Hopkinsville Electric System has become the latest Kentucky distribution system to give the Tennessee Valley Authority (“TVA”) the five-year notice required to terminate its long-term agreement with federal power company and begin shopping around for other energy suppliers.  In the wake of several recent terminations, TVA has begun to examine the implications of opening up access to its transmission grid.  FERC took up the same issue in an August 3 order [East Kentucky Power Cooperative, Inc., 112 FERC ¶ 61,160 (2005)], directing TVA to allow East Kentucky Power Cooperative to interconnect with the TVA system to transmit power to a co-op inside TVA territory whose contract with TVA would expire in 2008.  As other customers seek to source their energy needs from non-TVA suppliers, pressure on TVA to open its grid to competing suppliers is bound to increase. 

While TVA seems willing to open up its transmission lines, like all integrated generation-transmission utilities, it professes concerns that its native load have priority on its system and that those who benefit from system upgrades be the ones who pay for them.  It is unclear at this time how these concerns will play out, but TVA can be expected to purse so-called “participant” funding as authorized in the new Domenic-Barton Energy Policy Act.  According to TVA President Bill Baxter, the agency is very competitive within its territory, and TVA officials do not expect a huge hit to the agency's bottom line from distribution systems turning elsewhere to obtain their energy needs.  That insouciance seems at odds with projections that the giant power generator may soon have excess power to sell.  [NEW MATTER]