The Tennessee Valley Authority (TVA), the largest publicly-owned electric utility in the country, is the primary electricity provider in Tennessee. As a publicly-owned utility, TVA is governed by a board of directors. Historically, TVA has provided few energy efficiency programs and services to its customers.
While past energy efficiency efforts have been modest, efforts are underway in Tennessee that could lead to much greater funding for programs, increasing energy savings. In its 2007 Strategic Plan, TVA stated its commitment to be a leader in energy efficiency. Since the Plan’s release, TVA has drafted an energy efficiency and demand response plan and an environmental policy.
TVA’s goal, approved by the Board in May 2008, is to reduce peak demand 4% by 2012. As part of the ramp-up process, TVA released a suite of pilot energy efficiency programs, including in-home energy auditing programs and prescriptive incentive programs for HVAC technologies.
TVA reports that in Tennessee they spent $18.5 million on energy efficiency in 2009, saving 120,769 MWh. TVA reports their Tennessee budget for electric efficiency increased to $48.9 million for 2010.
Reported budgets for energy efficiency programs for 2011, and electricity savings for 2010, are in the State Spending and Savings Tables.
Tennessee Valley Authority (TVA), the largest publicly-owned electric utility in the country, is the primary electricity provider in Tennessee. TVA serves about 8.7 million customers. As a publicly-owned utility, TVA is governed by a board of directors, as are other federal power authorities. In the past, TVA had provided few energy efficiency programs and services to its customers.
While past efforts have been modest, efforts are underway in Tennessee that could lead to much greater funding for programs, increasing energy savings. In 2006, TVA's directors established a task force that examined energy conservation needs and made recommendations for an energy conservation plan for low-income households. In June 2007, the Tennessee legislature approved a joint resolution calling for TVA to initiate large-scale efforts to improve energy efficiency. House Joint Resolution Number 472 noted, "[E]nergy conservation can easily meet and exceed the growing demand for electricity; and….TVA used energy efficient means of creating power in the 1970s to supplant the need to build new power plants." Therefore, the legislature urged TVA to consider using energy efficiency to address the state's growing demand for electricity. In response, TVA has released a suite of pilot energy efficiency programs, including in-home energy auditing programs and prescriptive incentive programs for HVAC technologies.
Recent developments show that TVA is increasing its financial commitment to energy efficiency. According to the TVA, it spent $18.6 million on energy efficiency in the state in 2009. TVA reports its Tennessee budget for electric efficiency increased to $48.9 million for 2009.
Reported budgets for energy efficiency programs for 2011 are in the State Spending and Savings Tables.
The Tennessee Valley Authority (TVA) stated in its 2008 Environmental Policy that in order to meet its objective of reducing the rate of carbon emissions, it needed to reduce load growth by at least one-quarter over five years through energy efficiency and demand-side initiatives. TVA’s most recent stated goal in 2008 was to reduce peak demand 1,400 MW by 2012.
In its most recent integrated resource plan completed in 2011, TVA included savings goals from energy efficiency and demand response in its recommended planning direction. The goals included reductions in peak demand of 3,600-5,100 MW and energy savings of 11,400-14,400 GWh, to be met by the year 2020. These ranges include savings already achieved through 2010, when the planning process began. The degree to which these goals are binding in the long term is unclear. Tennessee's goals will be monitored for potential inclusion in ACEEE's map of states with an EERS as the efficiency programs are implemented.
For more information on Energy Efficiency Resource Standards, click here.
There is currently no policy in place that decouples electric utility profits from sales, however the Tennessee Valley Authority made a determination that efforts will be made to address the issue of lost contributions to fixed costs for distributors.
In 2010 the Chattanooga Gas Co. was granted an increased monthly charge for fixed costs to “more properly align the interest of ratepayers and utilities in better promoting energy efficiency.” The approach is approved for a three-year trial.
Evaluations in Tennessee are mainly administered by the Tennessee Valley Authority. There are no specific legal requirements for these evaluations in Tennessee. Tennessee uses three of the five classic benefit-cost tests identified in the California Standard Practice Manual. These are the Total Resource Cost (TRC), Utility/Programs Administrator (UCT), and Ratepayer Impact Measure (RIM). Tennessee specifies the TRC to be its primary test for decision making. According to Tennessee Valley Authority, the benefit-cost tests are required for overall portfolio and total program level screening, with some exceptions for low-income programs, pilots, and new technologies. The rules for benefit-cost tests are not specified. Some exceptions of flexibility exist in the application like low-income programs, pilots, and new technologies.