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Carbon Allocation 

MLGW does not generate power; instead, we buy power from the Tennessee Valley Authority (TVA) and distribute it to our local customers.  TVA has reduced CO2 emissions about 56% below 2005 levels and is projected to reduce CO2 emissions more than 60% below 2005 levels by the end of 2020.  (TVA expanded its CO2 emissions target to near 70% by 2030.)  This means that carbon footprints associated with MLGW customer electricity use have declined automatically. 

Carbon Emission Rates
TVA has provided the following information to assist MLGW business customers in understanding the carbon emissions associated with their power consumption.  This data reflects the average for the 154 local power companies that distribute TVA power across the region—including MLGW—and is based on consumption from commercial customers on the General Power Rate, which is shown as “E-2” on the MLGW bill.  CO2 emissions data for larger commercial and industrial customers on other electric rates is excluded from this average.  (Businesses not on the General Power Rate should contact MLGW for their carbon emissions data, which will vary from the data shown below.)

For customers consuming electricity under the General Power Rate, the CY2019 emission rate is 755.55 lbs CO2/MWh.  The CO2 rate disclosed reflects TVA’s CY2019 renewable energy credit adjustment, which resulted in a reduction of 4.08% in its as-delivered CO2 lbs/MWh rate.  Consistent with generally accepted carbon accounting standards and in response to customer requests, actual CO2 emissions have been annually allocated to customers in the same manner as costs.  

Your CO2 emission rate from TVA power is lower than the EPA’s current year (2018) eGRID national and regional averages, so be sure to use the TVA data in your carbon accounting and sustainability reporting.  
  • EPA eGRID national CO2 lbs/MWh rate of 947.18
  • EPA eGRID regional CO2 lbs/MWh rate of 1,031.54
These rates, as well as the rates for other regions of the United States, can be found at https://www.epa.gov/energy/egrid-summary-tables

This CY2019 CO2 lbs/MWh rate includes emissions from TVA-owned generation and purchased power.  This as-delivered aggregated generation was comprised of the resource mix shown here.  Renewables included 1.851% wind, 0.196% solar, 0.002% biomass and 0.168% biogas, while hydroelectric is categorized separately.  Null power included RECs-unencumbered renewable sources.

Statement of Self-Certification:
In partnership with TVA, MLGW provides as-delivered CO2 emission rates (not CO2e) to its customers in a manner consistent with generally accepted carbon accounting standards, such as The Climate Registry’s Electric Power Sector Protocol for the Voluntary Reporting Program, and the new World Resources Institute (WRI) and World Business Council for Sustainable Development’s (WBCSD) Greenhouse Gas Protocol’s Scope 2 Guidance.  These standards are now routinely used to disclose GHG emissions in corporate reports, SEC filings, and to public disclosure organizations such as CDP, The Climate Registry (TCR), EcoVadis, or the Dow Jones Sustainability Index (DJSI).

Carbon accounting users will still need to quantify their Scope 2 emissions associated with electricity use for CH4 and N2O using their choice of default factors for these gases.

Understanding Carbon Emissions
While all customers are sensitive to utility rates, some businesses/industries also compete on the carbon content of their specific products or calculate their overall carbon footprint.  It’s not unusual for corporate buyers to select products or for investors to screen a stock or bond based on carbon performance.  Companies also commonly include carbon performance in capital expansion decisions, which makes the CO2 emission rate of the energy resources used increasingly important.

More and more industrial customers are now asking their utilities to voluntarily disclose as-delivered (Scope 2) CO2 lbs/MWh rates to help support meeting plant carbon performance goals and/or make purchasing supplier decisions.

Generally, there are three categories of CO2 emissions that companies calculate, similar to debits and credits in financial accounting.  
  • Scope 1 covers direct emissions, what most people picture as coming out of a manufacturing plant’s smokestack or vehicle tailpipe into the air. Alternative transportation fuels (including electrification and compressed natural gas) are options for those looking to reduce Scope 1 emissions.
     
  • Scope 2 is one form of indirect emissions, dealing with energy purchased for on-site consumption.   Energy efficiency improvements, as well as renewable power purchases, can reduce indirect Scope 2 emissions.  When calculating emissions, don’t forget to recognize the impact of renewable energy purchases.  If TVA retires Renewable Energy Certificates (RECs) on behalf of the customer, the customer first subtracts the REC MWh from their total usage, then multiplies the remainder by the applicable CO2 lbs/MWh rate.  (1 REC = 1 MWh) 
     
  • Scope 3 is the second form of indirect emissions, representing the supply chain of a particular company.  It addresses the indirect upstream and downstream transportation and materials for all the pieces and parts that go into the product made, including the electricity that businesses use to manufacture products.  Energy efficiency, renewable power purchases and alternative transportation fuels are all options that suppliers can use to reduce indirect Scope 3 emissions.
MLGW recognizes that carbon footprint performance can be a critical factor in business decisions, so we are available to assist customers in reviewing CO2 reduction options.