A New Energy Dawn
Working Together for the People of the Region
A new day breaks over the Valley region as residents wake up to the familiar chime of their charging cellphones.
The whir of coffee pots precedes morning rituals of browsing the web on phones, tablets, computers and televisions.
Children getting ready for school ask for YouTube videos or online games while eating breakfast. Parents ask Alexa for a weather report or a song to brighten their day.
Homeowners check their smart appliance settings and set thermostats from their phones. In some households, the morning routine includes a visit to the garage to unplug a charging vehicle.
Our increasingly electrified society begins each day in ways that feel very different than just five years ago. And five years from now will undoubtedly seem even more distinct as technology and electrification continue to shape our daily lives.
The energy industry is ever-evolving, characterized by complexity, and currently experiencing unprecedented transformation.
The Valley region is not insulated from these changes.
Market forces, including a surge in electricity demand (driven by a confluence of electrification technologies and artificial intelligence), a resurgence in economic development, decarbonization aspirations and changing customer expectations are simultaneously creating new opportunities and risks.
Valley Vision — a collaborative effort between Tennessee Valley Authority, its 153 partner local power companies and other stakeholders — provides a framework that will be used to proactively address current and future challenges.
The goal? Creating a more cost-optimized, resilient and reliable future for the customers and communities they collectively serve.
Built around three initiatives — Load Service, Products and Pricing; Distributed Energy Resources (DER) Integration and Enablement; and Collaborative System-Wide Planning and Operations — Valley Vision is committed to creating a future that is optimized, resilient, reliable and flexible.
For nearly 100 years, TVA and its LPC partners have provided affordable, reliable power to the people and businesses of the Valley region — a core tenet of the public power model.
Using a straightforward, centralized approach to generation and distribution enables TVA and its partners to keep rates low while meeting customer needs across the Valley region.
But what has worked well in the past is not necessarily the sole solution for the future. Changing customer demands and expectations, along with rapidly evolving technological enhancements, means the way that power is generated and consumed will continue to evolve.
Today’s customers require more electricity than ever before. And a “one size fits all” approach is no longer the most effective or efficient solution. Residents, businesses and industries want electricity that matches their needs, goals and aspirations. It must be adaptable, flexible and resilient.
Customers of all types have also become more interested in understanding their energy consumption.
Similar to the “farm-to-table” trend seen in recent years within the food industry, today’s energy consumer wants to be better connected to, and have a deeper understanding of, the electricity they consume.
They want clear information on their electricity usage and cost to optimize consumption and reduce expenses. They also seek insights into the carbon content of the power being consumed, creating a complex Rubik’s Cube of customer perspectives. That said, efficiency, reliability and cost-effectiveness remain a central focus.
This focus has coincided almost perfectly with improved technology and increased availability of that technology, particularly across the distribution system. Electrification has increased dramatically in the last decade and continues to grow.
From smart appliances and electric vehicles to machines and artificial intelligence, the demand for electricity continues to rise. This increased demand, coupled with advanced storage options and DER, means that today’s consumers face greater consumption needs. Fortunately, these technological advancements also give consumers the ability to generate and store electricity themselves.
Today’s electricity consumer no longer has to be fully reliant on the centralized generation and distribution model but will have increased optionality to meet their needs. Because data and information are easily accessible and readily available, consumers can also quickly find products and services that match their needs without significant effort.
In short, today’s consumers are more knowledgeable and capable than ever before.
Valley Vision’s initiative on Load Service, Products and Pricing is key to addressing this changing paradigm and landscape. This initiative is foundational because it helps provide the necessary structure to ensure that future customers have the products and pricing options that meet their needs and fulfill tomorrow’s energy requirements.
Doug Peters, TVPPA President and CEO, applauds member system leaders who are actively engaging with TVA in the Valley Vision process, saying, “TVA is doing everything it can to balance a multitude of competing — and sometimes opposing — pressures. But the question we must ask is: How can TVPPA members and TVA take action today to strengthen the Valley’s energy future? We need to work together to expand dispatchable generation, invest in energy efficiency, accelerate real-time load management technologies like water heater control, and strategically deploy battery storage and peak-shaving solutions. In worst-case scenarios, these efforts must account for thousands of megawatts of capacity.”
Creating the optionality and autonomy for the widespread adoption of DERs and customization of customer programs and services will require the development of new rate options, compensation signals and business model constructs that fully optimize the unique Valley region model.
Valley Vision will drive the programmatic development of new options that can deliver economic benefits and value to both the grid and customers, while also expanding load service resources across the region.
Because so many residents across the Valley region start their day integrated with technology and dependent on electricity, Valley Vision addresses key questions about creating a more fully developed, dynamic, electrified future.
Consumers who utilize DER options can increase grid reliability in a few ways. A key to unlocking this opportunity is a three-sided collaboration between TVA, LPCs and end-use consumers. Providing opportunities for feedback and input from consumers and communities will help develop a framework that allows the region to continue flourishing while keeping costs low.
The key to success for this symbiotic relationship is effectively creating a flexible pricing structure and service model that enables TVA and LPCs to continue providing low-cost power.
The goal of Valley Vision’s Load Service, Products and Pricing team is to design a structure that will benefit both TVA and LPCs while also encouraging consumer participation and trust. Creating the public power model of tomorrow begins with working through the formation and implementation of a solid product and pricing model.
Last August, when stakeholders met to kick off phase two of Valley Vision in Nashville, Tennessee, the city’s rapidly growing skyline was hard to miss.
It’s easy to marvel at how quickly these buildings grow to new heights, but the pre-work and development of a solid foundation must come first. New pricing and service models are the foundation of Valley Vision’s execution, which will drive the concurrent development of other new capabilities and processes.
Establishing a solid foundation makes progress and growth possible, visible and sustainable.
Valley Vision initiatives are not isolated. They are complementary and expected to converge and create synergies over time for a more reliable and cost-optimized electricity infrastructure.
The initiatives of DER Integration and Enablement as well as Collaborative System-Wide Planning and Operations are integral to the effort’s overall success.
To fully unlock the value of DERs and other technology Valley-wide, innovation and strategic road maps over a multiyear time horizon will be required on all levels of the grid.
Peters emphasizes the need for LPCs to take an active role in addressing the capacity challenges facing the Valley. “TVA-scale projects take years to come online, but individual TVPPA members and our collective membership can take action now. The challenge before us is clear — how do we step up today, and how can TVPPA help?”
By building tech-enabled integrated system capabilities, we can better understand and quantify the potential of combining DER capabilities to not only strengthen the grid but also provide resiliency and risk mitigation.
In the face of energy transition risks and challenges, a robust integrated system-wide grid planning paradigm and process can help mitigate evolving challenges while ensuring grid resilience and affordability.
“TVA-scale projects take years to come online, but individual TVPPA members and our collective membership can take action now.” — Doug Peters, TVPPA President & CEO
As people come home from work at the end of the day, they will plug in their electric vehicles to charge, stream shows online and run appliances off the energy from storage batteries.
As families connect via FaceTime, use AI chatbots to help with homework and change their daily patterns based on electricity consumption, they will want to be confident that the electricity needed is consistently available.
With the implantation of the first initiative, Valley Vision will be well positioned to plot the course for tomorrow.