US House panel questions TVA's environmental, rate policies

Despite lower electric rates, energy burden in Tennessee is second highest due to less efficient energy use

Staff file photo / The Tennessee Valley Authority building in downtown Chattanooga is shown in 2016.
Staff file photo / The Tennessee Valley Authority building in downtown Chattanooga is shown in 2016.

A congressional panel is questioning cutbacks in the energy efficiency and renewable incentives offered by the Tennessee Valley Authority, claiming many electricity users in TVA's seven-state region still have an undue energy burden even with lower electricity rates than most of the nation.

The Democratic leaders of the House Energy and Commerce Committee and three of its subcommittees also want TVA to do more to decarbonize its power portfolio to align more with President Joe Biden's climate action goals. In a nine-page letter to TVA President Jeff Lyash, House Energy Committee chairman Frank Pallone Jr., D-N.J., said, "TVA's business practices are inconsistent" with its broader mission to help limit the costs of energy and protect the environment.

"Specifically, we are concerned that Tennessee Valley residents pay too much for electricity, which particularly impacts low-income households in Tennessee," the House Energy panel leaders said in their letter. "The Committee is also concerned that TVA is interfering with the adoption of renewable energy by its commercial and residential customers and, while it is making progress on decarbonization, it must do more this decade."

TVA, the nation's biggest public utility, supplies power to nearly 10 million people. The utility maintains residential rates that are below about 80% of the top 100 U.S. utilities, and TVA's industrial rates are lower than 95% of the nation's largest utilities, according to the U.S. Energy Information Administration.

Despite recent increases in the fuel portion of electricity bills, TVA rates are still lower than they were a decade ago, and the federal utility has pledged to keep its base rates constant for the next decade.

But because more homes and businesses are poorly insulated and a bigger share of customers rely upon electricity rather than natural gas for their heating, electricity consumption and electricity costs are higher in the Tennessee Valley than in most of the nation. With lower incomes than the U.S. average, many Tennessee households end up spending a bigger share of their income on electricity than in other parts of the U.S., even with lower TVA power rates.

Studies cited by Congress note that residential customers in Memphis spent as much as 27% of their annual income on energy, one of the highest energy burdens in the nation.

The letter from the House energy committee raises some of the strongest congressional criticism of TVA in decades and directs TVA to respond to an array of 16 questions about its future power plans by Feb. 2. The letter was signed only by House Democrats, and U.S. Rep. Steve Cohen, D-Memphis, applauded the inquiry into TVA policies.

"I commend my colleagues for pointing out the high electricity rates paid by Memphians and echo their concerns about the heavy financial burden these rates place on my friends, neighbors and constituents," Cohen said in a statement.

Unlike most of Tennessee's congressional delegation that has voiced support for TVA in recent years, Cohen has urged Memphis Light Gas & Water, TVA's biggest customer, to consider buying from other cheaper sources of wholesale power to help reduce energy costs in Memphis. The Memphis utility is now reviewing proposals from wholesale suppliers, including TVA, the Midcontinent Independent System Operator Inc. and other suppliers.

Pallone, the New Jersey congressman, questioned why TVA cut back on its energy conservation incentives given the higher energy use in so many households.

"Despite TVA's acknowledgments that energy efficiency is critical to achieving a least-cost energy mix, public reports indicate the federal utility reduced funding for its energy efficiency programs by nearly two-thirds between 2014 and 2018 and eliminated its energy efficiency customer incentive programs," he said in his letter to TVA. "As a result, TVA's annual energy savings from energy efficiency dropped from 512,084 megawatt-hours in 2014 to just 101,138 megawatt-hours in 2020."

Tennessee residential ratepayers, on average, use the second-most electricity of residents of any state, Pallone said.

TVA has maintained its support for free energy audits for residential and business customers and helps fund programs that target low-income neighborhoods for energy efficiency, including the Home Energy Upgrade program in Chattanooga.

Buddy Eller, vice president of communications at TVA, said in a statement that "we are committed to our role as a national leader in energy generation, innovation and carbon reduction," noting that TVA has cut its carbon emissions nearly twice as much as the national average while maintaining lower rates and supporting conservation programs. TVA said it is trying to target its energy efficiency assistance to low-income households that need the help the most.

"Since 2005, TVA has reduced carbon emissions by 63% and currently supplies nearly 60% of the region's energy from carbon-free sources in one of the nation's most diverse, robust and clean energy systems," Eller said. "The impact of a reliable, low-cost clean energy supply is directly connected to the region's economic development successes. Over the past five years, TVA has worked to help bring $45.9 billion in investment and 350,000 jobs to the valley."

Eller said TVA is working with its 153 local power companies to address the root causes of the high energy burden in the region with weatherization and other energy audits and programs. TVA has invested over $14.5 million in Home Uplift programs since 2018, resulting in an average of 30% energy savings in the more than 2,300 homes involved.

TVA's strategic plan for the future, adopted last year, calls for TVA to reduce its carbon emissions below the 2005 levels by at least 70% by 2030 and by 80% by 2035. But Biden has set a goal of making the electricity grid carbon free by 2035, and some environmental groups are pushing TVA as a federal corporation to become carbon free by 2030.

Stephen A. Smith, executive director of Southern Alliance for Clean Energy, said TVA needs to do more to decarbonize its power generation and aid consumers with energy efficiency.

"TVA has lost touch with its core service mission," Smith said in a statement this week. "We welcome renewed congressional oversight of this unregulated federal monopoly catering to the elite at the expense of the masses."

Contact Dave Flessner at or at 423-757-6340

Upcoming Events