Tennessee Valley Authority won’t say who limits power use when grid needs it
TVA rejected a Freedom of Information Act request for the federal utility’s demand response program participants. The program is a tool to prevent the implementation of rolling blackouts. (Samuel Hardiman/The Daily Memphian file)
The Tennessee Valley Authority touts its demand response system, a program that pays some industrial users to cut electricity consumption when the grid is stressed. But it won’t reveal how much energy those large users cut or which 500 users have agreed to participate.
The demand response system is among several steps the federal agency takes during periods of high energy demand. It is a tool to prevent implementing rolling blackouts such as those that took place across TVA’s footprint in late 2022.
TVA rejected The Daily Memphian’s Freedom of Information Act request for the federal utility’s demand response program participants, saying that the information is confidential.
What TVA will share is limited data about how much power the roughly 500 industrial customers that have opted in will shed during peak times. The lack of information obscures how the largest consumers react when TVA’s grid is stressed.
The FOIA rejection comes as environmental groups and community members have expressed concern about TVA’s power capacity across the region with the arrival of xAI in Memphis and other data centers in the region. TVA plans to build more than $10 billion of new power generation — paid for by ratepayers — for future demand.
In response to The Daily Memphian’s FOIA, TVA offered a one-sentence answer that said, in part, “At an aggregate level, TVA had approximately 500 industrial participants in demand response programs over 2022 and 2023 with a total potential contribution of up to 2,000 MW.”
To put the 2,000 megawatts in context, that is about 10% of TVA’s average daily load — or the equivalent of Memphis Light, Gas and Water on an average day. MLGW is TVA’s largest customer. The City-of-Memphis-owned utility accounts for about 10% of TVA’s revenue and electric load.
The height of TVA’s demand on Oct. 9 was about 19,000 megawatts.
Environmental groups criticized TVA’s lack of transparency.
“People in the Tennessee Valley deserve to know what their utility is up to, but far too often TVA keeps important information about its operations hidden from public view. Republican and Democratic members of Congress alike have urged the utility to be more transparent in their operations. That transparency is especially important as the federal utility is planning to spend nearly $9 billion on new dirty gas plants. TVA must commit to being more upfront and open with the families it serves,” wrote Amanda Garcia of the Southern Environmental Law Center in a statement.
How does demand response fit in with rest of the grid?
Demand response is not unique to TVA. Utilities across the country use it to lower the amount of energy needed at peak times. It is also cleaner than any form of electricity used to meet demand — power conservation means less power needs to be generated, lowering demand for fossil fuels.
Some utilities enroll residential customers in demand response, too. During peak times like summer’s hottest days, a utility will turn up a home’s thermostat. The customer gets paid for using less power.
TVA’s recently published draft, the long-term Integrated Resource Plan, says it has about 41,000 megawatts of electricity.
“To meet the region’s energy needs in all types of weather, TVA maintains 41,261 megawatts (MW) of generating capability (FY 2023). TVA operates a generating asset portfolio of 32,139 MW, maintains long-term agreements with third-party power producers totaling 7,421 MW, and offers demand response programs that provide 1,701 MW of capacity,” the draft document said.
In an amendment to TVA policies under the Public Utilities Regulatory Policies Act filed in April, TVA said it had 1,700 megawatts enrolled in demand response.
In its latest annual filing with the Securities and Exchange Commission, TVA said it hopes to grow participation in demand response to 2,200 MW. Its draft IRP said it could add between 100 and 400 megawatts of demand response by 2035.
Documents show xAI’s power contract, usage
While TVA won’t release which users participate in demand response, documents obtained through a Tennessee Public Records Act request show how much electricity xAI, the Elon Musk-founded artificial intelligence startup, will receive from MLGW and how much it has consumed over the past several months.
The Daily Memphian received documents about xAI through a separate public records law than the one TVA rejected. TVA, a federal agency, is subject to federal open records laws while MLGW is subject to state of Tennessee laws.
XAI’s arrival renewed concern about TVA’s ability to serve new growth in Memphis and elsewhere. At its peak, the first stage of xAI’s supercomputer will consume about 148 megawatts, and the second phase would bring the consumption to 270+ megawatts.
XAI does not yet receive all of its electricity from MLGW and TVA. Currently, it relies on more than a dozen natural gas turbines that charge Tesla Megapack batteries on the site.
As of this week, the company and TVA had not agreed on a contract for all of its power. TVA Board policy requires board approval for loads of greater than 100 megawatts.
“We are still in discussions with MLGW and xAI on those details but no agreement has been signed. The TVA Board will review their proposal at the appropriate time,” TVA said.
According to a person close to the company, the turbines charge the megapacks, which power the supercomputer.
The Daily Memphian obtained the electric service agreements between CTC Property, a subsidiary of xAI, and MLGW.
Five agreements total up to 68 megawatts of electricity. The agreements don’t mention electric curtailment beyond what MLGW can do under “force majeure,” an unforeseeable circumstance.
However, MLGW’s electric service policy says the utility can curtail anyone’s service at any time to protect the stability of its system.
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Tennessee Valley Authority xAI TVA MLGW Subscriber OnlyAre you enjoying your subscription?
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Samuel Hardiman
Samuel Hardiman is an enterprise and investigative reporter who focuses on local government and politics. He began his journalism career at the Tulsa World in Tulsa, Oklahoma, where he covered business and, later, K-12 education. Hardiman came to Memphis in 2018 to join the Memphis Business Journal, covering government and economic development. He then served as the Memphis Commercial Appeal’s city hall reporter and later joined The Daily Memphian in 2023. His current work focuses on Elon Musk’s xAI, regional energy needs and how Memphis and Shelby County government spend taxpayer dollars.
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