by Michael W. Kahn, staff writer for NRECA

After seeing the mildest winter in almost five decades last year, the winter of 2018 was a very different story for the Tennessee Valley Authority.

A colder-than-normal January helped TVA set three of its top 12 winter peak demand records, as well as an all-time record for energy demand in a 24-hour period: 706 million kilowatt-hours.

The provider of electricity to more than 150 co-ops and municipal systems reported May 4 that electricity sales climbed 6 percent in the first six months of fiscal 2018. At the same time, operating costs were down 4 percent, which TVA credited to more hydro and natural gas production, along with cheaper natural gas.

TVA raised base rates 1.5 percent last October. But John Thomas, chief financial officer, said the authority was “able to more than offset” that through fleet performance and lower fuel costs.

While the base rate increased from 4.8 cents to 5 cents, the fuel rate slipped from 2.1 cents to 1.8 cents. “So the overall effective rate to our customers is lower this year for the first six months than it was last year,” Thomas told a conference call.

TVA retired its Johnsonville Fossil Plant in December and its Allen Fossil Units 1-3 in March. But Bill Johnson, TVA president and CEO, made clear, “We expect coal-fired assets to continue to be part of our diverse generating mix for years to come.”

“We have continued to invest in our coal fleet, which remains an important part of TVA’s system,” he told the call.

Still, “TVA believes a diverse portfolio will continue to provide the most consistently low rates for our customers,” Johnson noted.

“One of the major changes for us is more nuclear capacity,” he said. “More nuclear power is a key part of our effort to make TVA’s power system cleaner and more diversified.”

For the first half of fiscal 2018, TVA said net income was up 140 percent from a year ago, to $750 million. Operating revenues were $5.3 billion, an increase of 5 percent from a year earlier.

Working late into the evening, the 110th General Assembly completed its work and adjourned SINE DIE on Wednesday, April 25, 2018. At least, we think they did (see below). It was a successful session for Tennessee’s electric cooperatives. Two significant pieces of legislation championed by co-ops are now law, and numerous bills with negative impacts were defeated.

Given that the final hours included acrimonious debate between the chambers, tension between the House and Senate was high. The first bill of the final day became the final bill of the session, as it required two separate Conference Committees to reconcile differences in the language. What was so unusual was that the committees produced the same legislative language in their reports. The first one failed when voted on by the House, the second (and identical) one passed several hours later.

However, the more detail-oriented Capitol watcher may wonder whether or not adjournment actually took place. According to the State Constitution, the legislature can only adjourn if either the House or the Senate passes a joint resolution and the other body concur in the same resolution. That is not what happened in 2018. After the long and sometimes bitter final day, both chambers passed their own resolutions and neither body formally endorsed the other one.

Barring a constitutional crisis, don’t expect any members of the legislature to call for their colleagues to return to Nashville to correct the formality, though. Election season has now begun.


Elections will re-shape representation

The summer and fall of 2018 will likely see record amounts of campaign activity. Six republicans, three democrats, and 26 independent candidates have filed petitions to be listed on the ballot to become Tennessee’s 50th governor since the term-limited Bill Haslam is unable to seek a third term. A competitive race to replace the retiring Bob Corker in the United States Senate could have national implications in terms of which political party controls the majority of seats. These two statewide races alone could result in over $50M of campaign spending as television commercials and direct mail pieces flood the state.

Additionally, three of the nine members of the United States House of Representatives are either retiring or seeking other office. This means the citizens of their districts will have the opportunity to elect new members of Congress. In the case of the 2nd Congressional District, in Knoxville and surrounding areas, it will be the first time since 1965 the Congressman will not hav the last name Duncan.

And now that the legislature has adjourned, state candidates are free to join their federal counterparts and fully engage in fundraising activities. Many primary elections will immediately kick into high gear, as the high degree of change could result in as much as one-third of the state legislature being new in 2019. Among state representatives who represent districts that include a electric cooperative, only two incumbent House members are running for re-election without opposition.

This election season will test the ability of co-ops to effectively engage with their legislative delegations. TECA staff stands ready to help member electric systems connect with candidates and demonstrate cooperative principle number seven – Concern for Community.


2018 Legislative Summary

Short summaries of the major issues that were enacted into law are provided below. In addition to the summaries provided below, you can view the final bill reports for this session, which include information about numerous pieces of legislation that were defeated throughout the year (smart meters, round up programs, utility board composition, and others).

Electric Cooperative Easements

SB 1646 / HB 1591

The State House and Senate approved legislation that will ensure efficient use of cooperative infrastructure for the provision of telecommunications and broadband services. After passage of the Broadband Accessibility Act in 2017, electric cooperatives were allowed to sell retail broadband services for the first time in their history. However, as many co-ops began to examine the possibilities a significant stumbling block to providing these services needed to be removed.

The fastest route to building broadband networks is for a cooperative to utilize its existing poles and routes of electric line for installation of new fiber-optic cables. However many of those routes cross private property, where the easement allowing access to the property was either prescriptive or limited to the provision of electric energy. This same issue has been the subject of significant litigation in Missouri, so TECA’s government relations team set out to change state law. Senator Ken Yager (R-Kingston) and Representative Gerald McCormick (R-Chattanooga) filed legislation to ensure that any easement used by a cooperative for the provision of electric energy could also be used for the co-op’s secondary purposes.

Thankfully, the General Assembly listened and passed Senate Bill 1646. After consideration by seven committees as well as the full House and Senate, the bill was approved unanimously. While other states have struggled with this issue, this legislation serves as a fantastic example of how electric cooperative’s unified voice can make a real difference at the Capitol.

Click here to see the final version.

Sales Tax on Utility Fees

SB 2121 / HB 2232

In response to an anticipated rule-making from the Department of Revenue, TECA joined with TMEPA, the Tennessee Gas Association, the Tennessee Association of Utility Districts, and the Tennessee Municipal League to propose legislation that prohibits the Department from applying sales tax to many fees charged to commercial and industrial utility customers. These fees, such as connection fees, have never before been subject to sales tax. The bill was sponsored by Sen. Ken Yager (R-Kingston) and Rep. Steve McDaniel (R-Parkers Crossroads).

Thankfully, the legislature listened. After some initial procedural uncertainty due to the bill’s effects of “forgoing” revenue to the state, the bill sailed through committees with broad support. It was enacted and made the law of the land on April 27.

Click here to see the final version.

Small Cell Legislation

SB 2504 / HB 2279

Titled the “Competitive Wireless Broadband Investment, Deployment, and Safety Act of 2018,” legislation that was intended to promote the deployment of small cell technology to facilitate 5G wireless services was passed after significant behind the scenes negotiation. However, those negotiations never spilled over into the legislative process as committee meetings saw little public fanfare over the issue.

The new law creates minimum standards for local governments to create siting requirements for small wireless facilities, and effectively prohibits local governments from imposing stricter requirements than those prescribed in the legislation. It also creates a maximum annual rental fee that local governments may charge for allowing this equipment to be attached to its buildings, water towers, traffic signals, light poles, etc.

Importantly, the language exempts electric cooperative (and all other electric distribution) infrastructure from the effects of the bill.

Click here to see the final version.

Broadband Accessibility Grants

Recognizing the need for the State’s investment in ensuring broadband becomes available for all Tennessee citizens, Governor Haslam included $10M in his original budget proposal for the Tennessee Broadband Accessibility Grant Program which is administered by the Department of Economic and Community Development. Rep. David Hawk (R-Greeneville) and Sen. Ken Yager both presented amendment requests to their respective finance committees, at TECA’s request, that would increase the fund. Additionally, Governor Haslam recommended an additional $5M of funding through his requested supplemental amendment to the budget.

At the end of the day, the budget passed by the legislature includes a total of $15M of broadband grant funding. The department will begin accepting applications in mid-July. To learn more about the program, visit ECD’s website.

At the end of March, TECA participated in Broadband Summit with the Governor and ECD. See the story here. We appreciate the dedication that Governor Haslam and his administration has shown to electric cooperatives and their involvement in broadband.

Flickr image by Casey Fleser

NASHVILLE – More than 60 co-op leaders from across Tennessee traveled to Washington, D.C., on Tuesday and Wednesday, April 10 and 11, to meet with members of the Tennessee congressional delegation as a part of the National Rural Electric Cooperative Association’s annual legislative conference.

“This trip is about building relationships,” said David Callis, executive vice president and general manager of the Tennessee Electric Cooperative Association. “When lawmakers evaluate legislation that impacts electric co-ops or rural Tennessee, we want them to think of us. It is important for them to know who we are and how policy will affect us and our consumers.”

In meetings with legislators, co-ops leaders encouraged lawmakers to support the Farm Bill and rural development programs, reject the administration’s proposal to sell TVA’s transmission assets and dedicate funding for rural broadband and other infrastructure projects. Lawmakers were also invited to visit their local co-ops to meet employees, attend annual meetings or tour co-op facilities.

Meetings were held with Senators Alexander and Corker and Representatives Black, Blackburn, DesJarlais, Duncan, Fleischmann, Roe and Kustoff.

“I’m a big supporter of rural areas, and I thank you for coming up to give a voice to the people you serve,” said Rep. Diane Black. “A lot of people never make it to visit legislators in Nashville, and certainly not to Washington, D.C. It’s important for their issues to be heard, and I appreciate what you do.”

In addition to visits with members of Congress, attendees also heard from industry and policy experts, including U.S. Secretary of Agriculture Sonny Purdue. During a speech to co-op leaders, Secretary Purdue discussed the importance of rural broadband and highlighted the successes of Tennessee’s electric co-ops. “Rural broadband is not just a luxury — it’s essential,” said Purdue. “Tennessee recently changed state law, and now seven of their electric co-ops are pursuing broadband. I don’t believe that America would ever reach the productivity we have today across our nation without abundant flow of electricity everywhere. In the same way, we cannot make America great again without high-speed e-connectivity available to every American.”

 

NASHVILLE – Dan Smith, a leader among Tennessee’s electric cooperatives, passed away on Wednesday, April 11, 2018. Smith was a board member for Middle Tennessee Electric Membership Corporation in Murfreesboro and served on the Tennessee Electric Cooperative Association board of trustees.

Smith is remembered as a passionate advocate for cooperatives and rural Tennessee. A board member for Middle Tennessee Electric Membership Corporation for almost 50 years, Smith served in multiple capacities for the Tennessee Electric Cooperative Association in recent years, including board president.

“Dan Smith left a mark on rural Tennessee,” said David Callis, executive vice president and general manager of the Tennessee Electric Cooperative Association. “He was a statesman who worked tirelessly to support cooperatives and other rural interests. His influence and service will be missed.”

“This news hurts, as we had hoped earnestly Mr. Smith would recover from this recent illness,” said Chris Jones, president and CEO of Middle Tennessee Electric Membership Corporation. “Our beloved Mr. Smith, leaves behind an unmatched and irreplaceable legacy, as no one loved the cooperative way more than Dan Smith. Middle Tennessee Electric and its employees past and present have lost a great champion for our cause. I will miss him greatly.”

Dan Smith speaking to delegates to the 2017 TECA Annual Meeting in Nashville.

 

Dan Smith and wife Vondie

NASHVILLE – There are more than 700 electric co-op lineworkers in Tennessee, and on Monday, April 9, we pause to honor their service to the state’s rural and suburban communities on National Lineman Appreciation Day. Tennessee’s electric co-ops extend our sincerest gratitude to the hardworking men and women who keep the power on and protect the public’s safety.

“We honor the dedicated service of these courageous Tennesseans and recognize the critical roles they play in keeping the lights on,” said David Callis, executive vice president and general manager of the Tennessee Electric Cooperative Association. “Our communities depend on reliable energy, and Tennessee’s electric lineworkers place themselves in harm’s way to power our everyday lives.”

Electric co-ops maintain more than 86,000 miles of power line and keep the lights on more than 99.96 percent of the time.

“These are special people who are passionate about their jobs and the communities they serve,” says Callis. “They go above and beyond, and all of us in this industry are honored to work with them.”

You can help Tennessee’s electric cooperatives honor lineman by posting on Facebook or Twitter with the hashtag #ThankAlineman.

 

NASHVILLE – On Tuesday, March 20, the BroadbandUSA Program, in partnership with the Tennessee Department of Economic and Community Development, hosted a Broadband Summit in Nashville. Gov. Bill Haslam along with other presenters discussed the importance of broadband and explored ways to increase deployment.

Gov. Haslam reiterated Tennessee’s commitment to expand broadband access: “All means all when it comes to access to education and job opportunities, and all means all when it comes to access to broadband.”

“Since the passage of the Tennessee Broadband Accessibility Act, electric cooperatives have moved swiftly to help answer the call for more broadband in rural Tennessee,” said Mike Knotts, TECA director of government affairs, who participated in a panel discussion during the Broadband Summit. “Seven of the state’s 22 electric co-ops have already made the decision to move forward with providing broadband service, and others are currently evaluating similar decisions.”

The Broadband Accessibility Act provided $10 million in grant funding in 2018 to spur broadband expansion in unserved areas. Earlier this year two co-ops received $2.7 million in broadband grants from the state. These grants have generated more than $90 million in broadband investment by electric co-ops in Tennessee. “The modest investments made through the Broadband Accessibility Grant Fund are already reaping huge rewards,” said Knotts. “That’s a tremendous multiplier, and we hope that future funding from the state will enable even greater levels of investment into this critical infrastructure.”

On Tuesday Gov. Haslam announced several budget amendments including an additional $5 million in nonrecurring broadband accessibility grants, in addition to the $10 million originally included in the FY 18-19 budget.

Gov. Haslam addresses attendees at a Broadband Summit hosted by the Tennessee Department of Economic and Community Development on Tuesday, March 20. Photo via Gov. Bill Haslam on Flickr.

NASHVILLE – More than 45 high school juniors from across the state attended the Tennessee Electric Cooperative Association’s annual Youth Leadership Summit on March 12-14 in Nashville.

Delegates to the annual event receive a hands-on look at state government, learn networking and leadership skills and develop a better understanding of their local electric cooperatives.

While in Nashville, the students visited the State Capitol Building where they were welcomed to Nashville by members of the Tennessee General Assembly. Alan Whittington, assistant chief clerk of the Senate, explained the process required to pass legislation and students debated and voted on a mock bill.

In addition to lawmakers, students also heard from Tennessee leaders like Caty Davis, Ms. Tennessee 2018; Adam Hammond, anchor for Nashville’s NewsChannel5; and Trooper Jeffrey Buchanan with the Tennessee Executive Protection Detail.

“There’s no time that’s bad to learn to be a better leader,” says Tanner Casey, a junior from Atoka High School attending the Youth Leadership Summit. “I appreciate the chance to improve my leadership skills, and I’m grateful for this unique opportunity.”

Delegates to the Youth Leadership Summit are encouraged to be leaders and use their talents to improve rural Tennessee. “Local electric co-ops, school officials and guidance counselors chose these deserving students to attend the summit based on their interests in government and strong leadership abilities,” says Todd Blocker, vice president of member relations for the Tennessee Electric Cooperative Association and director of the Youth Leadership Summit. “They will be the next generation of leaders in rural Tennessee, and we want to prepare them for the challenges and opportunities they will face.”

The unusually cold weather in December and January has created some unusually high electric bills for members of electric co-ops. Many are asking the question, “Why does my bill go up when it is cold outside?”

The infographic below helps explains the relationship between electric rates and energy consumption.

If you are concerned about your electric bill, contact your local co-op to learn more about programs and services that can help you save energy and money the next time the weather gets cold (or hot).

 

CHATTANOOGA – Today the Trump administration released the Legislative Outline for Rebuilding Infrastructure in America, a framework to address improvements to the nation’s transportation, energy, utility and healthcare needs. Among the items included in the plan was a proposal to sell the Tennessee Valley Authority’s transmission assets.

In response to the administration’s proposal, the Tennessee Valley Public Power Association, the Tennessee Electric Cooperative Association and the Tennessee Municipal Electric Power Association share the following response:

  • We strongly support the public power model and are fearful divestiture of transmission assets would have a negative effect.
  • We recognize the importance of TVA’s transmission assets to the ratepayers of the Tennessee Valley, and we believe they should not be sold to interests who may not place a priority on public power or the Valley’s interests.
  • It is important to note that Congress has not appropriated money to TVA since 1992, and customers have paid back the initial investment plus interest.
  • According to a 2013 study by the Howard H. Baker Jr. Center for Public Policy, TVA has returned to the U.S. Treasury more than $3 billion on the government’s original investment of $1.4 billion. Source of these funds are the Valley’s ratepayers.
  • Our respective organizations will pursue all options to protect electric ratepayers and the TVA assets they have paid to build as well as the public power model, which is as relevant today as it was 80 years ago.
  • Divestiture of part or all of TVA assets has been proposed in the past. Each time, Congress has vehemently rejected such privatization.
  • Proceeds from the sale of TVA’s transmission assets would go to the U.S. Treasury and would not benefit Valley ratepayers.

A complete copy of the Legislative Outline for Rebuilding Infrastructure in America is available on the TECA website.

[NASHVILLE] – On Friday, the Tennessee Department of Economic and Community Development announced that two electric cooperatives will receive grants to support the deployment of broadband in rural Tennessee. Gibson Electric Membership Corporation in Trenton will receive $1,353,148 million and Tri-County Electric Membership Corporation in Lafayette will receive $1,350,000.

David Callis, executive vice president and general manager of the Tennessee Electric Cooperative Association, made the following statement:

“We are pleased that the state recognizes the vital role co-ops can play in the expansion of broadband,” said Callis. “Modern healthcare, education and commerce depend on access to fast, reliable internet, and co-ops are uniquely positioned to bring this service to rural and suburban Tennessee. Today, we celebrate with Gibson EMC, Tri-County EMC and the communities they serve.”

In 2017, the Tennessee General Assembly, bolstered by strong support from Gov. Bill Haslam, passed the Tennessee Broadband Accessibility Act. This landmark legislation removed restrictions that prevented electric cooperatives from providing retail internet access and established a grant fund to encourage broadband expansion.

Tennessee’s electric co-ops serve more than 2.5 million Tennesseans, many of whom do not currently have access to broadband.