TVA action plan – now!
August 9, 2009
It would not be feasible or workable for a private corporation to emulate government at any level; federal, state, county or city. And to think that the reverse of this could be plausible or remotely possible under the U.S. Constitution reveals a complete lack of understanding of how American enterprise works.
America’s entrepreneurial society supports and acknowledges the role of government, our legal system of laws at all levels for without this tacit understanding we would be living under a different form of government, not a Republic.
And yet we have allowed the federal government to subsume our individual rights guaranteed under the Constitution and Bill of Rights with a festering sore we know as the Tennessee Valley Authority. Clearly the TVA violates two basic principles: The right to one’s property that has been taken away with little constraint by the policy of eminent domain, and secondly, the intervention of the federal government into the free enterprise system of competition.
Various interpretations of the Fifth Amendment to the Constitution have waxed and waned over the years and the George W. Bush administration tried through Executive Order 13406 to clarify further that property acquired by the federal government (eminent domain implied) was to be used for public purposes. Examples were offered.
Nowhere does that Order imply that the federal government through any loan or grant program, such as the Community Development Block Grant program in HUD, authorize the purchase of private property which then is turned over to another private party through a Redevelopment Agency. Note: the Kelo Supreme Court decision flies in the face of property rights and allows such exchange.
The TVA in the past has operated in the same manner by buying, selling and swapping federal land for a profit to the TVA. This practice still is going on in the TVA. There is nothing legal about the practice. A private corporation does not have the power of eminent domain.
The TVA presently owns or controls about 293,000 acres of unused land and it shows great reluctance to return this property to productive public use. Recently TVA announced that some of the Muscle Shoals “principle offices” site of the TVA will be put up for sale. Will it be another profit maker for the TVA? TVA, as usual, is circumspect about it but I believe that is what is planned.
TVA desperately needs cash to keep up its unwieldy financing structure. Its credit card balance is over limit; it has resorted to borrowing from a bank the federal government just gave billions of dollars to, Bank of America. If this does not impress one that something fishy is going on with TVA’s financing I think it should. (Ironically, the White House has requested that if anything “fishy” is going on to report it assuming that “something fishy” applies to anything that doesn’t smell or look just right; TVA is the perfect candidate.)
Even though recent examples prove otherwise such as the federal ownership of a controlling interest in General Motors and the insurance company, AIG, these actions ultimately will be ruled unconstitutional as were so many of FDR’s adventures in the 1930s.
Presently the Obama administration is trying to ram through the takeover and nationalization of America’s healthcare system. According to the latest polls, Americans are not buying it or of the gross spending of the administration. All in the face of huge tax increases.
Similarly, the TVA has overextended its creditworthiness and must dramatically increase electricity rates. The management skills required to keep rates “as low as possible” do not mesh with TVA’s current crop of managers or the direction of its board. One of the problems is that the TVA scheme of organization does not fit today’s demands of a sleeker, more efficient organization that ever is on the lookout for better and cheaper ways of producing and delivering electricity.
While the OIG must be given some credit for finally bringing out into the open what many knew all along, that TVA’s culture of self preservation was its top priority and that the fossil fuel (coal) plants have serious problems of accountability operating in an unyielding “TVA culture”.
But the TVA OIG, perhaps because of its own desire for self preservation also, never broaches two key matters; one, the fact that the TVA OIG is paid from TVA funds; this automatically brings to question its credibility; and secondly, the apparent cover of TVA’s deep-seated bonus structure. It is the latter that has led to serious safety and health issues of not only TVA employees but of surrounding communities. It is part and parcel of the “TVA culture”.
While the OIG report focuses mainly on the Kingston disaster and related problems, the other half of TVA operations namely nuclear and hydroelectric have exactly the same kinds of problems requiring corrective action.
What often has been lost sight of is that TVA first and foremost is a federal government agency but with unique capabilities, one being its authority to set its own power rates which cannot be overturned by any government body, state, local or federal. This is a yawning chasm of difference between TVA and any other federal agency.
It stretches credulity when the OIG states that TVA’s finances are “adequate”, adequate by what measure? Surely not by investor-owned power company standards because TVA operates under a different set of rules. For example, TVA pays no state or local taxes, no “corporate” taxes and is exempt from other requirements of the law.
While TVA does pay to states and localities mostly in its 80,000 square mile territory 5% of gross revenues, that amount is nowhere near what the actual amount would be if TVA was privatized and paid taxes as a corporation. And those taxes would come under the control of state and local tax-collecting government agencies not from an unaccountable federal agency.
In the 76 year history of the TVA with all of its gross management mistakes over the years nothing approaches the current accumulation of bad decisions which presently impinge on how TVA sets its electricity rates. Those rates have nowhere to go but up and by a substantial amount if to remain under present TVA law.
That is why I am calling for a freeze on TVA electricity rates and for the present management and board of directors to cease and desist rule making and obligating the TVA to future construction of any TVA facility including power and non-power facilities until such time as authorized by an interim governing body to be appointed by the president of the United States.
Appointments to the “TVA Task Force” will be as follows to a seven-member board of governors:
- Three high-ranking investor-owned utility CEO’s or COO’s of known caliber whose expertise in the industry is exemplary and who are thoroughly familiar with state and federal regulations governing electrical power production and transmission.
- One each from the following industries – manufacturing, construction.
- One representative from the Government Accountability Office to assess current fiduciary liabilities of the TVA.
- Two each congressional representatives; one Democrat, one Republican of their party’s own choosing subject to approval by the president.
The Task Force will organize itself after appointing one chairman and one vice-chairman and assigning work areas including legal, management, operations and assets. Further focus areas may be required such as retirement, employee relocation, unions and long and short term obligations.
Objective: To provide interim leadership and temporary management of TVA’s assets, production and maintenance of facilities, scheduling and pricing of commodity needs, feasibility analyses of existing plants to determine which plants are infeasible of continued operation and which ones needing upgrades or expansion. Immediately prepare safety reviews of all plants; hydro, nuclear, gas, coal and other systems.
It will be the goal of the Task Force to prepare all of TVA’s assets for sale by auction, transfer to other agencies, or other appropriate action. Proceeds, to the extent available, will be used to liquidate TVA’s bonded indebtedness and monies owed to vendors. Appropriate administrative staff to be provided by TVA.
The Task Force will be dissolved within 90 days from its beginning with recommendations to the president of a time frame to complete the objectives of the Task Force.
Phase One: To assemble all operating and management data in one central location for analysis while preparing safety reports on each TVA plant. Location to be determined by the Task Force.
Phase Two: First interim report to the president, CBO, OMB and congressional leadership due by week two; subsequent reports weekly until completion.
Phase Three: Prepare appropriate legislation to dissolve the TVA as presently structured including changing back to requiring congressional appropriations until liquidation of TVA is complete.
Phase Four: Prepare final report to the president and congress with proposed legislation including all legislation impinging on the TVA or of the TVA’s impingement. The final report will include a timetable for implementation of the dissolution and resettlement of affected federal employees.
The “freeze” will remain in effect until changed by the president with agreement from the Congress.
This report is due at the end of the interim service of 90 days at the same time when the Task Force will be disbanded.
Ernest Norsworthy
emnorsworthy@earthlink.net
http://norsworthyopinion.com