By Nancy S. Grant from April 2013 Issue
Five electric co-ops in western Kentucky receive the electricity they distribute to consumer-members from the Tennessee Valley Authority.
TVA's vast system of 29 hydroelectric dams is its most well-known feature. But there's a lot more. TVA also generates electricity at three nuclear power plants (two in Tennessee, one in Alabama), 11 coal-fired plants, 11 natural gas and other fuels combustion turbine power plants, one pumped-storage hydroelectric facility, plus 18 renewable energy sites using wind, solar, or methane gas. Electricity from these sources travels through 16,000 miles of transmission lines to 9 million consumers in seven states.
In Bowling Green, Ernie Peterson, TVA's general manager for customer relations in Kentucky, says, "The diversity that comes with this large geographic area means that we are not dependent on a handful of units. We think having multiple fuels and multiple sources is a very efficient business model."
Local decision making
Although TVA is a federal corporation with a board of directors appointed by the president of the United States, TVA does not receive any tax dollars. TVA is a nonprofit business that is financed entirely from power operations.
TVA's success depends on its relationship with the 155 local power suppliers within its service area. Representatives from each local distribution company belong to the Tennessee Valley Public Power Association. TVPPA members work with TVA to set broad policy goals, and to match TVA activities with the needs in their communities.
Eston Glover, president and CEO at Pennyrile Electric co-op in Hopkinsville, recently served as chairman of TVPPA. Glover, who continues to be actively involved on several TVPPA committees, says, "This partnership is one of the most important services we can provide for our co-op's member-owners. Working together with TVA we can meet our goals."
Peterson says, "There are real benefits to local decision making, whether that's emergency system restoration during a big storm, or making a large financial decision."
Peterson says, "At TVA our vision—the big picture of where we are going—is to be among the leading providers of low-cost and cleaner energy by 2020. And while we do that, we are focused on maximizing reliability."
To meet those goals TVA must find ways to supply exactly the right amount of electricity to meet demand that varies during each day and night, and from season to season. Peterson says, "We have to think about where we're going to get the right amount of generation to do that for a long way out. We have to position for the future, and the planning time frame is measured not in years, but sometimes in decades."
A mix of resources
Peterson says, "The capacity plan we have for the future calls for a balanced portfolio with more equal parts coal, nuclear, natural gas, and renewables, including hydroelectric."
TVA recently put together an extensive study called the "integrated resource plan" to guide its financial decisions about how best to use the generating sources it already has, and to help decide what new things to add to its system. Regional economic development teams, members of the public at large, independent environmental groups, and TVPPA members all contributed ideas.
Members of TVPPA recognize that changing this mix will occur slowly. Glover says, "We know that we will have to depend on coal as part of the proper mix of generation. We also must be prepared for fluctuating natural gas prices, and be aware of the environmental issues that both coal and gas bring to the scene. Therefore, it is in our best interest and TVA's best interest to have a good mix of fuel sources, including nuclear, hydro, and other renewables."
How those sources are used affects the dollars and cents individual customers see on their monthly bills. In general, TVA uses the cheapest power sources first to meet normal demand. When consumers increase their use of electricity, TVA turns on the next group of power sources—and they have higher operating costs. As demand increases, more power sources are added, each with a higher cost. At the peak when demand for electricity is at its highest, the cost to generate that extra electricity is also highest.
Glover says, "If we can shift some of our load away from when that heavy peak is, then TVA can use a lower cost generation method and fuel source—they don't have to turn on those higher priced units." Moving some electricity use to non-peak hours means TVA can use its resources more efficiently.
During any part of the day or night there's another benefit when consumers use energy more carefully. Peterson says, "We see energy efficiency as a virtual power source." The virtual he's describing isn't in the sense of not real, but in the sense of as a substitute. When consumers reduce their demand for electricity through improved efficiency, the power they do not need from existing sources will be available to serve the needs of a larger population in the future. That kind of demand-shifting is just as good as building a new power plant—and could help TVA save a lot of money.
NEW ENERGY IDEAS
Here are four TVA projects under way in Kentucky:
• A 5-megawatt solar farm on the base at Fort Campbell will produce enough power for 463 homes—and avoid 4.7 million tons of carbon dioxide emissions per year
• Replacing outdoor lighting fixtures with energy-efficient, long-life bulbs will lower electricity consumption—and reduce carbon dioxide emissions by 440 tons per year
• Installing control switches on water heaters and HVAC equipment at 1,100 homes will help manage power demand during peaks—and lower electricity costs
• Constructing a new substation at a 2,700-acre industrial site near Salem Church will enhance reliability—and prepare for economic development in the area