in Tennessee

Fiscal Budgets Tennessee state budget and finances Tax policy in Tennessee Finance Financial regulation in Tennessee Pensions Public pensions in Tennessee Pension health in Tennessee Civil liberties Affirmative action in Tennessee Campaign finance requirements in Tennessee Campaign finance requirements for Tennessee ballot measures Nonprofit regulation in Tennessee Education Charter schools in Tennessee Higher education in Tennessee Public education in Tennessee School choice in Tennessee Elections Ballot access Ballot access requirements for political candidates in Tennessee Ballot access requirements for political parties in Tennessee Political parties in Tennessee Ballot access requirements for presidential candidates in Tennessee Redistricting in Tennessee Voting in Tennessee Energy andEnvironment Energy policy in Tennessee Fracking in Tennessee Oil and gas extraction on federal land in Tennessee Endangered species in Tennessee Environmental policy in Tennessee Healthcare Healthcare policy in Tennessee Medicaid spending in Tennessee Effect of the Affordable Care Act in Tennessee Immigration Immigration in Tennessee

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Fracking in the U.S.
Energy policy in the U.S.
State fracking policy
State energy policy
Glossary of energy terms

Energy policy involves governmental actions affecting the production, distribution, and consumption of energy in a state. Energy policies are enacted and enforced at the local, state, and federal levels and may change over time. These policies include legislation, regulation, taxes, incentives for energy production or use, standards for energy efficiency, and more. Stakeholders include citizens, politicians, environmental groups, industry groups, and think tanks. A variety of factors can affect the feasibility of federal and state-level energy policies, such as availablenatural resources, geography, and consumer needs.

This article outlines state-level oil and gas regulations, renewable energy programs, oil and gas production, energy usage, energy and electricity prices, fuel taxes, and utilities in Tennessee.

See the tabs below for further information:

1. Policy: This tab provides information about state regulations on energy production and policies related to oil and gas production, fracking, renewable energy generation, energy efficiency, and net metering.
2. Production: This tab provides information about total energy production by energy source in Tennessee.
3. Usage: This tab presents information about electricity consumption by energy source.
4. Prices and taxes: This tab presents information about average energy and electricity prices, per capita spending on energy, and fuel taxes.
5. Utilities: This tab presents information about public and private utilities, electricity markets, the types of utilities in Tennessee, and the electric reliability organizations in Tennessee.
6. Background: This tab provides information about the types of nonrenewable and renewable energy sources produced and used in the United States, an energy profile of Tennessee, a state profile of Tennessee from theAlmanac of American Politics (2016), and economic indicators in the state, such as median income.

Policy

State regulations

The Tennessee Department of Environment and Conservation has regulatory authority overoil andnatural gas operations in the state. State rules and regulations cover the drilling of all wells used for oil or gas exploration, the spacing of wells, permitting requirements for oil and gas operators,injection wells used to enhance oil and gas recovery or to dispose of wastewater, the cementing and plugging of wells, the underground storage of natural gas, the prevention of well blowout and leaks, well restoration, reporting requirements, and more. All Tennessee rules and regulations related to oil and gas operations are found inTitle 60 of the Tennessee Annotated Code.^[1]

Fracking

See also:Fracking in Tennessee

The Tennessee Department of Environment and Conservation is responsible for regulatinghydraulic fracturing (also known as fracking) in Tennessee. The department enforces regulations for the reporting and disclosure of the types of fluids used in fracking and at what volume, a description of each chemical additive used in fracking, the maximum amount of surface and injecting pressure used during the process, well safety, and other information considered necessary by the department for the regulation of fracking. More detailed information on Tennessee's rules and regulations related to fracking can be accessedhere.^[2]

Renewable energy policies

States have implemented funding and financial incentive programs to subsidize or otherwise increase investment inrenewable energy resources such aswind,solar, andhydroelectric power. These programs includerenewable portfolio standards, grants, rebate programs, tax incentives, loans, performance-based incentives, and more. The aim of the policies generally involves reducing the cost of renewable energy production for consumers, reducing regulatory compliance costs, reducing investment risks involving renewable energy, and/or increasing the adoption of renewable energy sources by individuals and businesses.^[3]

Renewable Portfolio Standard

See also:Renewable Portfolio Standard

ARenewable Portfolio Standard (RPS), also known as a renewable electricity standard, is a mandate intended to increase the amount ofrenewable energy production and use. Under these standards, a utility company can be required by a state to have a certain percentage of its electricity come from certainrenewable energy resources. In addition, states may give tax credits to utility companies to fulfill these requirements.^[4][5]

As of February 2017, Tennessee was one of 20 states that did not have a Renewable Portfolio Standard or a voluntary renewable energy standard or target.^[6]

Grant programs

States, nonprofit organizations, and/or private utilities may operate grant programs for renewable energy. These programs may include state or private funding for energy installation costs, research and development, infrastructure and business development, system testing, and renewable energy feasibility studies (studies that look into the potential for renewable energy use in specific areas). Grants can be provided with or without requiring a recipient to match the grant. Additional incentives, such as lower interest loans, may be included with a grant.^[3]

As of March 2015, Tennessee was one of 24 states with a state-run grant program for renewable energy. The Tennessee Department of Environment and Conservation operates the Clean Tennessee Energy Grant Program, which distributes grants to municipalities, counties, utilities, and other entities established by statute. These grants are used to purchase, install, and construct eligible renewable energy projects, includingbiomass,solar energy,geothermal energy,solar energy, andwind energy. Other eligible projects include energy efficiency measures for lighting, heating, ventilation, and insulation.^[7]

See the map below for grant programs by state.^[3]

States with grant programs for renewable energy as of March 2015 (Source:Environmental Protection Agency)

Loan programs

Loan programs may be used to offer lower interest loans or other financing options to individuals and businesses to reduce the upfront costs of purchasing and installing renewable energy technologies. Loan programs may include programs that use payments from earlier borrowers to provide loans for new borrowers, programs in which building owners reduce their energy consumption to pay their upfront costs for renewable energy technologies, and programs that allow individuals with a higher debt-to-income ratio to purchase homes that use less energy, among others.^[3]

As of March 2015, Tennessee was one of 36 states with a state-run loan program for renewable energy technologies. The Tennessee Office of Energy Programs oversees the Pathway Lending Energy Efficiency Loan Program, which was established in 2010. The program distributes loans to commercial and industrial businesses, municipalities, counties, school districts, and other public agencies forrenewable energy projects and energy efficiency measures. Loans range from $10,000 to $5 million.^[3][8]

A complete list of state, local, and private incentive, loan, grant, and assistance programs for renewable energy and energy efficiency in Tennessee can be foundhere.

See the map below for renewable energy loan programs by state.

States with loan programs for renewable energy as of March 2015 (Source:Environmental Protection Agency (EPA)

Energy efficiency regulations

As of February 2017, Tennessee did not require all new residential and commercial buildings to meet energy efficiency standards, though local governments are allowed to adopt and enforce energy efficiency standards at the local level.^[9]

Net metering

Net metering is a billing system in which customers who generate their own electricity, usually usingrenewable sources (such assolar panels) are able to sell their excess electricity back to the electric grid, which is an interconnected network that is used to deliver electricity. This requires electricity to be able to flow both to and from a consumer.^[10][11][12]

As of October 2016, Tennessee was one of nine states without a statewide, locally operated, or privately run net metering policy. For a complete list of net metering programs by state, clickhere.^[6][13]

Recent legislation

The following is a list of recent energy policy bills that have been introduced in or passed by theTennessee State Legislature. To learn more about each of these bills, click the bill title. This information is provided byBillTrack50 andLegiScan.

Note: Due to the nature of the sorting process used to generate this list, some results may not be relevant to the topic. If no bills are displayed below, no legislation pertaining to this topic has been introduced in the legislature recently.

Ballot measures

Energy policy ballot measures

See also:Energy on the ballot andList of Tennessee ballot measures

Ballotpedia has not covered any ballot measures relating to state and local energy policy in Tennessee.

Utility policy ballot measures

See also:Local utility tax and fees on the ballot

Ballotpedia has not covered any ballot measures relating to local utility tax and fees in Tennessee.

Production

The sections below include statistics on total energy production in Tennessee, oil and natural gas production in Tennessee, oil and gas production in Tennessee over time (2004-2014), and oil and gas production onfederal land, including the amount of federal land leased in Tennessee for production.

Total energy production

The table below provides information regarding energy production in Tennessee in British thermal units (Btu). A British thermal unit is used to measure the heat contained in different fuels. The U.S. Department of Energy defines a Btu as "the quantity of heat required to raise the temperature of 1 pound of liquid water by 1 degree Fahrenheit." Fuels are discussed in terms of Btu to compare fuels with different energy content and prices. For example, one gallon of gasoline equals 120,524 Btu.^[14]

Nonrenewable energy production

The table below provides information regarding nonrenewable energy production in Tennessee. For coal data, the phraseproductive capacity refers to the maximum amount of coal that could be expected to be produced in 2014. The natural gas and crude oil production data refer to the amounts of natural gas and crude oil produced in December 2014 and April 2016, respectively.^[15][16]

Oil and gas production (2004-2014)

Note: This section provides information about oil and gas production on private and state-owned lands. Information onoil and gas production on federal lands is accessible here.

The graph and table below provide information about crude oil production in Tennessee. Information from select surrounding states is provided for comparative purposes.^[17]

The graph and table below provide information about natural gas production in Tennessee. Information from select surrounding states is provided for comparative purposes.^[18]

Oil and gas production on federal land

See also:Oil and natural gas extraction on federal land

The federal government leases federally managed land to private individuals and companies for energy development, includingcrude oil andnatural gas drilling,solar energy development, andgeothermal energy development. Approximately 166 million acres of federal land were available to be leased for energy development as of December 2014. TheU.S. Bureau of Land Management (BLM) is responsible for regulating oil and gas drilling on federal lands in the United States.^[19][20]

The table below provides information about oil and natural gas production on federal lands in Tennessee in 2014. Information from select surrounding states is provided for comparison.^[21][22]

Land leased

Private oil and natural gas companies apply for leases from theU.S. Bureau of Land Management (BLM) to develop energy resources on federal lands. After a lease is approved, the company must submit information to the BLM about how it will conduct its drilling and production operations. The BLM also inspects a company’s operations during production.^[23]

The table below provides information about oil and gas producing leases and acres on federal lands in Tennessee from 2013 to 2015. Information from select surrounding states is provided for comparison.

Energy usage

The section below includes statistics on electricity consumption in the state by energy type (in 2014).

Consumption

The table below provides information about energy consumption by source in Tennessee in 2014. Information from select surrounding states is provided for comparison.^[15]

Prices and taxes

The sections below include information on energy prices and spending in Tennessee, fuel taxes and state taxes in Tennessee and in neighboring states, and an overview of the federal tax on gasoline.

Energy prices

The price of electricity is affected by supply and demand. The supply of electricity is affected by fuel prices, environmental and energy regulations, power plant capacity, weather, and other factors. Demand for electricity also affects the price. Because electricity cannot be stored for long periods of time, it must be produced and used when it is needed. As demand for electricity increases, the price also generally increases.^[24][25]

The table below provides information about energy prices in Tennessee as of April 2016. Information from select surrounding states is provided for comparison.^[15]

Electricity prices can vary depending on the type of consumer; consumer categories include residential, commercial, industrial, and in some cases, transportation. The rate-making process is both political and economic. The table below presents information about electricity prices by consumer type in Tennessee in April 2016. Information from select surrounding states is provided for comparison.

Energy spending

The table below provides information about energy spending in Tennessee as of 2014. Information from select surrounding states is provided for comparison.

Fuel taxes

Click to enlarge.

Revenue collected by federal, state, and local governments from fuel taxes is usually used to fund transportation infrastructure such as roads and bridges. Some states may charge anexcise tax based on how much gas or diesel is purchased. Some states may charge retail tax based on the average price of gas over a certain period. Additionally, some states may charge an environmental tax to be used for environmental projects. TheTax Foundation, which created the map to the right, used data from the American Petroleum Institute, which converted each state's different tax structure into cents per gallon to compare each state's gas taxes. In 2016, gas taxes accounted for 23 percent of the price of gasoline. Crude oil accounted for 40 percent of the price of gasoline,refining accounted for 24 percent of the price, and distribution and marketing accounted for 13 percent of the remainder.^[26][27]

The table below provides information about state fuel taxes by type (excluding the federal gas taxes) in Tennessee as of January 2016. As of January 2016, Tennessee levied a 21.4 cent state gasoline tax and a 18.4 cent state diesel tax. Tennessee ranked 39th highest in total gasoline taxes (federal and state) and 44th highest in total diesel fuel taxes as of January 2016.^[28][29]

Federal tax

The first federal tax on gasoline was proposed by Secretary of the Treasury Ogden L. Mills under President Herbert Hoover (R) as a revenue generating measure to balance the budget during the Great Depression. A 1-cent tax per gallon of imported gasoline and fuel oil was passed as part of the Revenue Act of 1932 and signed by President Franklin D. Roosevelt (D). The 1-cent tax continued until 1951 when the tax was increased to 2 cents in part to raise revenue during the Korean War. In 1956, the tax was raised to 3 cents to fund the Interstate Highway System. During this time, the Highway Trust Fund was created as a means to fund highway construction. Since 1956, there have been increases to the tax. As of April 2016, the gas tax was last raised by PresidentBill Clinton (D) in 1993 to 18.4 cents per gallon.^[30]

Utilities

The sections below include general information on utilities, an overview of utilities and electricity markets, information on the types of utilities in Tennessee, an overview of electricity reliability organizations (EROs), and the EROs that oversee electricity in Tennessee.

Background

Utilities are firms that own and/or operate facilities to generate, transmit, and/or distribute electricity, gas, and/or water to the public. Electric utilities are commercial entities that own and operate facilities to generate, transmit, and distribute electricity to the public and/or the industrial sector. State and local regulators oversee transmission and distribution charges. Local utilities read electric meters and bill individuals or businesses, generally on a monthly basis.^[31][32]

Utilities are defined differently in each state and in federal legislation. Two general types of utilities are private and public utilities. Private utilities, commonly known as investor-owned utilities, provide stocks to investors and sell bonds. These utilities are regulated by state regulatory agencies. State agencies are also responsible for setting retail rates charged by investor-owned utilities, overseeing utility infrastructure, and ensuring that investor-owned utilities respond to customer service demands. Public utilities include government or municipally owned utilities. Another type of utility is an electric cooperative. Cooperatives are nonprofit businesses voluntarily owned and managed by the individuals and businesses that use their services. They are commonly used in rural areas that do not have access to a larger state or region-wide electric grid.^[32]

Electricity markets

Electricity markets in each state are defined as regulated or deregulated. A regulated market includes utilities that own and manage the power plants that generate the electricity, the electricity transmission lines, and the distribution equipment (such as wires and electric poles). In addition, the utilities rates are approved and regulated by local and state agencies. A deregulated market requires utilities to divest ownership in the generation and transmission of electricity. In this market, utilities oversee the interconnection from a meter at a household or business to the power grid and is responsible for billing ratepayers.^[33][34]

Depending on the state and/or area, public utilities may provide most or all energy services to homes and businesses, or a state may allow other private electricity providers to transmit and distribute electricity in addition to other utilities. For example, one type of private provider is a retail energy provider, which sells electricity in areas with retail competition. The provider purchases wholesale electricity and the delivery services (such as transmission lines) and can price electricity to particular consumers.^[33][34]

As of February 2017, Tennessee was one of 40 states with a regulated electricity market. The Utilities Division of the Tennessee Regulatory Authority regulates and sets rates for Tennessee's five electric utilities—the Appalachian Power Company, Electric Entergy Arkansas, Inc., the Electric Kentucky Utilities Company, the Electric Kingsport Power Company, and Electric Plains And Eastern Clean Line LLC.^[35][36]

Electric reliability organizations

TheEnergy Policy Act of 2005 required theFederal Energy Regulatory Commission (FERC) to designate an electric reliability organization (ERO) for the United States. An ERO oversees the reliability of a nation's electric grid. In 2006, FERC granted authority to the North American Electric Reliability Corporation (NERC) to develop and enforce grid reliability standards for the United States. NERC, a self-regulated nonprofit corporation, is authorized to enforce grid reliability standards for all users, owners, and operators of the U.S. electrical system.^[37]

NERC works with eight regional reliability organizations to oversee the U.S. electrical system. These organizations, known as regional entities, are composed of officials from investor-owned utilities, federal power agencies, electric cooperatives, and state and municipal utilities. Regional entities enforce NERC and regional reliability standards. Further, they forecast electricity demand and coordinate operations with other regional entities.^[38]

Tennessee EROs

As of February 2017, the SERC Reliability Corporation was the nonprofit regulatory commission that oversees electricity reliability in 16 central and southeastern states, includingTennessee. SERC was authorized by the North American Electric Reliability Corporation in July 2006 to serve as an ERO under the Federal Power Act. SERC monitors compliance with electricity reliability standards and assesses seasonal and long-term electricity grid reliability.^[39]

Background

The sections below include an overview of the types of renewable and nonrenewable energy produced and consumed in the United States, an energy profile of Tennessee (from theU.S. Energy Information Administration), a general profile of Tennessee (from the 2016 edition of theAlmanac of American Politics), and various economic indicators in Tennessee.

Background on energy resources

Nonrenewable energy sources, such ascoal,oil, andnatural gas (sometimes known as fossil fuels), and renewable sources, such ashydropower,wind,biofuels, andsolar energy, are produced in each state, though at different levels depending on a state's geography, energy consumption, and the raw materials available in a particular state. For example, several states do not have coal, oil, and/or natural gas resources. States that lack these resources import these fuels.^[40]

According to theU.S. Department of Energy, oil, coal, and natural gas comprise the majority of the resources used to generate power in the United States. In 2014, the top five energy-producing states were the top five fossil fuel-producing states—Texas,Wyoming,Pennsylvania,Louisiana, andWest Virginia. These states' fossil fuel production accounted for approximately 42 percent of U.S. energy production in 2014. States with fewer coal, oil, and natural gas resources generally consume less energy. In 2014, the bottom five energy-producing states—Rhode Island,Delaware,Hawaii,Nevada, andNew Hampshire—produced 0.2 percent of U.S. energy and consumed approximately 2 percent of total U.S. energy.^[40]

The production ofbiofuels (liquid fuels created from plant or plant-derived materials) is generally concentrated in the Midwest—states such asIllinois,Iowa,Nebraska, andSouth Dakota) given the region's agricultural production of crops such as corn, which is used to makeethanol, a biofuel that can be blended with gasoline and used as a transportation fuel.^[40]

Other renewable sources are used to generate power in the states include hydroelectric power, which accounted for about half of all renewable energy production in the United States in 2014.^[40]

Tennessee energy profile

As of 2013, Tennessee's electric power sector was the largest energy consumer in the state followed by the transportation sector. Tennessee's economy includes manufacturers, including motor vehicle and automotive parts manufacturing, food and beverage manufacturers, chemical production, and tobacco products. About 20 percent of the state's total energy consumption occurred in the residential sector, which uses energy for heating and air conditioning.^[15]

From 1983 to 2013,crude oil production in Tennessee did not exceed 1 million barrels each year. As of 2013, Tennessee oil production accounted for 0.01 percent of total U.S. crude oil production. In 2013, the state had one petroleum refinery, which was located in Memphis. The refinery had a capacity of approximately 180,000 barrels of crude oil per day. A pipeline from the Gulf Coast that travels through Tennessee delivers crude oil to the Memphis refinery before traveling to other states. As of 2013, around 60 percent of the state's petroleum consumed in Tennessee was used as motor vehicle gasoline.^[15]

As of 2013, Tennessee accounted for 0.2 percent of total U.S. natural gas production. Interstate pipelines deliver natural gas to Tennessee and continue on to the Northeast and the Midwest. As of 2013, the industrial sector accounted for around 30 percent of total natural gas demand in Tennessee. Approximately 25 percent of natural gas used in Tennessee was used in the residential sector followed by 20 percent in the commercial sector. In 2015, around 33 percent of Tennessee households used natural gas as their primary fuel source for home heating.^[15]

Tennessee produced less than 1 million tons ofcoal per year in 2014 and 2015. According to theU.S. Energy Information Administration, "Tennessee uses 20 times as much as coal as it produces." As of 2015, the majority of coal used in Tennessee was consumed to generate electricity. Coal is delivered to the state by railroads and river barges from Wyoming, Illinois, Colorado, Kentucky, and Virginia.^[15]

As of 2014, Tennessee's 10 largest power plants were operated by the Tennessee Valley Authority. The state'scoal-fired power plants generated approximately 40 percent of all electricity in Tennessee as of 2014, followed by 33 percent fromnuclear power, and 13 percent fromhydroelectric power andnatural gas each.^[15]

State profile

Presidential voting pattern

See also:Presidential voting trends in Tennessee

Tennesseevoted Republican in all seven presidential elections between 2000 and 2024.

Pivot Counties (2016)

Ballotpedia identified 206 counties that voted forDonald Trump (R) in 2016 after voting forBarack Obama (D) in 2008 and 2012. Collectively, Trump won thesePivot Counties by more than 580,000 votes. Of these 206 counties, one is located in Tennessee, accounting for 0.5 percent of the total pivot counties.^[41]

Pivot Counties (2020)

In2020, Ballotpedia re-examined the 206 Pivot Counties to view their voting patterns following that year's presidential election. Ballotpedia defined those won by Trump won asRetained Pivot Counties and those won byJoe Biden (D) asBoomerang Pivot Counties. Nationwide, there were 181 Retained Pivot Counties and 25 Boomerang Pivot Counties. Tennessee had one Retained Pivot County, 0.55 percent of all Retained Pivot Counties.

More Tennessee coverage on Ballotpedia

• Elections in Tennessee
• United States congressional delegations from Tennessee
• Public policy in Tennessee
• Endorsers in Tennessee
• Tennessee fact checks
• More...

Economic indicators

See also:Economic indicators by state

Tennessee's GDP increased by 1.7 percent in 2014. Click the image to view a larger version.

Broadly defined, a healthy economy is typically one that has a "stable and strong rate of economic growth" (gross state product, in this case) and low unemployment, among many other factors. The economic health of a state can significantly affect its healthcare costs, insurance coverage, access to care, and citizens' physical and mental health. For instance, during economic downturns, employers may reduce insurance coverage for employees, while those who are laid off may lose coverage altogether. Individuals also tend to spend less on non-urgent care or postpone visits to the doctor when times are hard. These changes in turn may affect the decisions made by policymakers as they react to shifts in the industry. Additionally, a person's socioeconomic status has profound effects on their access to care and the quality of care received.^[42][43][44]

Compared to neighboring states, in 2013 Tennessee had the largest gross state product at $287.6 billion. Most Tennessee residents earned incomes between 200 and 399 percent of the federal poverty level, with a median annual household income of $42,785. The unemployment rate in Tennessee was above the national rate in September 2014, 7.3 percent.^{[45][46][47][48]}

Note: Gross state product (GSP) on its own is not necessarily an indicator of economic health; GSP may also be influenced by state population size. Many factors must be looked at together to assess state economic health.

See also

• Energy policy in the U.S.
• Fracking in Tennessee
• Net metering
• Renewable Portfolio Standard
• Environmental policy in Tennessee

Recent news

The link below is to the most recent stories in a Google news search for the termsTennessee energy policy. These results are automatically generated from Google. Ballotpedia does not curate or endorse these articles.

Footnotes

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