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Some Things TVA Won't Tell You about Green Power Switch (GPS)

  • GPS is a major part of TVA's public relations. In fact, it's the only commodity or service which TVA markets directly to the public. (TVA sells "brown power" to 158 local distributors who in turn market it to the public.) So GPS serves as a major interface between TVA and the public.

  • But GPS is such a tiny part of TVA's total operations that it receives no little or attention from the TVA board and senior management. GPS is not mentioned in TVA's annual report, in TVA's new Strategic Plan, or in TVA's extensive annual 10-K report to the Securities and Exchange Commission (SEC).

  • GPS probably counts for extremely little in overall TVA policy making, finance, and investment decision making. GPS is administered by TVA's marketing department in Nashville, TN -- not by its power systems department in Chattanooga, TN.

  • The GPS program is financed in three ways. The biggest source is about $25 million from a private company (Invenergy LLC) for 15 wind turbines capable of producing 27 megawtts (MW) of power. Invenergy expects to recoup this amount -- and more -- through a long-term (20-year) power purchasing agreement (PPA) with TVA.

  • In addition, TVA claims to have invested about $13 million of TVA's own money: About $3 million for 0.3 MW from solar panels, $4 million for 2 MW from three wind turbines, and about $6 million for 8 MW from methane).

  • The third source is voluntary contributions from the public -- called a "premium" by TVA -- from residential and business "subscribers" to GPS. The cumulative premium paid by the public over the first eight years of GPS (2000-2007) totals about $6 million. So far as anyone knows (outside of TVA), TVA spends the public's money about as fast as it's received on operating expenses, marketing, and the other costs of the GPS program.

  • TVA is both an agency of the federal government (possibly the largest "independent" agency after the US Postal Service) and a giant corporation (#273 on the Fortune 500 List if it were publicly-traded). Yet thousands of GPS " subscribers" blindly trust TVA and voluntarily send money to help shield the giant agency/corporation from the criticism of environmentalists and from the responsibility of taking corrective action on its own.

  • TVA makes no accounting to the public (or to any regulatory body) about the uses of GPS funds from any source, including voluntary contributions received from the public. TVA does not publish balance sheets or income statements for GPS. So there is no way for the public to know if GPS goals (including the public expectation that voluntary payments will lead TVA to make increased investment in green energy) are being realized or not. There has been no review of GPS (by TVA, the Department of Energy, the press, environmental organizations, or anyone else) since it began on April 22, 2000.

  • TVA says that GPS is directed by a 12-member "steering committee." But TVA has not identified its members since 2003. The committee meets in secret. And no information about its meetings and decisions has ever been published. Officers of several environmental organizations serve on the steering commuttee, but web searches fail to reveal that any of them has ever made an accounting of the committee's activities to the public which they were presumably appointed to represent.

  • TVA designed GPS in 1998-1999 in response to public pressure. GPS has little or nothing to do with science, R&D, the environment, or global warming. Having given the public a way to "express its commitment to green power," TVA ignores polls and other ways to determine public opinion and considers the amount of voluntary contributions for GPS to be only the measure of "demand" for green energy in the TVA service area.

  • Except for the negative assertion (on the KUB website) that it "would not make any decision on adding additional resources to GPS until existing GPS generation is approaching full utilization," TVA has given no indication when the public's voluntary contributions to GPS will ever result in additional green power generation. TVA has never explained when and how this future investment in GPS will be decided, and -- so far as can be discerned -- TVA has no plan for making this crucial step.

  • Meanwhile -- and for the foreseeable future -- green power (GPS) displaces very little if any of TVA's "brown power" (power produced from coal, nuclear reactors, "old hydro," and other "dirty" sources). "Brown power" continues to be 99.95% of the total power distributed by TVA.

  • TVA uses several different definitions of "green power" and "renewable energy." The GPS definition (regulated by the CRS) is the most strict. TVA uses broader definitions in its annual report, when complying with the federal renewables purchase requirement (EPAct 2005), and when opposing federal and state renewable portfolio standards (RPS).

  • The major difference among the various "green power" definitions is "hydro modernization" (HMOD) which is excluded from GPS. In 2006, the TVA's HMOD capacity (358 MW) was almost ten times greater than the combined capacity of all GPS sources. Even HMOD ignors "old hydro," the emissions free source of electrical power which is what began TVA in the first place and which TVA still uses to a much larger degree that most other power companies.

  • When TVA started accepting voluntary contributions for GPS (on Earth Day 2000) it had no way to supply any "green power" (as defined by the CRS). Even when TVA started acquiring sources of CRS-certified green power, GPS "demand" exceeded GPS "supply" for five years.

  • The GPS program -- including the price the public pays for GPS -- has not changed at all for eight years, despite improvements in renewable energy technology, seven years of public discussion about energy and environmental policies, the demise of Enron, and many other changes affecting the technology and economics of green power.

  • Embarrassed by its inability to deliver green power to everyone who was paying for it (and risking the loss of GPS' certification by the CRS), TVA slackened GPS marketing in 2003-2004.

  • TVA ads now claim that GPS is a "growing movement," but any recent growth is probably more due the fact that TVA has resumed marketing the program extensively (radio, print media, etc.) than to any groundswell of genuine public opinion.

  • On December 5, 2006, a GPS manager told the 11th National Green Power Marketing Conference in San Francisco, CA, that a "direct marketing" campaign "tailored to reach more more affluent and younger groups" had incresed GPS sales 26.6% over a six-month period.

  • Many of TVA's advertising claims for GPS are tenuous. The claim that purchasing two blocks of GPS (i.e. paying $8.00 per month) equals the environmental benefits of planting an acre of trees in the Tennessee Valley was discredited by a FOIA inquiry in 2002. But the claim continues to be made by TVA and some of its distributors.

  • Tennessee and the southeastern states in general are very poorly suited for the production of green energy. There is far more sun, wind, and commercially available biomass in other parts of the country, and the economic law of comparative advantage should dictate that the western states produce all green power and the Tennessee Valley none.

  • The "capacity factor" of green power sources is far inferior to that of conventional energy sources. TVA expected to have a capacity factor above 30 percent when it constructed the first three wind turbines on Buffalo Mountain, but the capacity factor actually achieved by the existing 18 turbines is about 20 percent.

  • TVA claims that producing its own green power means that the environmental benefits of GPS are felt locally -- not at some distant point of production. This may be true, but the environmental "benefits" of GPS are minimal in any event. GPS accounted for only one twentieth of one percent (0.05%) of all electricity produced and distributed by TVA in FY 2006.

  • TVA says that the terms of its 20-year contract with Invenergy LLC are secret for "competitive" reasons. The public will therefore not learn anything about the economics of TVA's biggest wind power project.

  • Although the public is aware that GPS is intermittent -- no wind power is produced when the wind doesn't blow -- and no solar power is produced when the sun doesn't shine -- TVA hides the fact that several months can pass when GPS supply does not meet demand. GPS production in the summer of 2007 was only half of GPS consumption.

  • Electricity generated from photovoltaic cells is still very expensive under the best of circumstances, but TVA has made solar energy even more expensive by spreading its 16 solar sites over a wide geographic area for public relations and not for economic reasons. TVA expects solar energy to make only a token contribution to GPS (in fact only 1.5% in 2006).

  • The GPS newsletter was published four times a year in 2001-2003. Then three times a year in 2004-2006. Only one issue appeared in the first ten months of 2007. Never complete or timely, statistics about GPS are now even harder to find.

  • The three wind turbines owned by TVA were constructed on Buffalo Mountain in Anderson County, TN, after public opposition prevented their being constructed at two other locations: Lookout Mountain near Chattanooga and Stone Mountain on the TN/NC border.

  • Winds are not as favorable for power production on Buffalo Mountain (and in other areas on the Cumberland Plateau) as they are in the adjacent mountains of North Carolina, but TVA cannot consider installing wind turbines there because it's not part of the TVA service area (even though it's part of the Tennessee Valley watershed).

  • Plans for the original Buffalo Mountain wind farm called for a "Regensys" plant near Oliver Springs to store electricity while wind power was being generated and to release it when the wind was slack. But TVA cancelled this part of the project sometime in 2002, with no explanation given.

  • Methane from the Middle Point landfill north of Murfreesboro produced green power in 2001-2003. It still operates, but the power it produces no longer qualifies for GPS. There have been environmental problems at Middle Point, and in 2007 it was revealed that the landfill had been receiving radioactive waste from as far away as California for many years.

  • The second largest GPS source -- the co-firing with coal of methane from a wastewater treatment facility in Memphis -- was unexpectedly shut down for at least three months in the Summer of 2007, with no explanation given. As a result, total GPS production was less in FY 2007 than it was in FY 2006.

  • TVA ads boast that GPS comes from the wind, the sun, and the earth (methane gas). But in October 2007, GPS managers told The Tennessean newspaper that TVA could be generating more alternative energy for less cost, if only the public wasn't so "enamored" with wind and solar power. The newspaper story said green power from the earth (methane gas) lacks appeal to the rate-paying public because it comes from a "stinky mess."

  • According to rumor, very few TVA employees purchase Green Power Switch for their own homes. TVA, on the other hand, is a business like any other, and each TVA unit is apparently free to use its own budget to purchase GPS. TVA Chattanooga is a "Green Power Leader" (a business which has purchased 375 to over 1,000 blocks of GPS). TVA Knoxville is a "Green Power Partner" (a business which has purchased from 26 to over 250 blocks of GPS). And TVA Huntsville is a "Green Power Friend" (a business which has purchased from 5 to 25 blocks of GPS). But these are the only TVA units listed in these three categories of significant business purchasers.

  • Some (though not all) TVA distributors offer net metering, and TVA offers "Generation Partners" as a way for householders and businesses to generate wind or solar power for GPS. But this program produces miniscule results (in fact only 0.07% of total GPS production in FY 2006). TVA and its distributors offer no assistance with the acquisition and maintenance of wind and solar generators, apart from web links to the North American Board of Certified Energy Practitioners (NABCEP) and a few other general sources of information.

  • Here is the only mention of GPS in TVA'scurrent Strategic Plan (released on May 31, 2007): "The Green Power Switch program has helped TVA learn more about the potential for solar, wind, and methane gas generation in the [Tennessee] Valley." That's it? Just an observation that GPS "has helped TVA learn about the potential" for green power? What in fact did TVA learn? What changed as a result? How does GPS fit in with all of TVA's other programs? What is TVA's plan for GPS? What does TVA expect for GPS? What are the goals of the GPS program?

  • When comments were sought on the draft Strategic Plan, a TVA employee said, "TVA needs to take a hard look from an ethical perspective in marketing [GPS]. It appears to be an Enron-type house built on sand with no apparent accountability to the customer." This and other comments on the draft plan were briefly posted on the TVA website but were removed sometime over the Summer of 2007. The Enron quote survives in a newspaper story on the website of the Knoxville News Sentinel.

  • TVA is not preparing (at least not publicly) for the mandatory carbon regulation and/or renewable portfolio standards (RPS) which many industry observers foresee coming in the next few years. TVA in fact has opposed any such changes in the regulatory environment.

  • October 7, 2003, Grist Magazine quoted Stephen Smith, executive director of the Southern Alliance for Clean Energy, as saying: "The message is simple... To get these [green power] programs to take off in a big way you need federal-level efforts -- in particular a Renewable Portfolio Standard that requires a certain percentage of the whole generation mix in this country to come from renewable energy."

  • On March 5, 2004, the manager of GPS told the Southern Bio-Products Conference in Biloxi, MS, that the "future growth of [GPS and other] green pricing programs will depend on state [or federal?] laws requiring utilities offer green power to their customers."

    Abbreviations Used Above:

    CRS = Center for Resource Solutions, San Francisco, CA
    EPAct = Energy Policy Act of 1992 as amended in 2005
    FOIA = Freedom of Information Act
    FY = Fiscal Year (TVA's fiscal year ends on September 30.)
    GPS = Green Power Switch
    HMOD = Hydro Modernization
    KUB = Knoxville Utilities Board, one of 158 TVA distributors
    MW = megawatts, a measure of electrical productive capacity (1,000 kW = 1 MW)
    PPA = Power Purchasing Agreement
    RPS = Renewable Portfolio Standards, in effect a mandated minimum such as "10% of power production from renewable sources by 2010"
    SEC = Securities and Exchange Commission
    TVA = Tennessee Valley Authority

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