4 studies — including one commissioned by MLGW — conclude switching from TVA could result in $250 million – $450 million for Memphis every year

FACT: Since the Federal Energy Regulatory Commission (FERC) has ruled transmission lines are common carriers – a decision upheld in court – TVA cannot block another supplier from using them. Thus, switching from TVA does not require Memphis to build new transmission lines.

Furthermore, any CAPX infrastructure costs that may exist when Memphis makes the switch should be minor, based on our research, compared to what we anticipate Memphis should save by switching to MISO. This is just one of the many reasons we are requesting MISO be allowed to make an official, fully transparent proposal.

With more than 90% of MISO’s customers not generating their own electric power, MISO has suppliers with ample resources to provide all the power MLGW/Memphis needs.

TVA also operates 2 jets and recently purchased a helicopter from Jerry Jones, owner of the Dallas Cowboys. These aircraft and the cost of travel (much of it in-state) are paid for by TVA’s customers – including the rate payers of Memphis who comprise TVA’s largest customer base.

While Memphis has been part of the TVA footprint for nearly 80 years, and is TVA’s largest customer (currently purchasing 11% of TVA’s power annually), TVA has always treated Memphis as an afterthought. For example:

• TVA has 11,000 employees in, and serving, East Tennessee
• TVA has only 53 employees in, and serving, Memphis

When advocates began discussions with MLGW to ask about considering other energy providers, this is how TVA responded:

• TVA has hired five Memphis-based political lobbyists to lobby the city council
• For the first time in 80 years, TVA has begun distributing money to various Memphis charitable and civic causes, including the Memphis Urban League, the NAACP Memphis branch, the Memphis Chamber of Commerce – along with a $1 million donation to MLGW’s ‘Share the Pennies’ program – all of which is being paid for 100% with rate payers’ money

What’s more, TVA has agreed to pay $300 million to remove coal ash from the old Allen Steam Plant in Memphis and still faces serious questions about polluting the Memphis Aquifer, which provides Memphians with some of the cleanest drinking water in the nation. This is in addition to similar issues TVA has had in other parts of the state resulting in billions of dollars in clean-up and reparation costs.

Once a “firm transmission service” is requested, the transmission owner (in this case, TVA) is required to perform a study of the impact of the transmission service on the operation of the overall system. If it is found that upgrades to the system are needed to allow the “firm transmission service,” the entity requesting the service (in this case, MLGW), would pay for the costs of the upgrades. By agreement between the parties, these costs can be paid upfront or built into the ongoing transportation charges, which often are called “wheeling fees.”

Regardless of whether Memphis’ electric power is supplied from MISO or TVA, there is a very small probability that Memphis’ electric service can be interrupted during emergencies, most typically severe weather events. Curtailing of “firm transmission rights” during emergencies is the subject of many FERC regulations that dictate how and when emergencies can be declared and how restrictions can be implemented. In other words, TVA cannot arbitrarily curtail transmission of electric power to Memphis regardless the source of that electric power. It would be wrong to assume that an interruption of service to Memphis would be greater if Memphis’ electric power is supplied by MISO rather than TVA.

TVA is, by law, prohibited from curtailing the transmission of electric power as a punitive measure. The reality is that all the transmission systems in the eastern U.S. are highly reliable and governed by the same FERC regulations. Memphis would have a highly reliable power supply whether it is with MISO or TVA.

FACT: As one of TVA’s largest contractors, Siemens is not independent, nor can its analysis be fair and objective. Within the past several years, TVA has awarded Siemens hundreds of millions of dollars in contracts for work on TVA assets. The contract for work on the Watts Bar Nuclear Plant was $140 million alone. In turn, Siemens has invested in opening up an office in Chattanooga to serve TVA, one of Siemens’ largest customers.

Furthermore, Siemens has not sought actual, firm prices from the nation’s competitive electricity supply market, relying solely on estimates and projections. Siemens has admitted it is working closely with TVA on “assumptions,” yet has never disclosed the breadth of it’s relationship with TVA in regards to this obvious conflict.

After eight months working on this Integrated Resource Plan for MLGW, Siemens (which is being paid $720,000 for the plan) has not even requested a full, independent report from MISO executives regarding the actual cost of transmitting electric power to Memphis.

Put plainly, Siemens has not been transparent with Memphians about the assumptions being used in their analysis. In actuality, it appears Siemens has taken the work of the previous four studies, picked the highest cost assumptions from those studies, and put them together into a Siemens-authored, TVA-benefitting scenario. Then, after creating this faulty scenario, Siemens finally approached MISO – but asked MISO only to say whether they could support this scenario. Indeed, this approach is as odd as it sounds.

MLGW – and Memphians – deserved better from Siemens. If Siemens was trying to develop a solution with the best interests of Memphians in mind, the Siemens team would have asked MISO to present transmission arrangements that would allow MISO to supply all of Memphis’ power at the lowest cost. Siemens could have then used this data –  along with real market pricing obtained by asking power suppliers in MISO to provide bids – to develop the lowest cost option for Memphis. Siemens did not do this. Instead, Siemens developed its analysis using a dubiously crafted, worst-case solution for Memphis.

As a result, Siemens’ assertions are not just flawed. They are utterly unreliable.