The Tennessee Valley Authority has voted to close a coal-fired power plant that President Donald Trump took to Twitter to defend this week, yet another statistic in coal’s losing economic battle against natural gas and renewable energy alternatives, even in the heart of coal country.
At a Thursday meeting in Nashville, Tenn., board members of the New Deal-era federal power agency voted 5-to-2 to approve a staff plan to close the last remaining unit of the Paradise Fossil Plant, located in western Kentucky, by the end of next year. The vote came despite objections from the community, as well as the Republican-led state legislature, governor and congressional delegation — including Senate Majority Leader Mitch McConnell — over the job losses and economic impacts of retiring the plant.
Trump, who has the political support of Robert Murray, CEO of Murray Energy, a major coal supplier to the Paradise plant, joined the chorus with a Monday tweet stating that coal “is an important part of our electricity generation mix” and TVA “should give serious consideration to all factors before voting to close viable power plants.”
The Trump administration has claimed that many of the uneconomic coal plants planned to close over the coming years are critical to maintaining a resilient and reliable grid — a stance that has been refuted by evidence and testimony from grid operators, energy industry analysts, and most of the current members of the Federal Energy Regulatory Commission.
At Thursday’s meeting, TVA staff laid out evidence that the Paradise plant, as well as another coal plant slated for retirement by 2022, the Bull Run Fossil Plant, are costing ratepayers far more than they’re worth. Retiring both plants is expected to save the 10 million or so customers served by utilities that get their power from TVA about $320 million over 10 years, according to staff estimates.
Thursday’s five votes for closure included two of the four members appointed by the Trump administration. One of the 'no' votes, Kenny Allen, a retired coal executive who lives in Kentucky, said he was “still concerned about the overall economic impact” on the community, as well as “the long-term impact on TVA” in terms of grid resilience.
But TVA President Bill Johnson said at Thursday’s meeting that the agency has "more than enough capacity to meet the load without Paradise and Bull Run” to serve its utilities across Alabama, Georgia, Tennessee, Mississippi, Kentucky, North Carolina and Virginia. TVA’s share of coal-fired power has declined from 58 percent a decade ago to 26 percent as of last year, and is expected to shrink further to 22 percent by 2027.
Most of the slack has been taken up by nuclear power, which supplies 40 percent of its power, up from 20 percent a decade ago, new natural-gas plants, which now provide about 20 percent of TVA’s power, and its legacy hydropower projects, which provide about 10 percent.
TVA now gets only about 3 percent of its power from wind and solar, but that’s set to grow under some large-scale contracts announced in the past year. TVA is working with Facebook to power a data center in Alabama with renewables, and has also worked with Google for data centers in Alabama and Tennessee that will run on renewable power.
TVA’s board also voted Thursday to continue two programs, one aimed at integrating customers with behind-the-meter energy resources, and another to support a “DER flexibility research project” available to the utilities that buy its power. Under that pilot project, the Tennessee Valley Public Power Association, which represents the municipal utilities and electric cooperatives served by TVA, will contract for about 300 megawatts of solar power, combined heat and power, and other applicable distributed energy technologies.
TVA is also planning to incorporate renewable and distributed energy in its upcoming integrated resource plan, set to be released later this month, which will set the agency’s resource procurement plans over the next four years. TVA has said that it will be exploring “various DER scenarios and aim to improve its understanding of the impact and benefit of system flexibility as a way of adapting to the growth of renewable and distributed resources.”
At the same time, TVA is facing a lawsuit from environmental groups, saying its decision last year to cut its wholesale power rate by a half-cent per kilowatt-hour and impose a fixed half-cent “grid access fee” per kilowatt-hour instead, is designed to make solar power uneconomical.
TVA is also being eyed as the vehicle for a massive investment in clean energy under the nascent Green New Deal being developed by Democrats in Congress. The People’s Policy Project, a left-leaning think tank, has released a report calling for Congress to change TVA’s rules to require it to decarbonize its existing generation fleet, and authorize it to build and operate renewable energy plants outside its service territory.