • An explanation as to whether certain TVA rate changes were intended to interfere with the deployment of distributed energy resources; 
  • Whether TVA intends to update its decarbonization goals to conform to President’s Biden’s initiative to achieve a carbon-pollution free electricity sector by 2035; 
  • An explanation for TVA’s comparative underinvestment in solar and wind generation; and
  • TVA’s plans for replacing its Kingston and Cumberland Fossil Plants.

The full letter to TVA is available HERE.

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