Within the next 15 months, President Biden will be able to appoint a majority of the directors to America's biggest public utility which was established, in part, to be a "living laboratory" for all utilities.
The Tennessee Valley Authority has seven members serving on its board and two existing vacancies. In May, two more board terms expire, including for TVA Chairman John Ryder, and by May 2021 another board seat will open up to give the new Biden administration the potential to fill a majority of the 9-member board that governs TVA by May 2022.
With Democratic appointees, Biden could quickly reshape the federal utility created as part of Franklin Roosevelt's "New Deal" nearly a century ago. The new president could try to use the multi-purpose federal agency to push more of his clean energy priorities, although as an independent federal corporation governed by the TVA Act the White House is not able to direct TVA in the same way it controls its own departments.
TVA President Jeff Lyash said Friday that representatives of the federal utility are already meeting with staff in the new Biden administration White House and the relevant cabinet agencies such as the Department of Energy and the U.S. Environmental Protection Agency.
"We are trying to make sure that we educate and perhaps do a better job telling our story than we have in the past about what the capabilities and mission of TVA are and what we our planning going forward," Lyash said. "We also want to listen to hear the administration's views and look for ways that TVA can be supportive of the direction that the administration wants to take the country while always being mindful that we have a congressional mandate to serve the people of the Tennessee Valley."
Lyash said the planned improvements to TVA's generation and distribution system should make the utility both greener and more innovative — goals that should align with what the new president is urging.
"TVA is on a decade-long track of modernizing our generation fleet, reducing greenhouse emissions, incorporating new technologies and renewable energy and working with our customers to promote more electric vehicles, smart cities and distributed energy solutions," Lyash said after a TVA board meeting this week. "My sense is that our plans have a significant amount of overlap with where this administration wants this industry to go and that's always a good thing."
TVA has cut its carbon emissions by 60% since 2005 by shutting down more than half of the 59 coal-fired units it once operated and trimming the share of electricity generated by coal to only 9% of TVA's energy portfolio in the most recent fiscal quarter. Lyash said TVA and its local power companies are planning to add 7,000 to 10,000 megawatts of solar energy in the next 20 years. Last year, TVA's Green Invest program added 964 megawatts of contracted solar and 130 megawatts of battery storage.
But TVA expects to also expand its use of natural gas, at least in the coming decade or two until better technologies and energy sources develop for handling power peaks, especially when the sun doesn't shine or the wind doesn't blow for renewable solar and wind power. A study by Lazard of TVA's power system released this week projects that gas generation could rise to up to 34% of TVA generation, which environmental groups object to since burning fossil fuels contributes to carbon emissions linked to global warming.
The Biden administration wants to decarbonize the U.S. power sector by 2035, but TVA has pledged only to a 70% reduction by 2030 and an 80% reduction by 2040.
Lyash said TVA must meet its mission of both environmental stewardship and economic development which under the TVA act requires the utility to offer the lowest cost power that is feasible and reliable.
As former present Donald Trump discovered, the White House can't control TVA's decisions and even board members appointed by the president sometimes differ with what the president wants. Last year, Trump fired two TVA directors who had served as TVA chairman — James "Skip" Thompson and Richard Howorth — for supporting higher compensation for the TVA chief executive. Trump appealed to the TVA board he appointed to cut the pay for Lyash "by a lot" from the $7.3 million he was paid last year to "no more than $500,000." But on Thursday, TVA directors rejected Trump's appeal and agreed to pay Lyash even more if he meets TVA goals.
The past two presidents have proposed either selling off or splitting up TVA to help the federal government to trim its debt and end a government agency that both President Obama and President Trump said no longer needed to remain as a federal, tax-exempt corporation.
Lyash said he hopes to convince the Biden administration of the value of keeping TVA as an integrated, public power utility for its 7-state region.
Biden will be able to appoint each of the directors for the 9-member, part-time board that oversees TVA and through the board help shape TVA actions.
The Senators in the seven-state TVA region have a "non-binding agreement" that when a board vacancy occurs the new nominee comes from the state where the departing board member served and usually has the recommendation of a senator or congressman in that state from the party of the president. That practice would suggest that the next nominees would come from Alabama and Mississippi to replace the last two chairmen of the TVA board who former President Trump removed from the board last year. Both Alabama and Mississippi have two Republican U.S. senators, but Democratic congressional representatives are expected to propose nominees.
Trump nominated Oxford, Mississippi telecommunications executive Charles W. Cook for the TVA board last year — and then renominated him again last month before Trump's term ended. But Cook was never confirmed by the U.S. Senate and his nomination was withdrawn from the new White House on Feb. 4.
"Most expect new Biden nominations from both Alabama and Mississippi to fill the two vacancies," said Mike Arms, executive director of the Association of Tennessee Valley Governments, which represents the local governments in TVA's 7-state service territory. "Local government leaders realize policy changes will always occur when administrations change. But we hope the agency will continue to focus on providing clean, reliable and affordable power, while also maintaining strong partnerships with local and state governments to advance the region's economic development."
Contact Dave Flessner at firstname.lastname@example.org or at 423-757-6340.