Since the Tennessee Valley Authority earned its highest ever net income for the fiscal year that ended Sept. 30, we don’t see an immediate need to replace the three Democratic members of its board who are up for reappointment this year.
TVA, in its annual report filed with the Securities and Exchange Commission, reported a net income of $1.2 billion. That was significantly higher than its fiscal 2015 income of $122 million.
One third of the power utility’s board, including Chairman Joe Ritch, Mike McWherter and Peter Mahurin, is up for reappointment in the lame duck session of Congress that begins this week. Indeed, the entire board, for the first time in history, is filled with appointed Democrats.
While we are under no illusion that the politics of the board made the difference in TVA’s bottom line, we don’t advocate change simply because the party of the United States president will change in January.
Had there been public spats on the board about policy, with the board at war with those who handle the day-to-day operation of the utility, we might have a different view.
Board members, after all, are appointed by the president and approved by the U.S. Senate. Come January, both the presidency and the Senate will be led by Republicans, who might expect to want board members of their party in place.
At this point, though, neither of Tennessee’s Republican senators, Lamar Alexander and Bob Corker, have expressed interest in replacing the members. In fact, both have previously voiced support for them.
Whether things will change when President-elect Donald Trump takes office is unknown. He is liable to undo President Barack Obama’s Clean Power Plan, which had been forecast to cause energy prices to soar, but we can’t foresee at this point whether that will cause rancor between TVA administrators and board members.
Either way, there’s no doubting the utility had a successful year, which is borne out by its 10,700 employees preparing to share in $10 million of performance payments – averaging $9,532 per worker – next week.
For its 9 million customers across a seven-state region, meanwhile, TVA cut the price of power by 2.3 percent in fiscal 2016. The utility was able to do that, despite slightly lower power sales due to the mild winter, because of a nearly $800 million reduction in operating and maintenance costs, lower gas prices and a flexible portfolio of power sources, according to chief financial officer John Thomas.
We would like to believe the power utility is presently operating in the sweet spot of good management and good weather. Good weather is not always a given, but we believe good management for the 83-year-old TVA should be.