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Utilities appeal FERC denial to leave TVA

Utilities appeal FERC denial to leave TVA

Utilities appeal FERC denial to leave 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’s transmission system was built to benefit 10 million customers, who all equally bear the cost of its maintenance. FERC’s October 2021 decision to deny the petition reaffirms our position that it goes against the foundation of the public power model.”

“When filed, TVA and stakeholders strongly advocated for the Commission to deny the petition as the relief requested would unfairly shift costs onto other customers and is inconsistent with the public power model in Tennessee,” explained the company in a prepared statement. “Ultimately, FERC agreed to deny the petition; supporting our position that it is unfair when local power companies try to use the TVA system in a way that shifts their costs to the other 149 local power companies served by TVA 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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