TVA self-flagellation not enough
July 27, 2009
“…employees (are) taking initiative and making significant progress in remedying years of deferred maintenance.” (McKenna report July 21, 2009)
Don’t say I didn’t warn you; “I told you so” many times.
McKenna Long & Aldridge LLP was hired by the TVA Board of Directors after the Kingston disaster “to advise the Board on its legal duties and potential litigation exposure and to provide other advice related to Board oversight.”
“The following report is in response to the Board’s request and is independent from work that MLA (McKenna) has undertaken in providing legal advice.” And that statement itself tells that the report not only is not “independent” as implied, it does its best to defend TVA from more litigation. http://www.tva.gov/kingston/board_report/mla_kingston_report.pdf
The McKenna report does not reveal the extent of legal advice they already have given TVA but you can bet it has been extensive; TVA has paid a pretty penny for this report with many more “pennies” to follow for subsequent reports. TVA needs lots of legal help, funded, of course, by users of TVA electricity.
Later in this article I will point out omissions in the report that blatantly infer a cover up or at very least, TVA’s customary unwillingness to air their dirty laundry.
The report states that TVA management is reactive instead of being ahead of the curve anticipating problems before they occur. This clearly is a fault found in many government agencies as opposed to private enterprise which must be proactive to survive.
The penalty for failure in the TVA organization is nil. Maybe some reshuffling of organization boxes on a chart. But nobody gets fired. And the explanation is quite simple. Even with authority, no one is held accountable. When everyone is responsible, no one is responsible. TVA responds with promotions and by hiring more people.
The TVA CEO and present board would have been booted long ago if TVA had stockholders. Part of the weakness of the system is that change must come from a recalcitrant Congress and a “hands on” administration both sorely lacking for decades. TVA is left to its own devices of how to spend its $10 billion yearly income from fees. Actually, TVA charges a “fee” (a tax) for its provision of electricity through distributors rather than a “sale” directly to the some 8 million customers who in turn buy their kilowatts from distributors.
“(T)he fundamental question, which is: did system and culture failures allow such conditions to occur and remain undetected or unaddressed.” (McKenna report on Kingston) The answer is, of course, yes and has been known for many years.
The report continues, “To be sustainable, the current remediation activities in the Fossil Power Group will need to be part of a comprehensive TVA remediation program owned by senior management under Board oversight.” And no doubt developed by McKenna - for only a few million more.
Recently I have written about TVA’s poor management of cyber security and its severe chastisement by the Government Accountability Office (GAO) in a May 2008 report. Coincidentally, no doubt, TVA has now advertised for an expert in cyber security the same day my article was posted. Of the 19 security deficiencies GAO publically reported, TVA has not corrected a single one of them in over a year, they are all “in process”. The status of 73 additional cyber security recommendations by GAO which were not made public remains unknown.
The McKenna report condemns the TVA board and its management, particularly the CEO. It is the present board and CEO who put in place the present so-called modernization of TVA in the form of yet another “strategic plan” that obviously had no efficacy, no capabilities in either the board or top management.
With the understanding that one hand washes the other, it also should be noted that the McKenna report carefully avoids placing the blame for the Kingston dam burst directly on TVA, a position this same firm must defend TVA against in legal suits. Following the money, it stands to reason McKenna Long & Aldridge LLP is reticent to cast very long shadows on its current cash cow.
So as TVA income decreases, where will the funding for badly needed maintenance and repairs come from with an already stretched O&M budget? TVA already has shorted funds for nuclear reactor closeouts and is far behind in their payments to the TVA retirement account. Former TVA employees tell me of how TVA lets power production facilities run long past maintenance times until the equipment becomes almost useless. All in the name of production bonuses* and at the expense of safety of their employees and surrounding communities.
Underlying much of TVA’s structurally deficient organization is the unfounded belief that TVA management has no bounds, no constraints on how money is spent by the millions on many frivolous things such as golf outings, the blatant uncontrolled use of TVA credit cards and their failure to properly account for the hundreds of vulnerable TVA computers.
Is TVA “too big to fail?” No, it is the huge and unwieldy size of TVA ever at loggerheads with a free-market economy, ever taking away freedoms guaranteed under the Constitution – well, that is the problem. And the only way to solve it is for TVA to liquidate its assets to help pay off its $26 billion debt and completely to absolve ratepayers from that obligation. It is doubtful McKenna would counsel the obvious – for TVA to get out of the business.
This would return more than 80,000 square miles of sovereign state property in seven states back where it belongs; where privately owned profit making and tax-paying ventures would be under the purview of state public utilities’ commissions. It would be the end of yet another layer of TVA federal police which now extends from Mississippi to Virginia. Then the people again will have a say in electricity rate increases under their own political jurisdictions without fear or intimidation from the federal government.
TVA wants to be held blameless for their huge management mistakes and most of all to avoid paying the huge litigation costs surely to follow.
Maybe TVA was not unhappy when the EPA took over the mess caused by the Kingston disaster, maybe they were glad to try to reclassify their massive mistake limiting TVA’s liability. Something else that is not a “maybe” is TVA’s gross mismanagement along the way that could have prevented the ash dam break.
Yes, for years I have been warning of TVA’s incompetence, its inability to see itself properly, to understand what it isn’t much less what it is supposed to be. I have offered many suggestions for improvement but ultimately TVA’s dissolution is the best answer. McKenna surely must understand this by now; why would they “independently” cut down their money tree?
Ernest Norsworthy
emnorsworthy@earthlink.net
* Some, including myself, believe that the “root cause” of TVA’s dysfunctional organization stems from a desire to achieve bonus levels at all costs. And management is content to have the divisions “fight it out” among themselves. The word “bonus” nowhere is mentioned in the McKenna report.
EN