A growing number of electric utilities in the United States have made pledges to reach “net-zero” carbon dioxide emissions by 2050. But not the Tennessee Valley Authority, the nation’s largest public utility.

And that, according to a new report commissioned by Nashville business and community leaders, puts the Music City at an economic disadvantage.

The newly released “Nashville Carbon Competitiveness” report, from the Virginia-based consulting firm David Gardiner and Associates, identifies weaknesses in the TVA’s energy policies that could make Nashville less attractive as a venue for businesses that are decarbonizing their operations. There are also economic development implications throughout the TVA’s seven-state service area, including cities from Bowling Green, Kentucky, to Huntsville, Alabama.

“What we find is that companies are increasingly factoring climate considerations, really carbon reductions, in their overall business operations,” said James Hewett, a co-author of the report and the consulting firm’s vice president for renewable energy. That includes, he said, not only the largest companies but medium-sized and smaller ones, many of which find themselves having to meet carbon reduction goals as part of the supply chains of larger companies.

“Cities that can’t substantially reduce their carbon are going to be less attractive,” Hewett said. “For Nashville, it is not a near-term problem.” 

He said that the TVA “is largely meeting the sustainability targets of businesses there now. But it is going to become a problem when you look at 2030 and beyond.”

The report was commissioned by 20 Nashville business and community leaders, including Vanderbilt University law professor Michael Vandenbergh, an expert on environmental law, and director of Vanderbilt’s Climate Change Research Network.

Vandenbergh said that although the study focused on Nashville, because it looked at electricity coming from the TVA grid, “it has similar implications for Knoxville, Chattanooga, Memphis, and the other cities in the TVA service area.”

A top TVA official said that the federal utility welcomed the Gardiner and Associates report and also welcomed a continuing dialogue about economic development and clean energy.

“Our objectives are the same” as the community leaders who commissioned the study, said Chris Hansen, TVA vice president in charge of renewable energy. “We appreciate their interest in helping us meet those objectives.

He added: “We are really working to improve our carbon footprint.This is where renewable energy can drive economic development for the (Tennessee) Valley.”

Subject to Federal Government Whim

The report is the subject of a virtual public forum on Thursday at 12 p.m. Central Daylight Time, hosted by the Urban Land Institute’s Nashville branch. 

Leaders of the Nashville Area Chamber of Commerce, a business advocacy organization, and Nashville Electric Service, the municipal retail provider of electricity to Nashville, are among those scheduled to speak at the forum. Both declined requests for interviews through their media representatives.

“Climate change threatens the well-being of my kids and grandkids as well as much of humanity,” said Gary Garfield, a retired Bridgestone Americas CEO who is among the report’s 20 backers. “It is my hope that this project will prompt TVA to be considerably more aggressive in reducing its greenhouse gas emissions, either of its own accord or because of pressure from those it serves.”

Bridgestone Americas is the Nashville-based subsidiary of the Japan-based Bridgestone Corp, the global tire and rubber manufacturer.

The TVA is a product of the Great Depression, when it built hydroelectric dams and turned the 652-mile long Tennessee River into a navigable channel for commerce. The authority later turned to coal and nuclear power, and now serves 154 local retail electricity distributors and 10 million people in most of Tennessee and parts of Alabama, Georgia, Kentucky, Mississippi, North Carolina and Virginia.

As a monopoly, TVA is insulated from competitive market pressures. But it is also subject to pressure from the federal government. 

For example, before the TVA board voted in 2019 to close two antiquated coal-fired power plants in Kentucky and Tennessee, it heard complaints from President Donald Trump, Sen. Majority Leader Mitch McConnell, R-Kentucky, and Gov. Matt Bevin, R-Kentucky. In August, Trump removed the TVA board chairman and one other board member, and called for the firing of the chief executive officer over the authority’s use of foreign workers.

At the same time, some larger cities within TVA’s territory have been asking for more renewable energy to meet their climate goals. The cities have pledged to meet the goals of the Paris climate agreement, despite Trump’s decision to pull the United States out of the accord.

Memphis has been studying whether to leave the TVA, and whether renewable energy could help lower electricity rates. TVA has responded by seeking to lock its customers into contracts dubbed “never-ending,” in a recent lawsuit by the Southern Environmental Law Center, filed in part over TVA customers’ access to renewable energy.

In an unrelated study released Tuesday by the American Council for an Energy-Efficient Economy, Nashville ranked 58th among 100 major American cities in efforts to make buildings and transportation more energy efficient and to scale up the use of renewable energy.

Other TVA cities that were on the ACEEE 2020 Clean City Energy Scorecard were Knoxville, which ranked 51st, and Memphis, which ranked 70th.

For their part, TVA officials like to point to the utility’s overall “carbon-free” power supply, which includes nuclear and hydroelectric power. They have said they expect its carbon-free electricity to increase from 56 percent this year to 61 percent by 2030, according to the authority’s 2019 long-term energy plan.

The TVA now hopes it can get ahead of that schedule, reaching 70 percent below 2005 levels by 2030, said a spokesman, Josh Clendenen.

A Future Surge in Clean Energy Demand?

The carbon competitiveness report compared Nashville’s source of electricity to the power providers and electric grids of six cities that Nashville competes with to attract new businesses: Austin, Charlotte, Columbus, Indianapolis, Minneapolis and Raleigh. Those utilities are Austin Energy; Duke Energy Carolinas; American Electric Power; Indianapolis Power and Light; Xcel Energy; and Duke Energy Progress, respectively.

The report also analyzed each utility’s carbon reduction targets and planned renewable energy generation capacity. The authors then compared those figures to those of TVA, and identified the following a weaknesses:  

• TVA tracks “carbon intensity”—the emissions per unit of energy produced—rather than setting targets for absolute reductions in greenhouse gas emissions. Five of the six utilities that serve the Nashville area’s competitor cities— Austin, Charlotte, Columbus, Minneapolis, and Raleigh—use absolute greenhouse gas reduction targets.

• TVA has also made no commitment to decrease its carbon emissions beyond 2030. In contrast, the same five utilities serving competitor cities also have either committed to emissions reductions targets that extend to 2050, or to achieve net-zero emissions before 2050.

• If TVA’s plans are projected to 2050, its percentage of total renewable energy capacity would be, on average, 40 percent less by 2050 than the utilities in the other cities.

The report recommends, among other things, that Nashville work with the TVA to set a 2050 carbon reduction goal that achieves at least 80 percent—and preferably, 100 percent—reduction in emissions by 2050. The TVA should also increase renewable energy generation as part of a 2050 goal and provide more options to small and medium sized businesses to help them decarbonize and so be more attractive to large corporations, the report concluded.

“There is no reason why TVA’s commitment to decrease greenhouse gas emissions should lag behind those of other utilities in other regions,” said Nashville-based George Nolan, a senior attorney with the Southern Environmental Law Center. “At the very least, TVA should keep pace with its peers, and ideally TVA should be a national leader.”

Hansen, the TVA vice president, said the authority does not set carbon reduction goals beyond 2030 because of uncertainties in planning that far ahead. 

“TVA is about plans and not about aspirations,” he said. “We have a plan to get us to our 2030 goal. If we can figure out ways to improve on that, it will be incorporated.”

But,Hansen added, the TVA is willing to work with cities or businesses to meet their carbon goals. He cited TVA’s partnerships with tech giants like Facebook and Google in securing renewable energy for their operations within the TVA service area.

Vandenbergh, coauthor of the 2017 book, “Beyond Politics: The Private Governance Response to Climate Change,” argues that even without clear leadership from the federal government, some businesses are substantially reducing their carbon footprints and can make a meaningful contribution to fighting climate change.

He agrees that the TVA has been successful in providing renewable power to companies like Facebook, Google and to Vanderbilt University.

“The big question moving forward, Vandenbergh said, is what will the opportunities be like, not just for large companies and institutions, but also small and medium sized businesses?”

He added that as Fortune 500 companies require more of their suppliers, there could be a surge in the demand for clean energy.

“In the best of all worlds, we will trigger a race to the top,” he said.