TVA sale urged to fund green energy projects

TVA sale urged to fund green energy projects

November 19th, 2010 in Business Around the Region

As chairman of the Federal Communications Commission in the 1990s, Reed Hundt pioneered the auctions of the nation's airwaves that ultimately generated more than $40 billion for the federal Treasury and allowed the cell phone industry to flourish.

In his current role as head of the Coalition for Green Energy, Hundt is pushing a similar idea he claims could help to both create green jobs and a cleaner environment without costly government subsidies.

Hundt, who heads the Coalition for Green Energy, said Thursday the time has come for the federal government to sell the Tennessee Valley Authority and use the proceeds to create a private, nonprofit Energy Independence Trust to lend money for energy efficiency and renewable energy projects.

Turning green

The Coalition for Green Energy recommends:

* Putting the Tennessee Valley Authority up for auction to sell to private utility by 2014 to raise money for green energy projects

* Create a nonprofit Energy Independence Trust from TVA sale proceeds to make low-cost loans for energy efficiency and renewable energy projects

* Establish for 10 years tax policies to reduce taxes on clean energy investments and reduce regulatory hurdles to such projects


PDF: Cutting the cost of clean energy

"Selling TVA is certainly not a new idea, but we haven't previously had such a need to jump-start investments in the energy sector like we do today," Hundt said. "If we can successfully sell the government's interest in General Motors today, then maybe it's time we work to auction off the government's major involvement in the energy sector and the crown jewel of that is TVA."

The sale of TVA could prove more attractive in the new Congress than it has in the past. Illinois Republican Sen.-elect Mark Kirk already has proposed selling TVA.

But TVA officials and backers insist there is no need to sell TVA, which was created in 1933 to harness the power of the Tennessee River and has grown into the nation's biggest government utility.

TVA President Tom Kilgore said the utility has helped deliver reliable power priced nearly 20 percent below the average national rate for residential electricity.

"It is a model that has worked well," U.S. Sen. Lamar Alexander said in October when TVA welcomed its newest board members.

In a 21-page plan unveiled this week for "cutting the cost of clean energy," the Coalition for Green Energy and the liberal Center for American Progress suggest that incentives and tax breaks could be used to help control carbon emissions linked with global warming rather than the ill-fated "cap and trade" legislation that stalled in the Senate.

The auction of TVA, which Hundt estimates could fetch $10 billion or more, is a way to promote green energy initiatives in the private sector rather than relying upon government mandates or programs.

"If we can get this money for the sale of TVA, we could agree to plow that money back into sustainable energy projects in the same region so that it will turn into jobs in the Tennessee Valley," he said. "It's a way to solve this terrible unemployment problem."

The plan calls for state regulators to help define the terms of any TVA auction to help protect ratepayers and employees during any sale to rival utilities, such as the neighboring Southern Co., or Duke Energy.

Hundt estimates that by leveraging the proceeds from a TVA sale, the Energy Independence Trust could help support up to $100 billion of green energy initiatives.

"If that is targeted in the TVA region, everybody in the whole region would be better off with lower unemployment, higher economic growth and a cleaner environment," he said.