2 min read November 2022 — Trends like the growth of electric cars represent a major change for electricity companies. In an interview with Invest:, Tennessee Valley Authority Regional Vice President Justin Maierhofer spoke about the growth of the region and the future of electricity. “This industry will evolve more over probably the next two decades than the previous nine decades alone,” said Maierhofer.
What role does the Tennessee Valley Authority play in the region?
We are a quasi-federal government agency that serves seven states in the Tennessee Valley, and we have 153 local power companies that provide electricity to the end-use ratepayers. We also serve around 60 direct served industries. Our public power model serves about 10 million people in the Tennessee Valley. In 2023, we are celebrating our 90th birthday. We are unique in that we’re a public power, which gives our region a competitive advantage.
We compete for jobs and capital investment, and we’re focusing hard every day on four things: affordable electricity, reliable electricity, resiliency and sustainable energy. Those are our four key touch points and working with our customers like Middle Tennessee Electric, Nashville Electric Service and 151 others to meet the ever-increasing challenges around carbon reduction, capital investment, job creation and job retention.
How are you managing the challenges of inflation and increasing costs?
As our nation wrestles with rising energy costs, TVA is a cleaner, more diverse power supply that provides our region with a strategic advantage. The lower price of power drives economic growth as well as helps family finances. Over half of the energy that TVA supplies is carbon-free. We’re a national leader in carbon reduction, but we can do more.
We’re committed to increasing our carbon reduction while maintaining our commitment to delivering affordable electricity. That is the most important thing we do. In addition to affordability, there’s also reliability, resiliency and sustainability. Keeping rates low drives the economic engine of the Tennessee Valley. Lower bills help families who live, work and raise their families in the southeast.
What is your contribution to the recent business growth in the region?
We’re seeing some unbelievable growth here in Middle Tennessee as well as up in Kentucky. It’s up and down I-65 and I-24 as well as I-40 going east and west. Just in 2022 alone, we had almost 6,000 jobs that were created and retained and about $590 million in capital investment in Davidson County.
Some of those recent examples include Firestone Building Products, which is a leading manufacturer of roofing and building solutions. They announced plans to expand in Nashville. It’s 28 new jobs and $13 million to support the company headquarters. Iron Galaxy Studios, a top independent video game developer, announced plans to locate operations in Nashville. A third was Prisma, a marketing and logistics company, that announced plans to expand their operations in Davidson County. They’re going to create 100 new jobs and invest $12 million to support companies’ growth.
So, we are seeing explosive economic development here in Middle Tennessee. It’s been phenomenal and there’s a very strong likelihood that we have had some part in making that happen. A lot of it had to do with the reliable low-cost electricity that we provide. That makes it very attractive for these industries to come to Tennessee.
How are electricity companies evolving?
We’ve got a renaissance in the electricity business, which will include electrification of the transportation industry, including electric vehicles. TVA will have to increase the amount of electricity that we provide over the next three decades as a result. I expect that this industry will evolve more over the next several decades than in the previous nine decades.
We’re going to see a lot of changes. We anticipate 200,000 electric vehicles to be on the road by 2030 in the state of Tennessee. With that, the infrastructure and the ability to charge electric vehicles are going to be key in the future. We partnered recently with the Nashville Electric Service to install EV fast chargers at four locations around Nashville. And we’ve also got current plans to put EV fast chargers in Clarksville, Fayetteville and Lawrenceburg. This is an important part of that market because of range anxiety and the uncertainty of getting stranded during your trip. I think as we adopt and install more fast chargers, and more charging stations across the state of Tennessee and the Tennessee Valley, it will give consumers more confidence in purchasing those electric vehicles.
How do you see the future of clean energy?
In 2022, over half of the energy TVA supplied was carbon-free. We are a national leader in carbon reduction, but we think we can do more. We’re pushing towards a 70% reduction in carbon emissions from 2005 levels by 2030. We’ve got a path towards an 80% reduction by 2035 and then we’re aspiring to achieve net zero carbon emissions by 2050.
While we’re doing that, we continue to invest in our system, including more than $1 billion in base capital investments in our FY23 budget. That’s going to enhance our decarbonization efforts and help us maintain those stable rates, which again drives economic development for the region.
We’re also partnering with our local power companies to expand the region’s clean energy economy of the future. One that creates jobs and new investment to grow the valley economy while helping our customers and other organizations meet their performance and their own environmental goals. That’s why we created a nationally recognized program called Green Invest and provided local power companies the flexibility to generate up to 5% of their energy to help meet consumer demand for new renewables. We also plan to add 10,000 megawatts of solar by 2035. That is a very significant and aggressive investment.
What is your outlook for TVA over the next three to five years?
First, we are excited to celebrate the 90th anniversary of the signing of the TVA Act on May 18, 2023. Looking forward, we want to continue to focus on delivering reliable and efficient service today, tomorrow and for the years to come. We all want to see our communities grow and thrive as we work with our partners. We want to continue focusing on the three E’s, which are Energy, Environment and Economic Development. We are committed to providing low-cost, reliable, affordable energy as well as environmental stewardship.
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