WASHINGTON— Executives at the Tennessee Valley Authority have taken home $89.7 million in pay and bonuses over the past four years, $3 million of which is tied to decisions to deploy new fossil fuels, according to a report released today by the Center for Biological Diversity.
“Perverse Pay: Bonuses at the Tennessee Valley Authority Fuel Gas-Filled Future” found that TVA operates under a compensation structure that has incentivized executives to plan one of the country’s largest gas buildouts this decade. That’s despite the worsening climate emergency, unreliability of fossil fuel energy and jacked-up energy prices.
Today’s report outlines new performance metrics the federal utility’s nine-member board should adopt so executives can be rewarded instead for promoting renewable and resilient energy and advancing environmental justice.
“TVA’s board is handing out gold stars for mediocrity when it should be demanding A-plus work on a fossil free future,” said Gaby Sarri-Tobar, energy justice campaigner at the Center and lead author of the report. “It’s atrocious that ratepayers are paying millions for TVA executives to continue burdening families with pollution, high energy bills, and deadly pipelines for decades to come. The board should toss out bonuses that keep the top brass in the fossil fuel past and adopt new metrics to prioritize renewable energy, resilience and environmental justice.”
TVA is the largest federal utility in the nation, generating electricity for more than 10 million customers in Tennessee, Alabama, Mississippi, Kentucky, Georgia, North Carolina and Virginia.
CEO Jeff J. Lyash is the country’s highest paid federal employee and earned more from fossil fuel-related bonuses in 2021 and 2022 than the president of the United States did in annual salary.
Under Lyash’s direction, TVA has approved 5,000 megawatts of new gas and planned for more than 150 miles of new gas pipeline across Tennessee. TVA has also approved the first rate hike in four years, implemented rolling blackouts for the first time in TVA’s 90-year history after the failure of several coal and gas plants, and trucked millions of tons of toxic coal ash through Black neighborhoods in Memphis.
Lyash recently approved the construction of the Kingston gas plant and its accompanying 122-mile-long pipeline, instead of a renewable energy alternative. He ignored the Environmental Protection Agency’s request for a supplemental environmental review after the utility failed to address gaps in its cost and emissions analyses. With this new gas plant, Lyash could see a bonus of up to $400,000.
TVA’s current bonus structure awards fossil fuel deployment but offers no incentives for renewable energy. Today’s report outlines new performance metrics like a renewable portfolio standard aligned with federal clean energy goals that the board can adopt to incentivize executives and staff to meet annual clean energy targets. Bonus pay should also be tied to expanding access to distributed energy resources like rooftop and community solar, demand response, and energy efficiency, today’s report says.
TVA is currently 57% fossil-fueled; solar and wind make up only 4% of TVA’s entire energy mix.
TVA’s policies have hit communities hard, disproportionately burdening communities of color and low-wealth residents who experience some of the highest energy burdens in the country, with some paying monthly electricity bills upwards of $200. New performance metrics geared towards environmental justice, like rewarding decreases in number of shutoffs and equitably deploying distributed renewables in low-income communities would incentivize executives to keep costs low and tackle the compounding climate and energy justice crises.
