Congress can influence TVA to add renewables, trade groups say

Transmission planning by the federally owned utility TVA can bring more low-cost solar and wind power to customers, and Congress can guide the utility in that direction, says a report from two renewables trade groups.

February 3, 2025 William Driscoll

Image: TVA

The American Council on Renewable Energy has released a report listing 12 actions Congress could take to make TVA’s electricity service more affordable and reliable for TVA customers, largely through transmission planning and more renewable generation.

Report co-author Simon Mahan, executive director of the Southern Renewable Energy Association, said that “with increasing challenges to reliability of the TVA system during extreme weather events, like Winter Storm Elliott,” and the need for timely and affordable integration of renewable energy, TVA’s transmission planning “needs an upgrade,” and the report provides “sound advice” on how to get there.

TVA, a federally owned utility that serves Tennessee and parts of surrounding states, could import low-cost solar and wind power from regions to its west by entering a power purchase agreement with one of two transmission projects already underway, the report says. The two projects are the Southern Spirit project, with 3 GW of transfer capacity, and the Grain Belt Express project, with up to 5 GW of transfer capacity. TVA is also considering building its own transmission line to import wind power.

Congress could require TVA to “carefully consider the value” of such interregional transmission in future resource planning processes, the report says.

TVA could also increase solar capacity within its service territory through “multi-value planning.” Because the lowest-cost solar resources are likely geographically concentrated in certain parts of TVA’s territory, a multi-value plan “would model the lowest cost areas for all generation development and begin transmission planning now.”

“TVA should look for innovative solutions to quickly bring on new, clean generation,” the report says, “including adopting an interconnection entry fee approach and taking advantage of surplus interconnection possibilities in its existing generation fleet.” TVA’s current interconnection timeline stretches from six to eight years.

Researchers at the University of California, Berkeley have found that surplus interconnection capacity at fossil-fired generators could enable 500 GW of new renewable generation nationwide.

Congress has a specific lever to influence TVA, the report points out. TVA’s planned additions of generating capacity may take TVA “to the limit of its current borrowing capacity. If Congress must act to raise TVA’s credit limit it must ensure that the money is well spent—which means significant reforms to how TVA is managed.”

The report provides a “menu” of 12 Congressional options for achieving reforms. The first recommendation is to reform the TVA board, which is “woefully ill-equipped to provide the kind of feedback which would serve as a check on TVA.” The utility’s current resource plan “contains no less than 30 possible portfolios” and if approved “would simply serve to justify whatever action TVA chooses to take.” Among other options, Congress “could ensure that the TVA board has the resources to hire and maintain an independent staff tasked with protecting ratepayers and ensuring TVA operates according to best practices,” and that the board includes experts on utility regulation.

Other proposed reforms include improvements to TVA’s resource planning process, and bringing TVA under Federal Energy Regulatory Commission jurisdiction.

Regarding a proposal to privatize TVA, Congress could “evaluate the regulatory and financial incentives that will govern a privately owned TVA transmission system” before making any decision to privatize.

Congress could also direct the Congressional Research Service to publish a report investigating “how TVA can adopt best practices” in resource planning, transmission, and interconnection.

ACORE posted a webinar discussing the report, which is titled “Recommendations for Reducing Costs and Improving Reliability for Tennessee Valley Authority Customers.”

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