Alexander: TVA’s Rate Cut “A Lesson for California”

Posted on August 27, 2020

“There’s a lesson here. California has closed zero emission nuclear plants, closed low emission gas plants and relied on windmills and imported power from coal plants. TVA has led the nation in new nuclear plants, built new gas plants and limited the use of trendy, unreliable power. It has put strict pollution controls on its coal plants. The result is a rate cut for rates that already are among the lowest in the nation, 99.9 percent reliability, cleaner air, less debt and a brighter future for ten million residents of the Tennessee Valley.” – Lamar Alexander

MARYVILLE, Tenn., August 27 — United States Senator Lamar Alexander (R-Tenn.) said today that the Tennessee Valley Authority’s (TVA) decision to provide a two and one half percent “Pandemic Relief Credit” to wholesale customers, in effect lowering electric rates by two and one half percent, “is a lesson for California and its poor energy policy decisions.”  He said Californians are suffering electricity blackouts as electricity prices skyrocket, while TVA cuts rates and provides 99.9 percent reliability.   

“There’s a lesson here,” the senator said. “California has closed its zero emission nuclear plants, closed low emission gas plants and relied on windmills and imported power from coal plants. TVA has led the nation in new nuclear plants, built new gas plants and limited the use of trendy, unreliable power. It has put strict pollution controls on its coal plants. The result is a rate cut for rates that already are among the lowest in the nation, 99.9 percent reliability, cleaner air, less debt and a brighter future for ten million residents of the Tennessee Valley.”  

Alexander cited a New York Times August 18 report that as many as 3.3 million Californians could be without electricity for up to four days as California utilities resorted to rolling blackouts in response to electricity demand caused by a heat wave. The report said wholesale prices were surging to as much as $3,800 per megawatt hour, roughly 100 times the typical cost of transmitting power over a designated stretch of transmission line.

“California’s troubles are the direct result of its own poor policy choices,” Alexander said. “One reason for the blackouts was the wind didn’t blow so windmills didn’t work. Renewable energy is 36 percent of California’s electric generation, and Democrats have set a mandate for 60 percent in 2030 and 100 percent for 2045. At the same time, the state is shutting down its nuclear plants which are 99.9 percent reliable and emission free. The irony of this obsession with wind and solar power is California has to import power from neighboring states with fossil fuel coal plants to try to deal with the blackouts.

“On the other hand, TVA has built two new reactors, and when nuclear is combined with hydropower, 50 percent of TVA power is emission free. Twenty-six percent is low emission gas. Three percent is wind and solar. This combination of energy sources has made the valley’s air cleaner and made TVA one of the cleaner utilities in terms of carbon emissions. Most importantly, it fulfills TVA’s mission by federal law: provide large amounts of reliable electricity at a low cost.”

The senator said that, according to TVA, before the new rate cut, TVA rates for industrial users were in the lowest ten percent of states and rates for residential users were in the lowest 25 percent of states.  

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