Southeast's largest green power
program running deficit
By DUNCAN MANSFIELD
Associated Press Writer
The Tennessee Valley Authority's renewable energy program, the largest in the
Southeast, is selling far more premium-priced "green power" than it is
producing, according to an internal audit.
The nation's largest public utility sold 11.6 million more megawatt hours of
renewable electricity in 2003 than it made - a 42 percent deficit from the 27.4
million megawatt hours generated, according to a TVA inspector general's report
obtained by The Associated Press.
Fifteen wind turbines being erected on a former strip mine on Buffalo Mountain
near Knoxville could turn that deficit into a huge surplus that would make
renewable energy available to more consumers.
But without the windmills, the national accreditation of TVA's Green Power
Switch program hangs in the balance.
"From Day One we were in a deficit," program manager Gary Harris said.
"We didn't have any facilities. But that was the design of our
program."
From the start four years ago, TVA committed to supply Green Power Switch with
homegrown energy - instead of buying credits for green power made outside the
sometimes smoggy Tennessee Valley.
TVA would add generation as consumer demand grew, but an assortment of delays
hampered the plan.
Fifteen solar collectors built around the valley provided more visibility for
the program than power. Three small wind turbines on Buffalo Mountain were more
of an experiment than power generators.
The main supplier was to be a landfill gas conversion project near Murfreesboro
that never worked. A new source was found in Memphis, but it took time to
develop - burning methane from the city's wastewater treatment plant at TVA's
Allen fossil plant.
Expanding the Buffalo Mountain wind farm with 15 larger turbines, owned by
Chicago-based Invenergy LLC, could give Green Power Switch its first significant
surplus.
But property negotiations and expiration of federal tax credits delayed the
project more than a year. The windmills are now being hauled up the mountain and
should be operating by early next year.
"TVA has had its challenges in developing supply, but they are in good
standing with us," said Dan Lieberman with the Center for Resource
Solutions, the national green power accrediting group in San Francisco.
Under association rules, an accredited utility has one year to make up a supply
deficit - a so-called "true up" period.
"They have stayed within the 'safe harbor,'" Lieberman said of TVA,
"although we are definitely watching carefully."
TVA's program ranks seventh in power sales and ninth in the number of customers
out of more than 500 utilities in 33 states offering green power, the Department
of Energy reports.
Still, TVA pales compared to the top programs. Austin (Texas) Energy has more
than seven times the sales as TVA and Minnesota-based Xcel Energy has six times
as many customers as TVA.
TVA has 7,241 residential and 332 business green-power customers. The program is
only offered to 66 of TVA's 158 power distributors largely because of the lack
of supply. Advertising has been limited for more than a year for the same
reason.
Harris expects Green Power Switch will be offered to all distributors in TVA's
seven-state region when the new wind turbines come on line. Already, other
utilities are vying to buy the surplus.
"TVA is constantly chasing the demand, and I think that is a good
thing," said Steve Smith, director of the Southern Alliance for Clean
Energy and a member of the advisory panel that oversees TVA's green power
accreditation. "That shows people want it."
TVA charges a premium of $4 per month for a 150-kilowatt hour block of green
power - about 12 percent of a typical home's usage. Most consumers buy more than
one block.
Harris said TVA has invested about $9 million in Green Power Switch, which
accounts for about one-tenth of 1 percent of TVA's total generation. It gets
back about $1 million in annual sales.
TVA serves about 8.5 million people and several major industries directly in
Tennessee and parts of Alabama, Georgia, Kentucky, Mississippi, North Carolina
and Virginia.
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