By Kristi E. Swartz | 06/01/2022 07:14 AM EDT
Tennessee Valley Authority headquarters in Knoxville, Tenn. Bev Banks/File/E&E News
The nation’s largest public power utility soon could be operating with less than half of its board, increasing the uncertainty of whether it can help the Biden administration meet its already threatened decarbonization goals.
The Tennessee Valley Authority is down to five of its nine members at a time when the federal agency is considering dramatic changes to its electricity mix. That number could drop to two by the end of the year if the Senate fails to confirm President Joe Biden’s nominees for the board, who have been waiting more than a year to clear the chamber.
This means TVA may have to operate without a quorum at a pivotal time, its CEO and clean energy advocates told E&E News recently. The electric utility is weighing a low-carbon future that could include advanced nuclear reactors and is considering replacing coal with natural gas, which has drawn criticism from environmentalists.
“This is a pretty critical time in TVA because they are making decisions on how they are moving forward in the clean energy transition,” said Maggie Shober, research director for the Southern Alliance for Clean Energy.
Biden nominated four candidates to TVA’s board in April 2021; one has since dropped out. Since then, Biden has had the opportunity to nominate four additional board members, and some Republicans have called for nominees who represent certain states. But there’s been little movement. The White House did not respond to questions from E&E News about current or future TVA board picks.
“We have been waiting for months for those new names to be given, and they haven’t,” Shober said, later adding: “It’s not a good time for folks to be playing politics with this kind of a board.”
TVA’s board oversees the electric utility’s rates and major decisions to its long-term energy mix, in much the same way a public utility commission works with regulated electric companies.
Environmentalists have pinned much of the Biden administration’s carbon goals on TVA because it is a federal agency. This has become more important as hopes for a bipartisan energy bill begin to fade.
What’s more, the Biden administration has been under fire for not meeting campaign promises to aggressively cut carbon from the economy. Environmentalists and congressional leaders also have criticized TVA for setting carbon-cutting goals that aren’t in line with the administration’s (Energywire, Feb. 2). As an independent federal agency, however, TVA has some wiggle room when it comes to carrying out the president’s agenda.
TVA operated its most recent quarterly board meeting on May 11 with a quorum, comprising five members out of a possible nine seats. Since then, the terms of two board members have expired. Those members still can serve until the end of the congressional session — essentially the end of the year — unless Biden selects their replacements and the Senate confirms them.
Separately, board member and former Tennessee House Speaker Beth Harwell is running for a newly drawn congressional seat. Harwell, a Republican, is in a crowded primary field for Tennessee’s 5th District; if she wins the seat, she would have to give up her position on TVA’s board.
That could leave just two board members come 2023.
“Yeah, we’ve got a crisis coming,” said Amy Kelly, the Sierra Club’s representative for its Beyond Coal Campaign in Tennessee.
“We would like to see a full and functioning board for the nation’s largest public utility, especially at a time when we are trying to achieve an unprecedented carbon goal from the Biden administration and have a 100 percent carbon-free power sector by 2035,” Kelly said.
TVA CEO Jeff Lyash is confident that the agency will be able to run smoothly, even if its board dwindles to two or three members.
“If you lose a quorum, it doesn’t mean you don’t bring things in front of the board,” he said earlier this month. “We have positioned ourselves to operate.”
Indeed, TVA approved a series of authorizations on budgets and capital management at its November 2021 meeting. At the time, Lyash said the move put TVA “in a position to effectively run the operation if we lose the quorum” (Energywire, Dec. 22, 2021).
Yet Lyash, who has helmed other large electric companies, stressed that a complete board is important to an organization’s long-term operation. He said he’s made that clear to the Biden administration, the Senate and the Tennessee Valley caucus.
“I’m pretty consistent about saying: Identify board members that reflect the geography, the customer base and have the right set of skills,” he said. “And seating the board fully should be a priority.”
TVA serves seven Southeastern states, selling wholesale electricity to cooperatives and municipalities in Tennessee and parts of Alabama, Georgia, Kentucky, Mississippi, North Carolina and Virginia. It is at the center of the nation’s environmental justice challenges, and the majority of its territory is rural.
“It’s particularly important in an era of transition like this,” Lyash said in an interview with E&E News. “Having a strong board here at TVA is important to the 10 million people in the valley and to the nation.”
All of TVA’s current board members are Trump appointees. Former President Donald Trump fully flipped the board from Obama-era members during his four years in office. In the years since, TVA’s board has agreed with the electric company’s decision to shutter two aging and uneconomic coal-fired power plants, including one that had direct ties to the late Bob Murray, who was a coal executive and major Trump supporter.
Many clean energy advocates were critical not just of Trump’s appointees, but of former President Barack Obama’s picks, as well, arguing that they did little to advance any clean energy objectives.
Having Biden in the White House ignited optimism that that would change, environmentalists have said.
Indeed, Biden’s four picks, made last April, included people with backgrounds in clean energy, electricity and labor. They were Beth Geer, a sustainability adviser; Robert Klein, a former union member and gas and power utility employee; Kimberly Lewis, an information technology and engineering services company CEO; and Michelle Moore, an Obama White House alumna who heads a clean energy nonprofit (Energywire, April 26, 2021).
What was most notable, however, was that Biden made two of those selections a month before the terms of two sitting board members had expired. That raised hopes that the TVA board was a White House priority.
“I have never seen a first-term president appoint the seats of board members with nominees before those existing seats were even expired,” said SACE Executive Director Stephen Smith at the time. Smith has been involved with TVA in some way for three decades.
More than a year later, however, none of Biden’s nominees have been confirmed. The approval process stalled to the point that Biden had to renominate three of them earlier this year. The fourth, Lewis, dropped out, having decided to run for Congress.
Geer, Klein and Moore testified in front of a Senate subcommittee in April, but have not gone before the Environment and Public Works Committee, their last stop before the Senate makes a final vote (Energywire, April 7). Neither Committee Chair Tom Carper (D-Del.), nor Senate Majority Leader Chuck Schumer (D-N.Y.), have commented on the holdup of the nominations.
But a source familiar with the deliberations said the committee’s Democrats are working with the committee’s Republicans to reach an agreement on marking up the nominations. The committee passed — and the Senate confirmed — another TVA nominee recently: Benny Wagner to be the TVA inspector general.
Wagner testified at the same subcommittee hearing as the TVA board nominees. At that hearing, Republicans grilled Greer and Moore on past Twitter posts, including a tweet from Moore about how fossil fuels are not safe at any stage of their life cycle. The fact that none of the current TVA board members — nor Biden’s nominees — hails from Alabama, Kentucky or Mississippi has also come up in the long nomination process.
TVA’s governing document, known as the TVA Act, calls for nine board members, seven of whom need to be from the electric utility’s seven-state territory. It gives no geographic specifics beyond that.
But Mississippi utility regulators and one senator are calling for the board to include an official from their state. In March, veteran utility regulator Brandon Presley and Mississippi Public Service Commission Chair Dane Maxwell sent a resolution to Biden to appoint “at minimum” two TVA board members from Mississippi.
“I stand with Commissioner Presley on his action of calling on the Biden Administration to give Mississippi a seat at the table with the TVA,” Maxwell said in the March 11 resolution. “I personally think it just makes sense to give Mississippians a voice and a chance to represent the interests of Mississippi.”
Mississippi Sen. Roger Wicker (R), who sits on the Environment and Public Works Committee, has weighed in, as well.
“The Tennessee Valley Authority is and always has been vital for Mississippi’s electricity and economic development needs,” Wicker said in a statement emailed to E&E News. “Mississippi is home to the first TVA city, and nearly one-third of our state is in their service area. Our state’s best interests must always be represented within the organization, and I look forward to continuing to work with TVA in my position on the Environment and Public Works Committee.”
Wicker’s office referred E&E News to Senate Minority Leader Mitch McConnell (R) for additional details. McConnell represents Kentucky, where TVA decided to close the Murray Energy-supplied coal plant.
McConnell had no comment on the issue, his spokesperson said in an email to E&E News.
Once the TVA board is in place, its effectiveness in guiding the utility hinges on its members’ career backgrounds and personalities, Shober said. Biden’s picks include nominees with experience in distributed generation, energy justice, labor and climate policy.
“We won’t know until they come together as a board and start deliberating how that dynamic will go,” she said.
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By Kristi E. Swartz | 06/01/2022 07:14 AM EDT