TAEBC submits comments to TVA over 2018 rate change proposal

The Tennessee Advanced Energy Business Council submitted the following comments to the Tennessee Valley Authority (TVA) regarding its “2018 rate change draft environmental assessment (draft EA).”

To whom it may concern:

TAEBC champions advanced energy as an economic development and job creation strategy. We exist to foster the growth of Tennessee’s advanced energy technologies, companies and jobs.

Our definition of advanced energy is technology neutral—anything that makes energy cleaner, safer, more secure or more efficient is in the tent. At its core, we look to energy innovation as an economic development opportunity.

Distributed generation certainly fits that definition. Specifically, our main audiences are commercial and industrial end users, as well as large entities like municipalities, hospitals, universities, etc. While these audiences all appreciate least-cost power, they also are demanding more control over costs, use and how that power is generated. All of which directly relate to business opportunities for our members and those companies in Tennessee’s advanced energy economy—which contribute $33B to Tennessee’s GDP, employ nearly 325,000 people, include more than 17,000 business entities and pay an average annual wage that exceeds the state average.[1]

Furthermore, TAEBC has seen Fortune 100 and Fortune 500 companies across the country and Tennessee commit to reducing greenhouse gas emissions, increase energy efficiency targets or establish sustainability goals.[2] To remain competitive at recruiting and retaining business and industry, we know the Valley must offer an attractive environment for these companies to meet their goals and deploy advanced energy technologies.

As an example, Facebook selected North Georgia, outside of the TVA territory, for a data center because of its solar energy program offerings.[3]

Therefore, TAEBC suggests the TVA Board take “no action” related to 2018 rate change draft environmental assessment for the following reasons:

  • It is increasingly evident that the businesses of the TVA service area want more advanced energy and distributed energy resources (DER) customer options – businesses, both current and potential recruits, want access to additional capacity for renewable options – the proposed rate change alternatives (B, C, and D) significantly provide uncertainty and disincentives for those existing customers to remain and expand their operations but also are a huge deterrent for new economic development prospects to procure and advance their renewables/sustainability/technology missions in the Valley, thus reducing TVA’s historical competitive advantage of being a low cost option and customer focused utility that, at its core in the TVA Act, is supposed to prioritize technology innovation and advancement, which is TAEBC’s mission and objective.
  • TVA has indicated it wants to increase technological innovation and investment – all actions B, C, and D deter investment from all DERs in the Valley by changing the volumetric rates materially and imposing fixed charges to deter consumer investment in what TVA describes as “uneconomic DER.” TVA does not define “uneconomic DER.”  A transparent valuation of various DER technologies is essential to determining both the environmental and economic impacts of DERs. 
  • The draft EA states that the purpose of the rate change is to better align wholesale rates with the “underlying costs” to serve, but the EA does not disclose, for example, how those costs are divided between grid transmission infrastructure and amortized capital expenditures for generation units. 
  • TVA has not indicated what level of DER adoption presents an issue for cost recovery or grid access – this appears to be a punitive and/or premature charge that is not needed or necessary given the current DER adoption at this time, pending further TVA data or analysis.
  • The draft EA states, “TVA’s current energy prices over-incentivize consumer installation of DER,” and the “imbalance created by uneconomic DER investment means that costs are shifted to consumers throughout the Valley who do not invest in DER.”  Supporting documentation is not provided for either of these assertions. Understanding the inputs to these statements are important factors to determining market conditions, consumer demand (end users), economic impacts, and potential cost-shifting. 

TAEBC believes TVA is an asset to our region. In fact, TAEBC supports TVA in reaching its goal of becoming the energy company of the future and we are committed to partnering with TVA to that end.

Thank you for the opportunity to provide comments.

Sincerely,

Cortney Piper

Vice President, TN Advanced Energy Business Council

606 W Main Street, Suite 250, Knoxville, TN 37902

P: 865-789-2669

 

Cc TAEBC Board of Directors

Matt Kisber, President
Steve Bares, Secretary

Tom Ballard, Immediate Past President

Jeff Kanel

Trish Starkey

Marc Gibson

Jim DeMouy

Mary Beth Hudson

Chris Bowles

 

[1] Tennessee Advanced Energy Economic Impact Report (2015). http://tnadvancedenergy.com/tennessee-advanced-energy-economic-impact-report/

[2] More Companies Set 100% Renewable Energy Goals in 2017, Energy Manager Today (December 2017). https://www.energymanagertoday.com/100-renewable-energy-goals-2017-0173841/

[3] Walton EMC Chosen to Serve New Facebook Data Center with Renewable Energy (March 2018). https://www.morningstar.com/news/pr-news-wire/PRNews_20180307CL32967/walton-emc-chosen-to-serve-new-facebook-data-center-with-renewable-energy.html