The Tennessee Valley Authority is studying whether to contract this year to buy into what would be one of the biggest wind energy projects in the country.
Despite last week's election of a new president who has pledged his support for more fossil fuel power generation, TVA President Bill Johnson said the utility is still studying whether to ink a deal in the next six weeks to buy at least some of the wind-generated power windmills a Houston group is trying to transfer across the middle of America.
Clean Line Energy Partners LLC is planning to build high-voltage, long-distance transmission lines to carry power generated by windmills in Texas and Oklahoma to the Tennessee Valley. The development group wants to reach a deal with TVA to buy its power before the end of this year to take advantage of maximum federal tax incentives for wind generation that will not be as generous after this year.
"Election Day was a big sea change in America," Jimmy Glotfelty, executive vice president for Clean Line Energy Partners, told the TVA board last week. "But we believe that just because we've gone from Democrats to Republicans (in the White House) that does not change the need for jobs and low-cost energy in America and we believe we will provide that. We've been before this board for the past seven years and our project dynamics have not changed."
Clean Line is proposing to build a $2.5 billion direct-current line through Oklahoma and Arkansas to carry nearly 4,000 megawatts from Texas and Oklahoma to Memphis and, by extension along TVA transmission lines, to other power utilities in the Southeast.
Such projects have been aided by tax subsidies backed by President Obama, who wants to spur more renewable energy generation to replace coal and other carbon-producing sources of power linked with global climate change. President-elect Donald Trump has pledged to bring back more coal-fired generation, which could limit the future market for wind-generated electricity.
Johnson said last week the agency's staff is still assessing the Clean Line proposal and he didn't rule out TVA reaching some agreement by Dec. 31 to lock in more favorable prices available if the project is started now.
"Although this (Nov. 10) board meeting was our last for the year, there are other governance mechanisms that we could use to get a contract approved if we decide to do that," Johnson said following last week's board meeting. "We're still in active discussions with Clean Line and we will see where that goes."
Environmental groups want TVA to buy wind power from Clean Line, one of the biggest wind projects in the country and one that could help move wind generation from where it is best produced to where the power is needed. Such renewable power could help replace coal and other fossil fuels used for much of the electricity generation in the South but which many contend are pushing too much carbon dioxide into the atmosphere and contributing to global warming.
"Climate change is an urgent, global crisis and Americans and others around the world are increasingly seeing and feeling its economic impacts," Chris Ann Lunghino of the Southern Alliance for Clean Energy told the TVA board last week. "We need you, the leaders of our nation's largest public power agency, to step up and take action to protect our planet and our health while building our economy and maintaining low-cost power."
Lunghino said Clean Line is offering attractive electricity prices, estimated at about 3 cents per kilowatthour, because of the production tax credits currently available for new wind generation.
"It is unlikely that that price will be available next year because of the phaseout of the federal tax incentives for wind," she said.
The maximum federal production tax credits now available are worth about 2.2 cents per kilowatt-hour, but they will begin to decrease after Jan. 1.
Glotfelty said he expects many businesses such as Google will continue to demand carbon-free and other environmentally clean sources of electricity in the places where they locate.
Contact Dave Flessner at email@example.com or at 757-6340.