Here's an idea for you: Sell Congress, not TVA

Here's an idea for you: Sell Congress, not TVA

May 24th, 2013 in Opinion Times

TVA logo

TVA logo

Instead of privatizing TVA, perhaps we should look at privatizing Congress.

In today's clamor for smaller government, shouted by politicians who seem increasingly owned by PAC money and corporate campaign donations, comes a call from the Obama Administration to look at the feasibility of selling the Tennessee Valley Authority.

That's the same TVA that was established by Congress in 1933 to make electricity from the Tennessee River while also addressing flooding, economic and navigation issues in the 80,000-square-mile Tennessee River basin that covers portions of seven Southeastern states.

Thursday, one of Tennessee's U.S. senators, traditionally a defender of TVA's public ownership, said TVA might be better off severed from Uncle Sam. That senator was Republican Bob Corker, who prides himself as a money man.

Maybe Corker is just floating this bad idea for positioning, because while TVA could use some improving, it remains one of the region's -- and public's -- best assets.

Selling TVA is an uniformed idea, and both Corker and Tennessee Sen. Lamar Alexander and other Southern delegation politicians have said so. Or at least they did initially.

The original sale specter was tucked in the president's nearly 230-page 2014 budget.

"Given TVA's debt constraints and the impact to the federal deficit of its increasing capital expenditures, the administration intends to undertake a strategic review of options for addressing TVA's financial situation, including the possible divestiture of TVA, in part or as a whole," the document states.

But TVA is not funded by the federal government, and has not been in decades. What's more, the $25 billion in TVA debt that is merely carried on the books of the federal deficit isn't really taxpayer debt, and it is paid down regularly by the TVA using ratepayer money -- not taxpayer dollars.

But there is a benefit to both taxpayers and ratepayers by that debt being carried on the federal books: When TVA needs capital money to get loans, lenders view the agency as being backed by the federal government, so the lending interest rate is lower -- or at least it was until the new budget document went public.

Alexander said TVA bonds lost about $500 million in value after the announcement last month, largely because of uncertainty over whether the utility would be sold.

Now Corker's defection can't be seen as anything but more damaging. In fact, he would seem to be adding to the devaluation.

"While unfortunate but true, TVA as a going concern today is probably worth less than its debt, and its rates have become increasingly less competitive. So if the goal is deficit reduction, I doubt this idea gains much traction," Corker said earlier this month.

What everyone seems to be forgetting is that TVA, with its $11 billion ratepayer-funded operating budget, is much more than just an electricity provider -- which, again for emphasis, ratepayers, not taxpayers, bankroll.

TVA is a far better river and flood manager of the 652-mile Tennessee River and its tributaries than the U.S. Corps of Engineers -- the fallback federal agency that taxpayers would have to pay should TVA be sold. If you question that, just ask the folks in Nashville who were flooded by the Corps-managed Cumberland River in 2010.

And in February, after the Tennessee Valley had a soaking that put the region at twice the normal early year rainfall, TVA's flood control efforts averted $800 million in flood damage. At the same time the utility logged an all-time record for hydropower production.

But let's talk TVA taxpayer cost: The utility's first government appropriation in 1933 was $50 million -- million with an "m." That amount was also its last government appropriation for water quality and recreation needs in 1999: $50 million with an "m." TVA's government power appropriations ended four decades before that, in 1959.

Yet still, yearly, TVA spends on average $100 million for environmental and stewardship programs, as well as making about $550 million in-lieu-of-taxes payments to county and municipal governments for the 11,000 miles of shoreline and 293,000 acres of property and 200 miles of trails and 80 recreational facilities that it owns and manages.

Who will be taking on those costs? States? Counties?

Sure, TVA has warts. But does selling it make sense? No.

Selling Congress might, though.

Naah. Using Corker's initial logic, we couldn't get as much for Congress as we have invested in it.

The truth is, with any and every johnny-come-lately social welfare group declaring itself a 501(c)(4), and with many corporations making unlimited and undisclosed but perfectly legal corporate campaign donations, we mere voters and taxpayers have already been supplanted as owners of Congress. That body already is privatized in all but name.