SACE | Southern Alliance for Clean Energy

Tennessee Valley Authority Utilities



Once a leader on energy efficiency, the Tennessee Valley Authority has only recently begun to build a modern program to save energy instead of build power plants. As a federal agency, however, the TVA is not subject to a regulatory body or state law that holds it accountable for delivering energy efficiency.

Similar to other southeastern utilities, the first impulse of the TVA appears to be a focus on cutting peak demand (which helps avoid building occasionally-used power plants) rather than on saving energy. Saving energy is the surest path to lower customer bills and reduced global warming pollution.

Across the country, leading utilities achieve annual savings of 1% or more of energy sales. The TVA and the utilities it serves can join the leaders if they begin to focus on energy savings.

In 2007, the Tennessee Valley Authority launched an effort to build and implement an energy efficiency plan. We look for this program to represent an order of magnitude improvement over the weak "energy right" program.


Energy efficiency is the cheapest solution to our energy and global warming challenges. Leading energy efficiency programs across the country deliver energy savings at a cost of 2 to 4 cents per kilowatt-hour to customers. In contrast, new power plants cost at least 10 cents per kilowatt-hour.

Unlike conventional power sources, energy efficiency isn’t sensitive to price spikes because it doesn’t require fuel. Also, because it doesn’t require fuel, it reduces global warming pollution by 100%.


The Tennessee Valley Authority should establish aggressive goals for energy efficiency. The TVA and its distributor utilities should meet targets that place them among the nation’s leaders on energy efficiency within five years. With such efforts, the utilities can cancel plans to build unnecessary power plants.

Another approach would be to establish an independent energy efficiency utility. This could be a state (or federal) agency, non-profit, or for-profit company that is funded through an efficiency surcharge on electricity sales to partner with customers to reduce energy waste. However, funding such an agency to serve TVA customers could be problematic due to the unusual relationship between the TVA, its distribution utilities, and state governments.

Both utility-led and independent energy efficiency programs have solid track records in other parts of the country. The choice between these approaches is largely a matter of political interest and utility leadership (or lack thereof).

What SACE is doing

The Southern Alliance for Clean Energy is a member of the TVA’s advisory committee that deals with energy efficiency issues. Because the TVA is a federal agency, lines of accountability and transparency issues are somewhat murky. We have asked the TVA to disclose extensive information about its plan so that it can be evaluated in public.

We also participate in Tennessee Governor Bresden’s Energy Policy Task Force. Since Tennessee lacks authority to regulate or direct the TVA, any recommendations from this task force would be advisory to the TVA.