TVA Coal Reductions Could Come With High Price Tag - And Response

  • Friday, February 12, 2016
Lance Brown
Lance Brown

Reliable, low-cost electricity has always been the backbone of the Tennessee Valley economy. Low-cost power from the Tennessee Valley Authority, generated by a balanced mix of coal, natural gas and nuclear, drives the valley’s manufacturing economy and makes the region an attractive destination for business. In the process, Tennessee has developed the fourth largest automotive manufacturing sector in the U.S. and all Tennesseans continue to benefit from affordable and reliable power. 

However, proposed changes to TVA’s energy mix could place that momentum in jeopardy, threatening jobs, hindering economic development and disproportionally affecting those citizens least able to afford it. Today, coal represents about 40 percent of TVA’s generating capacity, providing a reliable, low-cost source of power for the utility. However, the utility is proposing to prematurely retire coal-fired power plants and rely more heavily on other power sources. The result of this choice is higher electricity prices and reduced competitive advantage. 

According to a study released this month by our organization – Partnership for Affordable Clean Energy – average electric rates in Tennessee will be more than 20 percent higher under the plan proposed by TVA. This translates into electricity rates higher than the U.S. average. Low-income households, including the working poor and seniors on fixed incomes, will be hit the hardest. 

The cumulative effect on Tennessee’s economy could also be severe. Diminished coal use by TVA will cause a $900 million decrease in Tennessee’s manufacturing output, reduce gross state product by more than $7 billion and result in a nearly $700 million drop in Tennessee state and local government tax revenues. In this period of economic recovery, when dollars are limited and businesses are under tremendous strain, such a setback to Tennessee’s economy should be avoided at all costs. 

The study also describes the impact to jobs due to TVA’s reduced use of coal-fired power, including the loss of more than 65,000 jobs annually by 2025. This annual loss of jobs would exceed all of the jobs lost in the state in 2012 and 2013 combined. A disproportionately large share of these job losses would be related to the state’s automotive sector. Competitive pressures in car production are already intense and Tennessee is no longer a low-wage state for the automotive industry. Additionally, automobile production is becoming even more electricity-intensive and dependent on emerging electro-technologies that use high volumes of energy. 

Endangering the auto sector, as well as thousands of other high-paying manufacturing jobs, is not a sound path for the energy policy makers tasked with protecting the regional economy through affordable power prices. Neither is saddling customers with higher power rates. Rather, TVA should return its focus to the elements that have served the region so well in recent years: low power costs and high reliability. Coal-fired generation is an essential part of this focus and should not be cutout overnight. Hopefully, through cooperation between elected officials and the utility’s executive leadership, TVA will work to preserve balance among its generation sources and ensure that coal-fired generation helps keep the Tennessee Valley strong and growing. 

* * * 

Lance Brown is executive director of the Partnership for Affordable Clean Energy, a not-for-profit organization that advocates for sensible energy policy on behalf of electricity users. Mr. Brown was appointed by Alabama Governor Robert Bentley to serve on TVA’s Regional Energy Resource Council. 

* * * 

This opinion piece by Lance Brown purports to be a research-based, unbiased analysis of energy policy. It sounded suspicious to me, so I did a quick web search about the organization. It only took a few clicks to find out that the “Partnership for Affordable Clean Energy” is closely tied to the fossil fuel industry.

For all intents and purposes, Mr. Brown is a lobbyist who is promoting the interests of coal producers as well as utilities who stand to reap higher profits by continuing with the fossil-fuel status quo rather than investing in *actual* clean energy. 

Mr. Brown is entitled to his opinions, of course, but should not be presenting them as facts nor attempting to appear unbiased or unattached financially to the industry he is promoting. 

Jeffrey Cross

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