Utilities appeal FERC denial to leave TVA

The decision will now go to the courts, where subsequent decisions and appeals could drag this matter on far into the foreseeable future.

February 21, 2022 Tim Sylvia

Image: TVA

Two Local Power Companies (LPCs), member power companies of TVA who supply their customers with electricity generated by TVA, have filed an appeal to the Federal Energy Regulatory Commission’s (FERC) October 2021 decision to deny their request for independent transmission service and freedom from their TVA supply deals.

Originally, four local power companies, Athens Utilities Board, Gibson Electric Membership Corp., Joe Wheeler Electric Membership Corp., and Volunteer Energy Cooperative, all petitioned to break their supply deals with TVA over TVA’s slow adoption of renewable energy resources and its unwillingness to provide them transmission service if they did not source all of their power from TVA.

The companies alleged that the federal entity violated Section 211 A(b) of the Federal Power Act, which allows any electric utility, federal power marketing agency, or any other person generating electric energy for sale for resale to apply to FERC for an order requiring a utility to provide transmission services, and FERC to redress discriminatory practices being made by transmitting utilities.

The companies also alleged that their supply deal with TVA is discriminatory so long as TVA has a generation portfolio skewed toward fossil fuels and relatively lacking in renewables, and that, once freed from their supply deals, they would pursue renewable energy projects.

In discussing why the petition was denied, FERC Chairman Richard Glick said it was not due to disagreement with the petitioners, but rather that the power to approve the petition is not held by FERC. Glick cited TVA’s “fence” provision, which limits TVA’s sales activities to a specified service area, but also prevents competitors from “cherrypicking” TVA’s customers by barring them from operating in the service area.

The petition’s denial was described Gaby Sarri-Tobar, a campaigner at the Center for Biological Diversity, as “a deeply disappointing decision and a slap in the face” to TVA customers.

“FERC just blew an opportunity to set an important precedent and give TVA power companies options for cheaper, renewable power and lower rates for customers, and begin breaking our fossil-fuel addiction,” continued Sarri-Tobar.

Two of the LPCs, Athens Utilities Board and Gibson Electric Membership Corporation, have appealed FERC’s decision to the DC Circuit Court of Appeals, bringing in the United States Court of Appeals for the District of Columbia Circuit to rule on FERC’s decision.

When reached for comment, a representative with TVA told pv magazine that:

“TVA respects the right of petitioners to seek review of FERC’s decision as part of the legal process. We look forward to participating in the proceedings and resolving this issue. TVA will continue to focus on working with customers and stakeholders across TVA’s service territory to provide the many benefits of the public power model to our 10 million customers. FERC’s October 2021 decision is consistent with TVA’s view that the public power model created by Congress through the TVA Act best serves the public interest, which fundamentally shares the benefits and related costs of the power system. The petitioners’ request would have unfairly shifted costs to TVA’s remaining customers and threaten the successful TVA public power model to serve the Tennessee Valley.”

The appeal process could proved to be a lengthy one, as any decision made in this case by the court could then be appealed to the Supreme Court.

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