TVA - FES or "FES"? TVA – FES or FES?
January 18, 2009
Some things simply are black or white and not shades of gray. It is clear from our founding documents and the writings of our founding fathers that the newly created U.S. Government would be a free enterprise society and not a federal enterprise society.
And that is why from the very start of the Tennessee Valley Authority in 1933 that its grayness has managed only to be a confusing, contradictory and very costly “enterprise” in the federal system.
The federal government never was intended to compete with free enterprise yet that is exactly what the TVA does in our free-market economy. Over 8 million people in seven Southeastern states are required to depend on the federal government to supply them with federal electricity. No other choice. Aside from the many favorable benefits the TVA receives, including being tax exempt, TVA gets a pass on many requirements other utilities must face. TVA’s payments in lieu of taxes (“bribes” in lieu of taxes) do not nearly account for the differences in taxes paid by other utilities. These “free” monies merely provide largess to politicians for their own arcane uses. They do not directly inure to the benefit of those who pay federal electricity fees. Other questions; when does a “fee” become a “tax” of the federal government; when do the people vote on such a “fee” or a “tax”? (“No taxation without representation”.)
The TVA has evolved into something quite different since its beginnings; a provider of flood control and temporary employment for thousands in the construction of hydro power plants to help local economies, to a shift to coal-fired plants, and then to nuclear, the supposed panacea.
Hydro production of electricity from the start proved to be the cleanest and cheapest way to produce electricity. It is true today, some 75 years later. Use of coal, the next cheapest way until nuclear, has proved to be the Achilles Heel of the TVA. Not only do coal-fired plants produce tons of unhealthy pollutants, they now obviously do not know how to deal with coal wastes. Coal-fired plants provide about 60% of TVA’s power. Witness the two dam breaches in Tennessee and Alabama, one of huge proportions and the other to a lesser extent. And then the unexplained release of toxic waste from the Ocoee dam. All of this in less than a month.
Nuclear is the cheapest to operate but far from being the cheapest to construct and to maintain. As TVA’s infrastructure slowly crumbles it will be too late to bring many plants up to modern technological standards. TVA’s venture into the nuclear production of electricity has a long and expensive history dating from the 1970s and 1980s when too many very expensive nuclear plants were started then abandoned.
With hardly any oversight from congress or the states where TVA operates, TVA has been given “too much deference” as Tennessee’s governor recently proclaimed. TVA’s problems are endemic, festering in TVA’s stale core culture of a bonus-driven production model. Corners have been cut, safety procedures ignored, and millions of people placed in jeopardy because of TVA’s failure to recognize certain dangers inside its operations and from outside compromises such as possible cyber-attacks on TVA’s grid.
Then it comes to the “bottom line”. Is the federal government a capable operator of electric utilities? Past history and present disasters say a loud “no”. Instead of providing seed money for dams to control flooding, navigability, and the ancillary of providing electricity, the TVA not only did not step aside for our free-market economy to work its magic, it only exacerbated the problem by trying to run it.
Look at the results: Over $25 billion in debt, overleveraged, and now TVA has a loan of a billion dollars from, of all places, the Bank of America, recipient of $20 billion from that other government, the U.S. Treasury. It is obvious that the U.S. Government (the larger one) does not know what the other one is doing. As a separate federal agency, TVA covers 80,000 square-miles of territory in seven sovereign states with 17,000 miles of virtually exclusive use of electricity transmission lines.
The solution, and this could well be the most timely, would be to liquidate TVA’s assets to help pay off its indebtedness and to return the provision of electricity in that 80,000 square-mile territory to separate investor-owned utilities. Surplus federal properties would be transferred to appropriate federal, state and local agencies. Operation of the rivers’ locks and dams rightfully are in the province of the Corps of Engineers. At least the people in affected states would have access to state and local representatives for their own “watchdogs”.
In the interim, the monumental effort to clean up the Kingston disaster and to provide for the people who were harmed by it should be wrested from the TVA and turned over to an independent organization not to be swayed by TVA’s perceived own best interests. Besides, it is TVA’s present job to keep the electricity flowing and not to take away employees from that essential task.
The electricity coursing down the transmission lines in TVA’s territory should clearly operate in the black, with no shades of federal government gray.
Ernest Norsworthy
emnorsworthy@earthlink.net
http://norsworthyopinion.com