You would think that such a large and influential public body, designed to modernize rural America with much-needed access to energy and development, would prioritize clean energy—in the interest of saving household energy costs, reducing climate pollution, and improving reliability, right? Shockingly, you would be wrong. Currently, TVA is one of the dirtiest utilities in America, receiving an abysmal “F” grade three years in a row in Sierra Club’s annual Dirty Truth Report that tracks utilities’ climate commitments. TVA has been doubling down on fossil fuels at a time when it should be rapidly transitioning away from them. In fact, it’s planning on building more expensive and unreliable dirty fossil gas plants and pipelines—in defiance of the Biden administration’s own national climate pledges.

This has all come at the expense of the communities it serves, who have experienced rolling blackouts and increasingly high bills due to its heavy reliance on fossil fuels in the past few years—not to mention the infamous and deadly Kingston coal ash spill a decade ago that still impacts community members to this day. Black and low-income families living in TVA’s footprint are bearing the brunt of high utility bills, dirty energy, and power plant pollution. Fortunately, there is a better way forward. 

President Biden Has a Window of Opportunity to Act

Now that TVA’s board, the company’s primary decision-making entity, finally consists of a majority of members appointed by President Biden, TVA has a window of opportunity to align itself with our national climate goals, break away from its reliance on coal and gas, and provide more reliable, cost-effective, and equitable energy to its ratepayers. If the board won’t clean its own house, the president should direct it to do so.

President Biden promised the American people a transition to 100 percent clean, carbon-free electricity by 2035. Meanwhile, TVA is planning to build new dirty gas plants that would operate for decades past our 2035 target. With the clock ticking to hit our nation’s climate goals, TVA can’t keep dragging its feet. The utility must shift course in its upcoming resource plan to stop building fossil gas and invest in renewable energy. And with unprecedented federal investments through the Inflation Reduction Act (IRA), it’s incredibly cost-effective and financially savvy for the utility to do so. 

And if current TVA CEO Jeff Lyash won’t commit to meeting our climate goals, the TVA board should replace him and hire a new CEO. Barring a dramatic shift in course, it’s time for the Biden administration to take executive action. First, let’s break down how TVA operates and how that impacts shifting its power generation mix. 

What’s the Tennessee Valley Authority and Why Does It Matter?

TVA is a federal utility with alarmingly little oversight. This is in part because of how it was set up and its recent history. TVA was created to lift the whole region out of poverty. At the time, that meant giving the Southeast power and independence. A few decades in, though, Congress pulled support. In the 1950s, due to intense lobbying of investor-owned utilities who saw low-cost TVA power as a competitive threat, TVA’s “fence” was established, making it self-financing, all while federal appropriations dwindled.

By the late 1990s, TVA was completely on its own and funded exclusively by electric customers—meaning it kept its independence, but started to move away from its initial purpose to serve the public, not make money. A nine-person board now runs the utility in tandem with its CEO, Jeff Lyash, who claims the title of the highest-paid federal employee, earning a whopping $10.5 million a year—all while customers have to pay more and more to keep the lights on. 

In short, TVA’s federal ownership means it neither answers to state regulators nor corporate shareholders, and its member utilities are often bound by forever contracts, leaving TVA largely unmotivated to act on climate or in the interests of the public it serves. TVA’s captive customer base and lack of accountability have created a stagnant system. With little to no incentive to depart from a business-as-usual power supply model, TVA is resisting transitioning away from dirty fossil fuels at the expense of the communities it serves.  

And like many duplicitous power companies, TVA markets itself as a proponent of sustainability, but its current plan to lock customers into fossil fuels tanks any chance of reaching our national, international—or even TVA’s own—climate goals. Currently, a vast majority of its energy mix is coal, gas, and nuclear, and only 4 percent of its portfolio comes from solar and wind. 

TVA is a federal power utility, and yet, it’s not following the trajectory the Biden administration, our climate, and our communities need. It needs to retire more coal plants, not invest in new gas, and instead, build more renewables. This lack of climate ambition is a major problem. 

BIPOC, Lower-Income TVA Customers Face the Highest Energy Burdens

One option, of course, is for customers to start leaving and stop financing TVA’s fossil fuel pollution. Decades after TVA was established to bring affordable energy access to underserved communities, Memphis residents, one of TVA’s primary customer bases, ironically, now face the nation’s highest energy burden. TVA’s customers have every incentive to start looking elsewhere.

A 2022 report from Greenlink Analytics found that Memphis has the fourth-highest energy burden among major cities across the country. The average household in Memphis pays 6.2 percent of their income toward their energy bills. (For context, typical household energy costs are considered unaffordable if they are above 6 percent of household income.) Even more concerning is the fact that when you zoom in on low-income households, renters, and Black and Latino households in Memphis, this percentage doubles. 

This is a massive justice issue and flies in the face of why the Tennessee Valley Authority was established. Worse yet, these same marginalized communities could face more gas power plant pollution if TVA continues on its trajectory of replacing fossil fuels (in the form of coal) with even more fossil fuels (in the form of gas). 

TVA is Doubling Down on Fossil Gas Plants

Utilities are required to provide a forward-looking planning document called an Integrated Resource Plan (IRP), where they determine what sources of energy they will build and rely on in the future. 

Despite first-ever rolling blackouts last winter caused by failing fossil fuel infrastructure, TVA is expected to propose new fossil gas plants as part of its IRP in early 2024. While the Environmental Protection Agency recommended TVA integrate renewable energy sources as replacements for retiring fossil fuel plants, TVA blatantly disregarded these concerns, and in January said it approved plans to build a 1,450-megawatt fossil gas plant to replace the behemoth Cumberland coal plant, which has operated since 1968.

This doubling down on fossil fuels flies in the face of our climate targets, and given the unreliability of gas plants during extreme weather events will inevitably lead to even less reliable power for TVA’s customers. Instead, TVA must update its energy mix to maximize renewable energy, like rooftop solar, battery storage, and energy efficiency, when it proposes its IRP in early 2024, just as several members of Congress have called for. 

How President Biden Can Help Bring Power to the People

Fortunately, there is a way to create much-needed accountability. TVA’s board has the ultimate say over the company’s operations and governance—and a majority of TVA board members are now President Biden appointees for the first time. TVA is better positioned than ever before to act in alignment with our nation’s climate goals and its customers’ needs. 

Apply Pressure to TVA's Board

President Biden needs to call on the board he appointed to do what he put them in power to do: make choices that are in the interest of customers and our climate goals. TVA’s board needs to get involved, including by rejecting any IRP that builds new fossil gas plants. 

And if TVA keeps going down the wrong path, the board should consider a change in leadership. TVA deserves a leader who will prioritize clean, reliable, and affordable energy for its customers—and operate in line with the federal government’s climate commitments. 

Pressure by the U.S. Postal Service board helped convince Postmaster General Louis DeJoy to get on board with electric vehicles and could serve as a positive example of how to rein in an independent federal body still implementing the policies of the previous president.

Help Scale Up Clean Energy Through Tax Credits

Moreover, President Biden can do more to use his executive powers to ensure TVA is leading a just clean energy transition in the Southeast U.S. The administration should consider an executive order directing TVA and other federal utilities to serve the public by scaling up clean energy, powering major electrification efforts across the economy, and scaling back climate pollution in line with national targets. 

The time has never been better to transition away from fossil fuels. Thanks to the IRA’s investments in clean energy, 99 percent of U.S. coal plants are more expensive to run than their solar or wind counterparts. Similarly, 99 percent of proposed gas plants are more expensive than an equivalent clean energy portfolio. Furthermore, “direct pay” tax credits make massive clean energy incentives available in full to public utilities for the first time. It simply doesn’t make financial sense for TVA—or its paying customers—to tie itself to the sinking ship of expensive, unreliable fossil fuels. 

Moreover, a new study by Synapse Energy Economics, the Center for Biological Diversity, and GridLab shows even more promise: Transitioning to 100 percent renewable energy by 2035, incorporating IRA incentives, could create 15,600 new jobs a year, cut household energy burdens by 4 percent, and generate nearly $27 billion in public health benefits. And there’s no need to reinvent the wheel. Progress elsewhere in the American Southeast, like North Carolina’s successful deployment of solar, shows there are pathways to investing in renewables. With strong policy and regulatory support, it is both possible and economical for utilities and ratepayers alike. 

TVA Must Be Held Accountable to Its Customers

If TVA refuses to push forward with a logical, cost-saving, and equitable clean energy transition, it’s the responsibility of the Biden administration to hold it accountable.

There are two possible paths forward. One where TVA maintains the status quo as a coal laggard, doubling down on fossil gas, facing lawsuits, and members leaving. Or a positive one, where it becomes a clean energy leader that exemplifies President Biden’s climate leadership and cuts costs and pollution. The upcoming IRP represents the fork in this road, and TVA and the Biden administration have a choice to make—it’s not too late to make the right one. 

Written by Medhini Kumar and edited by Charles Harper

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