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Local man bucks at green subscriber rates, starts community Web site for dialogue

By Hilary Trenda, Knoxville Voice, Knoxville, TN, February 21, 2008

NB: This is the annotated version of the article. Click here to see the article exactly as it appeared in Knoxville Voice.

Green Power Switch has been a renewable energy initiative of the Tennessee Valley Authority since 2000, offering power generated from solar panels, wind turbines and methane sources from around the state and Southeast.

[Solar contributes only 0.94%. Sources outside Tennessee contribute only about 0.35%. The only reason that there are any non-Tennessee sources at all is because TVA located six of the sixteen tiny GPS solar sites in Alabama, Kentucky, Mississipi, and Virginia for PR purposes.]

Intended to decrease reliance on finite natural resources that harm the environment,

[This is no doubt the implied intention of GPS, but I have not been able to find this or any other GPS goal stated in writing by TVA.]

the program is available to consumers willing to pay extra to fund green energy that is incorporated into the general mix of power for the state.

[To the extent that GPS theoretically decreases reliance on finite natural resources -- the program benefits all citizens -- not just the few TVA customers willing to pay extra for green energy. But the decrease is infinitesimal. GPS provided only 0.064 percent of TVA's total "system input" in FY 2007.]

[FYI, total "system input" is published in the TVA Annual Report for FY 2007, but TVA has not yet published a comparable number for GPS, and the number used to calculate the percentage shown above had to be scaled up from the GPS total for January-August 2007 as published in the print version of the most recent GPS newsletter (but not in the on-line version of the same newsletter).]

"TVA is doing this to try and remain environmental[ly] conscious and offer alternatives to customers," says TVA spokesperson Barbara Martocci. "By supplying GPS, you're reducing the dependence on coal-burning, nuclear and hydroelectric [power] by using the sun, wind and methane."

[It should be noted that both motivations stated by Ms. Martocci -- TVA's environmental consciousness and offering alternatives to customers -- are public relations goals. TVA has never stated GPS goals in terms of explicit environmental or experimental benefits. Incidentally, GPS is presumably not used to "reduce dependence" on hydroelectric power since it's already clean.]

But residents have recently raised questions about the goals actually fulfilled by the program

[Again, GPS has no explicit goals. So it is very difficult to measure the extent to which the GPS program has succeeded. Unfortunately, the number of residents raising questons in public is very few. But Mark Petty, Vanderbilt University director of plant operations, did so in The Torch magazine in June 2004. And a more recent example is Ellie Throop of Mr. Juliet, TN, who was quoted by The Tennessean on Oct. 14, 2007, after which the paper published the following comment emailed by an anonymous reader: "The Green Power Slam is nothing more than a PR scam. If [TVA were] a federal agency striving for better, cheaper and cleaner energy sources, it would [conduct] a multi-pronged experiment in energy conservation. Instead, TVA seeks every possible way to avoid installation of the latest smokestack scrubbers on its coal-fired plants and has resorted to the federal courts to allow them to continue fouling the air... You may be sure that Green Power is nothing more than a nuisance to TVA."]

and if the additional funds provided to it are being appropriately used.

[Fiscal accountability is another issue. The acceptance of voluntary contributions from the public by TVA -- or by any other corporation or federal agency -- is a public trust which incurs (or should incur) an obligation to make a strict accounting of the use of such funds, but TVA has never done so. During the comment period before the adoption of TVA's Strategic Plan, an "apparent TVA employee" said, "TVA needs to take a hard look from an ethical perspective in marketing this product. It appears to be an Enron-type house built on sand with no apparent accountability to the customer." When asked to comment on this charge, a TVA spokesperson avoided the issue by claiming that the Green Power Switch program "is like a model for utilities all over the country. We were among the first utilities to offer a Green Power program."]

Though residential subscribers typically pay an additinal $2 to $10 per month to fund green power, prices will soon increase since TVA's board of directors approved a seven percent rate hike at its Feb. 15 quarterly meeting.

[The seven percent increase decided Feb. 15 affects all TVA customers. An additional "fuel surcharge" was announced by TVA on Feb. 20, 2008. The surcharge is one half penny per kilowatt hour or about five percent on top of the seven percent increase. So the average residential customer will see an increase of at least twelve percent as of April 1, 2008. And some TVA distributors are adding increases of their own on top of this. But the premium which TVA charges for GPS won't rise (or fall). It bears no relationship to actual costs and hasn't changed since the GPS program began in April 2000. Because TVA has the power to charge whatever it wants for electricity, Tennessee is the only state in the country without a public service commission, the government body which approves rate increases in every other state.]

An estimated 12,000 Tennesseans subscribe to GPS for their homes, and businesses in Knoxville going green include the Tourism Board, Mast General Store, Three Rivers Market and TVA itself, among others.

[There are a lot of different things businesses should do before earning the "going green" label. See LEED for example. Unfortuantely, it's all too easy for them simply to sign up for GPS, afix a GPS decale to the door, and then claim that they are "green" or environmental friendly.

["TVA itself" has "gone green" in an extremely minor way. According to the TVA website, only "TVA Chattanooga," "TVA Knoxville," and "TVA Huntsville" purchase more than five blocks of GPS -- which costs only $20.00 per month.] A professional employee of TVA confided in me that he and most of the other employees he knows at TVA consider GPS to be a sham and that very few if any subscribe for their own residences.]

Ted Lollis, a Knox County citizen concerned about the program, became interested last August after taking a guided tour of the wind turbines TVA uses on Buffalo Mountain in Anderson County.

[The tour was on August 6, 2007. For photos of Buffalo Mountain, click here, or click here. Three of the smaller wind turbines on Buffalo Mountain are owned by TVA, and fifteen larger turbines are financed, owned, and operated by Invenergy LLP of Chicago, IL.

Lollis coordinated a forum Feb. 10 on GPS at the Tennessee Valley Universalist Unitarian Church to present doubts he has about the program, including its environmental benefits and the use of the extra money paid by subscribers.

[This paragraph is accurate except for the name of the church. Click here for the correct name.]

"I asked, 'What are the economics of the project, how much does it cost, how much is coming in from the subscribers?'" Lollis says. The TVA tour guide didn't have the answers, but relayed the questions, leading to a Sept. 19, 2007, meeting between Lollis and two TVA GPS managers from Nashville's Marketing department.

[GPS is managed by TVA's marketing department, and most of what the public is told about GPS comes through The Buntin Group ("Brand Fluency") of Nashville and other advertising agencies. If TVA were serious about GPS, wouldn't the program be managed by a research or engineering department, like coal and nuclear for example? And wouldn't research and operating results be shared with the public through technical reports?]

After roughly 90 minutes of explaining the program, Lollis says the TVA employees asked if he'd be interested in subscribing, and while he didn't think the program was worth the extra money, he left them with a long list of questions. They never followed up with answers, he says.

[Click here to see the questions left with the two GPS managers. In fairness, some of these questions were answered during the meeting on Sept. 19, 2007, but most were not.]

[Twenty-five days after the Sept. 19 meeting, one of the same GPS managers gave an interview to The Tennessean newspaper, during which TVA revealed for the first time how much it has invested in green power: $3 million for 16 solar sites (an average of $187,500 per site), $6 million for methane (presumably including both Allen and the failed Middle Point landfill site), and $4 million for the first three wind turbines on Buffalo Mountain. By comparing these costs to TVA data for installed generation capacity, we can determine that TVA spent $8,571,429 per megawatt of solar capacity, $750,000 per megawatt of methane capacity, and $2,020,202 per megawatt of wind capacity.]

[But these results exclude the biggest GPS component of all, i.e. $31 million which Invenergy LLP of Chicago, IL, borrowed in Europe and used to build an additional fifteen wind turbines on Buffalo Mountain ($1,148,148 per megawatt of wind capacity). Owned and operated by Invenergy, these turbines account for 72 percent of total GPS capacity but did not cost TVA a dime. To obtain Invenergy's participation, TVA entered into a 20-year power purchasing agreement (contract), the terms of which the GPS managers said on Sept. 19 are "commercially confidential."]

"[People] subscribe because it feels good," says Lollis, "but the insidious part is that it makes people relax and feel like they're doing their part, and there's a heck of a lot more to be done."

[Mark Petty, Vanderbilt University director of plant operations, made this case very well in The Torch magazine in June 2004. So did Professor Steven Pinker in the New York Times Magazine of January 13, 2008. (who did not address GPS per se but was wrting about climate change in general.]

Lollis spent the past five months conducting Internet research and compiling links to news stories to not only try and answer his own questions, but also to create a Web site to inform and possibly start a larger dialogue in the community. He hasn't chosen a domain name yet but anticipates the site will be online by the end of February.

[The website went on-line May 19, 2008. Its URL is]

"[The Web site] will probably be seen as biased in some ways -- I picked some embarrassing things for TVA to put on the chronology [page].

[Such things as TVA's underestimation of the wind on Buffalo Mountain, the cancellation of the "Regenesys plant" which would have stored GPS power), the abolition of TVA's Public Power Institute in 2003, the failure of the methane project at the Middle Point landfill near Murfreesboro, the unexplained interruption in methane production at the Allen coal-fired plant in Summer of 2007, and the elimination of 58 percent of all TVA research jobs at Christmastime 2007. Of course any cutting-edge program will have setbacks, but the embarrassment of these examples was made far more severe because -- in every case -- TVA withheld information from GPS stakeholders and from the public at large.]

This is one person's attempt to put a lot of things in the same place." Lollis says. "I don't think [GPS] amounts to much, I think it's harmful,

[As Hippocrates said over 2,000 years ago, "Make a habit of two things: To help, or at least to do no harm." GPS is harmful in at least four ways: (1) The public is paying out of pocket for what TVA should be paying from profits and loans (same as it does for nuclear power). (2) GPS allows TVA to pretend that it's doing something for the environment when it's not. (3) GPS gives TVA an excuse to do no more than the "demand" created by voluntary subscriptions. And (4) GPS diverts the attention of all concerned from other measures which would in fact make a significant difference, e.g. personal conservation, keeping the pressure of public opinion on TVA, and lobbying Congress for effective oversight of TVA and for effective green power policies in general.]

and people should stop throwing money away. But this [conclusion] is made from documented sources. My question is: How much does it cost? They've collected millions from citizens over the last eight years, and they've not said one word about what [the money] is doing."

[Quite apart from the debate over the environmental merits of GPS, TVA is both a giant corporataion and an agency of the federal government. Either way, it should publicly account to the penny for all of the money it's ever received in the form of voluntary payments from GPS participants.]

Despite Lollis's concerns, many in the environmental community, including The Southern Alliance for Clean Energy -- a nonprofit dedicated to researching and implementing renewable energy sources -- advocate the program. "This is probably one of the best in the Southeast,"

[This implies that the SACE has criteria to rank the green power programs in its eight-state area. Such criteria should be stated openly.]

says Gil Melear-Hough of SACE, who also attended Lollis' forum.

[Mr. Melear-Hough acknowledged during the forum that he is a member of the GPS Steering Committee. This committee meets in secret, and its decisions are never published, thus violating the standards that the TVA maintains for the Regional Resource Stewardship Council, another TVA committee which has public participation. Representatives of the SACE -- and the Tennessee Environmental Council, the League of Women Voters, and the Tennessee Environmental Education Association which also belong to the GPS Steering Committee -- have never told their members or the public what happens when they meet with TVA. This creates at least the appearance of a cushy relationship between the giant corporation/federal agency and the very non-governmental organizations which should be TVA watchdogs.]

In the past, SACE has clashed with TVA on many environmental issues, but Melear-Hough says the GPS program is a model for other Southeastern states.

[Perhaps on nucler power, but SACE has never clashed with TVA on GPS since it began in April 2000. On the contrary, SACE has faithfully attended every GPS event and has actually sought and processed orders for GPS from churches and universities. But the executive director of SACE may be growing a little impatient with TVA. He was quoted in 2007 as saying, "The GPS program is little more than political window dressing. And in 2008, he said, "With regard to renewable fuels, TVA seems stuck on its own 5-yard line.]

[GPS was the first green power program in SACE's eight-state area, and it's a "model" for the other seven states because SACE says it is.]

Although the program is an added cost to the consumer who chooses to participate, Melear-Hough says there are no federal grants or national incentives available to the utility because green power is a voluntary program.

[TVA received a $1 million grant to help launch GPS. I have not been able to find out about this grant or been able to determine if TVA fulfilled its conditions.]

"There's green power in every state of the union, but it's not something that's mandated. It comes down to how they raise money to build stuff," he says. TVA is held accountable to the program's goal

[What program goal?]

through The Center for Resource Solutions, a third party green auditor based in San Francisco. "We know [the money] is really being spent on green power and with marketing, they're only making factual statements," says Melear-Hough. "It's a pretty transparent process and they've passed with flying colors."

[The CRS "Verification Process" has two parts: The "Process Audit" and the "Marketing Compliance Review". The Process Audit "certifies" that TVA actually generates "green power" and that -- over time -- TVA sells no more green power than it generates. Click here to see TVA's last annual submission of data for the Process Audit. The Marketing Compliance Review looks at TVA's marketing materials. But neither of the two parts of the CRS verification process has anything to do with money or with the goals of the GPS program!]

[TVA and SACE repeatedly imply that the CRS audit puts GPS above reproach, but it does not. Neither TVA nor the SACE has ever published information about the economics of GPS or assessed whether or not GPS is meeting its goals after eight years of operation. If GPS is for public education, the $3 million TVA spent on solar sites might be justified. If GPS is experimental, the failure of the Middle Point landfill project might be justified (but only if the reasons for the failure were revealed). If GPS is really to clean the air, TVA should publish comparisons with its coal-fired and nuclear generation. But the public knows nothing of these things because GPS goals are unstated and because GPS results are unpublished.]

Part of the GPS initiative, developed by distributors like KUB [Knoxville Utilities Board] and the environmental community,

[TVA maintains that GPS is like a stool held up by the three legs of TVA, participating distributors, and the environmental community (of which SACE is the major representative). In Oct. 2002, the Center for Resource Solutions wrote that SACE support of GPS is "the kind of positive promotion that money cannot buy."]

dictates that only new technology and sites can be used for the program.

[Nothing is "dictated." TVA voluntarily accepted the somewhat arbitrary CRS criteria. In fact, TVA uses a broader definition of "renewable power" for the purpose of analyzing the possible effects of a federal renewable energy standard, as indicated in a briefing TVA gave Members of Congress on June 9, 2007.]

"It was decided that no generation that was in existence could be used in green power," Martocci says. For that reason, hydroelectricity, an energy source produced in dams by water turbines, is not a feature used in the GPS program, though Martocci adds there is continued debate about that policy.

The extra money GPS customers pay goes toward these intiial technology investments needed to implement renewable energy, funds maintenance and generates the power, whose production is costlier than traditional power sources like coal or nuclear power, Martocci says.

[So let's see the current balance sheet -- and profit and loss statements for each year since 2000! Did GPS customents pay to build TVA's 16 solar power sites which contribute virtually nothing to GPS? Did GPS customers pay for the failed methane plant at the Middle Point landfill? At least we do know that customers did not pay for the biggest GPS investment since it was financed in Europe by Invenergy LLP.

Nuclear sources typically cost 4 cents per kilowatt-hour, says Melear-Hough, compared to 25 cents per kilowatt-hour for solar power.

[Mr. Melear-Hough is correct about the uneconomic cost of photovoltaic cells. So why did TVA "invest" $3 million in 16 solar sites which contribute virtually nothing to GPS generation?]

Once wind production can be more effectively harnessed with more advanced technology, it will be a cheaper option.

[Many experts do expect that the cost of wind power will come down, but it will always cost more in the TVA operating area where there is sufficient wind only at the top of remote, hard-to-reach mountain ridges.]

He adds: "Wind comes in around 2 cents, and the catch methane, that's 4 to 5 cents. I've done the math, and it comes out to what people are paying for green power."

[If wind costs 2 cents and nuclear costs 4 cents per kilowatt-hour, why is TVA investing billions in nuclear power and virtually nothing in wind?]

[If SACE has "done the math," it should publish its methodology and constantly update the results of its analysis.]

[It would be extremely remarkable if the combined cost of all GPS sources is exactly "what people are paying [today] for green power." The rate which TVA still charges for GPS ($4.00 for 1 block of 150 kWh, i.e. 2.67 cents per kWh) was determined in 1999 before TVA had any experience whatsoever with the actual costs of greenpower generation, and many economic factors have changed dramatically since 1999.]

[TVA's premium for green power used to be below the national average, but now it's above the national average. According to the National Renewable Energy Laboratory (NREL), the ten lowest utility premiums for green power nationwide averaged 0.673 cents per kWh as of December 2006.]

This page was last updated on June 2, 2008.

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