Diverse Group Challenges TVA’s Potentially Discriminatory Ratemaking Practices

Guest Blog | January 30, 2018 | Press Releases

New Study Reveals Steady Increase in TVA’s Residential Rates While Industrial Customers Get Huge Break

Contact: Jennifer Rennicks, SACE, 865-235-1448, [email protected]


NEW SACE BLOG: Who has been getting $1.4 billion in rate cuts from TVA?

Tele-press conference recorded on January 30th at 11am ET available here.


Knoxville, Tenn. – A new report by Synapse Energy Economics reveals a massive cost shift from Tennessee Valley Authority (TVA) industrial customers onto its residential and small business customers over the last six years, raising big questions for this federally mandated utility monopoly. While industrial and direct serve customers have benefitted from a nearly 20 percent cut in the price of energy since 2010, residential and small business customers have experienced steady rate increases, a trend expected to worsen in the near future.

Report authors from Synapse Energy Economics, and advocates from Southern Alliance for Clean Energy (SACE), Tennessee State Conference of the National Association for the Advancement of Colored People (NAACP), and Friends of the Earth (FOE), gathered for a press conference on Tuesday, January 30, 2018, to discuss the findings of this report and the implications for TVA consumers.

“Our analysis found that, residential customers in the Tennessee Valley paid $1.4 billion more from 2011-2016, compared to what they would have paid if each class’s rates had increased by an equal percentage to yield the same total revenues,” stated Melissa Whited, Principal Associate at Synapse Energy Economics. “While TVA’s industrial rates have fallen steeply in recent years, other industrial rates in the region have remained relatively flat. These trends raise many questions about what is driving TVA’s ratemaking process.”

“The Tennessee State Conference of the National Association for the Advancement of Colored People (NAACP) finds this report troubling,” said Elder Jimmie Garland, Vice President of the Tennessee State Conference of the National Association for the Advancement of Colored People. “It’s a fact that many citizens, in particular citizens of color, in cities and rural areas across Tennessee are having to choose between paying utilities bills rather than acquiring necessary food and medicines. It is wrong for any organization to have total autonomy on how residents are assessed, especially when the assessor is acting as the chief oversight authority over both the formulation of their policies and its execution.”

“TVA is in violation of its contract with the people of the Tennessee Valley. TVA promised to make power available to them at the lowest possible rates, but has instead raised their rates to give a break to industrial customers,” stated S. David Freeman, former chair of the Tennessee Valley Authority & Senior Advisor to Friends of the Earth. “Franklin Roosevelt and countless others would be turning over in their graves at what TVA is doing today. Instead of power for the people, it’s running rampant as the largest unregulated power company in America, with its CEO as the highest paid federal employee.”

“TVA is hiding the ball on how it’s manipulating rates to the advantage of big industrial customers at the expense of families and small business. TVA has yet to fulfill numerous Freedom of Information Act (FOIA) requests from the Fall of 2017 outlining what they’re doing with the rate structure and making public special treatment to a few industrial customers,” said Dr. Stephen A. Smith, Executive Director of the Southern Alliance for Clean Energy. “They have held a large number of closed door meetings with industrial customers and TVPPA while slow-walking the release of details about these meetings and their impact on every other customer across the Valley. Meanwhile residents are paying higher bills every month because this self-regulating federal monopoly refuses to be held accountable to the customers it is legally required to serve.”

Video link for background or broadcast: Dr. Stephen A. Smith explains the myriad issues with TVA’s rate structure and self-regulatory nature in this two-minute video.



Founded in 1985, the Southern Alliance for Clean Energy promotes responsible energy choices that work to address the impacts of Global Climate Change and ensure clean, safe, and healthy communities throughout the Southeast. Learn more at www.cleanenergy.org.

Synapse Energy Economics is a research and consulting firm specializing in energy, economic, and environmental topics. Since its inception in 1996, Synapse has grown to become a leader in providing rigorous analysis of the electric power and natural gas sectors for public interest and governmental clients.

Friends of the Earth fights to protect our environment and create a healthy and just world. We are more than one million members and activists across all 50 states working to make this vision a reality.

The National Association for the Advancement of Colored People (NAACP) principal objective is to ensure the political, educational, social and economic equality of minority group citizens of United States and eliminate race prejudice. The NAACP seeks to remove all barriers of racial discrimination through the democratic processes.