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TVA Studies Value of Distributed Generation from Small Providers

June 10, 2014

KNOXVILLE, Tenn. The Tennessee Valley Authority, with the help of local power companies and stakeholders from the Valley, is working to determine the full value of distributed generation from small electricity providers.

Distributed generation refers to electricity produced at many small, dispersed sites, such as solar, wind or small gas turbine installations. These are in contrast with the large, centralized, traditional power plants that are the backbone of the TVA system.

This initiative, called Distributed Generation Integrated Value (DG-IV), will develop methods to set the value of distributed generation to the electric grid and the value of the grid to the small energy producer.

The Solar Electric Power Association is facilitating a regional stakeholders group that includes representatives from TVA, local power companies, the Tennessee Valley Public Power Association (TVPPA), state government leaders, renewable energy developers, national laboratories and various associations and environmental groups. The Electric Power Research Institute is also supporting the effort.

“TVA is building upon similar initiatives occurring across the country,” explained Joe Hoagland, vice president of TVA Stakeholder Relations.

“TVA’s analysis will include an equal focus on the value that solar provides to the grid and the value that the grid provides to the solar customer," he said. "This process will ensure that the value of solar and the value of the grid are appropriately allocated.”

TVA is undertaking this distributed generation study as the popularity of distributed generation continues to grow, even as incentives that were designed to encourage the early development of these emerging resources decline with the decreasing cost of solar and other distributed generation sources.

“This study of distributed generation is important to local power companies and our consumers,” explained Greg Williams, executive vice president and general manager for Appalachian Electric Cooperative and chairman of TVPPA’s Energy Services Committee. “Distributed generation affects local power companies and their distribution systems more so than TVA. That is why TVPPA feels it is important to be a part of the process to help evaluate and determine the cost of distributed generation.”

Patty West, director of Renewable Energy Solutions for TVA, said, “The collaborative effort of this dedicated group is really going to help TVA and the local power companies develop a methodology for pricing distributed generation that all stakeholders can understand and support.”

Solar energy will be the first distributed energy resource investigated. The process is expected to last through the end of 2014. Public comments will be accepted and stakeholder group information will be posted at

In related renewable energy news, TVA’s Renewable Energy Solutions staff has been reviewing the environmental impacts of mid-size solar projects (up to 20 acres) in order to develop a more streamlined method for evaluating projects. This is expected to simplify and shorten environmental review times for some smaller solar projects that participate in the Renewable Standard Offer program, where the renewable energy generated is purchased at market rates. In coming weeks, TVA’s National Environmental Protection Act staff will release a draft environmental assessment for a 30-day public comment period.

The Tennessee Valley Authority is a corporate agency of the United States that provides electricity for business customers and local power distributors serving 9 million people in parts of seven southeastern states. TVA receives no taxpayer funding, deriving virtually all of its revenues from sales of electricity. In addition to operating and investing its revenues in its electric system, TVA provides flood control, navigation and land management for the Tennessee River system and assists local power companies and state and local governments with economic development and job creation.

Media Contact

TVA Public Relations, Knoxville, (865) 632-6000

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