President Joe Biden has set a goal for the electric grid to stop producing planet-warming emissions by 2035. His signature Inflation Reduction Act is spending billions to supercharge investment in wind and solar power. And renewable energy is soaring throughout the country.
By Nick Tabor
Thanks to its widespread use of nuclear and hydroelectric power, the TVA already has a cleaner energy mix than many other utilities. But its embrace of gas to address future energy needs shows how even organizations that could move fastest to phase out fossil fuels are making compromises.
To environmentalists, the TVA’s gas investments stand out as one of the Biden administration’s least noticed failures in delivering on its climate promises.
Stephen Smith, executive director of the Southern Alliance for Clean Energy, noted that the utility serves roughly 10 million customers in parts of Tennessee and six other states, and its current construction spree could lock it into gas energy for decades to come.
“They’re not the only utility that’s doing that, but they’re doing it with a vengeance,” Smith said. “There’s a sad irony in that.”
Jeff Lyash, the utility’s chief executive, said the TVA is building out solar projects, but it also needs gas plants so it can accelerate the transition away from coal power, which is far more harmful to the climate than gas-fired electricity.
“We’re significantly scaling up renewables, and we’re retiring coal, and we’re building the kind of gas assets it takes to retire that coal and integrate those renewables,” he said in a recent interview. “The premise that I think is false is that you have to make a choice between these things.”
While many energy experts credit the TVA from moving away from coal, some also say the utility is making an unwise choice in replacing one fossil fuel with another. Given that the TVA already has plenty of nuclear and hydro energy, it may not need all those gas plants in order to stop using coal, said Melissa Lott, an energy specialist and professor at Columbia University’s Climate School.
“If we build a new power plant, we expect it to be on the grid for decades, and we pay for it accordingly,” Lott said. “So the question is: How do we make sure to not overbuild things that we may not want to have in the system here in a decade or two?”
As Biden prepares to leave office, many climate activists are cheering his achievements, especially how the Inflation Reduction Act has pumped billions of dollars into clean energy projects nationwide. But his handling of the TVA illustrates the limits of his more diplomatic approach.
The White House has numerous levers to influence TVA policies — including replacing board members — but it has chosen not to do so. Biden has appointed six of the eight current board members; one seat is vacant.
A senior Biden administration official — who spoke on the condition of anonymity to describe internal deliberations — said the White House is doing as much as it can given that the TVA is an autonomous agency. In particular, the administration is securing tax incentives and loans that support clean energy projects.
“On the funding front, this is the same set of tools we have with other utilities, but coupled with a lot more engagement with TVA to make sure those tools are being used,” the official said. The White House also has a representative on the TVA’s working group for its next long-range plan.
Like so much else, the future of the TVA could hinge on the November election. Vice President Kamala Harris has embraced Biden’s climate goals. Former president Donald Trump has made clear he would boost fossil fuels if he returns to the White House. He has, however, taken aim at the TVA in the past by criticizing Lyash’s salary and total compensation. It totaled $10.5 million last year, the most earned by any federal employee. (Defenders of the compensation say it is fair for someone running what is effectively a large corporation, and this year the board changed his incentive pay package.)
Either way, the TVA is sure to fight to safeguard its traditional autonomy. The utility has a distinct internal culture, one that’s patterned largely after the for-profit, shareholder-owned utilities that supply power in most other states. As Lyash has put it, the TVA runs “like a Fortune 500 business.”
A utility with New Deal roots
The TVA has a storied history, stretching back to when President Franklin D. Roosevelt created the agency as part of his New Deal. At the time, the agency’s mission was to rescue the Tennessee Valley region from dire poverty and underdevelopment through electrification, flood control, new farming techniques, regional planning efforts and new recreational areas. More recently, its role as an electric utility has come to dominate its operations. Its many assets include nuclear power plants, hydropower generators, and gas and coal plants.
For most of its history, the TVA had no chief executive and was overseen by three full-time board members, who were immersed in all aspects of the operation.
“They made the decisions,” said Roger Babb, a retired engineer who worked with the TVA from 1969 into the 1990s. “They were fully involved in everything.”
This all changed in 2005, when a federal law overhauled the utility’s structure. It created six more board seats, made the board positions part-time, and put a CEO in charge of day-to-day operations.
The bill’s sponsors promised it would “modernize” the utility and bring it into “the new deregulation age.” But over the years, environmentalists have become increasingly critical of the new structure. They point out that board members tend to have separate full-time jobs, and few of them come in with much utility experience — nor do they have a research staff of their own, independent from the TVA management.
“The board members barely know how to turn the lights on when they come in,” said Smith, a longtime TVA watcher. “They’re led around by the nose.”
Lyash and other TVA officials dispute Smith’s characterization. Lyash said the board has been actively involved in “setting policy and direction” during the six years he’s been with the utility.
Lyash, an affable 62-year-old from central Pennsylvania, comes from an energy industry family. One of his grandfathers worked as a coal miner, the other as a lineman for the local power company. After he studied engineering at Philadelphia’s Drexel University, he went to work for the U.S. Nuclear Regulatory Commission and spent the bulk of his career at Progress Energy and its subsidiaries — now known as Duke Energy following a 2012 merger.
During his tenure at the TVA, Lyash has worked to retire the utility’s coal power plants and manage a toxic byproduct of that power generation — giant piles of coal ash. Some of those efforts have been highly controversial, including a plan to truck the ash through south Memphis, a Black neighborhood, and dump it in a landfill there.
Lyash has also prioritized making the TVA a reliable generator of power, a challenge given the increasing demands on the grid from data centers and other big users of electricity. He said the 2005 transition helped put the utility on that path.
“If you go back and look at the performance of TVA by any measure — safety, reliability, cost, environmental performance … by any metric you see dramatic improvement,” he said. He added that the transmission system has been rated one of the country’s most reliable, and that the rates the TVA charges to retail and industrial customers are quite low.
Less enthusiasm for renewables
Overall, the TVA has made deep cuts to its carbon emissions, largely because it has shuttered coal plants while relying on hydropower and nuclear plants it already built. Over the last 15 years, the TVA has outpaced most of its peers, reducing its emissions by 57 percent as of 2021, compared with a sector-wide reduction of 40 percent as of 2020, according to the latest data available. As of last year, nuclear sources supplied 42 percent of the TVA’s power, natural gas 31 percent and coal 14 percent. All told, 55 percent of the power it generates is carbon-free, a higher share than many other utilities can boast.
Yet compared with other utilities, the TVA has historically been an outlier in resisting development of wind and solar energy. Those two power sources together now supply roughly 14 percent of the country’s electricity — and some states have managed to push their numbers higher. Solar panels alone generate 28 percent of California’s electricity and 26 percent of Nevada’s, and Texas is producing nearly 29 percent of its electricity with wind. As for the TVA, its combined percentage from wind and solar amounts to only 4 percent.
Lyash said the utility in the process of adding 6,000 megawatts to its solar capacity by 2035, up from 4,000 megawatts right now. When these assets are up and running, they will probably generate about 10 percent of the utility’s energy, which Lyash argues is a fairly high amount for the Southeast, given the weather.
In the meantime, the TVA is relying on new gas plants to meet the region’s power needs. Five of these plants are slated for Tennessee; the other three are in Mississippi, Kentucky and Alabama.
Environmentalists have filed lawsuits to stop two of these plants, in Tennessee.
“Every bit of fossil infrastructure that they’re retiring, they’re essentially replacing with new fossil fuels,” said Amanda Garcia, a senior attorney with the Southern Environmental Law Center, which is leading the litigation.
Some neighboring residents are also opposing these gas plants, fearing the risk of explosions or methane leaks.
In Cheatham County, Tenn. — a rural area near Nashville — neighbors want the TVA to withdraw plans for a 75-acre gas turbine plant and battery storage system that is close to a popular recreation area.
“Everybody is opposed to this,” said Tracy O’Neill, a longtime resident who has helped organize the protests. “Conservative, liberal, moderate. It doesn’t matter. It has nothing to do with politics and everything to do with health and safety.”
TVA officials say the plants will be safely operated. Lyash also pointed out that most of the new facilities are intended to serve as “peaking plants,” which means they’ll only run 5 to 10 percent of the time, when the demand for power is highest.
He said the utility would run the gas plants sparingly, “but when you need them, on that cold, frigid winter morning, during winter storm Heather, when we set the record peak, or in this heat wave we saw this summer … the people really need them for reliability.”
However, the two largest plants, which are set to be built in Cumberland City, Tenn. (northwest of Nashville), and Kingston, Tenn. (west of Knoxville), will not be peaking plants. Early analyses suggest the Cumberland plant will run 80 percent of the time and the Kingston facility will run roughly half the time, said Maggie Shober, research director at the Southern Alliance for Clean Energy.
In its ongoing litigation, the Southern Environmental Law Center argues that the TVA committed to the gas plants before it had conducted environmental reviews, and then did a cursory analysis. It also says the utility has barely considered alternatives to fossil fuels, though it’s required to do so by law.
The Environmental Protection Agency is also monitoring the TVA’s plans. In March, the EPA told the TVA that the utility’s environmental assessment for the Kingston plant was inadequate. At that point, the EPA could have referred the matter to the White House Council on Environmental Quality to mediate the dispute. However, the TVA board voted in April to ignore the EPA’s advice, and since then, the EPA has not taken further action.
In a statement, EPA officials said the agency has finalized changes to the Clean Air Act that could significantly reduce the amount of pollution that TVA power plants can emit.
“EPA has offered technical assistance to TVA as it works to comply with these public health standards,” the agency said, “and it also has the benefit of historic financial incentives made available under the President’s Inflation Reduction Act.”
A utility with wide latitude
Compared with many private utilities, there are few checks on the TVA’s power. Since it is a federal body, it doesn’t answer to regulators on the state level, and it also enjoys political protection from U.S. senators in the utility’s service area, most of whom are Republicans.
These legislators tend to select board members, and presidents often go along with their choices. Even when a president picks the nominees, GOP senators exercise tight control over who can get confirmed.
Marilyn Brown, a professor at Georgia Tech who was nominated to the TVA board by President Barack Obama in 2009, and again in 2013, said she was asked to speak with roughly 10 senators before her confirmation, and she recalled being “hounded” over her longtime advocacy of energy-efficiency measures. Brown added that Sen. Lamar Alexander, a Tennessee Republican who retired in 2021, asked her to oppose any wind projects in his state, and two senators questioned the basis of her concerns about global warming.
Brown’s confirmation for her second term was held up for months before she was finally approved.
“No nomination will go forward if there’s a majority of disgruntled senators associated with the seven states,” she told The Washington Post.
Among environmentalists, Smith is hopeful that a Harris administration would fight harder to appoint board members focused on climate change and not just fall back on the political tradition that allows Southern senators to pick the TVA’s leadership.
That decorum, Smith said, “has got to stop.”
