The TVA board meets in Norris, Tennessee in May 2023. Katie Myers / BPR
This report is made possible through a partnership between BPR and Grist, a nonprofit environmental media organization.
Residents in Avery, Burke, Cherokee, Clay, McDowell and Watauga counties may see their power bills increase – again.
The Tennessee Valley Authority, which serves portions of seven southeastern states, just announced a 5.25% rate increase for all wholesale customers. It’s the second TVA rate hike in two years – and the steepest increase in 16 years. The rate increase will go into effect on October 1, adding $4.35 to the utility’s monthly base rate. Some households may see varying impacts depending on the rates charged by their local municipal or for-profit utility.
Scott Brooks, TVA’s communications officer, said that the rate increase covers the necessary costs of the utility corporation’s carbon reduction plans while maintaining the stability of the electric grid.
“We are moving toward a future where, by 2050, we have an intention to be carbon neutral, zero carbon output and also maintain reliability,” Brooks said.
However, TVA has received criticism for its approach to carbon neutrality. Despite urging from the Environmental Protection Agency, the utility is planning to spend $15 billion in the next few years on new energy generation, mostly funded by its ratepayers, and mostly to build new natural gas infrastructure. Plan detractors say TVA’s decisions fly in the face of the Biden administration’s climate goals and lock the utility into fossil fuel generation for decades, much longer than climate scientists say we have to change course on climate change.
“It’s interesting that they’re framing it as a carbon reduction measure,” said Gabi Lichtenstein, a clean-power advocate with Appalachian Voices. “I’m assuming that they’re referring to (TVA’s) investment in the largest gas build-out of any utility this decade.”
Environmental activists express opposition to the TVA’s planned gas plants during a public listening session in Norris, Tennessee in May 2023. Katie Myers / BPR
Lichtenstein is an organizer with Appalachian Voices, which joined a Southeastern coalition advocating for transparency at the TVA.
Although natural gas plants pollute less than coal, studies have estimated that an average of 3% of the methane byproduct produced leaks into the atmosphere via drilling pads and leaky pipelines. Methane is a much more powerful greenhouse gas than carbon dioxide, both of which contribute to climate change.
Although TVA said it needs more natural gas to supply energy during peak demand in the region, Lichtenstein said one-third of the utility’s energy production comes from its three nuclear plants – which are often relied upon for the same reason.
However, TVA officials say this increase comes as a result of booming demand as the Tennessee Valley sees unprecedented population growth and extreme weather. Though the majority of new construction will involve natural gas infrastructure, the anticipated $500 million in revenue from the rate increase will also support dam safety, solar fields, and new investments in small modular nuclear reactors.
While TVA customers pay lower rates for electricity than 75% of utility customers in the country, the area it serves also suffers from high poverty rates, making customers highly cost-burdened.
Lichtenstein said the volatility of the natural gas market led to steep price increases, and TVA fuel costs doubled in 2022 as a result.
“The more they rely on gas as a fuel source, the more of these spikes people are going to have to deal with,” Lichtenstein said.
With TVA’s buildout, they’ve just committed themselves to about forty more years of carbon emissions, since that’s the lifecycle of the plants they are right now beginning to convert. TVA representatives say that these decades to come will give them the time they need to scale up renewable energy sources.
“We expect that the technology may be at a point where all of that will come together, and we won’t need the natural gas generation by 2050, but at this point we do,” Brooks said.