TVA’s Board Approves Dangerous Precedent

Guest Blog | May 10, 2018

New rate scheme will increase bills for poor, minority, elderly customers
MUSCLE SHOALS, Ala. – TVA customers gathered here to speak out against the proposed rate structure voted on and approved by the TVA board today, May 10. The new rate structure will hike bills on the Tennessee Valley’s most vulnerable residents and diminish clean energy progress. The vote followed a rushed and inadequate public engagement process, with lengthy final documents released days before the TVA Board vote.

A new “Grid Access Charge” in the approved rate proposal is likely to increase fixed fees – mandatory monthly charges paid regardless of energy use. Residential and small business customers will likely see their monthly fixed fees increase. TVA’s original proposal envisioned total fixed fees increasing up to a minimum average of $350 per year for residential customers, and today’s vote was the first step in what is expected to be a pattern of increasing monthly fees and costs with little to no public input, transparency, or regulation. The approved rate proposal means that TVA will be incentivizing and rewarding higher energy users, while slashing savings for families and small businesses who attempt to keep electricity bills low through conservation, efficiency, or building their own solar. This represents the opposite of effective rate policy.

Despite the rushed nature of the entire process, over 1,700 comments were submitted to TVA speaking out about the the flaws in this proposal and several made the trip to Muscle Shoals to deliver public comment at the board meeting. The full video will be available on TVA’s website in the coming days; here are a few direct quotes:

As stated in a letter from the Nashville Mayor David Briley to the TVA board of directors (can be found here and was read in person by Nashville resident Jason Carney): “The new rate structure will interfere with our city’s efforts to be the greenest city in the South, will place an undue burden on our poorest residents, and will hurt our ability to attract new companies and jobs to our regionâ?¦ The ‘Grid Access Charge’ also hurts smaller businesses, which are the foundation of Nashville’s prosperity. More than 300 small business owners around the state have signed an open letter to you expressing their concerns about the proposed rate change.”

That letter, from the Tennessee Small Business Alliance, can be read here. State Director of the Tennessee Small Business Alliance Lenda Sherrell attended the board meeting to deliver the letter as well as speak directly to the board, sharing quotes directly from the letter: “There are over 580,000 small businesses in TN alone, employing 1.1 million, and functioning as the true ‘economic engine’ of TNâ?¦ We strongly urge TVA leadership to go back to the drawing board and create a plan that helps small businesses throughout the Tennessee Valley unleash our economic potential, and allows us to compete fairly with our big business counterparts. TVA should be thoughtful, deliberate, and transparent, and develop a rate structure plan which recognizes the key economic impact that small businesses make throughout the Valley. TVA should promote our economic growth, not stifle it.”

Sandra Upchurch, Co-chair of NAACP Tennessee State Conference of Environmental Justice Committee & National NAACP ECJ-Co-Lead stated: “TVA gives big industries a break on their energy usage, the more they use, the more they save, while imposing fixed fees and a mandatory grid access fee on to the local power companies who will then pass those charges on to struggling people and families to pay moreâ?¦Where is the EQUITY here? The opposite of poverty is justice. There will be no Peace in the Valley without Energy Justice!”

“TVA’s own materials admit that the rate shift will increase bills for those who use less energy. What they don’t show is the faces of those low energy users: our lower- and fixed-income brothers and sisters, and studies show some of them are already being forced to make life-threatening tradeoffs when faced with high energy bills,” said Elder Jimmie Garland, Vice President of the Tennessee Conference of the NAACP.

“TVA’s intent all along has been to use its self-regulated federal monopoly rate authority to negatively distort the market for energy efficiency and customer owned solar power and shift a greater share of the perceived risk for lower demand growth on to its captive LPC servants. The sad, and yes immoral, unintended consequence will be adding more cost to our region’s low and fixed income citizens,” said Dr. Stephen A. Smith, Executive Director of the Southern Alliance for Clean Energy. “The only silver lining in this insidious plot is that you have AWOKEN us to the lack of transparency in the fixed charges on 80 percent of the residential customers monthly bills you ‘regulate’, a fact the executives likely conveniently forget to tell you, and when coupled with the explosive increases of these mandatory monthly fees over the past few years, we now move to a different playing field then this pretense we are witnessing today. So Bill [Johnson], congratulations for jamming this one through, and take solace while you and your millionaire jet set execs are zipping around in the clouds, knowing that we the people will be working the long game at the grassroots.”