Lawsuit against TVA’s discriminatory rate structure moves forward

A a district court judge has denied the utility’s motion to dismiss a lawsuit regarding a proposed grid access charge. The lawsuit claims the nature of the charge is discriminatory to low-income and solar-minded customers.

August 27, 2019 Tim Sylvia

TVA's Norris hydroelectric dam, which was completed in 1936.

Image: Tennessee Valley Authority

The word stereotype has an awfully negative connotation to it, though rightfully so. In the majority of cases, stereotypes present the subject at in question in a poor light, usually mocking a collective shortcoming. Even stereotypes which begin positive in nature become less so through overuse and the idea that the agreed upon notion applies to every member of the group in question.

If you’re a frequent reader of pv magazine, you’re probably familiar with the notion that large investor-owned utilities and power companies hold disdain towards distributed solar – a stereotype itself, despite the general truth behind it.

One of the drivers behind this stereotype? the Tennessee Valley Authority (TVA), who last attempted to institute a grid access charge, which would increase the power bills of low-consumption customers, in an effort to appease high-consumption customers and recoup $1.2 billion dollars.

On September 6, 2018, a group of five nonprofits, led by the Center for Biological Diversity filed a lawsuit against TVA alleging that the federally-run power company, the largest public power company in the nation, failed to “disclose and consider the reasonably foreseeable environmental impacts” presented by the charge.

TVA, as one facing lawsuit is like to do, filed a motion to dismiss the case and after a year of litigation, that motion itself has been dismissed and the case is still on.

The environmental impact angle of the lawsuit is twofold, founded on the belief that:

Taken together, these measures are designed to obstruct [distributed energy resource (DER)] adoption across all customer classes, in order to maximize the amount of electricity customers continue to obtain from TVA—primarily dirty electricity derived from coal and other polluting energy sources.

And, while hydroelectric power makes up about half of TVA’s electricity mix, that figure is matched by almost 50% of TVA’s electricity coming from fossil fuels. And in the entirety of TVA’s massive service area, only 0.4% of customers use some sort of DER.

Why is this? Well, according to the lawsuit and popular opinion, TVA views DER as a threat.

TVA maintains that DER constitutes “competition in the form of emerging technologies,” and has explained, in a filing with the Securities and Exchange Commission, that it views customer adoption of DER as “operational risks” that it must address, because “TVA effectively loses revenue on energy that DER send[s] to the grid.”

It will be incredibly interesting to see the outcome of this lawsuit and if said outcome leads to any increase in distributed solar under TVA’s service area. In other words, a boy can dream. The timing of this dismissal is funny, as TVA just recently publicly recognized the existence of utility-scale solar in the company’s 2019 Integrated Resource Plan.

Maybe TVA will change its tune on distributed solar in the future, but history tells us to remain skeptical.

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