On Monday, February 22, 2021, TVPPA filed as an intervenor in a petition before the Federal Energy Regulatory Commission (FERC). The petition was filed by four TVPPA members and seeks the federal agency’s intervention to require TVA to provide transmission access to the power distributions companies that are evaluating their long-term power supply. Petitioners in the case include TVA customers Athens Utilities Board, Gibson Electric Membership Corporation, Joe Wheeler Electric Membership Corporation and Volunteer Energy Cooperative, all of which purchase TVA-generated electricity and are TVPPA members.
In 2019, in response to customer concerns that TVA’s six consecutive rate increases had impacted its rate competitiveness and the need for additional distributed generation flexibility to enable TVPPA members to serve the best interests of their communities, TVA offered local power companies a long-term contract in exchange for a 10-year commitment to maintain steady rates, a 3.1% wholesale rate rebate and up to 5% generating flexibility. The petitioners are among 11 power distributors that do not agree with all of the terms within the 20-year contract, and are considering separation from TVA in an effort to provide more competitively priced electricity to serve their communities.
“The relationship between TVA and its distributor customers is unlike any other in the nation, and for more than 80 years it has served to build the economy and fuel life in the Tennessee Valley,” said Wes Kelley, TVPPA board chair and Huntsville Utilities president and chief executive officer. “TVPPA’s board of directors encourages TVA and petitioners to collaborate and reach a point of consensus that would enable those local leaders to reconsider their long-term commitment to the Valley’s power model.”
As an intervenor, TVPPA may participate in the discussion about both the role of FERC in TVA’s contract matters and how its intervention could, among other things, necessitate altering TVA’s statutorily-defined service territory. TVPPA supports its members’ local decisions, as each is governed by leaders from the communities in which they serve. Likewise, TVPPA believes in the power model defined in the Tennessee Valley Authority Act. TVPPA has taken a position in the matter before FERC that is supportive of maintaining the model that has served the region’s interests for more than 80 years. The association’s position is based on the merits of the petition and federal law, and is independent of TVA’s position on the matter.
“We hope that an agreement might be reached that bridges differences and supports the long-standing relationships between TVA and its wholesale customers, and honors the relationships between TVPPA’s members. TVPPA leaders are working with both parties toward that end,” said Kelley.