Your electricity bill is going up. Why? TVA is only telling part of the $15B answer.

The Tennessee Valley Authority will spend $15 billion on capital projects, like new generation and transmission, in the next three years. 

On what, exactly?

TVA has not disclosed how all of this money will be spent. In August, the TVA board approved a new budget, and a 4.5% rate increase, without knowing the financial details for two of the three years.

Part of this money will be spent on new fossil fuel infrastructure. In the past year, TVA has proposed new methane gas plant and pipeline projects at its sites in Cumberland, Kingston and Cheatham County. The Cumberland project is the only project that has been formally approved.

More: TVA is officially building a massive gas plant in Middle Tennessee

TVA CEO Jeff Lyash has suggested that giving the go-ahead for this money ahead of time will not affect how proposals are reviewed for projects like Kingston and Cheatham County, which have been described as economic risks to Tennessee Valley residents by Nashville officials, the Environmental Protection Agency and members of Congress. 

More: ‘Further pollution is unacceptable’: Nashville leaders decry TVA Kingston project

“While we may have some spend on projects along the way, the final decision to execute the project only comes after the gated process is complete and after the regulatory and environmental processes are complete,” Lyash said during the TVA board meeting in August. 

TVA plans to spend at least $3 billion on gas builds between 2023 and 2024, based on a budget report TVA submitted to Congress in March. The TVA board had already approved costs up to $3.5 billion specifically for the Cumberland and Kingston projects, according to TVA’s 10K for fiscal year 2022, even though the environmental review process for Kingston is not complete. The breakdown of those expenses is not public.

More: The Inflation Reduction Act makes renewables cheaper. But TVA is still pushing fossil fuels.

Courtesy Bureau of Land Management

Natural gas plants require continuous drilling, often in the form of fracking, to extract methane gas from subsurface rock. Methane is more than 80 times more potent than carbon dioxide at heating the planet in a 20-year period.

TVA never disclosed the cost of new gas facilities at Cumberland. Nine months after TVA CEO Jeff Lyash singlehandedly approved the project — a power that a short-staffed, President Trump-appointed board gave him while the Senate stalled to approve Biden appointees — the utility executive did not state the project cost after Nashville Electric Service board member Anne Davis asked him, twice, during the most recent NES board meeting.  

“Again, can we just talk about what the price is gonna be for Cumberland?” Davis said after Lyash deflected the first time. 

“Yeah, we’ll get you those numbers,” Lyash responded. 

TVA stays narrowly within the limit of long-term contracts

In 2019, TVA introduced 20-year, evergreen contracts to local power companies to lock funding into their system. Most utilities, notably minus Memphis, signed the contract. At the time, TVA told companies like NES that the contracts would allow them to avoid significant rate hikes — with the promise that TVA would not raise rates by more than 5% in the first five years.   

Now, in the fifth year, TVA is raising rates by 4.5%. 

Over the past couple of years, many officials and energy watchdogs have been warning that people in Tennessee will be paying for a fossil fuel expansion against their best interest.  

“The lifespan of the proposed plants undermines any cost-based argument made by the TVA,” former Mayor John Cooper’s office said in comments on the Kingston proposal earlier this year. “Leaving Nashvillians on the hook to pay for further pollution is unacceptable.” 

TVA’s rate increase will cost NES about $30 million per year and will translate to a roughly 3.7% rate increase for residents, according to NES.

During the September board meeting, NES approved a new contract to get more power from solar. The contract, made with TVA, allows NES to get about 5% of its power from solar outside of TVA. NES estimates that this allowance, called “flexibility,” will save the company between $5 and $15 million dollars per year. 

NES board member Michael Vandenbergh addressed this idea while they were approving the new rate increase, saying it was “a good reason for us to continue to look for flexibility so that we can generate power that is not subject to those rate increases.”