A strategic review of the Tennessee Valley Authority (TVA) announced as part of the US federal budget will consider the possible sale of all or part of the government-owned corporation. TVA executives appear to have been taken by surprise by the news.
|President Obama presents the 2014 budget (Image: White House/Pete Souza)
Although the review of TVA was not mentioned by President Barack Obama during his presentation of the budget for fiscal 2014, a chapter headed 'Creating a 21st Century Government' sets out plans for a strategic review including a partial or total sale of the self-financing government-owned corporation. In response, TVA released a statement saying that the budget contained "unexpected language" about the corporation.
In the budget documents, the Obama administration notes that the corporation's current capital investment plan includes over $25 billion of expenditure over the next decade to meet its future capacity needs, fulfil its environmental responsibilities and modernise its generating capacity. However, according to the budget documents, these capital needs are likely to exceed a statutory cap of $30 billion placed on TVA debts. "Given TVA's debt constraints and the impact to the federal deficit of its increasing capital expenditures, the administration intends to undertake a strategic review of options for addressing TVA's financial situation, including the possible divestiture of TVA, in part or as a whole," the document notes.
TVA president and CEO Bill Johnson promised that the corporation would cooperate with the Office of Management and Budget to provide the information needed for the strategic review. "While we do this, our employees will stay focused on doing their jobs, serving our customers and the people of the Tennessee Valley," he promised.
Although owned by the federal government, TVA does not receive taxpayer dollars and its debt is not taxpayer funded, the corporation pointed out, with chief financial officer John Thomas emphasising that TVA is "financially healthy."
Nonetheless, the government budget documents notes that "reducing or eliminating the federal government's role" in programs such as TVA, "which have achieved their objectives," could help to put the nation on a "sustainable fiscal path."
TVA was established in the 1930s to produce low-priced electricity and manage natural resources for a large portion of the southern USA including most of the state of Tennessee and parts of Alabama, Georgia, Kentucky, Mississippi, North Carolina and Virginia. Its generating portfolio includes three nuclear power plants - Browns Ferry, Sequoyah and Watts Bar - which produce some 30% of its electricity, as well as fossil and hydro capacity. The corporation also has a remit to provide flood control, navigation and land management for the Tennessee River system.
Nuclear features heavily in TVA's plans for the next two decades. The corporation is currently working to complete the construction of Watts Bar 2, and is also planning to complete the partially-built Bellefonte 1 reactor in Alabama.
Researched and written
by World Nuclear News