The Tennessee Valley Authority needs more flexibility with its congressionally imposed debt ceiling to fund new and cleaner power plants, a TVA audit concludes.
“TVA is fast approaching a crossroads,” TVA Inspector General Richard Moore said in a new 48-page review of TVA’s financial standing. “TVA may experience issues with its ability to adequately fund operations, maintenance and capital projects without increasing the debt ceiling, raising rates, or choosing among options.”
While TVA’s debt is creeping closer to its $30 billion cap, the audit suggests that TVA’s borrowing is not necessarily out of line with that of other utilities. The current debt ceiling for TVA was adopted by Congress in 1979 and, adjusted for inflation, would be worth more than $90 billion today.
TVA’s debt reached nearly $27 billion in 1997 before the agency set a goal of cutting its borrowings in half within the next decade by turning to more outside suppliers for new energy. TVA later reversed that path and is trying again to generate nearly all of its own power.
As a result, TVA’s long-term debt obligations began rising in 2010 after dropping by $2 billion in the previous decade.