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TVA directors approves green energy initiatives

November 18, 2011


The Tennessee Valley Authority Board of Directors approved the replacement of its Generation Partners program with a new Green Power Providers program and a three-year pilot program to charge less for electricity during seasonal hours where it is typically used least.
Kim Greene, group president for strategy and external relations with TVA, presented both measures to the board, which passed both of them unanimously.
Through Generation Partners, TVA pays a premium for power from alternative energy facilities generating up to 50 kilowatts. To help pay these premiums, TVA also has a Green Power Switch program which allows customers to contribute as little as $4 per month to enable TVA to generate 150 kilowatt-hours of electricity from a renewable resource, usually solar energy.
Greene said the expenses of Generation Partners premiums have outstripped TVA’s revenue from Green Power Switch, prompting TVA to moderate the program, refocusing it on smaller renewable energy enterprises.
“The original intent of this program was really to spur solar generation on rooftops of homes and rooftops of small commercial businesses,” Greene said. “It was really not intended for large solar farms.”
Greene said a study by the U.S. Department of Energy has shown a significant decrease in expenses for solar energy since 2009, with projections for solar energy to reach a parity with conventional electricity generators over the next 10 years. As a result, Greene said, the new Green Power Providers program will allow for contract terms of 20 years, but will only feature price premiums for the first 10 years. Premiums will also be re-evaluated year to year, she said.
Greene also presented the Off-Peak Pricing pilot program, which would reduce energy costs at certain times of day for customers with energy loads of five megawatts or greater. As an example, she displayed a graph showing demands on TVA’s power grid in June, which rose to approximately 26,000 megawatts in the afternoons and as low as 16,000 megawatts late at night.
Greene said TVA’s generators are more efficient if they are not below an output of about 17,500 megawatts, and efficiency makes electricity cheaper. So, TVA should not only discourage heavy use of energy during peak hours, but also encourage energy use during off-peak hours. TVA can accomplish this goal, she said, by offering rate reductions to high-watt customers, such as industries, as incentives to shift their hours of operation to off-peak hours.
Three members of the board have terms ending this year: Mike Duncan, Tom Gilliland and chairman Denny Bottorff. The board members expressed appreciation for the departing members and elected vice chairman Bill Sansom as Bottorff’s successor, with a term expiring Dec. 31, 2013. Other vacancies on the board will be filled through presidential appointments.
Other actions the board took included:
u TVA President and CEO Tom Kilgore’s annual salary will stay at $2.708 million in accordance with a federal salary freeze.
u Approved $530 million in tax equivalent payments to state and local governments for fiscal year 2011, with projections for $567 million for fiscal year 2012. The TVA Act requires the federal utility to distribute 5 percent of its gross proceeds to state and local governments it works with.
u Approved a long-term service agreement with General Electric International for up to $120 million for three gas turbines at the new John Sevier Combined Cycle Plant in Hawkins County, Tenn.
u Recognized Jim Hagerman as TVA’s Engineer of the Year for his dedication to the ash spill cleanup and recovery at Kingston Fossil Plant.

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