TVA belt tightening not on table?
May 25, 2009
Mike Duncan, former Republican National Committee head, takes over as chairman of the TVA board dropping his first gavel on June 4 in faraway Young Harris, Georgia.
It should be a very quiet meeting since it is distanced from TVA’s headquarters in Knoxville, Tennessee, away from all of the demands now pressing TVA’s very existence.
The basic matters though, should encompass several areas including board membership, agency staffing and financial concerns.
First, Duncan should tender his resignation from the board to serve only at the pleasure of the Obama administration; all of the remaining board members should also submit their resignations in like manner. Second, former board chairman Bill Sansom whose term expired May 18, should excuse himself from the board. Hangers on look self-serving; nobody is so important that business could not be handled by the remaining five members, a quorum.
I have seen no indication of staffing reductions at the TVA. There is no dreaded reduction in force, a federal agency term (RIF). TVA income from electricity sales has dropped precipitously with no concomitant reductions in employee costs. TVA expenses are rising at even higher rates with no end in sight.
Every company, every family in the United States is going through serious belt-tightening. None of that is much evident at the TVA.
Starting with board members, they voluntarily should suspend receiving their part-time salaries to help show their concern for the ratepayers and, of course, to reduce TVA costs. Their expense accounts should be frozen at a rate at least 50% below typical use. Having board meetings away from the home office for example is a huge and unnecessary extra expense.
Tom Kilgore, President and CEO of the TVA, should voluntarily cut his salary by 25% and to forgo any bonuses during the crisis. Similar cuts in top executive pay and bonus elimination should follow also.
The bonus system should be suspended indefinitely to take the pressure off of production which has been at the expense of the health and safety not only of employees but that of the public. The Kingston disaster is a good example of the consequences of a failure to act promptly to repair a leaking dike that resulted in dire circumstances for an entire community. Their health and safety have been greatly affected.
Mired in a $25 billion debt, TVA should stop borrowing money, especially from investor-owned banks such as the Bank of America, a recipient of “bailout” funds from the U.S. Treasury. If funds are necessary for the continued operation of the TVA, emergency federal appropriations should be requested to maintain the integrity of energy supplies.
All of TVA’s ongoing loan and grant programs should be halted as well as TVA’s payments in lieu of taxes. The latter amounted to over $450 million last year. “IOU’s” may temporarily be substituted but eventually ceased entirely.
Meanwhile, a thorough review of TVA’s management practices and policies immediately should be undertaken by appropriate congressional committees and the administration to determine whether the present TVA model is still applicable to modern-day electricity production.
For some of my views on the TVA, see http://norsworthyopinion.com
Ernest Norsworthy
emnorsworthy@earthlink.net