Environmental groups sue TVA to overturn new grid access charge

Critics want fee overturned until environmental review done

The Tennessee Valley Authority headquarters in downtown Chattanooga is shown in this file photo.

Five environmental groups are joining in a lawsuit against the Tennessee Valley Authority to try to block a new grid access charge scheduled to begin next month.

In a 27-page lawsuit filed in federal court in Alabama, the Center for Biological Diversity and other climate and energy-conservation groups claim that TVA rate changes and cutbacks in renewable and energy efficiency programs in fiscal 2019 will discourage consumers from investing in solar, wind and energy efficiency projects and harm the environment as a result.

TVA adopted the grid access charge in May after an environmental assessment concluded it would not have any significant impact on the environment but would better align TVA charges with its actual costs.

TVA's new fixed fees, or grid access charge, begins Oct. 1 and will require municipalities and power cooperatives that buy TVA power to pay a mandatory electricity fee regardless of their energy usage. The lawsuit claims local power companies such as Chattanooga's EPB will pass along the grid access fees and such fixed fees for homeowners and businesses will make rooftop solar less cost-effective by requiring a fixed payment even if solar generation cuts their energy use.

TVA says it is raising fixed costs to cover its transmission expenses, which must be provided to all customers regardless of their consumption. The federal utility is offsetting the fixed rate increases with comparable reductions in variable electricity rates, but consumer groups complain the realignment will disproportionately benefit large businesses.

"TVA's outrageous new rates penalize people working hard to save energy and money while rewarding big companies that run up huge electricity bills," said Howard Crystal, one of the attorneys who filed the lawsuit against TVA. "This perverse plan forces customers to prop up dirty, outmoded power plants instead of transitioning to renewable power. We desperately need clean-energy progress and efficiency investments to protect our communities and the environment."

The lawsuit claims TVA failed to disclose the environmental impacts of all of its rate changes in its environmental reviews. The National Environmental Policy Act (NEPA), adopted in 1970, requires an environmental impact study of government programs and policies that could hurt the environment.

TVA's environmental assessment of the rate realignment, including the new grid access fee, determined that the change would not have a significant impact on the environment. The lawsuit challenges that finding.

Even though TVA has shuttered half of the coal plants it once operated and is looking at closing two more coal plants, the lawsuit claims the new rates could discourage energy conservation and thereby could lead TVA to keep more of its older fossil plants in operation.

"TVA continues to lose its leadership position on renewable energy and energy efficiency," said Daniel Tait, technical director for Energy Alabama.. "TVA's rate changes are about one thing and one thing only - killing energy efficiency and renewable energy to protect its monopoly stranglehold on regular folks."

When the TVA board approved the grid access fee in May, TVA President Bill Johnson said the change "will move a small amount of cost out of the variable category in each bill and put the same amount in the category for fixed costs so this is not a rate increase."

TVA is making the change in pricing as energy-efficient technology like LED lights bulbs and self-generated power from solar panels and windmills are already reducing consumption of TVA-generated electricity. But while power sales decline, the utility must still maintain more than 16,000 miles of transmission lines and generating capacity to meet power demand when the sun doesn't shine or the wind doesn't blow.

"Some consumers, particularly the more able ones, can invest n some solar panels or other resources, but they still rely on the valley-wide transmission system for backup power," Johnson said. "The result is how we bill for electricity can be out of sync with the actual costs of getting electricity to some consumers."

TVA residential electric rates are still among the lowest 25 percent of America's 100 biggest electric utilities and TVA's industrial rates are among the cheapest 10 percent in the country, according to Department of Energy data.

While TVA's new grid access fee has led to higher fixed rate charges by a number of local power companies in the Tennessee Valley, EPB opted not to impose a grid access fee for the 2019 fiscal year.

TVA also helps local distributors with its Energy Right program that performs free energy audits to improve energy efficiency. TVA also has supported a number of pilot solar energy programs, including EPB's Solar Share program in Chattanooga.

But environmental groups complain that TVA is doing less than electric utilities in Georgia and North Carolina to promote renewable energy and TVA has cut what it spends to help its customers install energy efficient furnaces, appliances and insulation.

Because of the climate, heavy dependence upon electricity and cheaper and less energy efficient housing in the Tennessee Valley, per capita consumption of electricity in TVA's 7-state region remains higher than the national average, pushing up power bills even with lower average rates.

"TVA is trying to mislead people by talking about their 'low rates.' But energy consumers don't pay rates, they pay bills, which are calculated as a rate times consumption plus fixed fees," said Stephen Smith, executive director for the Southern Alliance for Clean Energy. "Customers in the TVA service territory have some of the highest bills in the United States. The devious 'grid access charge' will only accelerate the high-bills problem by increasing fixed fees and stifling efforts to control electric consumption by families and small businesses, leading to higher costs and more pollution. This legal action seeks to educate people about what is happening to them each and every month."

Contact Dave Flessner at dflessner@timesfreepress.com or at 757-6340