TVA says it avoided another 'Texas.' Critics say cold caught it with 'pants down'

Extreme cold across Tennessee and the rest of the Tennessee Valley Authority's footprint put rolling blackouts on the table Friday and called into question TVA's persistent claims of electric reliability, which it has made throughout the past four years.

TVA, a federal agency that provides electricity to Memphis, all of Tennessee and parts of six other states, first issued and then rescinded a mandate of rolling blackouts across its footprint. It then had local power companies implement rolling outages Saturday morning. The directive was caused by outages at TVA coal plants and natural gas plants, the federal agency confirmed.

TVA CEO Jeff Lyash said in an interview Friday the decision to trigger "Step 50" of TVA's emergency contingency planning helped the utility's seven-state footprint avoid another "Texas," a reference to the 2021 disaster when more than 200 people were killed amid widespread outages during freezing weather.

The website Poweroutage.Us -- which tracks electric outages across the country -- revealed the severity of Tennessee's electrical situation Friday. Tennessee had more than 80,000 electricity customers out, including 16,000 MLGW customers and almost one-third of those served by Nashville Electric Service.

The map also showed that other states, which are served by a broad assortment of other utilities and belong to other electric grids, struggling, too. Maine, a place accustomed to the cold, had 172,000 customers out. New York, Pennsylvania and North Carolina all had more than 100,000.

The specter of rolling blackouts comes after TVA spent years telling Memphis, Light, Gas and Water, the city-owned utility and TVA's largest electric customer, that there were electricity reliability risks if MLGW left TVA and decided to purchase electricity elsewhere. Those claims, made by TVA CEO Jeff Lyash, were particularly prominent after widespread blackouts in Texas in 2021.

The rescinded directive for rolling blackouts also follows analysis of Energy Information Administration data from a renewable energy group this summer that it said revealed how much TVA relied on other electric grids during summer peaks. TVA has disputed the analysis.

However, on Friday, like electric grid operators often do during times of high demand, TVA acknowledged it imported electricity from other neighboring grids.

"TVA is getting caught with its pants down. They were crowing about their performance last time around which I would argue was pretty inflated last time, because they got bailed out. And then this time the crows have come home to roost. They were writing checks they couldn't cash," said Daniel Tait, research and communications director for the utility watchdog group the Energy Policy Institute

In 2021, TVA exploited ERCOT's issues. Now it faces its own bout with extreme cold

Frigid cold also gripped Memphis and much of the central and southern U.S. in early 2021, almost two years ago. The prolonged cold caused an electricity crisis in Texas and a substantial amount of the grid overseen by the Electric Reliability Council of Texas went down.

The ERCOT grid struggled for myriad issues. Natural gas plants went down in the extreme cold and demand peaked. When rolling outages were instituted to preserve the grid from being overwhelmed, the power to part of the natural supply was caught off, making things worse for natural gas plants, according to the Texas Tribune.

While Memphis felt similar temperatures, TVA's grid did not buckle then. The extreme cold did not extend all the way across its footprint like it does now, meaning heightened demand was isolated to West Tennessee and North Mississippi. So, the federal agency sought to use the situation in Texas as an opportunity.

In 2021, Lyash said the federal agency’s nonprofit model is a differentiator and is why TVA would be more reliable in the face of extreme events than other privately owned for-profit entities or marketplaces.

"We maintain a very high reserve margin.... We see the frequency of these extreme events increasing,” Lyash told The Commercial Appeal shortly after the 2021 power supply crises. "You can see it in how these other systems are performing compared to TVA's now. We are here to serve 10 million people, not operate a market."

Lyash's comments helped push then MLGW CEO J.T. Young to halt the city-owned utility's consideration of leaving TVA. Young cited the ERCOT blackouts as a reason why. The MLGW board saw things differently and narrowly voted against ending the search for a new power supply.

On Friday, Lyash was asked about his comments and TVA's frequent comments about risk. He said the decision to tell local power companies to shed 5 to 10 % of their electricity load was a sign the federal power provider had an emergency planning system that works.

"Everybody faces these risks, and eventually the risks are realized. And here we realized them and the question is when you realize them, is your system still reliable given the process ou implement? Or do you have a Texas? And we didn't have a Texas," Lyash said.

Energy efficiency and planning could abate extreme weather

Tait did not disagree with Lyash's 2021 assertion that extreme weather events are happening with more frequency.

"There's no doubt that Lyash is right that these things are happening with increasing frequency. It's a problem," Tait said. It goes back to what are the business decisions that TVA has made to prepare us for this. Where's the energy storage? Where's the connectivity to other markets? Where's the energy efficiency and demand response programs that, should have been around for years to help us in these types of times?"

Increased investment in energy efficiency, Tait said, also helps when the power goes out. A more efficient house with better insulation uses less power when the power is on and cools slower when the power is out. He noted that in Lyash's 2021 comments, the federal employee was concerned with different business models. There are flaws in both, Tait said.

"There is no doubt all markets are not created equal. And there's a problem with markets, too. That's not to say that every market is perfect, but neither are vertically integrated utilities, right? TVA can't run around and be like, let's blame everything on markets when stuff like this happens to them," Tait said.

Blackout announcement could revive stay or leave debate

Memphis' search for a new power supply -- one that TVA feared -- ended earlier this month with the MLGW board vote. But the flexible nature of MLGW's contract with TVA means the issue could be revived at any time. And TVA critics seized on Friday's news.

TVA's perceived reliability was among the critical elements of why an MLGW-employed consultant, GDS Associates, recommended MLGW stay with the federal provider this year after a yearslong bidding process on its power supply.

If blackouts occur -- and even if they don't -- it will likely give further political current to the question of whether MLGW should leave TVA, an issue that appeared moribund just weeks ago.

"TVA was awarded a perfect score for reliability in the power supply RFP conducted by GDS for @MLGW. When asked why during the appeal GDS conceded they conducted no analysis but gave them a perfect score “because they are the current provider to MLGW," said a tweet from Steven Reid, a Memphis political consultant who has worked for Franklin L. Haney Company, a firm that bid on MLGW's power supply and appealed its loss.

The news of potential rolling blackouts came just two weeks after the MLGW Board of Commissioners voted against signing a generational, long-term contract with TVA and instead opted to remain on MLGW's evergreen contract with TVA, which has a five-year notice period.

MLGW CEO Doug McGowen took the job two weeks ago and is facing his first crisis. He may also soon face political pressure from TVA critics who want him to reconsider MLGW's decision to stay with TVA.

That pressure only mount in the face of questions about TVA's reliability. On Friday, McGowen didn't show his cards.

Asked about the implications of rolling blackouts on the Memphis power supplier's relationship with TVA, McGowen redirected to the need for reliable power in the short-term.

"We're gonna focus on today's issue today. That's a much longer-term question..." McGowen said Friday. "We're gonna work with our partners who provide our power today to do what we can to make sure it's reliably there for you."

Reporters Lucas Finton and Laura Testino contributed to this report.

Samuel Hardiman covers Memphis city government and politics for The Commercial Appeal. He can be reached by email at samuel.hardiman@commercialappeal.com or followed on Twitter at @samhardiman.

This article originally appeared on Memphis Commercial Appeal: TVA claimed reliability for Memphis. Winter storm shows vulnerabilities