TVA – fixing the unfixable?

March 17, 2013

 After 80 years of experiments, Congress has has yet to see that when the federal government tries to duplicate what private industry does, it is bound to fail. Of course, the Tennessee Valley Authority was the Great Experiment in the 1930s. It boggles the mind to see how many iterations TVA has gone thru and still it has been unable to replicate industry results. There is good reason for this…

 TVA says it is “competitive” in the utility business but it is a federal agency, and by its very nature, it is not supposed to compete within our free enterprise system. FDR said something about being fearful and the Congress was also afraid and the New Deal was born; many of those programs later were ruled unconstitutional and Congress for the most part, let them remain so.

 Not so, for TVA, which today provides electricity to about 9 million customers in the southeast blanketing parts of seven states in violation, I believe, of their state sovereignty. The weaknesses of those states are now much improved since the ‘30s and they should recoil from further federal domination. Withdrawal from the requirements of the TVA Act could be done by small changes in state laws, which in effect would make competitive electricity once more available to their citizens. The collection of taxes would again be controlled by the individual states reflecting state requirements, not an artifically derived so-called payment in lieu of taxes.  

 The monoply of the TVA has to be broken to enable free enterprise to again florish in the South and to rekindle the then budding electric utility business of the 1930s. The dominance of federal presence for such a long period has altered the culture of the region from one of independence, which was growing, to a stunted dependence on the federal government.

 Because of the inveiglement of TVA in almost every facet of of southern civil society, looking at the consequences of TVA are hard to swallow. Besides racking up an enormous debt of $30 billion, which presently is hung around the necks of TVA ratepayers, not taxpayers, it is hard for them to see the looming rate increases that must follow. And a look at the dichotomy between the government and private business is just plainly ignored. The revenue to TVA annually is about $10 billion and that money is coveted by the federal government. If that same amount were instead distributed thru the normal business process, each of the states involved would profit for their own citizens instead of pouring it into the amorphous black hole of the TVA.   

 TVA proudly proclaims that it receives no congressional appropriations, that is, it gets no taxpayer money and relies only on income from money received from ratepayers. That is not true if TVA’s backdoor financing is considered the responsibility of American taxpayers. TVA, like the rest of the federal government, seems unable to restrain itself from spending money, as they say, they are unable to repay.

 TVA cannot and should not be “fixed.” It is not a hard choice to make between the federal government and private business; the Constitution is abundantly clear on the issue of electricity control.

 Ernest Norsworthy

Limited Government




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