Sign 2018 Petition to TVA

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Stop TVA from Under Paying for

Solar Energy

$

clipart, polar bear floating past tropic

The current TVA reimbursement for green energy, compared to prior years, decreases profitability for the solar system owner by over half.  At the very time we need green energy the most, this discourages investing in green energy.

Replacing fossil fuel energy is
essential to fighting the progress of Climate Change.  The cost of green energy must still come down to compete with brown energy.

Why Sign Petition,

in a nutshell .  .  .

Climate  Change

TVA is a part of our federal government.  Our government's main responsibility is to protect us, including protecting us from Climate Change.  Hold your federal government accountable.

Support Solar with

your Signature

 

What's the change in TVA Green Electricity ?

  • In 2018, TVA has made a huge change in the way it pays for green electricity to the little guy (you).

  • It no longer pays the solar system owners at a "retail rate".

  • This drastically reduces the income a solar system can make and they didn't make much profit before.

  • TVA reimburses producers (residential & commercial) of green electricity based upon a “Green Power Providers” 20-year contract.

  • The new / 2018 TVA contract with a Green Power Provider ‘pays’ for the solar electricity at a “flat-rate”. 

  • This rate does NOT include any cost increase due to inflation for the 20 years.

  

What could that hurt ?

  • Over 20 years the power of inflation is staggering.

  • Adjusting the annual income with the Forecast Inflation Rate (of the Historic 100-yrs), over 20 years, the impact is decreasing a solar system provider’s income from the 1st year to the 20th year by one-half.

  • Simply put, it is NOT a fair way to conduct business.

  • Profitability (Return on Investment/yr) is    decreased  by  over  half

  • This cripples the investment incentive for solar systems - there is very little profit incentive as it is. 

 

What can you do ?

  • Join ASA Officers in signing our petition to TVA, online by email

  • It's called Petition against

  
Unfair “Flat Rate”
Reimbursement to Solar

Electricity Providers in the TVA Area

 

Please sign. 

TVA is part of our federal government. 

Yea, you know, the same government that takes taxes from us to "serve" Americans.

The one that is protecting the environment.

You know the one.

TVA is a government-owned monopoly.

That means we have no choice but to use TVA.

Explanation of Petition

  

Premise -

  • Before 2018, TVA’s Green Power Providers program reimbursed solar electricity providers at “retail rate”

  • That kept up with inflation over all 20 years of the contract.

  • In 2018, TVA changed this reimbursement to be a “flat-rate” (9 cents/kWh for residential & 7.5¢/kWh for commercial providers)

  • it NO longer keeps up with inflation over the 20 years of the contract & therefore significantly penalizes the investment in  green energy by the average American.

  

Bottom-line -

  • The “Average Annual Inflation” rate is 3.22% for the last 100 years.  {This means the price of goods doubles every 20 years. }

  • Simply put, TVA is now paying you in “2018 dollars” for EACH of the 20 years AND it goes down in value with inflation every year. 

  • In 20 years, the “Buying Power” of that “2018 dollar” can only buy half of the goods it buys today.  Your income goes down in 'value' each year.

  • By NOT keeping up with increasing electric rates over 20 years, the “flat-rate” reimbursement effectively decreases by 25% the TOTAL Gross Income from your solar system.

When e-signing the petition,

Thomas Moss tells TVA:

When you buy electrical power from solar producers, pay a fair rate!  As a society, the last thing we need is to de-incentivize solar energy.

When e-signing the petition,

Daniel Chang tells TVA:

Solar energy is good and free! Solar energy is abundant in Alabama and right time to expend our energy strengths to empower our lower cost competitiveness of electricity to compete for advanced manufacturing businesses and investment in Alabama, such as nano-materials, lithium-ion battery.., etc.

Main Points made

in this Petition

 

  • The 2018 “flat-rate” reimbursement over 20 years, by NOT keeping up with inflation, is unfair to Green Providers

  • Green energy will make our country independent & our planet cleaner & safer from Climate Change

  • TVA is part of the U.S. government, its main objective is to serve & protect Americans, including protecting us from Climate Change

  • As a part of the U.S. government, it MUST be fair to all

  • The electricity produced by a solar system (& put on “the grid”) is the identical electricity sold to the next door neighbor

  • Why is “one hand” of the government encouraging green energy producers (with the tax credit of 30%) AND TVA, “another hand” of the SAME government, penalizing us with over a    25%    decrease in TOTAL Income for the entire 20 years ?

When e-signing the petition,

Wade Austin tells TVA:

We need to get proactive about supporting the transition to renewable sources of electricity. This change takes away important incentives from people who are working to create a clean energy future.

Green Energy is Vital to Fight Climate Change

In late Nov 2018, a federally mandated scientific study was released on Climate Change called the "Fourth National Climate Assessment".  It was compiled by 300 leading scientists across 13 federal agencies.  It states Climate Change is a manmade phenomena.  They concluded our food from farmers in the US will be greatly reduced and deaths will result, especially in the midwest which is predicted to have the largest increase in extreme temperature. 

" ... it suggests that if the United States immediately reduced its fossil fuel use and greenhouse gas emissions, it could save thousands of lives and generate billions of dollars in benefits for the country." 

A report from the UN in October predicted that the Earth will reach the crucial threshold of 2.7 degrees F above pre-industrial levels by as early as 2030.

We can no longer afford
the luxury of Denial

Green Energy is essential to reduce

those greenhouse gas emissions.

$

Actual Petition Text for your Review

DATE                 

October 7, 2018                                                                               

TO                      

Tennessee Valley Authority
400 West Summit Hill Drive 
Knoxville TN 37902
Jim Hopson, Public Relations Manager          

CC                       

Federal Trade Commission, Bureau of Consumer Protection
Department of Energy
Senator Richard Shelby
Senator Doug Jones
Representative Mo Brooks     

FROM                

Alabama Solar Association, Board of Directors

RE                       

Unfair “Flat Rate” Reimbursement to Solar Electricity Providers in the TVA Area

 

Alabama Solar Association (ASA) is a non-profit organization that promotes & educates the general public in North Alabama on the benefits of green energy and conservation of electricity, starting in our homes.  We see the huge potential of solar electricity generated by solar panels in Alabama.  We have seen the cost of solar electricity decrease 70% in just the last 8 years.  This price reduction makes solar a cost effective means of producing the valuable commodity of electricity in, not only this state but, the entire South.  It will make the country, as well as our state, independent of foreign oil.  It also has the added benefit of being a ‘clean’ source of energy for our planet.

 

Previously, TVA reimbursed customers with solar panels at ‘retail’ cost for electricity generated over 20 years.  This reimbursement structure kept up with electricity cost increase over the length of the contract.  For this vision, thank you.  As you know, a high-quality solar panel will generate electricity for much longer than that with some

minimal degradation.  In 2018, your Green Power Providers program is no longer keeping up with the actual price due to inflation for this electricity over the life of the contract.  The current TVA contract, a customer must sign for reimbursement, is a flat-rate 9 cents/kilowatt hour (commercial customers:  7.5¢/kWh).  Why is “one hand” of the government encouraging green energy producers (with the tax credit of 30%) AND TVA, “another hand” of the SAME government, penalizing us by an over 25% decrease in TOTAL reimbursement income over 20 years?  We think this in unfair, as the electricity generated by a solar system is the exact same electricity you provide to your costumers, and furthermore is much “cleaner & greener” to protect this beautiful area of the country.  It is delivered directly and automatically to the surrounding TVA customers by the local Utility Company’s grid. 

 

We feel this is an abuse of power by a government-owned monopoly and not worthy of an agency of the Federal Government who is charged with serving the people by protecting the environment and improving the quality of life in the Tennessee Valley.  With the power of a government-owned monopoly comes huge responsibilities.  One of those responsibilities, above all, is to be fair to the individual citizen you serve.

This TVA policy does NOT “maintain a fair marketplace” as required by the Bureau of Consumer Protection of the Federal Trade Commission.  Therefore, it is breaking the law.  This is, not only a case of one hand of the government not knowing what the other hand is doing, but one hand of the government NOT abiding by the rules of the other in fair business practice. 

Please change this policy to reimburse solar electricity providers with a true ‘retail’ rate that will keep up with inflation over the 20 year life of the contract.

 

Celia Jay Mackey,

ASA WebMaster   

clipart, climate change - hot, cold ther

My Documentation of the Above Facts

Changes from 2018 Program

The reimbursement rate / kWh
is the same.

However, for residential solar systems, the maximum size is 7.5 MW

Last year it was 10 MW.

Window capture of TVA website documentin

A bit on Inflation -

the "invisible interest rate you pay for living"

that erodes your Buying Power year after year

The Average Annual Inflation Rate for the past 100 years is 3.22%.  That's the number most experts say you should plan for in retirement.

 

Example - If you stick $1,000 under your mattress (don't invest it), in 20 years that $1,000 will have the "buying power" of 1/2 that

  

Your $1,000 will only be able to buy $500 worth of goods in 20 years. 

So "today dollars" depreciate each year.  You don't have the same "Buying Power" with them.  They don't have the same 'value' in the future.  The longer the time frame, the more significant the depreciation.  The effect is cumulative.

 

The price of goods go up usually each year.  The average of all those increases is called the Average Annual Inflation rate.  It works on the compounding principle.  And therefore can accumulate into a big increase depending on how many years you're talking about.  It "nibbles away" at today dollars a little bit each year.

You've heard your Grandmother say, "I can remember when the price of Gasoline was 50 cents / gallon", or "I remember when hamburger meat was a dollar / pound.

  

That's  Inflation.

graph, Cumulative Effects of Inflation p
from xcel on comparing keeping up with I

 I call it the "invisible interest rate you pay for living".

The past decade (since the 2018 "Nightmare on Wall Street")  the U.S. Inflation rate has been unusually low.  But the Great Recession was very unusual.

Even at a low number, over 20 years, inflation erodes your "Buying Power" year after year.  And over time, it errodes significantly.

  

You need more money, in the future, to buy the same 
amount of goods.

Hypothetical Example
over 20 years

  

Let's say, you have a small solar system (about 8 kW).  Let's say, it can produce $1000. of electricity each year. 

In 20 years, your total gross income from that system is  $20,000.  (Note :  Gross income does not factor in how much the solar system cost you.)

This is NOT adjusted for Inflation. 

The Average Annual Inflation Rate for the past 100 years is 3.22%.  Remember, today dollars can't buy the same amount of goods 20 years from now. 

But TVA is counting on you not knowing about inflation.  Don't feel bad.  Most people don't understand it and those that do, underestimate how in adds up over the years.  Inflation is sneaky.

You must "adjust" today dollars for inflation to determine how much buying power you will have in the future.

 

That hypothetical $1000. / year actually goes down "in value" 3.22% each year and that's compounded It creeps down in value.

In the last (20th) year of the contract, you are only making an income of $537., in that future year's "dollar".  Your "buying power" is cut in half.

So the 1st year you made $1000 income and each year slowly less & less until, in year #20, you make $537.

  

Let's look at TOTAL Gross Income for the entire 20 years, adjusted for inflation.

The good news is your yearly income started at $1000.  The bad news, in the last year it was half that.  The TOTAL for 20 years, at flat-rate, is $14,918 in that last year's "dollar" (NOT $20,000).

So the % decrease of your solar system "TOTAL Income", due to inflation, 

is    -25% .

 

This reduces

the profitability

by over half.  

The Return on Investment in the current contract is 1.7% / yr.  Under the previous contract, RoI was 3.9% / yr .

This Excel Worksheet Shows my Work
for Adusting for Inflation
Powerpoint Presentation explains the Impact Inflation has on "Fixed Income"
Excel Worksheet on 20 Years of Historical Inflation

This is the problem I have with the new "flat-rate" reimbursement by TVA -

  

It is the same electricity on the grid that is sold to your nieghbor. 

  

It is the same electricity in the 20th year as it was in the 1st year.

So why is

TVA paying

less for it

???

$

a bit on TVA . . .

Tennessee Valley Authority (TVA) is a

federal government-owned monopoly.

TVA was originally developed for flood control in this area.  It was created by President Franklin Roosevelt (FDR) in the 1930's to respond partly to the Great Depression in the 1920's.  Many farmers were hit hard by this depression, especially in the South.  That was compounded by the flooding of the Tennessee River which would sometimes wipe out his crops for the entire year.

  • TVA is federally government owned and therefore cannot be overridden by state law.

  • By federal law, PURPA (Public Utility Regulatory Policy Act), utilities must reimburse independent electricity providers by at the least “avoided costs” rate of electricity.  That is only 1.9 cents / kWh for TVA.  This rate does NOT include ANY capital expenditures (ex. cost to build power plant, labor to run the plant, maintenance on plant, distribution of the electricity {cost of the physical grid}).

  • Our local Utility companies have very little authority.  They are dictated by TVA.

  • TVA reports / belongs to NO other organization in our federal government.  TVA is essentially autonomous.  There is NO “Check & Balance” on TVA .  There is NO oversight.  Congress does approve TVA’s budget &  BoD .