New CEO of TVA seeks to tackle concerns over coal ash, transparency and the threat of losing its biggest customer

New CEO of TVA seeks to tackle concerns over coal ash, transparency and the threat of losing its biggest customer

May 9th, 2019 by Dave Flessner in Business Around the Region

Tennessee Valley Authority President Jeffrey Lyash speaks with the Times Free Press from the TVA Chattanooga Office Complex on Tuesday, April 23, 2019 in Chattanooga, Tenn.

Photo by C.B. Schmelter

The new head of the Tennessee Valley Authority on Thursday appointed top TVA executives to help tackle the utility's ongoing coal ash cleanup problems and the threat of losing its biggest customer.

In his first board meeting in Franklin, Tennessee, TVA CEO Jeff Lyash also promised to review TVA policies to address concerns by lawmakers about the secret manner in which the federal agency conducts some of its business.

Lyash, the former CEO of Ontario Power Generation (OPG) hired to head TVA in March, praised TVA's staff and operations and said the agency's improving financial picture should keep power rates in the Tennessee Valley relatively stable and below most of the country for years to come.

But after meeting with stakeholders across TVA's 7-state region, Lyash sought Thursday to address some of the biggest challenges he has seen in his first month on the job as head of America's biggest government utility.

Lyash said TVA and other electric utilities still must address the legacy of their coal plants and their residues to cleanup the coal ash like what spilled out of a ruptured pond at TVA's Kingston coal plant a decade ago. Lyash named TVA's vice president of enterprise relations, Dr. Joe Hoagland, to head a new review of the way TVA is handling its coal ash cleanup and communicating with communities where coal plants have closed or left coal residues.

The site of the TVA coal ash spill is pictured on Jan. 21, 2009, near Kingston, Tenn.

The site of the TVA coal ash spill...

Photo by MICHAEL PATRICK

"This is an ongoing issue for our industry," Lyash said of the cleanup from old coal mines, plants and ash ponds. "TVA's approach is as good or better than others in our industry — and it should be."

Lyash charged Hoagland with reviewing TVA policies and improving communications with communities and citizens upset by coal pollution or the aftermath of recent fossil plant closings and their cleanup.

A federal jury last year found a TVA contractor hired to clean up the Kingston coal ash spill — Jacobs Engineering — endangered its employees when it failed to follow proper safety measures in cleaning up the 1.1 billion gallons of coal ash slurry that spilled into the river and nearby properties to the TVA plant.

Lyash said TVA was not named in that lawsuit, but he said the health and safety concerns raised in the litigation underscore the ongoing concerns about how utilities clean up the coal plants that have fueled electricity generation for decades in America.

"Now it is time to come to grips with this," he said.

 

Keeping Memphis in the TVA fold

Lyash also named TVA's vice president of transmission operations and power, Aaron Melda, to help work with the city of Memphis as it reviews its future power options and to strengthen communications and relations with Tennessee's biggest city and its Memphis Light Gas & Water utility.

Memphis has been our customer for more than 80 years and we intend to keep them for another 80 years," Lyash said.

But MLGW, TVA's biggest local power company responsible for about 8 percent of TVA's $11 billion a year in revenues, is considering options to give TVA notice and split with the federal utility in five years. The Memphis utility is conducing a long-range power study to assess its options, including generating its own power or buying from another wholesale power supplier.

"Memphis is our biggest power customer and we are their biggest water and gas customer," Lyash said.

TVA has promised to clean up the Allen Steam Plant it closed in Memphis last year to prevent coal ash from leaking into the Memphis underground sands where the city gets its drinking water.

TVA has acknowledged that ongoing groundwater monitoring at the shuttered Allen fossil plant has uncovered an area between the shallow aquifer and the Memphis Sand aquifer without a protective clay barrier.

Lyash insisted TVA is committed to protecting the environment around the former coal plant and promised to better communicate with Memphis officials about TVA programs and plans to help MLGW assess its future options.

I want to make sure that the city leaders need to know all that they can to make the right decision about their future," Lyash said.

TVA contends its power is more reliable, carbon-free and likely to be stable than other sources of electricity for MLGW.

 

Battle over TVA transparency

But TVA's transparency about its coal ash cleanup, grid access fees and other policies and plans have been challenged by lawmakers in both Nashville and Washington D.C.

U.S. Reps. Tim Burchett, R-Knoxville, and Steve Cohen, D-Memphis, are pushing legislation to require the TVA board to open up its committee meetings to the public. The Tennessee Legislature last month unanimously passed a resolution in support of such transparency.

TVA's chairman and CEO both said Thursday that the federal utility is more transparent in its operations and does more to seek public input than other investor-owned utilities or even the government-owned utility in Ontario, Canada where Lyash previously worked.

"TVA appreciates the value of transparency and makes available thousands of documents each year," TVA's outgoing chairman, Richard Howorth, said during TVA's quarterly board meeting Thursday.

But critics of TVA's transparency said Thursday's board meeting illustrated their concerns when directors approved a change in TVA's grid access fee without detailing the change and delegated the authority to make other changes in the fees charge by local power companies to the CEO.

TVA Director Ron Walters said the changes ultimately adopted by the board were minor. But Stephen Smith, the executive director for the Southern Alliance for Clean Energy who last year criticized TVA's initial adoption of the grid access fee, said the utility failed to disclose any details about the changes it was making.

"Clearly we are disappointed with the continued lack of transparency in TVA's decision making processes, particularly with something like the controversial grid access charge, which was nothing less than a wholesale rate change for customers," Smith said. "Because they were barely disclosed in the public portion of today's meeting, and because there has been no effort to make the specifics of these changes public, we really have no visibility on what these changes actually mean for people in the Tennessee Valley."

TVA officials described the grid access fee changes as "de minimis" in nature, but Smith countered that "the only thing we know for certain is that we have a 'de minimis' amount of information about these proposed changes."

Howorth said significant TVA decisions must go through an National Environmental Policy Act public review process and all TVA board meetings where decisions are made every quarter are open to the public and broadcast on the internet. But Howorth said the board committee meetings, which lawmakers want TVA to open to the public, are where directors discuss business sensitive matters in the competitive power industry and where nuclear safety, cybersecurity, national security and sensitive personnel matters are considered.

"We are more than willing to discuss additional transparency steps ... but "TVA is unique from most other government entities in that we have competitors," he said.

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


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