Haslam proposes $11.8 million in state funds to settle TVA/Ocoee whitewater rafters dispute

Rafts line the shore Sunday, July 17, 2016, near the Ocoee Whitewater Center.

NASHVILLE - Big changes are planned for the Tennessee Ocoee River region's management and funding - along with an $11.8 million state appropriation aimed at bringing a 20-year resolution to spats between TVA and rafting companies over the free-flowing whitewater that has generated a flow of tourism dollars for the impoverished area.

In Gov. Bill Haslam's amendment to his proposed 2017-2018 budget, unveiled Tuesday, the governor included the grant to reimburse the Tennessee Valley Authority for the cost of power lost when the Polk County river flows freely during the spring, summer and early fall.

But the money, which would ultimately be repaid to the state, is only part of a years-long effort and now apparent agreement between the state, TVA, other federal agencies, whitewater rafters and area legislators.

Proponents say it will bolster not only the Ocoee area but other parts of Southeast Tennessee, including Cleveland, Chattanooga and Athens.

photo Tennessee Department of Environmental Conservation employees Jessica Rader, an environmental specialist, and biologist Chip Walton perform a monthly water quality sampling at TVA's Ocoee #2 dam in 2011.

"It's a huge win for Southeast Tennessee," said Sen. Mike Bell, R-Riceville, who along with Rep. Dan Howell, R-Georgetown, have been working with the whitewater industry and their representatives, Haslam, the Tennessee Department of Environment and Conservation, TVA, the U.S. Forest Service and others to come to an agreement.

Bell and Howell have legislation moving in the General Assembly to create a new type of water authority, the Ocoee River Recreation and Economic Development Fund, to support recreational water releases on the Ocoee.

The new entity would be overseen by an 11-member board and all fees currently paid by whitewater rafting customers to TVA would go into the fund.

The fund's purposes include reimbursing the state for an increased role in managing the area. But it's not limited just to that. Money can be used for infrastructure upgrades to the Ocoee River management zone. And the fund can accept money from public and private entities as well as solicit private grants and donations through a nonprofit 501(c)(3) entity.

Administratively attached to the state, the fund and the money it receives from fees now paid by rafters to TVA would go toward repaying the state as well as paying for an increased state management role of the Ocoee River area.

Howell's bill is expected to come to the House floor on Thursday.

"Without this agreement, without a new structure, without some kind of agreement that brings all the stakeholders together, which this bill does, basically we can say that recreation on the Ocoee would go away in November 2018," Howell said.

The Ocoee River whitewater industry sprouted decades ago when TVA shut down its Ocoee River flume to repair the structure which feeds its hydroelectric power plant on the river.

Canoeists and kayakers discovered the free flowing river was a whitewater paradise. When the flume was repaired, there was a huge controversy when TVA began to again use the river for hydroelectric generation, rather than allowing the river to freely flow in the riverbed for whitewater rafting and canoeing.

Through the resulting agreement struck in 1984, whitewater rafting companies began charging customers a fee to reimburse TVA, a federal utility, for lost power revenues, in exchange for allowing water to run through the river bed during the spring, summer and early fall. The initial fee of $3 per passenger was ultimately cut to only $1 per customer when funds generated by the fee proved sufficient to repay the original $6.5 million federal payment to TVA for use of the river for 1116 days a year by commercial rafters.

But the 35-year-old agreement is set to expire in March 2019.

J.T. Lemons, a leader in the Ocoee Outfitters Association who helped negotiate the original 1984 rafting agreement with TVA, said Tuesday he was pleased that the state has agreed to front the money to TVA to help the whitewater rafting industry continue after the current contract for use of the river expires in March 2019.

Ocoee's annual whitewater season ends in October.

"The state wants to make sure that the Ocoee River didn't go down the tubes," Lemons said, referring to the TVA flume in which water is diverted to produce power when it doesn't flow freely in the riverbed for rafters.

Lemons said "we've built a whole industry around the river and we're glad the state is doing what it can to help promote tourism in this area. We're very pleased with this agreement (between the state and TVA) and we've got our fingers crossed that it doesn't run into any snafus."

Two years ago, the Times Free Press reported that TVA was looking at seeking an increase from the $1 fee to $8.80 per ticket for a traditional Middle Ocoee River guided trip. The per-ticket fee increase for a trip down the Upper Ocoee would rise from $4.50 fee per ticket to $10.69.

That drew objections from the rafters who say it would prove ruinous to their businesses and tourism.

What's envisioned now is a 10 percent fee on each ticket with the money going into the new fund to pay for management, improvements and the like. The amount of money would rise as ticket prices increase. Right now, it would amount to about $4 per ticket.

"I can't give enough credit to the governor of catching the vision of what this could become," said Brian Bivens, who as a youth worked as an Ocoee guide and now works as a lobbyist with the rafters' group among the family firm's clients.

"I think this is his [Haslam's] way of saying, 'Go!," Bivens added.

Business Editor Dave Flessner added to this report.

Contact Andy Sher at asher@timesfreepress.com or 615-255-0550. Follow on twitter @AndySher1.