OXFORD, Miss. ― The Tennessee Valley Authority Board of Directors approved a set of principles to guide local power companies interested in adding locally sourced energy for their customers during its quarterly meeting Thursday.
Last August, TVA began offering local power companies a long-term partnership option that includes the flexibility for them to meet a portion of their power needs through their own generating sources. To date, 135 of the local power companies served by TVA have taken advantage of the Valley Partner option.
“Over the past few months, we collaborated with our new Valley Partners to develop a set of principles to help them serve some of their own customers’ requests for cleaner energy,” said TVA President and CEO Jeff Lyash. “Among the principles we’ve jointly developed, up to 5% of a partner’s average energy needs can be met by new distributed energy solutions built in their own service territory, ultimately helping TVA’s carbon reduction efforts in the future.”
Valley Partners can begin implementing this flexibility option later this year after the completion of necessary environmental reviews.
The flexibility option is consistent with direction outlined in TVA’s Integrated Resource Plan, and TVA has already been adding its own new renewable energy generation and programs while continuing to maintain 99.999% reliability and low energy costs. Focusing on larger-scale solar installations that offer significantly lower costs per kilowatt-hour, TVA signed power purchase agreements for 674 megawatts of new solar generation in 2019 and has already signed up an additional 484 megawatts in 2020.
A portion of this solar generation comes through TVA’s new Green Invest program, which links local power companies, businesses and solar developers together to create new generation to supply specific needs. The most recent Green Invest facility, announced in Columbus, Mississippi, will include 200 megawatts of generation and 50 megawatts of battery storage capability when it comes online in 2022.
“TVA already has one of the cleanest power systems in the country with 57% of the energy used in the first quarter of FY20 coming from carbon-free sources,” said Lyash. “Adding the new renewable capacity offered by our solar programs to TVA’s existing nuclear, hydroelectric, wind and solar generation will continue to reduce our carbon emissions, which are already 60% below 2005 levels and on track for a 70% reduction by 2030.”
Improvements to TVA’s power system are factored into its 10-year strategic financial plan, which includes continued investment while maintaining steady rates and reducing debt.
In the first quarter of FY20, TVA’s fuel and purchased power expenses were 13% lower than the same period a year ago with an overall net income of $192 million. Interest expense was 5% lower while TVA’s total debt and financial obligations were $246 million dollars lower in Q1 – their lowest levels in 30 years
“Reducing debt, investing in a cleaner, more diverse portfolio and improving our operational performance helps us keep rates low,” said John Thomas, chief financial officer. “In fact, our effective wholesale rate for Q1 was 2% lower than the previous year.”
Reliable, low cost energy continues to be a key factor in bringing new business to TVA’s seven-state service area. Working with local power companies and other agencies, TVA helped attract or retain more than 27,500 jobs and $2.4 billion in capital investment to the region in the first quarter of FY20.
In other business, the board:
The Tennessee Valley Authority is a corporate agency of the United States that provides electricity for business customers and local power distributors serving nearly 10 million people in parts of seven southeastern states. TVA receives no taxpayer funding, deriving virtually all of its revenues from sales of electricity. In addition to operating and investing its revenues in its electric system, TVA provides flood control, navigation and land management for the Tennessee River system and assists local power companies and state and local governments with economic development and job creation.