Alexander Urges TVA "Not To Raise Tennesseans’ Electric Bills To Buy Power It Doesn’t Need"

Wednesday, March 22, 2017

Senator Lamar Alexander urged TVA not to purchase power from the Clean Line Energy Partners’ proposed Plains and Eastern Clean Line wind energy transmission project, which would “carry comparatively more expensive, less reliable electricity to Tennessee and other southeastern states.”

In a speech on the Senate floor, Senator Alexander warned that a contract with Clean Line Energy Partners could cost TVA ratepayers more than $1 billion over the next 20 to 30 years – which could cause TVA to have to raise Tennessee’s electric bills for power they don’t need. TVA has said they don’t need any new baseload power in the coming years, and even sold the unfinished Bellefonte Nuclear Power Plant – which would have produced reliable baseload power for the next 60 years – because they simply didn’t need the power.

“TVA is on a good path.  Its leadership has made sound decisions that will benefit ratepayers and our region. To fulfill its mission to provide ‘safe, clean, reliable and affordable power for the region’s homes and businesses’ it has opened the first nuclear power reactor in the 21st century.  It is placing pollution control equipment on all its coal plants, and it is completing new natural gas plants.

“TVA has done this while reducing its debt and reducing electric rates, which is good news for jobs and economic development in the region.”

“TVA has concluded that it doesn’t need more power for the foreseeable future.  Therefore, its board should resist obligating TVA’s ratepayers for any new large power contracts, much less contracts for comparatively expensive and unreliable wind power. Instead, TVA should continue to provide low-cost, reliable power to the region that boosts economic development throughout the Tennessee Valley.”

Senator Alexander’s prepared remarks are below:

Today I come to the floor to express once again my opposition to the possibility that the Tennessee Valley Authority (TVA) might raise our electric bills and waste more than $1 billion buying electricity the region does not need by agreeing to purchase power from the Clean Line Energy Partners’ proposed Plains and Eastern wind power transmission project. 

Congress has a responsibility to conduct oversight of TVA’s decisions and also ensure that TVA is fulfilling its mission as defined by the TVA Act. 

Although TVA does not receive any federal funding from Congress, TVA is a federal corporation and its Board members are nominated by the president and confirmed by the Senate.

The House Transportation and Infrastructure Committee and the Senate Environment and Public Works Committee, the Committees responsible for oversight of TVA, have held hearings to discuss TVA’s budget and policies.

So as a United States Senator, I’m here today to exercise my oversight responsibilities.  

Clean Line Energy Partners, a Texas-based company, is proposing to build giant, unsightly transmission towers from Oklahoma through Arkansas to Tennessee – known as the Plains and Eastern Clean Line – to carry comparatively more expensive, less reliable electricity to Tennessee and other southeastern states.

For the first time ever, federal eminent domain will be used – over the objection of the state of Arkansas and both the state’s senators – to acquire the land necessary for the transmission line. 

In order to move forward with construction of the single 700-mile high voltage direct current transmission line, Clean Line Energy Partners must find utilities in the southeast willing to purchase the power produced by an Oklahoma wind farm and transmitted by the Plains and Eastern Clean Line.

For this reason, Clean Line Energy Partners, and their supporters, have been urging the Tennessee Valley Authority (TVA) to agree to a long term power purchase agreement for their wind power.

In November, shortly after the election, the Southern Alliance for Clean Energy said, “We strongly encourage TVA’s board of directors to immediately contract for at least 1,000 megawatts of wind power on the Plains and Eastern Clean Line.”

Why the rush? The answer is this: federal subsidies for wind power – subsidies that waste billions of taxpayer dollars each year – end after 2019.

A petition being pushed by the Southern Alliance for Clean Energy urging TVA to purchase the power spells this out: “Critical deadlines regarding the federal production tax credit for wind power are fast approaching...The time to contract for low cost wind power is now.”

So last December, I wrote to TVA saying “there should not be a rush to approve any proposal from Clean Line Energy Partners. This is a big, expensive decision and should be left to the new Board next year.”

While this decision should be left to a full Board when all of its members are confirmed, I don’t know why either a board with three vacancies or a complete board with all of its members confirmed would even consider approving such a deal.

A contract with Clean Line Energy Partners could cost TVA ratepayers more than $1 billion over the next 20 to 30 years, the typical length of such an agreement.

TVA would be disregarding its mission to provide low-cost power to the region if it were to contract for power the region doesn’t need, regardless of the source of electricity.

In recent years, according to TVA, power demand throughout the Tennessee Valley has declined.

In 2013, TVA began working with its customers to develop a long-term plan to meet the region’s power needs through 2033.

In 2015, when TVA completed its Integrated Resource Plan, that plan concluded “there is no immediate need for new base load plants after Watts Bar Nuclear Unit 2 comes online and uprates are completed at Browns Ferry Nuclear Plant.”

As a result of this conclusion, because TVA did not need the power, TVA decided last year to sell the unfinished Bellefonte Nuclear Power Plant.  

For the foreseeable future, TVA has said it doesn’t need any new baseload power and does not plan on any major capital construction projects.

This is good news for ratepayers because it means TVA can reduce debt and keep electric rates low.  

So why would TVA announce that it doesn’t need new power for the next 15 years, sell a nuclear power plant capable of producing reliable baseload power for the next 60 years, and then turn right around and buy unreliable wind power that might only be available for 20 or 30 years assuming the turbines don’t break down?

TVA is on a good path.  Its leadership has made sound decisions that will benefit ratepayers and our region. To fulfill its mission to provide “safe, clean, reliable and affordable power for the region’s homes and businesses” it has opened the first nuclear power reactor in the 21st century.  It is placing pollution control equipment on all its coal plants, and it is completing new natural gas plants.

TVA has done this while reducing its debt and reducing electric rates, which is good news for jobs and economic development in the region.

Even if TVA did need more power – which it has said it does not – TVA should not agree to buy more wind power which is comparatively unreliable and expensive.  

A look at TVA’s previous experience with wind power illustrates how unreliable wind power can be, especially in our region. 

In 2001, TVA opened the first commercial-scale wind project in the Southeast. It is generous to say it has been a failure. This project on Buffalo Mountain near Knoxville has the capacity to generate 27 MW of electricity.

However, according to TVA, in 2016, the Buffalo Mountain wind turbines only provided 4.3 MW on average. This is just 16% of their rated capacity.              

In other words, these turbines – which cost as much as $40 million to build and must cost millions over the life of its contract – produce little electricity and little value for TVA’s ratepayers. 

Wind usually blows at night when consumers are asleep and don't need as much electricity.

And until there’s some way to store large amounts of wind power – a utility still needs to operate nuclear, gas or coal plants when the wind doesn’t blow.

Take for example a recent TVA peak summer day. On July 26, 2016, the Tennessee Valley homes and businesses consumed 29,512 MW of electricity – nearly all of TVA’s capacity of 33,000 MW of electricity.

Part of TVA’s capacity on that day included contracts for nearly 1,250 MW of electricity produced by wind power.

However, at the peak demand during the day, when power was most urgently needed, those wind turbines with a rated capacity of 1,250 MW actually delivered only 185 MW of electricity.

So on a day when the Tennessee Valley needed power the most, wind turbines provided less than 15% of their rated capacity and less than 1% of the total electricity needed to power our region’s homes and businesses.

Not only is wind power unreliable, it can be more expensive than nuclear – which also produces zero emissions – or natural gas – which is low emission.  

TVA is currently completing a new 900 MW natural gas plant for roughly $975 million that will improve air quality in Memphis and be one of the most efficient natural gas plants in the world.

Natural gas plants usually operate for at least 30 years, and according to TVA can provide power in as little as 20 minutes to meet peak demand during hot summer afternoons and cold winter nights.

Last year, TVA opened the country’s first nuclear power reactor in the 21st century, Watts Bar II, at the cost of approximately $5 billion.

Watts Bar II will safely provide 1150 MW of power more than 90 percent of the time for the next 40, 60 and possibly even 80 years. 

The point is: TVA has concluded that it doesn’t need more power for the foreseeable future.  Therefore, its board should resist obligating TVA’s ratepayers for ANY new large power contracts, much less contracts for comparatively expensive and unreliable wind power. 

Instead, TVA should continue to provide low-cost, reliable power to the region that boosts economic development throughout the Tennessee Valley.


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