Tennessee Valley Authority: Additional Steps Are Needed to Better Manage Climate-Related Risks
Fast Facts
The Tennessee Valley Authority (TVA) provides electricity to 10 million customers in 7 states.
TVA faces some climate-related risks that could affect its ability to generate and transmit electricity while keeping rates low. For example, in 2010, some TVA infrastructure was submerged in over 5 feet of water when 15 inches of rain fell in 2 days. Relocating this infrastructure to higher ground cost about $9 million.
TVA hasn't taken inventory of all of its assets and operations that are vulnerable to climate change, or developed a resilience plan that identifies and prioritizes measures that address specific risks.
We recommended that it do so.
TVA’s Service Area and Power Generation Assets
Highlights
What GAO Found
The Tennessee Valley Authority (TVA) faces several climate-related risks to its operations. Increasing temperatures and other climate-related risks are expected to affect TVA's ability to generate and transmit electricity, according to reports reviewed and stakeholders interviewed by GAO. For example, in 2007, 2010, and 2011, TVA had to reduce power generation at its Browns Ferry Nuclear Plant because river temperatures were too high to receive discharge water from the plant without raising ecological risks. Climate-related effects, such as heavy precipitation and flooding, could also create added costs to TVA's operations—such as for infrastructure investments—that could affect TVA's ability to keep electricity rates low. For example, in 2010, a TVA substation was submerged in over 5 feet of water when 15 inches of rain fell in 2 days. TVA relocated the substation to higher ground, at a cost of about $9 million.
Tennessee Valley Authority's Browns Ferry Nuclear Plant in Alabama
TVA has taken several steps to manage climate-related risks. For example, TVA identified risks, such as flooding and drought, in its 2021 Climate Action Adaptation and Resiliency Plan and implemented several resilience measures, such as relocating certain infrastructure. However, TVA has not conducted an inventory of assets and operations vulnerable to climate change or developed a resilience plan that identifies and prioritizes resilience measures to address specific risks. According to the Department of Energy's (DOE) Guide for Climate Change Resilience Planning, conducting an inventory of assets and operations vulnerable to climate change can help utilities more accurately identify relevant hazards and the potential severity of disruptions to operations or damage to related infrastructure. This, in turn, would better position TVA to plan and implement appropriate actions to address climate change vulnerabilities as they become more acute, and as new and better information becomes available. In addition, developing a resilience plan that includes a portfolio of resilience measures could help TVA identify available options and determine whether mitigating certain risks is worth the investment. Doing so would help TVA better fulfill its mission of providing reliable and affordable power to its customers.
Why GAO Did This Study
More frequent extreme weather events and other risks associated with climate change could cost utilities and customers billions of dollars from power outages, disruptions to electricity generation capacity, and infrastructure damage. Enhancing climate resilience means taking actions to reduce potential future losses by managing climate-related risks. TVA is a federal corporation and the nation's largest public power provider. TVA provides electricity to about 10 million customers in seven states, including 153 local power companies and about 60 large industrial customers and federal facilities.
GAO was asked to examine U.S. energy infrastructure resilience. This report examines (1) climate-related risks to TVA's operations; and (2) steps TVA has taken to manage climate-related risks, and additional steps needed. GAO analyzed relevant reports and financial disclosure documents; and interviewed TVA officials and knowledgeable stakeholders from consumer groups and DOE national laboratories.
Recommendations
GAO is making three recommendations, including that TVA conduct an inventory of assets and operations vulnerable to climate change and develop a resilience plan that identifies and prioritizes resilience measures. TVA neither agreed nor disagreed with our recommendations.
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Tennessee Valley Authority | The TVA Chief Executive Officer should direct TVA staff to conduct an inventory of assets and operations vulnerable to climate change that includes analyzing the likelihood and degree of damage or disruption from climate change and the likely consequences if specific climate effects were to occur. (Recommendation 1) |
Open
TVA agreed with our recommendation. In June 2023, TVA stated that it had formed a cross-functional team to inventory current TVA efforts to identify assets and operations vulnerable to climate risks and partnered with the Electric Power Research Institute's Climate READi (Resilience and Adaptation) to implement new planning processes and tools to maintain an inventory of vulnerabilities identified through the study as appropriate. TVA also stated that it is taking other actions. For example, TVA stated that it formed a team comprised of subject matter experts across the organization to review resilience with respect to Winter Storm Elliot, and completed an assessment to identify specific actions that TVA will take to ensure the reliability and resilience of its power grid and enhance communications with local power companies and stakeholders during severe weather events. TVA added that it also uses an enterprise risk management process to identify, assess, manage, and prioritize enterprise risks, including climate-vulnerable assets and operational processes that TVA may face over the next 5 years, and evaluates longer-term system assets in the 5 to 20-year timeframe through its long-term asset planning, including the development of an Integrated Resource Plan. To fully address our recommendation, TVA should use the information it gathers from the efforts described above to complete an inventory of assets and operations vulnerable to climate change that includes assessing the likelihood and degree of damage or disruption from climate change and the consequences if specific climate effects were to occur.
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| Tennessee Valley Authority | Once TVA staff identifies vulnerable assets and operations, the TVA Chief Executive Officer should direct TVA staff to develop a resilience plan that identifies and prioritizes measures to address climate change vulnerabilities and that includes a portfolio of resilience measures and an action plan that specifies which risks to address and how and when to do so. (Recommendation 2) |
Open
TVA agreed with our recommendation. In June 2023, TVA stated that it had taken several actions to address this recommendation. These actions include: (1) implementing and maintaining a seasonal readiness process that identifies and prioritizes measures to address potential seasonal risks of climate change for winter and summer outlook; (2) ensuring TVA's Enterprise Risk Management process prioritizes measures to address climate change vulnerabilities and facilitates the development of action plans for addressing those vulnerabilities and increases awareness of and mitigation plans for four enterprise risks related to climate resiliency based on the results of a vulnerability analysis (e.g., assets and operational risks associated with extreme environmental conditions; degrading asset material conditions; system capacity, and fuel supply); and (3) developing new priority actions to be integrated into TVA's Climate Action Adaptation and Resiliency Plan to document agency actions to address climate change vulnerabilities. To fully address our recommendation, TVA should use the information it gathers from the efforts described above to develop a portfolio of resilience measures and an action plan that identifies which risks to address and how and when to do so.
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| Tennessee Valley Authority | TVA's Chief Executive Officer should direct staff to establish a plan to routinely reassess the TVA resilience plan and incorporate updated information about implemented resilience actions, as well as updated information about climate change, resilience technologies and planning tools, and connected infrastructure vulnerabilities. (Recommendation 3) |
Open
TVA agreed with our recommendation. In June 2023, TVA stated that it has taken actions to address this recommendation, including: (1) reviewing TVA's seasonal readiness process to ensure it periodically evaluates inventory of seasonally vulnerable assets and operations and is informed by updated information that could affect seasonal weather impacts of climate change; and (2) confirming TVA's Enterprise Risk Management process includes routine reassessment of each risk portfolio and associated resiliency plans to ensure all risks, including climate risks, are identified, assessed, and mitigated. TVA also stated that it is in the process of reporting on progress of new priority actions in TVA's Climate Action Adaptation and Resiliency Plan to further ensure TVA's planning processes are being routinely reassessed, and incorporate appropriate climate guidance and information. To address our recommendation, TVA should first develop the resilience plan that identifies and prioritizes measures to address climate change risks, and clarify its plans for how often it will reassess it.
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