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State Energy Efficiency Policy Database

Tennessee

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Summary

The Tennessee Valley Authority (TVA), the largest publicly-owned electric utility in the country, is the primary electricity provider in Tennessee. As a publicly-owned utility, TVA is governed by a board of directors. While past energy efficiency efforts have been modest, TVA has ramped up energy efficiency programs for electricity customers across all sectors in recent years.  Nonetheless, Tennessee falls below the national average for efficiency spending and realized savings.

In its Integrated Resource Plan (IRP), published in March 2011, TVA stated its commitment “to be the Southeast’s leader in increased energy efficiency.” TVA’s Board of Directors has set a goal to achieve a 3.5% reduction of sales through energy efficiency by 2015. As part of the ramp-up process, TVA has implemented several energy efficiency and demand response programs for all end-use sectors: residential, commercial and industrial.

The Tennessee Regulatory Authority (TRA) is the state agency charged with the setting of rates and service standards for privately-owned telephone, natural gas, electric and water utilities.

The most recent budgets for energy efficiency programs and electricity and natural gas savings can be found in the State Spending and Savings Tables on the left.

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November 8, 2013


Customer Energy Efficiency Programs

While past efforts to provide energy efficiency programs and services to customers have been modest, efforts are underway in Tennessee that could lead to much greater funding for programs and increasing energy savings. In June 2007, the Tennessee legislature approved a joint resolution calling for the Tennessee Valley Authority (TVA), the largest publicly-owned electric utility in the country, to initiate large-scale efforts to improve energy efficiency. House Joint Resolution Number 472 noted, "[E]nergy conservation can easily meet and exceed the growing demand for electricity; and….TVA used energy efficient means of creating power in the 1970s to supplant the need to build new power plants." In response, TVA has released a suite of energy efficiency programs, for all customer segments, including but not limited to: home energy evaluations, rebates and attractive financing for efficiency measures, and technical/advising services.

The most recent budgets for energy efficiency programs and electricity and natural gas savings can be found in the State Spending and Savings Tables on the left.

Links:

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November 8, 2013


Energy Efficiency Resource Standards

The Tennessee Valley Authority (TVA) stated in its 2008 Environmental Policy that in order to meet its objective of reducing the rate of carbon emissions, it needed to reduce load growth by at least one-quarter over five years through energy efficiency and demand-side initiatives.

In its most recent integrated resource plan completed in 2011, TVA included savings goals from energy efficiency and demand response in its recommended planning direction.  The goals included reductions in peak demand of 3,600-5,100 MW and energy savings of 11,400-14,400 GWh, to be met by the year 2020. These ranges include savings already achieved through 2010, when the planning process began.  The degree to which these goals are binding in the long term is unclear, and therefore is not considered an EERS


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September 26, 2013


Alternative Business Models

There is currently no policy in place that decouples electric utility profits from sales, however the Tennessee Valley Authority made a determination that efforts will be made to address the issue of lost contributions to fixed costs for distributors.

In 2010 the Tennessee Regulatory Authority (TRA) approved the Chattanooga Gas Co.'s request for an increased monthly charge for fixed costs to “more properly align the interest of ratepayers and utilities in better promoting energy efficiency.” The approach is approved for a three-year trial.


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September 3, 2013


Reward Structures for Successful Energy Efficiency Programs

There is currently no policy in place that rewards successful energy efficiency programs. The Tennessee Valley Authority has made a determination that incentives are not appropriate for a public power company.


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August 9, 2013


Energy Efficiency as a Resource

There is currently no state- level policy in place that treats energy efficiency in the electricity sector as a resource. However, TVA evaluates energy efficiency and demand response programs on a level playing field with generation assets through the Integrated Resource Plan process.

For more information on energy efficiency as a resource, click here.


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September 26, 2013


Evaluation, Measurement & Verification
  • Cost-effectiveness test(s) used: TRC, UCT, RIM
  • Uses a deemed savings database: no

Evaluations in Tennessee are mainly administered by the Tennessee Valley Authority. There are no specific legal requirements for these evaluations in Tennessee. TVA uses three of the five classic benefit-cost tests identified in the California Standard Practice Manual. These are the Total Resource Cost (TRC), Utility/ProgramAdministrator (UCT), and Ratepayer Impact Measure (RIM). TVA specifies the TRC to be its primary test for decision making. According to TVA, the benefit-cost tests are required for overall portfolio and total program level screening. The rules for benefit-cost tests are not specified. Some exceptions of flexibility exist in the application like low-income programs, pilots, and new technologies.

TVA has instituted a robust EM&V effort to assess all its programs on an ongoing three- to four-year cycle.  An independent, third-party contractor has been engaged to collect onsite performance data, validate adherence to program guidelines and identify potential process improvements.  Planning estimates of impacts, life spans and net-to-gross ratios are adjusted in accordance with the findings of the EM&V assessments.


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August 20, 2013