Process Maps and Procedures for
Regulatory Policymaking
Effective November 1, 2023
Note: This is intended as a process guide. Nothing herein creates any rights or obligations, and the process described is subject to change by TVA.
TABLE OF CONTENTS
1.0 Purpose
2.0 Background
3.0 Process Overview
4.0 Scope and Timing
5.0 Roles and Functions
6.0 Process Maps and Procedures
6.1 Eligibility Review Process
6.2 Standard Process
6.3 Expedited Process
6.4 Alternate Compliance Process
7.0 Definitions
REGULATORY POLICYMAKING PROCESS MAPS AND PROCEDURES
1.0 PURPOSE
This document provides local power companies (LPCs) that distribute TVA power with an overview of TVA’s four regulatory policy development processes. The four processes described herein each have a unique process map and process steps.
2.0 BACKGROUND
With the TVA Act, Congress granted the TVA Board broad authority to define its regulatory role and policies, which in its judgment, are necessary to carry out the purposes of the TVA Act. The TVA Board entrusts Regulatory Assurance (RA) with the responsibility of developing, interpreting, and enforcing regulatory policies. For purposes of application of the processes described herein, TVA defines a policy as a plan or course of action, of a government or business, intended to influence and determine decisions, actions, and other matters (The American Heritage® Dictionary of the English Language, Fourth Edition). RA develops policies for the 153 LPCs within the TVA region consistent with the terms and conditions of the TVA Wholesale Power Contract (Power Contract) as well as the TVA Board’s regulatory determinations, consistent with the TVA Act. To facilitate transparent and consistent development of policy, RA staff and a small working team of LPCs discussed and created four policymaking processes. They are the: Eligibility Review Process, Standard Process, Expedited Process, and Alternate Compliance Process. These policymaking processes define the roles and responsibilities of process participants, set parameters for policymaking, delineate distinct steps for initiating and executing policy development, and offer stakeholder engagement opportunities.
3.0 PROCESS OVERVIEW
Policy development begins when a new policy, policy revision, or policy clarification is requested by an LPC, Tennessee Valley Public Power Association (TVPPA), TVA Board, or TVA staff. There are two major stages of policy development. The first stage of policy development is the Eligibility Review Process. All policy requests must enter the Eligibility Review Process for consideration. In the Eligibility Review Process TVA determines whether a policy request meets certain requirements and is eligible to proceed to the second stage of policy development. If a policy request is not a candidate for policy development it will not proceed, and an explanation will be provided.
In the second stage of policy development one of three policymaking processes is used: the Standard Process, Expedited Process, or Alternate Compliance Process. The Eligibility Review Process provides criteria that assists TVA in determining which of the three processes should be used for policy development in the second stage.
Figure 1. Overview of Policy Development
4.0 SCOPE AND TIMING
Unless otherwise determined by TVA to be appropriate, policy development requests should relate to non-discrimination and/or low rates and meet the requirements defined in the Eligibility Review Process. TVA’s policy development process cannot be used to interpret an existing policy, review a rate request, or create an emergency policy.
Once TVA receives a policy request, TVA will endeavor to complete its Eligibility Review Process within 90 days. Thereafter the timeline for policy development is dependent upon the process targeted for the second stage of policy development. TVA will endeavor to complete the Standard Process within 6 to 18 months, the Expedited Process within 6 months, and the Alternate Compliance Process within 12 months.
5.0 ROLES AND FUNCTIONS
Regulatory Assurance and Authorized Contributors are the main participants in the policy development process. Their roles and functions are outlined in the below table.
| Role | Functions |
| Authorized Contributors Defined as LPCs, TVPPA, and others authorized by TVA on a case-by-case basis (e.g., Valley state-wide LPC Associations, impacted industries, etc.) to participate in the policymaking processes. However, LPCs are the only Authorized Contributors that may make an alternate compliance request and participate in the Alternate Compliance Process. |
|
| Regulatory Assurance (RA) Evaluates policy requests and addresses policy-related needs accordingly. RA also collaborates with Authorized Contributors to support effective listening, strategic execution, and policy development. Additionally, RA evaluates and responds to alternate compliance requests. |
|
6.1 Eligibility Review Process and Procedure
Overview
RA created the Eligibility Review process as the starting point for all stakeholder policy development discussions. Policies that meet the eligibility review criteria defined in the Eligibility Review Process move to the Standard, Expedited, or Alternative Compliance processes. The Eligibility Review Process ensures incoming stakeholder policy requests are directed to the correct policymaking process (i.e., Standard, Expedited, or Alternate Compliance) and identifies requests that are not candidates for the processes.
Process Steps
Process Steps
1. Eligible Requestors with an interest in TVA policy can request a meeting with RA to collaborate on policy-related concepts, opportunities, or challenges. Such meeting with TVA will serve as a forum to discuss topics from a conceptual perspective before a formal policymaking request is submitted and the Eligibility Review occurs. RA will schedule any such meeting and invite Eligible Requestors to the meeting. In addition, TVA will be responsible for summarizing the meeting and posting the summary on its Technology Platform for review by Eligible Requestors, including those who could not attend the meeting. TVA will determine when it is time to proceed from a conceptual discussion to a policymaking request. Note that this conceptual discussion is optional, and eligible requestors may submit policymaking requests to TVA without completing this step. Proceed to step 2.
2. Eligible Requestors must submit their policymaking requests to TVA RA via the Technology Platform. Authorized Contributors other than LPCs, TVPPA, and TVA staff cannot make policymaking requests. Instead, such external parties must discuss their policy ideas with TVA, TVPPA, or an LPC, who will determine whether further action is warranted. Proceed to step 3.
3. RA will review all policymaking requests submitted by LPCs, TVPPA, and other Eligible Requestors. RA will determine if the policymaking request is asking TVA to authorize an alternate compliance approach to an existing policy.
a. If the request is for an alternate compliance approach, proceed to Alternate Compliance Process.
b. If the request is not for an alternate compliance approach, proceed to step 4.
4. RA conducts an initial assessment of the policy-related request. TVA will seek to determine whether the request was properly submitted by an Eligible Requestor and whether there is sufficient information to conduct an eligibility review of the request.
a. If the request is properly submitted by an Eligible Requestor and contains sufficient information, proceed to step 5.
b. If the request is not properly submitted by an Eligible Requestor or does not contain sufficient information, proceed to step 8.
5. RA determines if the request is within TVA’s area of regulation (e.g., low rates, non-discrimination, etc.). Policy Interpretations, Rate Requests, and Emergency Policy Requests are specifically excluded from the Standard, Expedited, and Alternate Compliance Processes.
a. If the request is within TVA’s area of regulation, proceed to step 6.
b. If the request is not within TVA’s area of regulation, proceed to step 8.
6. RA applies the eligibility criteria to the policy-related request. RA asks and determines the answers to the following questions:
- Will the request achieve an LPC or TVA strategic objective?
- Is the area ripe for policy development?
- Is it pressing or critical to TVA or LPC interests?
- Is there interest in the requested topic?
- Is there material, legal, or reputational risk?
- Do local, state, or federal agencies have a critical role in the proposed matter?
- Will the proposed policy be subject to a National Environmental Policy Act (NEPA) review?
a. If the request passes the eligibility review, proceed to step 9.
b. If the request does not pass the eligibility review, proceed to step 7.
7. Regulatory Assurance gains concurrence from internal stakeholders. Proceed to step 8.
8. Regulatory Assurance informs requesting Authorized Contributor(s) of denial and the Eligibility Process ends. If a request is a denial due to lack of sufficient information, then RA will notify the requesting Authorized Contributor(s) so they can resubmit the request, if they choose.
9. Regulatory Assurance determines if the policy request is urgent by evaluating responses to the following questions:
- Is the policy needed in the next 2-6 months to prevent or mitigate substantial legal or financial impact to TVA, LPCs, and/or ratepayers?
- Is the policy needed in the next 2-6 months to prevent or mitigate harm to TVA, LPCs, and/or ratepayers from an emerging public health or welfare matter?
a. If the policy request is urgent, proceed to the Expedited Process.
b. If the policy request is not urgent, proceed to the Standard Process.
End of Eligibility Review Process.
Figure 2. Eligibility Review Process
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Figure 2. Eligibility Review Process
6.2 Standard Process and Procedure
Overview
RA developed the Standard Process for policymaking. The Standard Process will serve as the primary guide for TVA's regulatory policy development.
RA developed the Standard Process for policymaking. The Standard Process will serve as the primary guide for TVA's regulatory policy development.
Process Steps
1. Regulatory Assurance receives the request intake from the Eligibility Review Process.
Designated Third-Party Participants: In some cases, Designated Third-Parties (e.g., Valley state- wide associations, business/trade associations, industry participants, or others who may have an interest in commenting on the proposed policy, etc.) may be identified by TVA, LPCs, or TVPPA as potential process participants. In such a case, TVA will evaluate the request and authorize or deny them for participation in the process. TVA will notify LPCs and TVPPA by posting a notice on the Technology Platform once a third-party is authorized to be a Designated Third-Party who will participate in the process. Authorization to participate permits the Designated Third-Party to create and view comments, view drafts of policies, and participate in other policy discussions (i.e., Engagement Discussions).
Proceed to step 2.
2. After policies have been reviewed for eligibility, Regulatory Assurance (RA) publishes the Notice of Policymaking Intent (Notice of Intent) on TVA’s Technology Platform, where the notice is viewable for 30 days by Authorized Contributors. Proceed to step 3.
3. Authorized Contributors review and provide written comments on the Notice of Intent via the Technology Platform. Authorized Contributors may directly provide feedback or work with TVPPA or a Designated Third-Party participant to provide comments. All formal comments must be submitted through the Technology Platform in written form, unless otherwise stated by TVA. Any comment provided (e.g., in-person, email, etc.) to a TVA staff member (e.g., Customer Relations Managers (CRMs), Regulatory Analysts (Analysts), etc.), rather than through the Technology Platform, is considered informal feedback and will not be documented or warrant a formal response. The comment period allows Authorized Contributors to help shape the discussion by submitting written data, considerations, or proposed ideas. The comment period will not exceed 30 days, unless otherwise stated by TVA. Once TVA reviews a comment, the comment will be posted on the Technology Platform to allow other Authorized Contributors to review it. Proceed to step 4.
4. Regulatory Assurance hosts an Engagement Discussion with Authorized Contributors on the proposed policy. TVA will notify Authorized Contributors of the time and place for the Engagement Discussion in advance. TVA will also post the meeting summary on the Technology Platform for all Authorized Contributors to review. If TVA determines additional engagement discussions are required, the same process of notification and posting a meeting summary will apply. Proceed to step 5.
5. Regulatory Assurance reviews the comments submitted in response to the Notice of Intent and other available information and develops the initial policy draft. Proceed to step 6.
6. Internal Stakeholders receive an update on the draft policy from Regulatory Assurance, and they consider the policy’s potential impact on existing or planned projects, anticipated impacts on enterprise initiatives, and any associated risks. Internal Stakeholders may also request additional information or provide strategic direction. Proceed to step 7.
7. The appropriate TVA Board Committee is briefed on the draft policy as part of regular committee business. This is a standard update on activity related to draft policies. Proceed to step 8.
8. Regulatory Assurance publishes the draft policy on the Technology Platform for comment for 30 days. Proceed to step 9.
9. Authorized Contributors review and provide written comments on the draft policy via the Technology Platform. Authorized Contributors may directly provide feedback or work with TVPPA or a Designated Third-Party participant to provide comments. All formal comments must be submitted through the Technology Platform in written form, unless otherwise stated by TVA. Any comment provided (e.g., in-person, email, etc.) to a TVA staff member (e.g., CRMs, Analysts, etc.), rather than through the Technology Platform, is considered informal feedback and will not be documented or warrant a formal response. The comment period allows Authorized Contributors to respond to the draft policy by identifying policy gaps, additional considerations, or other insights. The comment period will not exceed 30 days, unless otherwise stated by TVA. Once TVA reviews a comment that has been submitted, the comment will be posted on the Technology Platform to allow other Authorized Contributors to review it. Proceed to step 10.
10. RA hosts an Engagement Discussion with Authorized Contributors to discuss the previously submitted Authorized Contributors comments. TVA will notify all Authorized Contributors of the time and place for the Engagement Discussion in advance and, after the meeting, publish a meeting summary for all Authorized Contributors to view. Proceed to step 11.
11. RA conducts a final review of the Authorized Contributors comments and updates the proposed policy as needed. After reviewing comments, Regulatory Assurance drafts the final policy. Proceed to step 12.
12. RA coordinates review by Internal Stakeholders. Proceed to step 13.
13. RA provides Authorized Contributors the final version of the proposed policy during a final Engagement Discussion. Afterwards, TVA will post a summary of that discussion on the Technology Platform for all Authorized Contributors to review. Also, RA will post its disposition of previous written comments on the Technology Platform. Those comments will be aggregated by topic and formally addressed in the disposition of comments. Proceed to step 14.
14. All policy topics are subject to TVA’s determination of governance requirements, and those governance requirements determine whether Board Approval is required. Where policy development does not require Board Approval, Board Apprisal occurs. Proceed to Step 15 to finalize policy or 16 to communicate process closure without finalizing policy.
15. RA publishes the final policy on TVA’s public website. *Process Complete
16. Regulatory Assurance communicates that no new policy will be implemented and closes the process. It is important to note that step 16 can occur not only after Step 14, but also after any other step in the process at TVA’s discretion based on feedback received from Internal Stakeholders, Authorized Contributors, or the TVA Board. *Process Complete.
*Process Complete. When the process is finished, the policymaking file will be marked complete and removed from the Technology Platform within 30 days after the policymaking process ends.
Figure 3. Standard Process
Figure 3. Standard Process
6.3 Expedited Process and Procedure
Overview
The Expedited Process and procedure guides TVA's regulatory policy development when a policy is needed in six months or less based upon a true and supported finding of necessity.
The Expedited Process and procedure guides TVA's regulatory policy development when a policy is needed in six months or less based upon a true and supported finding of necessity.
Process Steps
1. RA receives the request intake from the Eligibility Review Process.
Designated Third-Party Participants: In some cases, Designated Third Parties (e.g., Valley state- wide associations, business/trade associations, industry participants, or others who may have an interest in commenting on the proposed policy, etc.) may be identified by TVA, LPCs, or TVPPA as potential process participants. In such a case, TVA will evaluate the request and authorize or deny them for participation in the process. TVA will notify LPCs and TVPPA by posting a notice on the Technology Platform once a third-party is Authorized to be a Designated Third-Party who will participate in the process. Authorization to participate permits the Designated Third-Party to create and view comments, view drafts of policies, and participate in other policy discussions (i.e., Engagement Discussions).
Proceed to step 2.
2. RA gains concurrence from internal stakeholders on its justification for using the Expedited Process for policymaking. The Expedited Process does not proceed without their agreement that there is a true and supported finding of necessity to use the shorter process. Joint concurrence creates a layer of oversight that ensures appropriate use of the process. Proceed to step 3.
3. After policies have been reviewed for eligibility and internal concurrence is obtained, RA publishes the Notice of Policymaking Intent (Notice of Intent) on TVA’s Technology Platform, where the notice is viewable by the Authorized Contributors. Proceed to step 4.
4. RA develops the initial policy draft. Proceed to step 5.
5. Internal Stakeholders receive an update on the draft policy from Regulatory Assurance, and they consider the policy’s potential impact on existing or planned projects, anticipated impacts on enterprise initiatives, and any associated risks. Internal Stakeholders may also request additional information or provide strategic direction. Proceed to step 6.
6. The appropriate TVA Board Committee is briefed on the draft policy as part of its regular committee business. This step is a standard update on activity related to all draft policies. Proceed to step 7.
7. RA publishes draft policy on the Technology Platform for comment for 30 days. Proceed to step 8.
8. Authorized Contributors review and provide written comments on the draft policy via the Technology Platform. Authorized Contributors may directly provide feedback or work with TVPPA or a Designated Third-Party participant to provide comments. All formal comments must be submitted through the Technology Platform in written form, unless otherwise stated by TVA. Any comment provided (e.g., in-person, email, etc.) to a TVA staff member (e.g., CRMs, Analysts, etc.), rather than through the Technology Platform, is considered informal feedback and will not be documented or warrant a formal response. The comment period allows Authorized Contributors to respond to the draft policy by identifying policy gaps, additional considerations, or other insights. The comment period will not exceed 30 days, unless otherwise stated by TVA. Once TVA reviews a comment that has been submitted, the comment will be posted on the Technology Platform to allow other Authorized Contributors to review it. Proceed to step 9.
9. RA drafts the final policy after reviewing all comments. Proceed to step 10.
10. RA coordinates review by Internal Stakeholders. Proceed to step 11.
11. RA provides Authorized Contributors the final version of the proposed policy the TVA Board will review. RA will answer any questions related to the policy. Afterwards, TVA will post a meeting summary on the Technology Platform for all Authorized Contributors to review. Also, RA will post its disposition of previous written comments on the Technology Platform. Those comments will be aggregated by topic and formally addressed in the disposition of comments. Proceed to step 12.
12. All policy topics are subject to TVA’s determination of governance requirements, and those governance requirements determine whether Board Approval is required. Where policy development does not require Board Approval, Board Apprisal occurs. Proceed to Step 13 to finalize policy or 14 to communicate process closure without finalizing policy.
13. RA publishes the final policy on TVA’s public website. *Process Complete.
14. RA communicates that no new policy will be implemented and closes the process. It is important to note that step 14 can occur not only after Step 12, but also after any other step in the process at TVA’s discretion based on feedback received from Internal Stakeholders, Authorized Contributors, or the TVA Board. *Process Complete
*Process Complete. When the process is finished, the policymaking file will be marked complete and removed from the Technology Platform within 30 days after the policymaking process ends.
Figure 4. Expedited Process
Figure 4. Expedited Process
6.4 Alternate Compliance Process and Procedure
Overview
The Alternate Compliance Process is the process reserved for LPCs seeking approval for an alternative method to comply with an existing or proposed policy’s goal and/or purpose.
During policymaking, research is carefully conducted and practical approaches for TVA and LPC compliance are analyzed. RA acknowledges that multiple processes or procedures may be considered and typically one is chosen as the prescribed solution. Additionally, RA is aware that occasionally an LPC may wish to explore whether an alternate approach (i.e., one other than the chosen solution) will benefit their electric system or its ratepayers based upon their unique circumstances. TVA developed the Alternate Compliance Process to allow LPCs to submit such requests and supporting documentation to TVA.
To protect any associated proprietary information, TVA only discusses an LPC’s request for review of an alternate approach and TVA’s resulting decision with the LPC that requested the review. Thus, transparency in the process is limited by design.
Process Steps
During policymaking, research is carefully conducted and practical approaches for TVA and LPC compliance are analyzed. RA acknowledges that multiple processes or procedures may be considered and typically one is chosen as the prescribed solution. Additionally, RA is aware that occasionally an LPC may wish to explore whether an alternate approach (i.e., one other than the chosen solution) will benefit their electric system or its ratepayers based upon their unique circumstances. TVA developed the Alternate Compliance Process to allow LPCs to submit such requests and supporting documentation to TVA.
To protect any associated proprietary information, TVA only discusses an LPC’s request for review of an alternate approach and TVA’s resulting decision with the LPC that requested the review. Thus, transparency in the process is limited by design.
Process Steps
1. RA receives the request intake from the Eligibility Review Process. Proceed to step 2.
2. RA reviews the application for the Alternate Compliance Process and confirms that the request is from an LPC and pertains to an existing or proposed policy. In their application, the requesting LPC should: (a) make a formal request for regulatory approval of an alternate compliance approach; (b) specify the regulatory policy at issue; (c) explain their alternate compliance approach; (d) explain why an alternate compliance approach is needed; (e) state how they plan to achieve the policy's intent with the alternate approach; and (f) attach documentation and data supporting their assertion that the alternate approach will achieve the policy’s intent.
The request must not seek to make a new policy, revise an existing policy, or clarify the policy. After reviewing the application, RA will draft a proposed recommendation.
Proceed to step 3.
The request must not seek to make a new policy, revise an existing policy, or clarify the policy. After reviewing the application, RA will draft a proposed recommendation.
Proceed to step 3.
3. RA meets virtually or in-person with applicant to discuss the request. At that time TVA may request additional information or ask questions to gain a better understanding of the request to finalize its proposed recommendation. Proceed to step 4.
4. Internal Stakeholders review the proposed alternate compliance request and RA’s recommendation. They consider whether and how authorization of the request will impact existing policy. Internal Stakeholders may also request additional information or provide strategic direction. Proceed to step 5.
5. RA determines if it is necessary to apprise TVA executive leaders of the alternate compliance request.
a. If the request needs to be sent to TVA executive leaders, proceed to step 6.
b. If the request does not need to be sent to TVA executive leaders, proceed to step 7.
6. TVA executive leaders review the proposed recommendation and rationale and provide any guidance related to the request. Regulatory Assurance will manage any feedback or required changes before approving or denying the alternate compliance request. Proceed to step 7.
7. RA finalizes its decision to authorize or deny the alternate compliance request.
a. If the request is authorized, proceed to step 8.
b. If the request is denied, proceed to step 9.
8. RA notifies the LPC that the alternate compliance request has been authorized. The correspondence is captured in TVA’s internal repository but is not published for viewing.
9. RA notifies the LPC the alternate compliance request has been denied. TVA may invite the LPC to revise and resubmit the package within a certain amount of time for reconsideration. For example, a requested revision to a package could be to provide additional documents (e.g., supporting documents showing methodology, achieved benefits, and/or allocated costs). Proceed to step 10.
10. RA decides to authorize or deny the alternate compliance request based on the supplemental information.
a. If the request is authorized, proceed to step 8.
b. If the request is denied, the LPC is notified of the denial. *Process Complete
Figure 5. Alternate Compliance Process
7.0 DEFINITIONS
Alternate Compliance Process – A process reserved for LPCs seeking approval for an alternative method to comply with an existing or proposed policy’s goal and/or purpose.
Authorized Contributors – For purposes of this process and procedure, Authorized Contributors are defined as Local Power Companies (LPCs), Tennessee Valley Public Power Authority (TVPPA), and any third-parties (e.g., Valley state-wide associations, business/trade associations, industry participants, or others who may have an interest in commenting on the proposed policy, etc.) authorized by TVA, on a case by case basis, to participate in the Standard or Expedited Process for a particular topic.
Board Approval – When a policy must be considered by the full TVA Board and approved by a majority vote.
Board Apprisal – When the TVA Board’s applicable committee is briefed on a proposed policy, but Board approval is not required.
Designated Third Party – Third party identified by TVA, LPCs, or TVPPA as potential process participant for a particular topic and authorized by TVA to participate in the Standard or Expedited Policymaking Process.
Eligibility Review Process – First step for all incoming policy requests. This process helps direct incoming requests into the correct process and identifies requests that are not candidates for a policymaking process.
Eligible Requestor - Local Power Companies (LPCs), TVPPA, TVA Board, and TVA staff.
Emergency Policy Requests – Temporary policies that must be implemented within 30 days of a request and remain in effect for no more than 90 days.
Engagement Discussion – An established meeting between TVA and Authorized Contributors in the policymaking process designed to provide a space/time for open dialogue regarding a proposed policy.
Expedited Process – The policy development process used when TVA is required to make a policy more quickly (2-6 months) than usual due to a true and supported finding of necessity.
Internal Stakeholders – TVA internal business units and members of TVA’s staff such as TVA’s Office of the General Counsel.
Notice of Intent – Informs Authorized Contributors of TVA’s intention to develop policy and what issue or concern the policy will address. The notice also states information related to next steps and when process participants can submit written comments.
Policy Interpretations – The explanation of how an existing policy applies to an LPC’s set of facts that assists the LPC with understanding how to correctly utilize the policy.
Notice of Intent – Informs Authorized Contributors of TVA’s intention to develop policy and what issue or concern the policy will address. The notice also states information related to next steps and when process participants can submit written comments.
Policy Interpretations – The explanation of how an existing policy applies to an LPC’s set of facts that assists the LPC with understanding how to correctly utilize the policy.
Rate Requests – An LPC’s request for TVA to authorize a local rate adjustment (LRA). The Standard, Expedited, and Alternate Compliance processes and procedures do not apply to individual LPC rate requests.
Standard Process – The main regulatory policymaking process for topics within TVA’s regulatory authority that do not have a 6-months or less time sensitivity.
Technology Platform – Website/webpages (e.g., Valley Connect or other technology) where TVA posts notices, draft policies, comments, and other communications for Authorized Contributors to review.