TVA’s 2010 budget – where’s the (cut) beef?
November 6, 2009
Sometimes when you look at figures and they do not seem right or logical, it’s time to be asking some questions. And I have lots of questions for the TVA.
The 2009 year-end Statement of Operations (est.) shows the projected revenue figures for 2010 to be deeply cut from $13.5 billion in 2009 to $11 billion - and this after a 20% base rate increase.
The differences are stark and should be troubling to every buyer of TVA electricity in TVA’s seven-state territory. In government, when “sales” (revenues) go down, costs go up. In private industry, when sales are down, cuts are made to maintain profitability. And if not done so quickly enough, the company soon will be sold or inevitably go into bankruptcy.
Neither fleet afoot nor as adroit as an investor-owned utility, TVA, while trying to act like a stockholder owned electricity provider, today estimates an increase in operating expenses by almost half a billion dollars for 2010. And TVA is prone to shade figures in their favor.
“The 2010 operating budget includes $302 million in increased funding for the new “Valley Investment Initiative” among other increased budget items.
What is TVA’s Valley Investment Initiative? Plain and simple, it is a payoff to keep industries in place and to use TVA electricity. Bribes, if you will, by meeting criteria prescribed by TVA including an agreement to keep using TVA power, a “long-term commitment”.
This is troubling in several respects. The first is the use of federal funds in the restraint of trade, illegally interfering with free marketplace participation. TVA already holds a monopoly as electricity supplier in an 80,000 square-mile swath of the Southeast. Hapless TVA ratepayers, I call them TVA taxpayers, have no say in any of TVA’s budget increases, taxpayers have zero input. Still, they must pay for all of TVA’s schemes.
TVA does have in its 2010 budget $502 billion for “Tax Equivalent Payments”, a completely misleading heading for those payments that go into slush funds, as Alabama Gov. Bob Riley calls them, for politicians’ use. What better use for that money than to rebate it to customers who are more frugal in their electricity use?
And much better than the so-called time of day billing soon to come from TVA to force users to conform to TVA’s supply, not from a customer’s demand for it. How much one uses electricity still is a customers choice, how much they are willing to pay for it.
The time of day billing says, in effect, that if everyone fires up their TVs at about the same time in the evening, they must be prepared to pay a premium for their electricity. That is not market driven electricity use; it does try to force a change in human behavior.
It is impossible to discern what the TVA budget actually is when only selected bits of information are supplied. I have requested line-item budget information from the TVA in order to make reasonable comparisons say, between the actual 2009 budget and the now approved 2010 budget. Ah, but they cut $1.9 billion in the budget for the period 2010 through 2012 (that’s three years). Yes, where? TVA does not say. I know there is an old game bureaucrats in Washington used to play (not so much anymore; there are no “cuts”) where “cuts” are merely reductions in increases. Is TVA too far away from Washington to play that game?
And yet TVA continues its merry way of borrowing and spending money it does not have. Extending the Kingston disaster expenses 15 years down the road does not eliminate the debt owed by TVA “taxpayers”. What it does mean is that TVA taxpayers will pay considerably more for rollover after rollover for the refinancing of debt.
But there are billions more dollars TVA is committed to pay (oops! TVA pays nothing; TVA taxpayers foot the entire bill) all under the guise of staying within TVA’s legally mandated cap of $30 billion borrowing authority.
It is not so. How they legally can do it, I don’t know, but TVA goes “off budget” to extend its monetary ventures. Maybe that is what CEO Tom Kilgore means when he says “debt-like” obligations.
The result is that TVA through sleight-of-hand, smoke and mirrors, now you see it or now you don’t trickery, TVA taxpayers must pay for all of TVA’s chicanery and wastefulness.
Question: Will all of the TVA taxpayers who accept the forced payment for TVA ineptitude and to pay for enormous salaries and bonuses please hold up your hand? (While TVA’s hand is in your pocket.)
TVA taxpayers pay without representation from elected local, state or federal representatives. They have no say whatsoever in the rules handed down by the TVA, a federal government agency. (Where’s that ad on solar powered generators?)
Ernest Norsworthy
emnorsworthy@earthlink.net
http://norsworthyopinion.com