Savings are real for Memphis if break with TVA happens

Expert report: Savings are real for Memphis if break with TVA happens

New analysis commissioned by Friends of the Earth and conducted by Brattle Group finds flaws with Siemens IRP report

MEMPHIS – A new expert study joins the growing body of evidence showing that Memphis could save billions of dollars by leaving the Tennessee Valley Authority for cheaper, cleaner, and greener power.

Last month, the Memphis’s Power Supply Advisory Team released its final Integrated Resource Plan (IRP) report, which was prepared by the Siemens Group. It found that Memphis could save between $120 and $150 million per year and reduce its greenhouse gas footprint by leaving the TVA. This contradicts a 2019 analysis from the Brattle Group (commissioned by Friends of the Earth), which found that MLGW could save $240 to $333 million per year by leaving the TVA.

Friends of the Earth commissioned the Brattle Group to analyze the Siemens IRP report. Key findings include:

  • Both the Siemens and Brattle reports conclude that leaving the TVA “could significantly increase the share of renewable energy (and correspondingly lower the amount of greenhouse gas emissions), providing power to Memphis at costs that could save Memphis ratepayers billions of dollars over the coming decades.” However, the discrepancy in savings between the Siemens Group report ($120 to $150 million) and the Brattle Group report ($240 to $333 million) is significant.
  • Brattle critiqued the Siemens IRP report for its “questionable assumptions,” including uncritically accepting the TVA’s claims about the costs MLGW might experience in leaving TVA (such as transmission infrastructure, loss of a TVA payment of a transmission credit for their use of the MLGW transmission loop, the costs of building generation capability and payment-in-lieu-of-taxes benefits). 
  • Brattle also critiqued the Siemens IRP report for uncritically accepting TVA’s claims about the future costs of TVA power.
  • These assumptions explain the differences in cost savings between the two reports.

Notably, officials at the TVA also publicly criticized the Siemens IRP report, claiming that MLGW would not save money by leaving. However, the TVA’s claims were not backed up with any supporting analysis or documentation and differ with every other expert study on this topic, which show savings ranging from $100 to 450 million per year.

“Study after study has shown that Memphis can save hundreds of millions of dollars per year by leaving TVA,” said Michelle Chan, VP of Programs at Friends of the Earth. “With the pandemic worsening, the city cannot afford to leave money on the table as Memphians face more suffering and unemployment in the months and years to come.”

A full copy of the Brattle Group’s report will be filed as part of Friends of the Earth’s public comment on the IRP report by Siemens. The comment period ends on Monday, July 6, 2020.

Contact: Erin Jensen, (202) 222-0722, [email protected]

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