The TVA’s 2025 Draft IRP and EIS does not adequately examine distributed energy resources, energy efficiency, and demand management sufficient to satisfy NEPA’s EIS requirements or NRDC v. Vermont Yankee Nuclear Power Corp. By precluding customer-generators the federal government in the TVA continues to crush the free market, disallowing market-based solutions from driving down prices in generation of electricity. 

While over 40% of TVA’s capacity indirectly serves residential customers, the IRP makes no mention of avoided costs associated with peak demand reduction in a distributed energy regime. The EIS does not distinguish between resources in front of and behind the meter. Neither the IRP or EIS account for line losses and rejected energy associated with transmission and generation business-as-usual, nor do the documents analyze the impact on rates for the same. Additionally, the EIS fails to consider the carbon intensity of all of the above, effectively only analyzing scenarios based on TVA’s Scope I emissions. 

Congress directed the TVA to promote economic development and national security. Without adequate distributed energy resources within relevant territories, communities in the Valley will be unable to establish microgrids–consistently promoted on the basis of both cost effective grid enhancement and national security. The IRP does not address how existing methane generators will enhance national security or economic development, except by provision of additional capacity. 

TVA does nothing to distinguish itself from the many other utilities in the United States who are realizing significant savings and grid enhancements through proliferation of distributed energy resources and energy efficiency programs. Efficiency Vermont provides a robust example of an efficiency utility which has been bidding “negawatts” into capacity markets at competitive rates for over 10 years.1 PG&E is developing demand response programs in major sectors such as agriculture,2 and the solutions could easily work if TVA trained LPCs to conduct the same. The Valley is not substantially different but for the bounded logic of the way things are. 

TVA’s Distributed Resource scenario incorrectly assumes the need for additional incentives, yet several states do not provide additional incentives and realize tremendous, customer-side market-based solutions. The IRA and ITC federal incentives coupled with renewables’ dominance in the levelized cost of electricity3 are more than adequate to defeat the economics of utility scale methane plants, and distributed renewable resources do not leak methane. Each kWh produced and consumed behind-the-meter is ⅔ more efficient than a kWh which is transmitted.4 For more on the value of Distributed Energy Reources to the grid and the cost effectiveness of these solutions, See the Dunsky report to the New Hampshire PUC,5 and Sustainable Energy Advantage’s report to the Maine PUC.6 

Finally, TVA fails to adequately consider the value of DERs to the grid at large. Behind-the-meter distributed energy resources provide significant savings to distribution utilities, as they reduce congestion and peak demand and can even provide grid enhancing services. Front-of-meter systems serving customers within the distribution utility open the possibility of microgrids. Assuming a compensation structure that still allows LPCs to collect fixed transmission and distribution charges, there will be no concern for cost-shifting. 

TVA should consider TVA Flex 3.0, in which it allows the States and local governments to promulgate their own incentives, or decline to do so, and let the economics speak for themselves. In Flex 3.0, distribution utilities should be able to purchase as much distributed energy within their territory as possible. This will maximize the national security and economic development elements of the TVA’s mandate, ensuring that energy dollars continue circulating in local communities and cultivating sufficient regional environments for microgrids to emerge. 

There is no reason New Hampshire and California residents should be able to form group net metering agreements, but no citizen of Tennessee may do so. As someone born and raised in the Valley, it is rather embarrassing that New England’s generation market is saturated with solar PV when their capacity factor is so low due to their winters, and the capacity factor in the Valley for solar PV is significantly higher. If one were coming in fresh and reviewing the ownership structure and generation restrictions, you would be forgiven if you were unsure whether you were reviewing the TVA or Union Electrica de Cuba. 

Georgia is getting ahead of the issue, even drawing REC sales revenue into their State, but with this IRP the TVA is stalling progress in all of its member states–especially Tennessee. Failure to free generation markets up for competition will continue to slow the influx of federal incentive dollars into the Valley. With the advent of new technologies such as small scale solar, small scale wind, battery storage, and group net metering tools, continued reliance on the old ways risks TVA running afoul of the Due Process clauses and the Equal Protection clause. 

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1https://www.raponline.org/wp-content/uploads/2023/09/rap-nemecowart-eeparticipationinelectricitycapacitymarkets-2014- sept-12.pdf 

2 https://www.dret-ca.com/wp-content/uploads/2023/07/PGE-Agricultural-Demand-Response-Study.pdf 

3 https://www.lazard.com/media/xemfey0k/lazards-lcoeplus-june-2024-_vf.pdf 

4 https://www.energyvanguard.com/blog/the-meaning-of-rejected-energy/ 

5 https://dunsky.com/wp-content/uploads/New-Hampshire-Value-of-Distributed-Energy-Resources-Final-Report.pdf 6 https://www.maine.gov/mpuc/sites/maine.gov.mpuc/files/inline-files/NEB-Y2023_CBA-LD%201986.pdf