Later today in Nashville, PACE will release a study showing that TVA’s plan to further reduce its use of coal for electricity generation could have negative economic effects in Tennessee. The report, entitled Potential Economic Impacts in Tennessee of Reduced TVA Reliance on Coal, was authored by Management Information Services, Inc., a Washington, DC-based analysis firm.
Although coal today supplies about 40 percent of TVA’s electricity, the utility has gradually relied more on natural gas for electricity generation. As this reduction in coal use continues, the study finds, the impact on electricity rates and the state economy could be significant. The study calculates, for example, that average electric rates in Tennessee will be more than 20 percent higher under the coal reduction plan proposed by TVA. Low income households, including the working poor and seniors on fixed incomes, would be hit the hardest.
“The study we will release today makes it clear that TVA’s plan to continue reducing its coal use comes with real costs,” says PACE Executive Director Lance Brown, who represents Alabama on TVA’s Regional Energy Resource Council. “We hope that TVA’s leadership will recognize these multiple negative consequences and reconsider its plan to shut down coal-fired resources.”
Joining PACE Executive Director Lance Brown in releasing the study will be PACE Board Chairman and Tennessee River Valley Association Executive Director Cline Jones and PACE Board Member and National Black Chamber of Commerce President Harry Alford. Representatives of the Tennessee Mining Association are also expected to attend the study release.
In addition to causing higher electricity rates, the cumulative effect on the Tennessee economy of reduced coal use by TVA could also be severe. The study finds that reduced coal use by TVA could cause a $900 million decrease in Tennessee’s manufacturing output, reduce gross state product by more than $7 billion, and result in a nearly $700 million drop in Tennessee state and local government tax revenues. The study also describes the impact to jobs of TVA’s reduced use of coal-fired power, including the loss of more than 65,000 jobs annually by 2025.
“Coal-fired power has always been one of the backbones of a strong economy and affordable power rates,” explains National Black Chamber of Commerce President and PACE Board Member Harry Alford. “The last thing the Tennessee economy needs is to move backwards in terms of job growth and manufacturing competitiveness.”