State and Local Policy Database

Tennessee

State Scorecard Rank

29

Tennessee

15.5Scored out of 50Updated 9/2017
State Government
Score: 5.5 out of 6
State Government Summary List All

The state offers a variety of financial incentives for energy efficiency. The state government leads by example by requiring energy-efficient buildings and fleets, benchmarking energy use in public buildings, and encouraging the use of energy savings performance contracts. The state has several major research centers focused on energy efficiency.

Financial Incentives List All

Financial incentive information for Tennessee is provided by the Database of State Incentives for Renewables and Efficiency (DSIRE Tennessee). Information about additional incentives not present on DSIRE is listed here.

EmPower Tennessee Initiative: Through this initiative the state is working to reduce energy costs and consumption across state-owned and managed facilities by measuring and controlling energy use, investing in increasing energy efficiency and renewable power generation, and creating an operational environment of excellence. Of the state's approved $43 million budget for FY2016, over $37 million is dedicated to energy efficiency projects. The remainder will go to the procurement and implementation of a utility data management system and related energy management infrastructure.

Pathway Lending Energy Efficiency Loan Program (EELP): Pathway Lending's EELP provides Tennessee business and non-profit entities with below-market loans for energy efficiency and renewable energy improvements. In 2017, Pathway Lending issued 30 loans on 44 applications received, resulting in 5,761,110 kWh of annual energy savings and $661,830 in estimated monetary savings due to utility reductions. 

Pathway Lending’s EELP will not cover loan fees but will finance all other loan costs, including assessments, design, equipment and installation. Any project that reduces utility consumption, across electric, gas, or water, may apply for financing through this program. The loans are designed to allow for energy costs savings derived from each project to provide the repayment of the loan. The EELP now offers up to six years of financing for qualified energy efficiency and renewable energy projects to Tennessee local governmental entities, including municipalities, counties, school districts and other similar public agencies. To be eligible for a loan, a governmental entity must have a complete third-party energy audit, assessment or vendor proposal that details estimated energy savings. The EELP is a collaborative effort between Pathway Lending, the State of Tennessee / Tennessee Department of Environment and Conservation (TDEC), and the Tennessee Valley Authority (TVA).

Last Updated: July 2018

Building Energy Disclosure List All

There is no disclosure policy in place.

Last Updated: July 2018

Public Building Requirements List All

In 2015, the Tennessee General Assembly approved funding in the FY 2015-16 state budget for EmPower TN, Governor Bill Haslam's statewide “lead-by-example” strategy to reduce the state’s energy consumption and costs across state-owned and managed facilities through the implementation of energy efficiency projects and energy management systems and processes.  The appropriated budget is in excess of $43 million, with $37.5 million dedicated to energy efficiency (EE) projects and the remainder to the procurement and implementation of an enterprise utility data management (UDM) system and related energy management infrastructure.  The UDM system will collect energy cost and consumption data and allow for the analysis, tracking, reporting, comparison and benchmarking for every State facility. 

To maximize utility savings opportunities for state facilities,  the state building energy management statutory responsibilities for state-owned and managed facilities (Tenn. Code Ann. §§ 4-3-1012 and 4-3-1017-1019) were transferred from the Department of General Services (DGS) to TDEC Office of Energy Programs (OEP) via Executive Order on January 1, 2017.  A new section, State Facility Utility Management (SFUM), was formed under TDEC OEP to oversee these responsibilities, as well as the EmPower TN strategy.

SFUM is required by statute to track and analyze utility cost and consumption data, including energy. All state agencies and public higher education institutions are required by statute to assist SFUM’s analysis. They do so by appointing a department coordinator or liaison who must provide SFUM with their organization’s energy usage data. SFUM has worked with 72 state agencies and public higher education institutions to configure the UDM platform for all state-owned and managed facilities (approximately 97 million square feet of property). As of June 2018, a total of 10,312 utility meters and 8,200 “cost centers” have been created and associated with their respective facilities. Initial outreach to all 348 utility providers is complete, with 94% of vendors having provided historical data and ongoing utility bills. The UDM contract includes integration with the State of Tennessee’s accounting system for state agencies. This integration will increase operational efficiencies by reducing staff time spent keying and logging cost and consumption data and the utilization of 50+ automatic “auditing” and/or “alarm” tools within the system.  Currently, 95 end-users of an estimated 300 have access to the UDM platform and are learning the accounts payable functions through the test environment.

The Office of the State Architect and the Department of General Services (DGS) have collaborated to develop the High Performance Building requirements (HPBr), which build upon the existing State of Tennessee Sustainable Design Guidelines, to provide an energy-efficient and consistent approach to new construction, renovation, and operation and maintenance of all state buildings based on industry best practices. 

As a DOE Better Buildings Challenge Partner, the City of Knoxville has improved its municipal buildings’ energy performance by 12% from a 2010 baseline, making progress towards its goal of 20% improvement by 2022. Similarly, the City of Chattanooga has committed to reducing the energy use intensity of its buildings 20% by 2025, using a 2013 baseline. Since 2013, Chattanooga has improved energy performance by 13% across more than 190 City properties. Finally, Metro Nashville has an ordinance in place that requires all new and renovated Metro buildings over 5,000 square feet to achieve LEED® Silver or a greater level of LEED certification (Source: https://www.nashville.gov/mc/ordinances/term_2003_2007/bl2007_1374.htm). Currently, as part of that requirement, facilities are designed to reduce annual energy cost compared to a code minimum standard by at least 10%.

High Performance Building Requirements (HPBr)

The state’s High Performance Building Requirements (HPBr) require compliance with ASHRAE 90.1-2010 for all state facilities and higher education campuses.  The HPBr includes a checklist to encourage energy performance above ASHRAE 90.1-2010, including total building performance, lighting power levels, daylight harvesting, vacancy sensors, and high efficiency HVAC.  In accordance with TCA §12-3-905, the HPBr requires the purchase and installation of Energy Star equipment for all Energy Star eligible equipment types.  The HPBr requires data centers with cooling systems be sub-metered downstream of the UPS, a requirement for achieving an Energy Star rating.  The HBPr challenges the State’s project design teams to think holistically and use tools such as building modeling and life cycle cost analysis to compare, integrate and optimize various system options.  The HPBr positions the State of Tennessee for success by integrating best practices for a lower total cost of ownership. The HPBr is for state facilities and public higher education campuses.

Last Updated: July 2018

Fleets List All

Tennessee Code Annotated §4-3-1109 (Energy Efficient State Vehicles) establishes the goal that 100% of newly purchased passenger vehicles be energy-efficient vehicles or alternative fuel motor vehicles. An energy-efficient motor vehicle is defined as a passenger motor vehicle that is:

  • An alternate fuel vehicle as defined by the Energy Policy Act of 1992 (Public Law 102-486);
  • A flexible fuel vehicle (FFV) utilizing ethanol, biodiesel, or any other commercially available alternative fuel approved by the United States Department of Energy;
  • A hybrid-electric vehicle (HEV);
  • A compact fuel-efficient vehicle, defined as a vehicle powered by unleaded gasoline that has a United States EPA estimated highway gasoline mileage rating of at least twenty-five miles per gallon (25 mpg) or greater for the model year purchased;
  • An electric vehicle (EV);
  • A vehicle powered by natural gas; or
  • A vehicle powered by ultra- low sulfur diesel fuel that meets Bin 5, Tier II emission standards mandated by the EPA and that has an EPA estimated highway mileage rating of at least thirty miles per gallon (30 mpg) or greater for the model year purchased.

As of June 30, 2017, the State owned 485 energy-efficient passenger motor vehicles, including 358 FFVs, 58 hybrids, 5 EVs, and 64 energy-efficient vehicles with an average highway fuel economy of at least 25 MPG.

508 energy-efficient passenger motor vehicles, including 372 flex fuel vehicles, 72 hybrids, 5 electric, and 79 energy-efficient vehicles that have an average highway fuel economy of at least 25 MPG. Included in these totals are 42 vehicles that were purchased during FY2017, all of which were energy-efficient. The State met its target goal of purchasing 100% energy-efficient passenger vehicles in FY2017.

Tennessee statute also requires that 25% of newly purchased vehicles used in EPA-designated nonattainment areas must be hybrid electric vehicles or vehicles powered by natural gas, provided that such vehicles are available at the time of procurement. For areas not designated as nonattainment areas, the 25% requirement can be met with compact fuel efficient vehicles in addition to hybrid electric vehicles or vehicles powered by natural gas.

Last Updated: June 2018

Energy Savings Performance Contracting List All

The State allows and encourages ESPC as a viable solution to investing in energy efficiency at State facilities and higher education campuses. The Tennessee State Building Energy Management Program implements the Energy Action Plan for Tennessee Buildings, which cites Energy Savings Performance Contracting as a key element. Before the Action Plan, Tennessee rarely utilized ESPCs. In May 2018, the Tennessee legislature passed legislation acknowledging that state procurement agencies may enter into performance contracts for energy savings for state-owned buildings and facilities through alternative procurement or contracting vehicles. The legislation also encourages up to five pilot projects

This bill amended TCA Title 4 and Title 12.

The Tennessee Board of Regents, which is the Supervisory Board for State universities outside of the University of Tennessee system, community colleges, and vocational-technical schools, has completed 17 ESPC projects in the past decade, totaling $54,000,000 in investment. The annual projected savings for these projects is $6,800,000.

In May 2018, the University of Tennessee Health Science Center (UTHSC) in Memphis signed a contract for a $5.5 million ESPC project. This is the first phase of a planned $30 million project to overhaul the campus’ energy and plant equipment.

Last Updated: July 2018

Research & Development List All

Tennessee’s energy efficiency research and development field comprises a variety of contributors, including several higher education institutions as well as a national laboratory.

The University of Tennessee – Knoxville

The University of Tennessee - Knoxville (UT-Knoxville) has a strong partnership with Oak Ridge National Laboratory, which collaborates with other state stakeholders and industry members, including the Electric Power Research Institute (EPRI), on energy research. The University of Tennessee Research Foundation (UTRF) also promotes the commercialization and deployment of advanced technologies, some of which are related to energy efficiency. A solar array installed in April 2015 on a UT-Knoxville parking garage has proven to make the campus more energy efficient and continually serves as a research tool for students seeking to develop and study next generation renewable energy technologies. Research on this array and the efficiency impacts of on-campus power generation will continue for at least the next few years.

The Center for Ultra-Wide-Area Resilient Electric Energy Transmission Networks (CURENT) is a National Science Foundation (NSF) Engineering Research Center, led by UT-Knoxville, that is jointly supported by NSF and DOE. Partner higher education institutions include Northeastern University, Rensselaer Polytechnic Institute, and Tuskegee University. CURENT's research focuses on improvement in grid transmission efficiency, better accommodation of renewable energy sources, full utilization of energy storage, and accommodation of responsive load.

CURENT’s main project is to develop and demonstrate a community-based, smart, and flexible microgrid with an open source microgrid controller for enhanced functionality and guaranteed low costs. The proposed microgrid concept is expected to reduce annual critical loads interruption time by 98%, reduce power generation emissions by 20%, and improve energy use efficiency by 20%. CURENT partners, including the Electric Power Board of Chattanooga (EPB), ORNL, National Instruments (NI), EPRI, TVA, and Green Energy Corp (GEC), will work to assist in project implementation and eventual commercialization.

The Institute for Advanced Composites Manufacturing Innovation (IACMI) is a $259 million public-private partnership led by UT-Knoxville that focuses on advanced fiber-reinforced polymer composites, which combine strong fibers with tough plastics to cost-effectively manufacture materials that are lighter and stronger than steel. IACMI is supported by a $70 million commitment from DOE and a $189 million commitment from IACMI's partners (including ORNL, Vanderbilt University, and more). IACMI has also received a $15 million commitment from the Tennessee Department of Economic and Community Development as part of an effort to facilitate local breakthroughs in energy-efficient manufacturing and materials. Established by UTRF as a Tennessee-based nonprofit 501(c)(3), IACMI houses more than 160 members and continues to overcome barriers to the use of advanced composites through the development of low-cost, high-speed, and energy-efficient manufacturing and recycling processes. 

The Center for Manufacturing Research at Tennessee Technological University (TTU) focuses on advanced manufacturing and materials for energy storage and conversion.  The Center conducts energy assessments as part of its DOE-funded Industrial Assessment Center (IAC), which has been active since 2006. Through the IAC, engineering professors and students perform onsite energy assessments on industrial sites to locate and recommend energy efficiency opportunities.

TTU also houses a Center for Energy Systems Research (CESR), established to advance energy system design, efficiency, and resilience. Read more about its energy efficiency activities here: https://www.tntech.edu/assets/usermedia/coe/usermedia/coe/CESR_Annual_Report_2017_Binder_1.pdf.

The University of Memphis houses a second TN-based, DOE-funded IAC, which provides no-cost studies of manufacturing plants across West Tennessee, North Mississippi, and Eastern Arkansas. On average, recommended actions from an assessment result in annual cost savings of $100,000 per industrial entity.

Middle Tennessee State University (MTSU) houses a Center for Energy Efficiency, which provides both an organized approached to campus-wide efficiency projects as well as educational opportunities for students and the professional community. Focusing on its “Three Cs”—Campus, Classroom, and Community—the Center supervises building retrofits, energy management projects, infrastructure upgrades, etc.; offers cooperative internship opportunities and job placement for students in energy efficiency fields; and provides educational/energy certification seminars, training opportunities, and leadership resources.

Vanderbilt University spends almost $8 million per year on energy projects, around $3.4 million on energy efficiency research alone. Learn more about the University’s efforts here: https://www.vanderbilt.edu/sustainvu/what-we-do/energy/vu-main-campus-energy-efficiency-and-conservation-accomplishments/.

Last Updated: July 2018

Buildings
Score: 4 out of 8
Buildings Summary List All

Since Tennessee is a home rule state, codes are adopted and enforced at the jurisdictional level. Residential construction must comply with the 2009 IECC and commercial and commercial and state-owned buildings must comply with the 2012 IECC. Tennessee has hosted code training sessions.

Residential Codes List All

State building codes adoption and enforcement efforts fall under the purview of the State Fire Marshal’s Office within the Department of Commerce and Insurance (C&I). Any changes to building energy code must comply with the state’s rule-making procedures. On November 2, 2015, C&I conducted a rulemaking hearing to adopt the 2009 IECC for residential one and two family dwellings and townhouses. The permanent rules were filed with the Secretary of State on November 4, 2016 and went into effect on February 2, 2017. See http://share.tn.gov/sos/rules/0780/0780-02/0780-02-23.20170202.pdf and https://www.energycodes.gov/adoption/states/tennessee for additional information.

However, because Tennessee is a “home rule” State, significant variation exists in codes adoption and enforcement at the local level. Under Tennessee statute, all local jurisdictions must adopt a residential energy code that is within seven years of the most recently published energy code. However, all local jurisdictions may also opt out of adoption with a two-thirds majority vote of the local governing body. In addition, local jurisdictions cannot be required to adopt a local code that is more stringent than the one adopted by the State, but they may voluntarily choose to adopt an updated code version. If opting out, the vote must be completed after each local election cycle. To date, 86 jurisdictions have opted in to the state residential building code (apply the statewide building code to their jurisdiction and utilize the state’s building permit system and building inspectors), 80 jurisdictions have opted out (building codes are not recognized nor enforced), and 264 jurisdictions are exempt (building codes are adopted locally, meeting or exceeding the statewide standard; exempt jurisdictions hire their own inspectors and all paperwork is administered locally and audited on a 3 year cycle).

The State began implementation and enforcement of adopted energy codes for new building projects in July 2011. The State Fire Marshal’s Office requires a State building permit for new residential and certain commercial construction in areas of the State, except those where an exempt local government is enforcing a residential or commercial building code itself or where the local government has notified the Department it has opted out of the law. Building construction projects subject to code enforcement by the State Fire Marshal’s Office are required to obtain a State building code permit prior to commencing construction. The Department verifies contractors' licensure as part of the permitting process.

According to C&I, a number of local jurisdictions have adopted building energy codes that exceed versions adopted by the State. TDEC OEP is aware of at least 109 local jurisdictions that have already adopted the 2012 Residential IECC, and 11 that have adopted the 2015 IECC.

Last Updated: July 2018

Commercial Code List All

State building codes adoption and enforcement efforts fall under the purview of the State Fire Marshal’s Office within the Department of Commerce and Insurance (C&I). Any changes to building energy code must comply with the state’s rule-making procedures. On August 19, 2015, C&I conducted a rulemaking hearing to adopt the 2012 IECC for commercial and state-owned buildings. The permanent rules were filed with the Secretary of State on May 6, 2016 and went into effect on August 4, 2016. See https://www.energycodes.gov/adoption/states/tennessee for additional information. 2006 IECC applies to Moderate-hazard facility industrial, Group F-1; Low-hazard factory industrial, Group F-2; Moderate-hazard storage, Group S-1; and Low-hazard storage, Group S-2 buildings.

However, because Tennessee is a “home rule” State, significant variation exists in codes adoption and enforcement at the local level. Under Tennessee statute, all local jurisdictions must adopt a residential energy code that is within seven years of the most recently published energy code. However, all local jurisdictions may also opt out of adoption with a two-thirds majority vote of the local governing body. In addition, local jurisdictions cannot be required to adopt a local code that is more stringent than the one adopted by the State, but they may voluntarily choose to adopt an updated code version. If opting out, the vote must be completed after each local election cycle. C&I does not maintain a list of local commercial building code adoptions. To date, 86 jurisdictions have opted in to the state residential building code (apply the statewide building code to their jurisdiction and utilize the state’s building permit system and building inspectors), 80 jurisdictions have opted out (building codes are not recognized nor enforced), and 264 jurisdictions are exempt (building codes are adopted locally, meeting or exceeding the statewide standard; exempt jurisdictions hire their own inspectors and all paperwork is administered locally and audited on a 3 year cycle).

The State began implementation and enforcement of adopted energy codes for new building projects in July 2011. The State Fire Marshal’s Office requires a State building permit for new residential and certain commercial construction in areas of the State, except those where an exempt local government is enforcing a residential or commercial building code itself or where the local government has notified the Department it has opted out of the law. Building construction projects subject to code enforcement by the State Fire Marshal’s Office are required to obtain a State building code permit prior to commencing construction. The Department verifies contractors' licensure as part of the permitting process.  

Last Updated: July 2018

Compliance List All
  • Gap Analysis/Strategic Compliance Plan:  The Tennessee (TDEC) Office of Energy Programs, the Tennessee Department of Commerce and Insurance, and the Tennessee Fire Service and Codes Enforcement Academy) are currently engaged in a residential energy code compliance baseline field study. The Southeast Energy Efficiency Alliance (SEEA) and its partner, Southface, are leading the initiative, which is funded by a U.S. Department of Energy award to SEEA.  This study will focus on a sample of single-family homes in the two climate zones in Tennessee and will identify the residential building energy code sections for which the State may wish to consider conducting additional education, outreach, and/or training.  The kickoff meeting was held in March 2017, and the study is expected to be completed in FY2018.
  • Baseline & Updated Compliance Studies: the State of Tennessee, through TDEC OEP, C&I, and TFACA, is participating in a residential energy code compliance baseline field study. The Southeast Energy Efficiency Alliance (SEEA) and its partner, Southface, are leading the field study, which is funded by a U.S. Department of Energy award to SEEA. This study will focus on a sample of single-family homes in the two climate zones in Tennessee and will identify the residential building energy code sections for which the State may wish to consider conducting additional education, outreach, and/or training. The project is approximately 75% complete and will be submitted to DOE for final review in the summer of 2018.
  • In addition, under state regulations, the State Fire Marshal’s Office is granted authority to audit local exempt jurisdictions every three years, in order to check that they are enforcing codes correctly.  Tennessee plans to complete an audit and see that local jurisdictions are within seven years of the most recently published code. Audits for commercial buildings include a plan review and inspection of a small sample of buildings (would not be considered a statistically representative sample). Approximately 90 jurisdictions are audited each year.
  • Utility Involvement: The State Fire Marshal’s Office has not established utility commission regulatory guidelines.  The Tennessee Public Utility Commissioner (formerly Tennessee Regulatory Authority) does not regulate the Tennessee Valley Authority (TVA), the federally-owned corporation that provides electricity to approximately 99.7% of the electricity service territory in Tennessee.)
  • Stakeholder Advisory Group: The State Fire Marshal’s Office has met with the Southeastern Energy Efficiency Alliance (SEEA) several times over the past several years to discuss building energy codes and enforcement. SEEA has offered to provide assistance and advice for adopting new codes and to influence energy code stakeholders.There is no established timetable for meetings. They are convened on an as-needed basis.
  • Training/Outreach: 
    • In addition to adoption and enforcement of building energy codes, C&I provides training and continuing professional education courses to codes inspectors across the State through the Tennessee Fire and Codes Academy (TFACA). In 2013, the TDEC Office of Energy Programs (OEP) / State Energy Office provided $195,000 in grant funding to C&I to develop a 2012 IECC training program for inspectors. OEP also provided C&I the opportunity to participate in 2012 IECC “train-the-trainer” courses administered by Southface Energy Institute. The grant funding allowed C&I to purchase equipment and gain the knowledge necessary to provide training to codes inspectors across the State.
    • Following the grant period in 2013, C&I offered several free training opportunities to codes inspectors in all regions of the State. Classes were hosted at TFACA campus in Bell Buckle, offered in jurisdictions throughout TN, and plans have been discussed to offer online training for participants who are unable to attend the classes. Stephen Snow, TFACA Codes Enforcement Program Director, noted that the training program was extremely successful in its initial outreach, then requests for the training slowed for a couple of years once jurisdictions decided to adopt or not.  But recently due to the State requirement for jurisdictions to adopt an edition of the IECC that is always within 7 years of the latest printed edition, TN jurisdictions are once again exploring which viable edition they will adopt.
    • A couple of instances provide evidence for this trend.  Early in 2016, the town of Cookeville requested that TFACA come and provide training to approximately 40 of their local contractors which the town assembled for the sole purpose of learning the requirements of IECC.  In February 2016, the East TN Building Officials Association asked the Academy to hold IECC – DET training for approximately 130 inspectors and building officials in their region to help their inspectors understand and implement IECC testing requirements.  As interest in IECC adoption and enforcement increases, TFACA will create more IECC courses throughout the State to move out of “introductory” training and into more “topic-specific” training.

    • The most recent course offering was the IECC course presented by TFACA which was requested by the Tennessee Building Officials Association and which was presented at their State-wide conference.  At this event, inspectors from all parts of TN gathered to hear the Academy’s training on the 2018 IECC.  Many jurisdictions are posed to adopt the 2018 edition, and their representatives in that class were very receptive to the information presented.

    • Also, TFACA and the SFMO have been exploring implementation of a comprehensive program to incorporate “distance learning” which will change the way all Academy training will be offered, including IECC course delivery. This online training will reach more individuals and small groups of officials within jurisdictions whose strict budgets have traditionally precluded travel to the TFACA campus for this material.  While more jurisdictions have adopted the 2012 IECC through the support of Academy IECC training, new inspectors joining these departments will be more easily trained in the use of the code, and will still have access to the resources the Academy can provide to support that training.  SFMO and TFACA officials are optimistic about the benefit this new medium will bring to inspectors in TN, and will have a variety of online presentation methods and testing options to insure students of TFACA distance learning are properly equipped to enforce the most current and viable editions of the IECC. 

Last Updated: July 2018

CHP
Score: 1 out of 4
CHP Summary List All

The state offers financing assistance for some CHP projects, but does not otherwise have policies in place that encourage CHP deployment. Two new CHP systems came online in Tennessee in 2017.

Interconnection StandardsList All

Policy: Tennessee Interconnection orders

Description: On January 5, 2007, the Tennessee Regulatory Authority (TRA) issued orders in dockets 06-00182 and 06-00183 stating that Entergy and Kentucky Utilities had already implemented standards 11 (net metering), 14 (time-based metering), and 15 (interconnection) as described by PURPA 2005, prior to August 8, 2005 and further consideration of those standards by TRA was not required (i.e., declining to make any changes in the existing standards).

In August 2007, the Tennessee Valley Authority (TVA) adopted a modified version of PURPA 2005: "TVA shall make available, upon request, interconnection service, for generators with output of 20 MW or less, to any electric consumer that it serves." As part of its decision, TVA is allowing the distribution utilities that operate in its territory the flexibility to create their own interconnection procedures that are similar to TVA's.

Last Updated: July 2018

Encouraging CHP as a ResourceList All

There are currently no state policies designed to acquire energy savings from CHP (like other efficiency resources) or energy generation from CHP (in terms of kWh production) that apply to all forms of CHP.

Last Updated: July 2018

Deployment IncentivesList All

There are currently no statewide policies that provide additional incentives for CHP deployment. In 2015, the Tennessee Valley Authority (TVA) issued a request for proposals to industrial customers in the TVA-service area to provide technical guidance and financial assistance towards the capital costs of waste heat recovery and/or CHP projects. The objective is to provide up to $7 Million to establish at least 5 MW of customer-owned generation from waste heat recovery and CHP. TVA awarded $6.75 Million to Erlanger Health Systems in Chattanooga, TN to build a 6 MW CHP facility, which is under construction.

The Pathway Lending Energy Efficiency Loan Program (EELP), a low-interest revolving loan fund, was launched in the fall of 2010 to assist for-profit and not-for-profit commercial and industrial businesses in implementing energy efficiency and renewable energy improvements, including CHP. The program's interest rate is 2% fixed rate for up to 5-year term loans and 5% fixed rate for 5-10-year term loans. Qualifying entities can apply for loans between $20,000 up to $5M. The EELP also offers up to six years of financing for qualified energy efficiency and renewable energy projects to Tennessee local governmental entities, including municipalities, counties, school districts and other similar public agencies. The EELP is a collaborative effort between Pathway Lending, the State of Tennessee / Tennessee Department of Environment and Conservation (TDEC), and the Tennessee Valley Authority (TVA).

Last Updated: July 2018

Additional Supportive PoliciesList All

Some additional supportive policies exist to encourage CHP in Tennessee. The Qualified Energy Conservation Bond Program and Clean Tennessee Energy Grant Program have both been used to encourage the deployment of waste heat to power (WHP) systems in the state.

The University of Tennessee Center for Industrial Services also helps companies evaluate, measure, and create a site-specific energy plan, which may include evaluating CHP options. 

Last Updated: July 2018

Utilities
Score: 1.5 out of 20
Utilities Summary List All

The Tennessee Valley Authority (TVA), the largest publicly-owned electric utility in the country, is the primary electricity provider in Tennessee. As a publicly-owned utility, TVA is governed by a board of directors. While past energy efficiency efforts have been modest, TVA has ramped up energy efficiency programs for electricity customers across all sectors in recent years. Nonetheless, Tennessee falls below the national average for efficiency spending and realized savings.

The Tennessee Regulatory Authority (TRA) is the state agency charged with the setting of rates and service standards for privately-owned telephone, natural gas, electric, and water utilities.

The most recent budgets for energy efficiency programs and electricity and natural gas savings can be found in the State Spending and Savings Tables.

Customer Energy Efficiency Programs List All

In June 2007, the Tennessee legislature approved a joint resolution calling for the Tennessee Valley Authority (TVA), the largest publicly-owned electric utility in the country, to initiate large-scale efforts to improve energy efficiency. House Joint Resolution Number 472 noted, "[E]nergy conservation can easily meet and exceed the growing demand for electricity; and….TVA used energy efficient means of creating power in the 1970s to supplant the need to build new power plants." In response, TVA has released a suite of energy efficiency programs, for all customer segments, including but not limited to: home energy evaluations, rebates and attractive financing for efficiency measures, and technical/advising services.

The most recent budgets for energy efficiency programs and electricity and natural gas savings can be found in the State Spending and Savings Tables.

Last Updated: July 2018

Energy Efficiency as a Resource List All

There is currently no state-level policy in place that treats energy efficiency in the electricity sector as a resource. However, TVA evaluates energy efficiency and demand response programs on a level playing field with generation assets through the Integrated Resource Plan process.

For more information on energy efficiency as a resource, click here.

Last Updated: July 2018

Energy Efficiency Resource Standards List All

The Tennessee Valley Authority (TVA) stated in its 2008 Environmental Policy that in order to meet its objective of reducing the rate of carbon emissions, it needed to reduce load growth by at least one-quarter over five years through energy efficiency and demand-side initiatives.

In its 2011 integrated resource plan, TVA included savings goals from energy efficiency and demand-response in its recommended planning direction. The goals included reductions in peak demand of 3,600-5,100 MW and energy savings of 11,400-14,400 GWh to be met by the year 2020. These ranges include savings already achieved through 2010, when the planning process began. The degree to which these goals are binding in the long term is unclear and therefore is not considered an EERS. 

Last Updated: July 2018

Utility Business Model List All

There is currently no policy in place that decouples electric utility profits from sales, but the Tennessee Valley Authority made a determination that efforts will be made to address the issue of lost contributions to fixed costs for distributors.

In 2010, the Tennessee Regulatory Authority (TRA) approved the Chattanooga Gas Co.'s request for an increased monthly charge for fixed costs to “more properly align the interest of ratepayers and utilities in better promoting energy efficiency.” The mechanism is referred to the Alignment and Usage Adjustment (AUA). The AUA applies to residential (R-1) and Small Commercial (C-1) classes. A revenue per customer was calculated for the aforementioned customer classes in docket 09-00183. Each year, the actual revenue per customer is compared to the benchmark revenue per customer. If the revenue per customer declines, then customers are surcharged to collect the difference during the subsequent year, and vice-versa. The AUA was approved on a three-year trial and was extended pending a full report on the mechanism. It remains in effect. There is, however, a 2% accrual on margin recoveries. 

There is currently no policy in place that rewards successful energy efficiency programs. The Tennessee Valley Authority has made a determination that incentives are not appropriate for a public power company.

Last Updated: July 2018

Evaluation, Measurement, & Verification List All
  • Cost-effectiveness test(s) used: TRC, UCT, RIM
  • Uses a deemed savings database: no

Evaluations in Tennessee are mainly administered by the Tennessee Valley Authority. There are no specific legal requirements for these evaluations in Tennessee. TVA uses three of the five classic benefit-cost tests identified in the California Standard Practice Manual. These are the Total Resource Cost (TRC), Utility/Program Administrator (UCT), and Ratepayer Impact Measure (RIM). TVA specifies the TRC to be its primary test for decision making. According to TVA, the benefit-cost tests are required for overall portfolio and total program level screening. The rules for benefit-cost tests are not specified. Some exceptions of flexibility exist in the application like low-income programs, pilots, and new technologies.

TVA has instituted a robust EM&V effort to assess all its programs on an ongoing three- to four-year cycle. An independent, third-party contractor has been engaged to collect onsite performance data, validate adherence to program guidelines, and identify potential process improvements. Planning estimates of impacts, life spans, and net-to-gross ratios are adjusted in accordance with the findings of the EM&V assessments.

Last Updated: July 2018

Guidelines for Low-Income Energy Efficiency Programs List All

Requirements for State and Utility Support of Low-Income Energy Efficiency Programs

No specific required spending or savings requirements were identified.

Cost-Effectiveness Rules for Low-Income Energy Efficiency Programs

According to the Tennessee Valley Authority (TVA), the benefit-cost tests are required for overall portfolio and total program-level screening. The rules for benefit-cost tests are not specified. Some exceptions of flexibility exist in the application like low-income programs, pilots, and new technologies.

Coordination of Ratepayer-Funded Low-Income Programs with WAP Services

Level of coordination is unclear from publicly available data.

Last updated: July 2018

Self Direct and Opt-Out Programs List All

There are no self-direct or opt-out programs in Tennessee. 

Data AccessList All

Tennessee has no policy in place that requires utilities to release energy use data to customers or third parties. 

Last Updated: July 2018

Transportation
Score: 3.5 out of 10
Transportation Summary List All

The state has passed complete streets legislation and allows regional authorities to set up dedicated funding streams for mass transit.

Tailpipe Emission Standards List All

No policy in place or proposed.

Last Updated: July 2018

Transportation System Efficiency List All

Transportation and Land Use Integration: Tennesee's Multimodal Access Grant provides supports the transportation needs of transit users, pedestrians, and bicyclists through infrastructure projects that address existing gaps along state routes and access at transit hubs

VMT Targets: No policy in place or proposed.

Complete Streets: In 2010, Tennessee adopted a bicycle and pedestrian policy that mandates transportation planning agencies and developers to integrate provisions for bicycles and pedestrians into the new construction and the reconstruction of roads and highways.

FAST Freight Plans and Goals: Tennessee has a state freight plan that identifies a multimodal freight network, but it does not include freight energy or greenhouse gas reduction goals.

Last Updated: July 2018

Transit Funding List All

Tennessee Senate Bill 1471, passed in 2009, calls for the creation of a Regional Transportation Authority in major municipalities. It allows these authorities to set up dedicated funding streams for mass transit either by law or through voter referendum.

Last Updated: July 2018

Incentives for High-Efficiency Vehicles List All

No policy in place or proposed.

Last Updated: July 2018

Equitable Access to TransportationList All
Tennessee does not have any state programs in place to incentivize the creation of low-income housing near transit facilities, but it does consider the proximity of transit facilities when distributing federal Low-Income Housing Tax Credits. Last Updated: July 2018
Appliance Standards
Score: 0 out of 2
Appliance Standards Summary List All

Tennessee has not set appliance standards beyond those required by the federal government.

Last Updated: July 2018