KUB commits to solar power – and a controversial long-term relationship with TVA

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Last year, Knoxville Utilities Board committed to supplying 20 percent of its electricity through solar generation by 2023, through Tennessee Valley Authority’s (TVA) Green Invest program. By 2023, KUB will provide 502 megawatts annually of new-to-the-grid solar power to its customers. This represents the equivalent of enough energy to power 83,000 homes. The $1.63 million cost will be paid by a credit provided by TVA as part of its 20-year partnership agreement with KUB.

The announcement was celebrated by solar energy advocates, including the Tennessee Solar Energy Industries Association, but some environmental watchdogs maintain there are issues with the contracts that local power companies had to enter into with TVA to participate in Green Invest.

For the past few years, TVA sought 20-year rolling contracts with local power companies. KUB’s previous contract with TVA was for five years. In August 2019, TVA presented the Knoxville Utilities Board with a 20-year contract that would provide a credit of 3.1 percent on wholesale base rates and flexibility to allow up to 5 percent of KUB power to come from local sources.

Stephen Smith, who holds a doctorate in veterinary medicine from the University of Tennessee, has served as the executive director of the Southern Alliance for Clean Energy (SACE) since 1993. Founded in 1985, SACE promotes responsible energy choices in the Southeast.

(Smith is on the board of directors of the Foundation for Global Sustainability. Hellbender Press is an independent project of FGS).

“Any time solar is being built, that’s a positive thing,” Smith said. But, he added, “It’s important to put it into context. What has [KUB] given up by entering into what we consider a Draconian contract?”

Smith addressed KUB’s board of commissioners at its October 2019 meeting, recommending KUB not approve the contract. He told the board it would give TVA no incentive to respond to KUB’s concerns and could limit the amount of locally owned and generated power.

He was also interested in seeing whether Memphis Light, Gas and Water would agree to a TVA long-term contract, which is under discussion there. A public advocacy group, $450M for Memphis, has cited several studies that show savings of $250 million to $450 million for Memphis energy consumers if MLGW switches from TVA-supplied power to other sources. A more conservative estimate, $122 million, comes from energy advisors at Siemens, the consulting firm selected by MLGW and the Memphis City Council to make recommendations.

Smith said the potential amount of energy from renewables for MLGW is “orders of magnitude over what they have with TVA.”

In March 2020, KUB president and CEO Gabriel Bolas recommended that KUB commissioners sign the long-term TVA contract. Bolas advised that the opportunity to be part of Green Invest was not available with a five-year contract. After the board’s approval of the contract, KUB directed TVA to use part of its partnership credit to immediately commit to 212 megawatts of solar power on the KUB grid.

Bolas stated that the agreement “provides ample opportunity for KUB to support efforts by the City and others to reduce emissions from power generation.”

Smith disagreed.  “We think it wasn’t properly vetted,” he said of the contract. “KUB has hitched their wagon to the future of TVA. I believe that decision will come back to haunt customers of KUB.”

At the time of the announcement, Smith tweeted, “A 20-year evergreen contract in this dynamic electric market is a fool’s errand.”

Last summer, Amanda Garcia, director of Southern Environmental Law Center’s Tennessee office, filed a lawsuit against TVA in federal court in Memphis on behalf of several environmental groups over what the organization calls the “never-ending contract.”

Solar futures

Bryan Jacob is solar program director for SACE and produces its “Solar in the Southeast” annual report. The report ranks solar usage among various Southeastern utilities on a watts per customer basis. Utilities doing a good job are recognized as “Sunrisers,” while those trailing behind are “Sunblockers.” For three years in a row, TVA has made the Sunblocker list. Jacob said that as he assembles data for the 2021 report, to be released in June, KUB “will be in the hunt for one of those prestigious Sunriser designations.”

What remains to be seen, Jacob said, is whether, after KUB reaches the 20 percent solar supply in 2023, that’s the maximum amount that TVA will allow KUB or whether it is a path to a bigger number.

He said that many of the utilities SACE tracks have transparent action plans, but TVA tends to be vaguer about quantifiable steps toward goals. For example, Florida Power & Light has an integrated resource plan (IRP) that lays out a clear path to produce more than 10,000 megawatts of solar by 2029, with benchmarks noted. In contrast, the IRP that TVA approved in 2019 outlines a 20-year plan for “up to” 14 GW of solar capacity but is vague on how it would get to that number.

Much of the increase in demand for solar has come from corporations that have their own sustainability goals and from consumers interested in renewable energy. But change should be utility-led, not corporate-led, Smith said. As the nation’s largest public utility, TVA “should be on the cutting-edge of renewables.”

A climate-committed city

One issue on which everyone agrees is that the city of Knoxville is committed to being a leader in the reduction of greenhouse gas emissions.

In 2019, under former Mayor Madeline Rogero, the city committed to a 50 percent reduction in greenhouse gases by 2030 for municipal operations and an 80 percent reduction in greenhouse gases by 2050 for the entire community (both relative to a 2005 baseline).

Current Mayor Indya Kincannon, who took over in January 2020, has assembled a Climate Council to help map the path to the 80 percent reduction. Smith is one of 12 council members, as is KUB president Bolas.

In a statement, Kincannon said KUB’s commitment to 20 percent solar is “a major step that advances the objectives of our Climate Council to reduce community greenhouse gas emissions. KUB is a leader in the valley for their sustainability efforts.”

Smith wishes that the solar energy that KUB is using would be created here. Instead, the energy will be produced at solar farms in Lowndes County, Mississippi, and Lake County, Tennessee. 

“We’re buying the bragging rights to say that some small portion of solar is on the grid,” Smith said. He noted that that’s not the same as having the jobs or economic development that would come with having a solar industry in and around east Tennessee. “We believe that TVA should be building future solar here.”

Corrected on 2/24/21: The sentence,
"Jacob said ... KUB 'will be in the hunt for one of those prestigious Sunriser designations.'”
It mistakenly included the TVA abbreviation.

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