TVA: Killing Solar with 3 Easy Steps:

1.  Step one. Develop and publicize a “beneficial” solar program. Accept accolades for being a “solar proponent.”

TVA has for the past few years been fine tuning and running a solar program in the Tennessee Valley. This program started small, but has grown very popular as solar installers have moved into the area and began providing good service at competitive prices.

This solar program has changed names over the past couple of years and is currently called the Green Power Providers (GPP) Program. This program started out allowing people to install solar systems with 2 primary incentives. The first is a $1000 rebate that is sent to the customer once the system has been installed. The second incentive is that ALL of the electricity that the solar system produces will be purchased by TVA for 10 years at a premium. The premium rate for the first few years was $.12/kwh above the retail rate of electricity. So…. if your solar system produced 100kwh of electricity in one month all of that would be sold to TVA at the retail rate ($.10/kwh) plus the incentive ($.12/kwh) for a total credit of $.22/kwh and a monthly total of 100kwh x $.22/kwh = $22 credit.

This premium rate is guaranteed contractually for 10 years. The only way for this type of a system to work is for the solar systems to be installed with two separate meters. One meter (your existing electricity meter) still works and charges you for all of your usage. The second meter is the dedicated solar meter that only records electricity being sold to TVA and sent out to the grid. On the monthly statement you would get two readings… one is the amount you used as a debit, and the other as the amount of electricity you produced as a credit. With a large solar system it is fairly easy to end up with a credit at the end of the month. You could be making money with solar! At the end of the year TVA would settle up with you and send you a check if they ended up owing you money.

This program has been dramatically modified over the years. The caps on the size of the system were cut by 80% in 2010 (from 1 MW to 200kW) and then reduced again by 75% (from 200kw to 50kw). Currently new installations are limited to 10kw unless the site can show annual usage of more than a 10kw PV system would produce. The only real way that this program works is with two separate meters (in order to document the exact amount of solar produced by the PV system and purchased by TVA).

2.  Step Two. Make “Net Metering” illegal & interconnection Difficult

Net Metering is a method of connecting a PV solar system to the “Grid” that allows the single meter to spin forward when using electricity (like at night) and to spin backwards when a PV system is producing more energy than you are currently using and “sells” it to the grid (like possibly during the middle of the day).

Net Metering is legal and used in 36 states and is a “fair” way of allowing interconnections to the grid. When you generate solar electricity your meter will be spinning backwards. When you use grid electricity your meter will be spinning forward. Your final bill will be based on the “Net” of the final number on the meter and could either be a credit or a debit. It is a one to one correlation between energy used and energy sold… you can buy or sell at the same rate.

TVA has decided that “Net” metering is illegal in their service area. They do this by forbidding all of their distributors from purchasing any electricity from any other source than TVA. All distributors must sign a contract agreeing to only purchase electricity from TVA. And this includes purchasing any electricity from a small power producer (like a home solar system).

So no customers in the TVA region can connect a solar system and then just buy and sell at the retail rate. To connect to the grid a solar customer must connect according to TVA’s rules (either GPP or as a “dispersed power producer”) and have 2 meters (one dedicated to usage, the other dedicated to production).

The Dispersed Power Producer  (DPP) is TVA’s unofficial program for everyone who wants to connect a solar system to the grid outside of GPP. They  released the latest guidelines for this program in April 2013.  This program applies to small residential as well as large commercial solar PV installations. TVA requires a dual metering system and  is willing to pay only the avoided cost of electricity.      So…. the daily peak rates are $.03461/kwh or $.03415/kwh.  TVA is willing to pay under 3.5 cents for solar energy, yet charge that same customer 10 cents for all of the coal produced energy that they use. How very generous.

Under the DPP program one must also pay a monthly “meter charge” and pay for any upgrades or modifications necessary to connect the solar system to the grid. Also, there is no way to use any of the generated electricity in your own house… on a dual metered system, TVA takes it ALL at their ridiculously low purchasing price.

So… solar is technically still legally possible in the TVA area, but only a simpleton would ever sign their ridiculous contract. After the monthly meter fee, the owner of a small solar systems would end up paying money to TVA each month in order to provide solar energy to TVA’s grid.  There would be absolutely no benefit to the system owner.

TVA has only two legal ways to connect a solar system to the grid. One is the GPP and is pretty good. The other is the DPP and is very bad…. practically worthless.

3.   Step Three. Put an Arbitrarily low cap on the GPP solar program.

TVA announced that they will be putting a cap on Green Power providers. They earnestly proclaimed that they want to keep renewable energy costs “in balance,” so they have decided to tie the amount of money available for solar directly to the amount of money raised by their consistently unsuccessful program entitled “Green Power Switch.” So TVA put the 2013 cap on their GPP solar program at 7.5 MW.

Green Power Switch for years has been under-subscribed. It allows people to pay extra for electricity in 150kWh blocks so that the extra money goes towards renewable energy. The subscribers pay $4 extra per 150kWh block per month and get to feel good for their “donation.” This program was started in 2000 and has been under-performing, but steadily growing for years. The program itself was started as a way to get “environmentalists” to pocket the cost of cleaner energy on the TVA grid. Rather than TVA simply cleaning their power production, they opened a program so that customers could pay extra to “help green the grid.”

So, rather than choosing a “cap” to the program based on public demand, or based on the benefits that solar adds to the grid, or from some other logical criteria, they have publicly tied the GPP Solar program to their under-performing Green Power switch Program. This cap was recently reached after less than 4 months… by the end of April 2013. No further solar installations may be made in the TVA region under the Green Power Producer (GPP) until 2014.  

To put this 7.5 MW cap for the whole TVA region into perspective here are some comparisons:

An average installed PV kw in Tennessee produces around 1250 kwh/year (per PVWatts). So the 7.5 MW will annually produce about 9,375,000 kwh of electricity. The premium rate paid for this electricity is $.09/kwh, so the annual cost of this program to TVA will be $843,750. Add in the $1000 bonus for each of the 250 systems that made it in under the deadline ($250k) and TVA has  invested $1,093,750 into the whole GPP program. Of course this doesn’t count TVA’s administrative costs, but you can see that TVA’s investment in actual solar is mind bogglingly miniscule.

Compare this to TVA’s $2.5 billion annual budget for capital items and you see that TVA has no real interest in anything solar. Most of that 2.5 billion budget is going to retrofit outdated coal powered generation plants or to make unending payments to the two nuclear power plants TVA is trying to complete (Both are over budget and behind schedule). These capital funds go to contractors at Bellefonte (the “zombie reactor” which has already cost over $6 Billion and is still nowhere near completion) or Watts Bar II (the reactor that was supposed to be operational in 2012 at a cost of $2.5 Billion, but recently announced it wouldn’t be ready for operation until 2015.. at a cost of $4.5 Billion). TVA’s investment in this years GPP solar program is 4/100th of a single percent of TVA’s total annual capital budget.

Also, compare this meager investment in solar with the Kingston Fly Ash spill Cleanup. This one “mistake” by TVA back in 2008 is costing every TVA rate payer $.67 EXTRA on EACH monthly utility bill. This added expense (to clean up TVA’s coal mess) has been added since October of 2009 and will continue until at least 2022. So, TVA serves over 9 million people in their service area. That is roughly 3 million monthly bills every month. The amount that TVA is collecting (from ratepayers) for this ONE mistake back in 2008 is approximately $2 million PER MONTH. Twice as much as TVA budgeted for their GPP solar program for ALL of calendar year 2013.

Again, compare this microscopic investment in solar with TVA’s investments of rate payer money into their company pension fund. TVA has added $1.3 Billion to the fund since 2009. The investment in the 2013 GPP program is about 8/100th of  ONE  percent of this pension addition.

To add insult to injury it appears that TVA does not actually invest ANY of it’s own money into the GPP solar program at all.

TVA’s GPS (Green Power Switch) program is supposed to be the program that “balances” the GPP solar program. As of February 2013 the GPS newsletter (the latest issue) states that there are 24,130 residential blocks subscribed and 13,086 commercial blocks currently subscribed. That income totals $1,786,368 over a 12 month period.  (This is not including any of the Renewable Energy Credits that TVA is also selling).

So… TVA puts a cap of just over $1.1 million in the total 2013  GPP solar program, and the GPS program that is supposed to be funding it generates  about $1.8 million of voluntarily DONATED money to TVA for solar or renewable energy.  TVA invests none of its own  money in solar at all. ALL of the money going into solar comes from ratepayers donating extra money for renewable energy. Beyond that, TVA actually is taking a cut of $.7 million from the “balanced” solar program. Probably for administrative expenses.

Solar is the one energy source that is completely funded by the system owner (not by TVA’s debt), it always offsets the most expensive peak power (the middle of the day), helps strengthen the grid (through distributed power production), does not lose energy to line losses (7% of TVA’s energy simply leaks out or is lost to heat). Solar is an energy production source that causes no pollution, and the cost of installing solar has fallen over 50% in the past few years. One would think TVA would be all about promoting solar and using it in it’s portfolio. One would be flat dead wrong.

In fact, if you look at the latest IRP (Integraged Resouce Plan) that TVA published you can easily see the emphasis that TVA puts on renewable energy and solar in particular. This plan lays out TVA’s “goals” for the next 20 years. This is clear sky thinking about where TVA wants to be that informs all of the daily decisions at TVA. Well their goal for all renewable energy by 2029 is a staggering total of “1500 to 2500 megawatts.” These numbers are in Chapter 8, but are published on the first page of the IRP webpage. It is clear for everyone to see. By 2029 TVA plans to have built up their renewable energy portfolio to between 1500 Megawatts and 2500 Megawatts. Of course in footnote #2 you see that these numbers INCLUDE 1600 Megawatts of Wind contracts that are ALREADY written.

So…. TVA’s ambitious plans for clean renewable energy from today until 2029 (the next 16 years) is to actually cut renewable energy by over 100 Megawatts.    A Net reduction in renewable energy over the next 16 years.     Nuclear plants are scheduled to expand (increasing TVA’s debt and liability), coal plants are scheduled to expand (increasing TVA’s debt and liability). But renewable energy is planned to be reduced by 100 megawatts.

I am pretty sure TVA can hit their goal of cutting these Megawatts of renewable energy  by simply following their current action plan. It all makes perfect sense. For TVA to even talk about promoting clean energy in their media or published documents is pure hypocrisy. A simple reading of their IRP spells it out for all to see.

There is no question that TVA has no interest whatsoever in solar power. If TVA could make solar power illegal…. they would. And with this latest cap on the GPP program they have essentially done just that in Tennessee and the whole TVA region. By not allowing Net Metering they require any potential solar customers into a DPP program that basically steals their solar power…. Even after that PV customer has invested his own capital to install the system. That PV energy is actually greening TVA’s grid and adding peak energy(along with the other benefits of PV solar previously mentioned).

No customer will install solar knowing TVA will simply steal it….. so TVA has succeeded in making PV solar de facto illegal in Tennessee at this moment (and potentially until the first few months of 2014). At the same time the publicity folks at TVA are breaking their arms patting themselves on the back about what a wonderful solar program they have (GPP) and about how clean and green they are.   The proof TVA has a “valuable solar program”  is how quickly  it “filled up.”

So, while TVA pats itself on the back for promoting “sustainable solar,” the solar industry in the TVA area is actively trying to figure our how to keep their doors open. All solar companies will be affected, and most will simply evaporate. 8 months is a long time for any company to be forbidden from making any sales.   

TVA has a website dedicated to showing how they promote economic development.   Well… the 182 companies in the solar value chain here in Tennessee can easily see that TVA has no interest whatsoever in their well being…

TVA certainly isn’t tilting the playing field in favor of solar or renewable energies. TVA is intentionally killing them.  

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