As TVA prepares to raise electric rates this fall for the third time in six months, Tennessee’s congressional members are blaming the Chinese, Democratic leaders in Congress and the Republican-controlled TVA board for the record string of increases.
U.S. Rep. Marsha Blackburn, R-Tenn., said the jump in TVA rates shows that Congress needs to end its summer recess and immediately deal with legislation to open up more American oil, gas and coal fields for exploration. Rep. Blackburn, who returned this week from a congressional trip to Arctic oil fields she wants explored in Alaska, said electricity and other energy costs are going up because the United States is not developing enough of its own energy supplies.
Rep. Blackburn is among GOP members in the House who are urging Democrats to return to Washington, D.C., to take up the Republicans’ proposal for more offshore drilling, clean coal development and nuclear power.
“The Democrat no-energy policy is hurting Tennesseans at the gas pump, and now it will hurt them every time they turn on the light switch,” Rep. Blackburn said.
U.S. Rep. Jim Cooper, D-Tenn., dismissed such partisan criticism, noting that the TVA board was appointed entirely by President Bush and most directors are active Republicans. The TVA Congressional Caucus, comprised of members from the seven states served by TVA and which helps oversee the agency, also is controlled by Republicans.
“This shouldn’t be about partisanship as much as it is about efficiency and fairness,” Rep. Cooper said. “I don’t have enough information yet to know if TVA is being fully efficient, but I do know that many of TVA’s distributors are not. I would hope that distributors will use some of their excess funds to help hold down these rate increases.”
Rep. Cooper said TVA’s board, which has quickly moved to boost rates nearly 35 percent through successive increases in April, July and in October this year, is not subject to any regulatory review.
“There has been very little congressional oversight of TVA and even less of its distributors,” he said.
But U.S. Sen. Lamar Alexander, R-Tenn., chairman of the TVA Congressional Caucus, insists there has been adequate Congressional oversight of the agency.
“I think TVA has a good board and is developing a good strategic plan,” he said. “The Congress gives regular oversight of TVA through the TVA caucus and through our committees, including the Environment and Public Works Committee of which I am a member.”
Sen. Alexander put much of the blame for TVA’s rate hikes this year on the explosive growth of China, which is building 40 new coal power plants this year.
“When China becomes a net importer instead of a net exporter of coal, that drives up the price of coal,” he said.
TVA derives more than 56 percent of its power from coal, and the spot price of coal has more than doubled in the past year. Most of the $2.5 billion increase planned in TVA rates in fiscal 2009 is because of higher prices for the coal used to stoke the utility’s 11 coal-fired power plants.
Sen. Alexander said TVA’s higher electric rates reinforce the need to promote more conservation to help limit what consumers pay for heating and cooling their homes and businesses.
“Obviously, we don’t like to see electric rates go up, but what it suggests to me is that in the Tennessee Valley we’re going to have to focus more on conservation and not waste so much power,” he said.
U.S. Rep. Zach Wamp, R-Tenn., whose congressional district has the most TVA employees, also defended the agency’s board and management. But the Chattanooga congressman said TVA needs to do a better job communicating and reviewing rates with its distributors and customers and may need more oversight from Congress.
“This is a painful time to be raising electric rates, when the economy is in a slowdown and gasoline and food costs are already going up,” Rep. Wamp said. “I don’t appreciate the lack of time and information given to distributors and others in advance of this increase.”
Rep. Wamp also said the soaring cost of coal and natural gas confirm the need for America to expand its own oil and gas exploration and for TVA to build more nuclear power, which uses less expensive fuel.
“TVA needs to be a leader in developing more nuclear plants,” he said.