The head of TVA’s biggest distributor said today that Congress needs to raise the debt ceiling for the Tennessee Valley Authority to allow the federal power agency to undertake costly, long-term improvements.
Jerry Collins Jr., president and chief executive of Memphis Light, Gas & Water, said the $30 billion cap on how much TVA can borrow should be raised so new power plants can be built and long-term investments made without having to burden existing customers with most of those costs.
“The debt ceiling needs to be raised such that our customers that we have today don’t have to pay the total costs for infrastructure that is going to be around for the next 30 to 40 years or even longer,” Mr. Collins told the TVA board of directors during a meeting today in Jackson, Tenn. “I would encourage you to work to raise the debt ceiling.”
In the next five years, TVA is projecting to double what it spends on capital spending programs for new power generation, environmental controls and demand response. The agency is in the midst of a $2.5 billion program to finish a second reactor at the Watts Bar plant near Spring City, Tenn., and TVA President Tom Kilgore said the staff will make a recommendation to the TVA board in August about what type of reactor should be built at the Bellefonte Nuclear Plant in Northeast Alabama.
In its most recent quarterly report, TVA said its long-term statutory debt was $21.8 billion. The utilility has more than $4 billion of other short-term debt and debt-like obligations counted as long-term obligations. TVA set the current debt cap of $30 billion in 1979.
For complete details, see tomorrow's Chattanooga Times Free Press.
If the TVA board requests and the Congress agrees to increase the maximum TVA debt presently capped at $30 billion to $40, $50, $60 billion or more, they will be committing a fraudulent act. The directors should be removed from office for fraudulently using “backdoor” financing instead of openly requesting additional appropriations from Congress.
This is a long-time problem with TVA; they make very costly mistakes dating back to the 1980s, presently billion dollar legal battles and the most recent billion dollar (or more) Kingston disaster.
Past history of TVA mismanagements seem to guarantee similar costly mistakes in the future. What then? More billions of debt? The fact is, TVA presently is broke and has to rely on short term borrowings just to stay afloat.
Electricity sales are declining along with the national economy and TVA splurges on a new organization structure with highly paid federal employees some paid over a million dollars annually. This is simply outrageous.
There is a way out, however, and it may be nasty and slow. Stop throwing good money after bad and sell TVA’s power assets; require that TVA pay state and local taxes, not in so-called “in lieu of taxes” but equivalent taxes paid by adjacent investor owned utilities.
Secondly, remove TVA from its protected status and have it compete with other federal agencies for appropriations. Then at least there will be congressional oversight so lacking since 1979.
Declare the great FDR TVA experiment over; see what really was planned in 1944 in this chilling video http://officeofwarinformation.com/valley-of-the-tennessee/
Ernest Norsworthy
The TVA Board needs to take action to stop the complete irresponsibility of TVA Executive Officers. If the current Board can not mange the executives then the TVA Board needs to go.
Unfortunately, Congress refuses to offer meaningful oversight of the TVA. If Congress refuses to act responsibly then vote them out of office.
TVA long and short term debt is near $26 billion. The TVA has failed to act responsibly in managing their debt, environmental stewardship failures are also evident.
The TVA has failed to update their current generation fleet of dams and steam plants with modern technology. Instead they have chosen to pour money into radioactive atomic power plants which cost enormous amounts of money to maintain while neglecting all other operations, including energy efficiency and sustainable energy solutions.
Rid the TVA of the dead weight management failures or rid the taxpayers and ratepayers of the TVA.
Mr Jerry Collins, Jr. is nothing more than a supporter of inefficient socialist bureaucracy. Why is he not screaming for increased efficiency of the TVA's power generation capacity and demanding an end to deceitful upper level management? Instead, he supports the continued poor management of the TVA?
More socialist bureaucrats are not what our nation or the TVA needs in this time of massive debt.
It is time for the rate payers to shout loudly, NO MORE DEBT!
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