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The Tennessee Valley Authority is at a pivotal moment, one driven by new direction from above as the Trump administration eliminates renewable incentives, rearranges the utility’s leadership, and encourages extending the lives of coal- and gas-fired plants. As the utility plans its next quarter-century of energy production, those who run it insist they’re doing the best they can to meet the demands of the times, even as environmental organizations and community members protest that it’s backtracking on its transition away from fossil fuels.
The TVA’s comprehensive Integrated Resource Plan, or IRP, evaluates the power needs through 2050 of the 10 million residents in the seven states it serves, that includes all of Tennessee, and parts of western North Carolina, Alabama, Mississippi, Kentucky, Georgia, and Virginia. The utility completed its last plan in 2019, and started to develop a new one in 2023. Now, TVA says, changing market and political trends prompted a revision. This latest IRP draft has significant departures from the last iteration, mostly prioritizing nuclear, gas, and coal.
The plan is emerging from the turmoil that has roiled the Tennessee Valley Authority since President Donald Trump’s second inauguration. The process stalled when the agency’s board lost its quorum last year after Trump fired three of its members. That delayed any major decision making for more than nine months. The utility’s CEO, Don Moul, stepped down and was replaced by Mike Skaggs, the former vice president of construction and operations at the Watts Bar Nuclear Plant. Once Trump appointed three new board members over the winter, IRP discussions began anew.
TVA spokesperson Scott Brooks said the changes to the plan represent practical priorities. “It's all a reflection of what's happening in the market,” he said.
The updated plan is based on three economic assumptions, he said.
The first is a reduction of federal tax incentives for renewable energy. Because of the rollbacks in the One, Big Beautiful Bill Act of 2025, new, utility-scale solar construction must begin by 2027 to benefit from those incentives. While the 2025 plan predicted up to 20 gigawatts of potential solar buildout, the latest iteration expects no more than 5. Wind energy is off the table entirely, although Brooks said the utility will continue to consider offers from wind and solar developers.
The second assumption revolves around federal deregulation of nuclear, gas, and coal power, which the utility defends as a way to manage the reliability of the grid during peak hot and cold snaps. The Trump administration has lifted what it termed “burdensome” Environmental Protection Agency restrictions on coal plant emissions, and encouraged utilities to keep coal plants open beyond their expected lifetimes and reopen those that have been closed. The Department of Energy has offered federal support to upgrade coal plants. In addition to retaining its coal fleet for the time being, TVA is nearly doubling its previous estimated investment in gas and is planning to pursue licenses to extend the lifetimes of its nuclear plants.
The plan also assumes data centers will continue to strain the region’s grid infrastructure and increase demand for energy. The TVA is exploring the possibility of establishing a rate specifically for data centers, which currently account for as much as 20% of the utility’s industrial load, an amount the board expects to double by 2030.
From these assumptions, TVA has developed three scenarios. The first is derived from the utility’s current frame of reference; the second is pegged to mounting demand from data centers, and the third is based on the possibility of future legislation to reduce carbon emissions. However, not everyone is convinced the TVA’s plans are sensible, not only for the climate impact, but for the utility’s financial health.
Dennis Wamstead, an energy analyst at the Institute for Energy Economics and Financial Analysis, said the decision to keep coal-fired plants open based on changes in politics doesn’t reflect the economics of aging coal units, which are expensive to maintain and can contribute to higher customer rates.
“Their decision or their endorsement of a pretty concrete retirement date scenario in 2021 has been upended perhaps by political events, but that does not change the economics,” Wamstead said. “Those plants are no longer economic and increasingly unreliable.”
The Tennessee Valley Authority is accepting public comment on the latest Integrated Resource Plan through July 22nd. A final recommendation is expected August 6.
