TVA offers to use customer money to pay utility legal fees for support of TVA monopoly

Maggie Shober | February 2, 2021 | Alabama, Tennessee, Utilities

The Tennessee Valley Authority is the nation’s largest public power utility. It is owned by the federal government but operates solely on revenues from electricity customers across the Tennessee Valley. And we recently learned that TVA is using that ratepayer money to pay the legal fees in exchange for support in front of the Federal Energy Regulatory Commission (FERC).

You read that right: TVA is offering to pay the legal expenses for its utility customers to intervene on its behalf.

TVA is no stranger to tipping the scales in favor of the unregulated monopoly utility.

Four LPCs want to leave TVA, TVA will do anything it can to block them

Let’s back up and remind everyone what is happening at FERC. In January four of TVA’s utility customers, also called Local Power Companies or LPCs, began a process at FERC to determine whether TVA is violating federal law by barring utility customers from accessing its transmission. We wrote a blog post with more details about the FERC case (Docket #EL21-40).

TVA has yet to issue a statement about the FERC complaint. Instead, they are working behind the scenes to drum up support among utility customers by offering to pay for legal representation if the LPC intervenes on behalf of TVA or posts comments in support of TVA.

We have an email that has been circulated to LPCs where TVA offers to “pick up the cost” of representation and help with FERC filing if the LPC either:

  1. Intervenes “on behalf of TVA,” or
  2. Posts comments “in support of TVA.

Below is the exact language from an email sent to LPCs:

Excerpt of an email circulating among TVA’s local utility customers

TVA is offering financial and non-financial assistance to LPCs that support TVA’s position. In addition, when TVA lays out the options it says are available to LPCs, it only states that the LPC can:

  1. Intervene/comment on TVA’s behalf,
  2. Show support for TVA, or
  3. Do nothing.

In fact, despite what TVA might want LPCs to think there is a fourth option: LPCs can intervene in support of opening transmission access for LPCs.

If an LPC is deciding whether to get involved, TVA offering to pay for legal fees could tip the scales, leading more LPCs to intervene or comment than would in the absence of this unethical offer by TVA.

TVA uses customer funds to keep customers locked in

And let’s end by circling back to where we began: TVA does not receive funds from taxpayers, it does not receive funds from shareholders, it only receives funds from ratepayers. That means that when families and businesses all across the Tennessee Valley pay their electric bills they are sending that money to fancy DC law firms to defend TVA’s unregulated monopoly and keep them locked into 20-year self-renewing contracts.

I don’t think this is the public power model FDR spoke about that became the original TVA, but I guess it’s the public power model TVA’s CEO Jeff Lyash likes to talk about: one that uses citizens’ hard-earned money to stack the deck in its favor.

Maggie Shober
Maggie Shober works to speed the clean energy transformation in the Southeast through analysis and advocacy. She has expertise in renewable energy, energy efficiency, coal retirements, energy market modeling, and…
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