TVA is responding now to criticism from the Southern Alliance For Clean Energy directed at comments by its CEO Bill Johnson during an appearance during Tennessee This Week.
Related: Tennessee This Week: TVA CEO Bill Johnson defends purchases of aircraft after criticism
The following is the full statement from TVA:
TransparencyTVA is an agency of the people, put in place to serve the people here in the Tennessee Valley. We do this by being part of the Valley communities, interacting with our customers and the public, and having two-way dialogue about the things we do. It starts with transparency, and so we provide extensive information on our public website, are active with social media, hold public meetings, produce newsletters, and use every channel available. TVA is one of the few federal entities to comply with Securities and Exchange Commission reporting requirements, submitting publicly-available detailed financial and operational reports on a quarterly and annual basis, as well as for any significant change to our business decisions.People have a regular voice in what we do. TVA board of directors meetings are open to the public and include a listening session specifically designed to allow interested stakeholders to directly address board directors and senior TVA leaders. We fully comply with the National Environmental Policy Act and offer numerous public comment opportunities during the scoping and recommendation phases of any major project.We also actively seek out members of the public to participate in various advisory boards and working groups. Currently, we have public representatives on the Regional Energy Resource Council and the Regional Resource Stewardship Council, as well as the working group currently updating our Integrated Resource Plan. In fact, Dr. Smith himself has served on a number of these groups, which offer recommendations and opinions that directly impact TVA’s policies and plans.Through these channels we hear many different opinions and perspectives based on individual and community interests and priorities. All of that input is considered as we attempt to balance conflicting interests to make the best decision for the nine million people who count on us every day.FOIA Requests for Economic Development InformationOur Freedom of Information Act program is available for individuals to request information not already publicly available and was selected as one of the nation’s best by the U.S. Department of Justice in 2017. FOIA does exempt certain documents and information from public release when their disclosure could compromise security or sensitive financial information.TVA works closely with regional, state and local agencies to attract and retain jobs for the area. To do so, prospective companies often disclose detailed information on their business and finances that would create a competitive disadvantage for them if publicly released. Likewise, economic development activities are themselves very competitive and, if released, would place the Tennessee Valley at a disadvantage to other states and regions competing for the same businesses. It is our mission to create and retain jobs for the people we serve and our numbers over the past decade demonstrate we are getting results. To do that requires that we respect the confidentiality of information deemed confidential. We do detail the various TVA programs available for economic development on our public website.TVA OversightTVA operates under the oversight of a board of directors appointed by the President of the United States and confirmed by the U.S. Senate. Specific subcommittees of the U.S. House of Representatives and U.S. Senate oversee TVA’s operations, as does the Office of Management and Budget. An independent Office of the Inspector General ensures that our activities consistently follow applicable laws and regulations, as well as our own policies. In addition, TVA works in partnership with local power companies, who are themselves led by boards and leaders either directly elected by the public or appointed by elected officials chosen to represent them.Pricing Structure and Fixed CostsTVA currently does not have any fixed costs associated with our wholesale rates to the local power companies. The bills Dr. Smith references are not from TVA, but from his local power company. Many local power companies served by TVA have chosen to move some of their fixed costs into a flat service charge rather than including it as part of the rate for each unit of power. Ultimately, this move more fairly spreads the cost of power service across everyone who benefits from it and would actually reduce the variability of power bills during high demand periods in the winter and summer.While Dr. Smith specifically focuses on the fixed cost portion of his bill, it is more appropriate to examine his total bill over the same period. We are uncertain of the basis for his claim about increasing costs over the next ten years. Through our employees’ work, we have reduced our annual operating and maintenance costs by $1 billion and reduced fuel costs by $1 billion since 2014. Those savings flow through our customers and to consumers, as we are a non-profit public power entity. In fact, over the past five years, TVA’s effective power rates have dropped two percent and our average residential retail rate has improved from 37th lowest in the nation to the 29th lowest. Seventy-five percent of Americans pay more for power than the people we serve the Valley today, and we continue to focus on how to keep rates as low as feasible.The utility industry is evolving to meet the needs of those we serve. TVA is discussing a revised pricing strategy with local power companies that is designed to be revenue neutral. It is not a rate increase, but a rate structure change that moves a small portion of fixed costs to a flat service fee while reducing the variable cost of power by the same percentage. It is based on cost of service and would be applied fairly to all users in each rate class, including residential and industrial. This proposal does not limit an individual’s choice to invest in renewable energy or ability to take personal steps to lower power bills through energy efficiency measures.
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