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TAEBC submits comments to TVA regarding Draft 2019 IRP

To whom it may concern:

The Tennessee Advanced Energy Business Council (TAEBC) is pleased to submit the following comments to the Tennessee Valley Authority (TVA) regarding its 2019 Integrated Resource Plan (IRP).

TAEBC would like to reiterate our commitment to supporting TVA as it takes steps to proactively address the evolving utility marketplace. Our intent is to provide TVA with economic development trends and data to inform the utility’s decision on how best to meet future electricity demands while continuing its broader mission to deliver cost-effective, cleaner energy, that promotes the three-pronged mission of Economic Development, Energy, and Environmental Stewardship.

TVA’s approach to the 2019 IRP represents the utility’s recognition of a shifting energy landscape and its role in becoming an energy company of the future. This is significant.

TAEBC applauds TVA’s emphasis on flexibility related to this IRP so the utility is better able to respond and adapt to a changing energy marketplace. TAEBC also applauds the recent announcement of TVA’s utility scale RFP announced on April 1, 2019. While the details of the TVPPA/LPC driven Flexibility Resource Project (FRP) are not public or finalized, this is another opportunity to further advanced energy technologies and solutions in the Valley.

While this IRP emphasizes aspects of advanced energy like distributed energy resources (DER), electrification and technology advancements—specifically pointing out as part of TVA’s mission under the TVA Act, the agency is called upon to be a leader in technology innovation– it stops short of fully embracing the advanced energy economy in a way that would have ripple effects across Tennessee’s and the Valley’s economy.

The Tennessee Advanced Energy Business Council, through our comments, will lay out the case for TVA to more fully embrace the advanced energy economy. These comments are in the spirit of TVA’s emphasis on plan flexibility. In lieu of offering prescriptive comments, our organization will provide guiding principles for TVA to consider as it finalizes its IRP.

Background

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. 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.

We encourage TVA to examine the advanced energy industry and Tennessee’s leadership position within the industry as it considers its 2019 IRP. This is a growing and lucrative sector of our economy. States and regions that provide an attractive home for this industry — and its workforce – will be rewarded with jobs and capital investment. Primary examples of this are Google and Facebook locating data centers to the Tennessee Valley because TVA was willing to work with them on renewable energy goals. Additionally, Walmart is encouraging its suppliers to incorporate renewable energy into the manufacture of goods sold at its stores through Project Gigaton.1 In order to keep and grow these jobs in Tennessee, we need to ensure access to advanced energy and appropriately promote the programs or processes in place so Tennessee based suppliers can meet their customers’ sustainability goals.

Tennessee’s advanced energy economy contributes nearly $40 billion to our state’s GDP, employs almost 360,000 people, includes more than 18,000 business entities and pays an average annual wage that exceeds the state average.2

Globally, advanced energy is a $1.4 trillion industry. That is almost twice the size of the global airline industry and nearly equal to worldwide apparel revenue.3 Tennessee can be even better positioned to lead this industry because of our assets.

The world’s largest companies are turning to advanced energy to power their operations, decrease emissions and gain a competitive advantage in the marketplace. Tennessee has a unique support system that connects companies with world-renowned technology, unique utility assets and a booming advanced energy industry to deploy and manufacture innovative energy solutions and surpass sustainability goals.

Tennessee’s unique assets include:

  • Home to the largest U.S. Department of Energy science and energy lab, Oak Ridge National Lab,
  • TVA’s three-pronged mission of power generation, environmental stewardship and economic development makes it a unique utility asset,
  • More than 18,000 businesses are included in Tennessee’s advanced energy economy, providing access to a variety of solutions, skills and expertise.

Guiding Principles

TAEBC encourages TVA to consider how its IRP might encourage or discourage economic development, capital investment and jobs in our region from the advanced energy sector. This includes companies that 1) are directly engaged in the advanced energy industry (i.e. manufacture advanced energy widgets), 2) deploy advanced energy technologies as part of a commitment to corporate sustainability and 3) provide professional services (i.e. installers, engineers, etc that locate operations and talent in the region to service regional customers).

1)   To remain competitive at recruiting and retaining business and industry, TVA must offer and promote an attractive environment for these companies to meet their sustainability goals and deploy advanced energy technologies.

Environmental groups sometimes write off TVA’s renewable energy progress because it does not have a defined Renewable Portfolio Standard. We do not want to same thing to happen with site selectors and those responsible for scouting states for expansion or location because they cannot readily identify TVA’s advantages and offerings.

TVA’s new Renewable Investment Agreement (RIA) was developed in response to corporate demand. However, information on the program is not widely promoted or available. Additionally, the RIA was created mainly with solar in mind and opportunities exist to expand the technology offerings to align more with the TVA strategies identified in the IRP to support economic development recruitment and retention of some of the Valley’s largest existing and future employers.

Allowing local power companies more flexibility to meet their end user demands for advanced energy is also a step in the right direction. The new Flexibility Resource Project (FRP) is a step, but lots of details and policies remain unclear and the marketplace cannot transact with vague guidelines. Clear, transparent and easily accessible information on these options is key to leveraging the economic development opportunities and maintaining customer control and retaining TVA and LPC customer relationships/revenue.

2)   Allow for a blend of scenarios and strategies.

Given the trends in our economic and energy landscape, it is likely TVA will experience a blend of scenarios and strategies.

For example, last fiscal year, business investment in the Tennessee Valley topped $11 billion, setting a record year for TVA.4

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.

According to a report from Ceres that examines data provided by Fortune 500 companies, the largest companies in the United States are steadily increasing their clean energy and energy efficiency efforts while improving their bottom lines – a trend that is having an important role in the decarbonization of the U.S. electric power sector in recent years.5

From the report:

“Overall, 48 percent of the 2016 Fortune 500 (240 companies) have a greenhouse gas target, a renewable energy target, an energy efficiency target, or some combination thereof. The largest companies continue to lead, with 63 percent of Fortune 100 companies setting targets.”

Additionally, a new corporate alliance was formed this year called the Renewable Energy Buyers Alliance (REBA), a trade organization that will help companies take advantage of new ways to purchase clean energy. REBA aims to empower tens of thousands of companies to buy renewable energy in the coming years — increasing the market from roughly 5,000 companies today.

Through last year, companies signed enough corporate renewable deals to support nearly 16 gigawatts of new renewable energy capacity in the U.S. REBA aims to accelerate that activity and grow the market to 60 gigawatts by 2025.6

REBA member companies include those with operations in the Tennessee Valley like Google, GM and Walmart.

This means that TVA is likely to experience a scenario of Valley Load Growth (or at least demand for a certain kind of load growth), Decarbonization and Rapid DER Expansion.

Additionally, a blend of strategies (Promote DER, B; Promote Resiliency, C; Promote Efficient Load Shape, D; Promote Renewables, E) can be an effective response to the above blended scenario.

3)   Maintain and increase awareness of advanced energy trends and economic opportunities. Embrace these trends to TVA’s advantage.

Three specific examples come to mind. Although there are more.

The first has been mentioned multiple times—corporate America’s demand for advanced energy technologies in order to locate business in a state. Google and Facebook are primary examples.

The second is electrification. When VW announced an $800 million and 1,000 job plant expansion in Chattanooga to manufacture its electric vehicles, Tennessee Economic and Community Development Commissioner, Bob Rolfe proclaimed the state has a goal of becoming the top electric vehicle producer in America. Rolfe said, “Our goal is to be at the forefront of all electric vehicle manufacturing and the suppliers that will wrap around.”7

If our state’s economic development goal is to become the top electric vehicle producer in America, TAEBC believes TVA should complement this goal by making the Tennessee Valley the most electric vehicle friendly region in the country to fully leverage the economic opportunities from this industry. This needs more consideration in the IRP.

Thirdly, the “hydrogen economy” is virtually upon us. Tennessee is a leader in hydrogen research. We encourage TVA to examine how that will impact its future. Conversion of gas turbines to burn hydrogen is trending now and has both economic and environmental benefits. Similarly hydrogen powered transportation is gaining ground. All this will impact TVA in multiple ways.

We encourage TVA to use the IRP to increase technological innovation and investment in the Valley so that we may seize this opportunity and emerge on the winning end of this trend, rather than fall behind. Another example not mentioned in the RFP is waste-to- energy technology that can assist Tennessee’s pulp and paper industry.

4)   Procurement of advanced energy resources

Resource planning should include both TVA-built resources and procured third-party resources; as well as take into consideration customer-sited and demand-side management resources. Correctly valuing distributed energy resources (DERs) is critical to integrating the benefits they offer to both demand and supply side operators. Valuing a stack or system of DERs is a challenge that must be addressed as the net benefits may increase when certain technologies are used together.

1 Walmart. Project Gigaton. https://www.walmartsustainabilityhub.com/project-gigaton

2 Tennessee Advanced Energy Business Council. Tennessee Advanced Energy Economic Impact Report (2018).      https://tnadvancedenergy.com/2018-tennessee-advanced-energy-economic-impact-report/

3 Advanced Energy Economy. Advanced Energy Now, 2017 Market Report. http://info.aee.net/hubfs/PDF/AEN-2017-Market-Report.pdf

4 Flessner, Dave. Chattanooga Times Free Press. November 14, 2018. https://www.timesfreepress.com/news/business/aroundregion/story/2018/nov/14/business-investment-valley-tops-11-billirecor/483054/

5 Ceres. Power Forward 3.0 (2017). https://www.ceres.org/sites/default/files/reports/2017- 04/Power%20Forward%203.0%20-%20April%202017%20-%20Final.pdf

6 DiChristopher, Tom. CNBC. March 28, 2019. https://www.cnbc.com/2019/03/27/corporate-giants-form-alliance-to-create-a-boom-in-us-clean-energy.html 

7 Pare, Mike. Chattanooga Times Free Press. January 22, 2019. https://www.timesfreepress.com/news/business/aroundregion/story/2019/jan/22/state-eyes-top-spot-ev-assembly-official-says/487161/

 

Thank you for the opportunity to provide comments. TAEBC stands ready to assist TVA as it becomes the energy company of the future.

Sincerely,

Cortney Piper

Vice President, TN Advanced Energy Business Council

 

Cc TAEBC Board of Directors

Trish Starkey, President

Steve Bares, Secretary

Matt Kisber

Jeff Kanel

Marc Gibson

Jim DeMouy

Mary Beth Hudson

Chris Bowles

Steve Seifried

Deadline to submit comments for TVA 2019 IRP Draft

TVA is planning its power-generation system for the next 20 years, and your thoughts will help shape the final plan. Your input will impact the electricity you use in the future and the quality of life in the Valley.

TVA released its draft 2019 Integrated Resource Plan (IRP) and draft Environmental Impact Statement (EIS) on Feb. 15. The 2019 IRP is a comprehensive study that provides direction on how TVA can best deliver clean, reliable and affordable energy in the Valley over the next 20 years. As part of the study, TVA is preparing a programmatic EIS to assess the natural, cultural and socioeconomic impacts associated with the IRP.

TVA invites you to provide comments about the plan. TVA will offer numerous ways for you to learn more and to provide input. Check out the interactive report at this website. You can submit those public comments here until April 8.

After public input is incorporated, the final IRP and EIS will be available to the public and then presented to the TVA Board of Directors for approval. Once approved, a Record of Decision will be published.

The IRP and EIS will help shape TVA’s power system over the next 20 years. You have the power to make a difference in the future of your electricity and life in the Valley.

TVA releases draft Integrated Resource Plan (IRP) and invites public feedback

The Tennessee Valley Authority (TVA) released its 2019 draft Integrated Resource Plan (IRP) on Feb. 15, 2019. TVA is currently inviting public stakeholders for feedback on the draft through April 8, 2019. TAEBC will submit public comments for the final IRP.

The IRP provides a long-term vision for how TVA can best meet the Valley’s need for power during the next two decades. According to the draft, the IRP will impact how TVA supports environmental stewardship, encourages economic development, and offers low-cost electricity in the area.

As the utility industry is evolving rapidly, this IRP will improve TVA’s ability to create flexible power-generation systems that will ensure reliable power at an affordable cost. The IRP will also inform TVA’s Long-Range Financial Plan.

TVA is updating its 2015 IRP due to vast changes within the utility industry, including increased access to natural gas, heightened attention on energy conservation efforts, and lower costs of renewable generation. As the nation’s largest public power provider, it is imperative for TVA continually seek out new solutions the region’s energy needs.

This IRP has been under development since Feb. 2018, when scoping efforts first identified issues relevant to the public and provided the foundation for the current draft. During the spring and summer of 2018, TVA began the development of model input and framework process, which involved finding and creating scenarios, resource options, and business strategies.

In the fall of 2018, TVA analyzed and evaluated the performance of their 30 resource portfolios that were identified during the previous modeling process. Throughout this projected 18-month journey, TVA has actively engaged external stakeholders, like TAEBC, to share their assumptions, opinions, and expertise to create an IRP that will benefit all Tennesseans.

In April 2018, TAEBC submitted comments to TVA as part of the initial IRP drafting process. With these comments, TAEBC reaffirmed our commitment to support TVA as it takes steps to address the ever-changing utility marketplace. The purpose of these comments is to illustrate how TVA can best meet future electricity demands with access to economic development data. The guidance we provided included:

  • Ensure there is a collaborative, public, open stakeholder process for developing the IRP.
  • Resource planning should include both TVA-built resources and procured third-party resources; as well as take into consideration customer-sited and demand-side management resources.
  • Correctly valuing distributed energy resources (DERs) is critical to integrating the benefits they offer to both demand and supply side operators. Valuing a stack or system of DERs is a challenge that must be addressed as the net benefits may increase when certain technologies are used together.
  • Consider how the IRP might encourage or discourage economic development, capital investment and jobs in our region from the advanced energy sector.

TVA will hold public meetings throughout the state over the next month to present the plan, answer questions, and accept written comments for the IRP. According to the IRP timeline, TVA will complete public meetings by April 2019, release the final IRP to the public in summer 2019, request approval from the Board in August 2019, and publish a Record of Decision soon after.

To learn more, sign up for TVA’s public webinar on Tuesday, Feb. 26 from 11:00 to 11:45 a.m. Follow this link to register. The recorded version will be available on TVA’s website.

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

Deadline to submit public comment on TVA 2018 rate change proposal

The Tennessee Valley Authority (TVA) proposes to revise the structure of its wholesale electric power rates through pricing that better aligns wholesale rates with the underlying costs to serve wholesale customers. As outlined in the August 2017 rate change letter to local power companies (LPCs), TVA proposes to reduce the standard service energy rates by 1¢ per kWh and establish a grid access charge to recover an equivalent amount of revenue.

On March 9, 2018, TVA released a draft Environmental Assessment (EA) that reviews the proposed rate change and the potential environmental and economic impacts of the change. The draft EA is available for public review and comment until April 9, 2018.

In the EA, TVA considers a broad range of three potential rate change alternatives. In addition to reviewing its proposal (1¢ per kWh), TVA reviewed an alternative that would apply a smaller energy charge reduction and grid access charge (0.25¢/kWh) and an alternative that would apply a larger reduction and grid access charge (2.5¢/kWh). Each of the rate change alternatives under review in the EA would be revenue neutral for TVA (i.e. they would not change the amount of TVA revenue).

In addition, TVA proposes to make several other changes in rates, including:

  1. Incorporating the environmental adjustment and other adjustments currently on the adjustment addendum into the base rates;
  2. Moving all hydro allocation adjustments (credits to residential customers, debits to non-residential customers) from base rates to the appropriate adjustment addendum;
  3. Decreasing Large General Service rates to move them closer to what it costs to serve those customers. Rates for Standard Service and Large Manufacturing Service will be increased slightly so that this change is revenue neutral;
  4. Updating the power cost recovery components of LPCs’ resale rates to account for changed Standard Service wholesale rates and changed hydro allocation adjustments;
  5. Changing the fuel cost adjustment mechanism to administer the resource cost allocation to three rate classes instead of two rate classes;
  6. Providing LPCs flexibility in their adminstration of the hydro allocation credits distributed to residential consumers;
  7. Implementing a series of rate administration simplification initiatives to simplify business conducted through the rate schedules, including:
    1. Modifying Part B of the Outdoor Lighting rate schedule to replace the list of available fixtures with a cost-based formula,
    2. Consolidating the B, C and D rate schedules into one manufacturing schedule and one general service scheule, while maintaining the current rate structure and separate rates for each class, and
    3. Phasing out or eliminating mid-month billing; and
  8. Updating ESS (Electricity Sales Statistics) reporting requirements.

Although provided for under the current wholesale rate schedule and not a change to the wholesale rate schedule, TVA also proposes to rebalance the hydro allocation credits distributed to residential consumers with the hydro allocation debits collected from non-residential consumers to reflect recent declines in commercial and industrial sales.

While the proposed rate change would not affect the total revenue collected by TVA, the allocation of revenues across customer classes and among LPCs would change slightly. If approved by the TVA Board of Directors, the rate change would be implemented October 1, 2018.

Submitting Comments

TVA welcomes the public’s comments on the draft EA. Comments must be received or postmarked no later than April 9, 2018. Comments may be submitted by e-mail or mail to Matthew Higdon at the addresses below. Please note that any comments received, including names and addresses, will become part of the project administrative record and will be available for public inspection.

For more information click here.