Obama budget staff studying sale of TVA but unions and Lamar Alexander denounce move

Obama budget staff studying sale of TVA but unions and Lamar Alexander denounce move

November 20th, 2013 by Dave Flessner in Business Around the Region

Sen. Lamar Alexander, R-Tenn.

Photo by Associated Press/Times Free Press.

POLL: Should TVA be privatized?

President Obama's fiscal 2014 budget plan may have died in Congress, but one of its provisions to consider selling the Tennessee Valley Authority is still under study.

The Office of Management and Budget, which proposed in April that the federally-owned TVA be sold to help pay down the U.S. debt, has organized an inter-agency working group with TVA "to conduct a strategic review of TVA," according to a memo obtained by the Federal Times.

"The administration is evaluating a broad range of options to address TVA's capital financing constraints," OMB says in the memo.

TVA President Bill Johnson said TVA staffers have met with OMB representatives to discuss the agency's debt and budget, but he said the next steps "are not in our hands." In Obama's budget proposal, OMB said "reducing or eliminating the federal government's role in programs such as TVA, which have achieved their original objectives and no longer require federal participation, can help put the nation on a sustainable fiscal path."

But the proposal to privatize TVA after 80 years of ownership by the federal government is being denounced in the Tennessee Valley by both liberals and conservatives.

Tennessee's senior GOP leader, U.S. Sen. Lamar Alexander, R-Tenn., pressed the Obama administration this spring about its plans for TVA, which Alexander insisted is critical for U.S. security.

"Is the Obama administration really going to sell TVA?" Alexander asked at the committee hearing on the Department pf Energy budget. "You might suggest to the president's advisers that if he's going to sell the agency that produces tritium - all of the tritium for our nuclear weapons system - he might get some advice from the Department of Energy before he does so."

Alexander said selling TVA was "one more bad idea in a budget full of bad ideas" that President Obama has proposed to Congress. TVA quit receiving any direct federal taxpayer subsidy in the 1980s, and Alexander said that after deducting its debt "selling TVA would probably cost taxpayers money" and "could lead to higher electricity rates" for Tennesseans.

The biggest labor union representing many of TVA's 12,681 employees also denounced the president's proposal to sell TVA.

The International Federal of Professional and Technical Engineers said Obama's budget proposal "portends a desire to make radical changes to TVA.

"In our view the belief that the TVA's mission is no longer essential and is somehow linked to the fiscal sustainability of the overall federal budget is ill-advised," said Gay Henson, president of Engineering Association Local 1921 in Chattanooga.

Contact Dave Flessner at dflessner@timesfreepress.com or at 757-6340