Updated at 5:39 p.m. on Wednesday, Oct. 31, 2018, with more information.
The Tennessee Valley Authority broke federal travel rules and its own policies in flying TVA helicopters without proper documentation and justification, according to an internal audit released Wednesday.
TVA's inspector general said many trips TVA executives made on its executive helicopter were too short to use such aircraft, such as those between Knoxville and Chattanooga. Auditors determined that it cost $1,160 to make the helicopter trips between airports in Knoxville and Chattanooga and saved only 15 to 24 minutes compared with driving between the two cities.
"Cost comparison analysesand business justifications prior to the use of the helicopters were not documented," Assistant Inspector General David Wheeler said in the audit of TVA helicopter use. "Failure to follow the federal travel rules and TVA policy prevents TVA from ensuring [that] travel costs are managed effectively and may cause reputational risks for TVA with regard to wasteful use (or perceived wasteful use) of the TVA helicopters."
TVA President Bill Johnson decided to buy a $6.95 million executive helicopter equipped by Mercedes Benz to replace an aging helicopter he said had demonstrated potential flight problems. Johnson said the new aircraft is safer and helps TVA executives be more efficient in how they use their time.
The executive helicopter, which was once used by Dallas Cowboys owner and billionaire Jerry Jones, was bought by TVA in 2016 to help show off properties for economic development and business prospects, helping the utility to attract a record level of investment in the region over the past three years.
But critics of Johnson's purchases of executive aircraft said the audit underscores their concerns about the extra cost of using the executive helicopter, which Johnson ordered to be bought since he became TVA CEO in 2012.
"It is sloppy, unprofessional and, as TVA continues to raise rates on residents across the Valley, it is totally indicative of how out of touch TVA's management is with the people they serve," said Stephen Smith, executive director for the Southern Alliance for Clean Energy. "It's not the world that TVA customers live in and it's just really sad for them to be jetting around or riding on luxury helicopters when they don't need to and, as this audit shows, they can't justify."
TVA owns nine helicopters, although one is no longer in use, to survey its transmission lines, transport equipment and employees and to provide executive travel for TVA executives and business prospects. TVA used its eight operating helicopters to make 2,138 flights from October 2014 to the end of last year, including 239 for transporting passengers and 203 for economic development trips, according to the audit.
TVA spokesman Jim Hopson said TVA has used aircraft since the 1930s to help service and maintain its 16,000 miles of transmission lines across its 7-state region. Based on comparison with other American utilities of similar territory size, TVA has the same number of aircraft or fewer, Hopson said.
In response to the audit, TVA said it is working to improve its procedures. TVA began testing and implementing a new flight management software this year to better document and record use of the aircraft.
But officials insist that no federal travel rules were broken.
"As always, we respect the role the Office of Inspector General plays and agree that our documentation and processes were in need of the improvements we are making," Hopson said. "However, we disagree with some of their conclusions about federal travel rules, especially as they pertain to the operational use of our helicopter fleet as opposed to passenger transportation. There is no indication that federal travel rules apply to the use of aircraft for operational purposes and 90-plus percent of all helicopter flights at TVA are for operational purposes for line patrols and construction."
TVA's helicopter services group has five pilots and three mechanics and performs maintenance on the equipment at the TVA hangar in Muscle Shoals, Alabama.
TVA has spent more than $29 million on executive jets and helicopters to expand its corporate aircraft fleet under Johnson's leadership. An earlier audit by the Inspector General in March concluded that TVA's purchase of an $11.2 million corporate jet four years ago has not been cost effective. Johnson also disputed that audit, noting that TVA has improved both its operating performance and its economic recruitment since buying the jets and transporting executives around the Valley faster than in the past. Johnson said TVA has fewer planes and helicopters than some other electric utilities in the South.
But Smith said TVA, as a federal corporation, should act differently from investor-owned businesses that may opt to use their profits to provide jet or executive helicopter travel for its executives.
"I have no problem with helicopters being used for transmission lines and other operating purposes, but it makes no sense to spend so much money to use them to transport executives around the valley," Smith said.
Former Health and Human Services Secretary Mike Price resigned his cabinet post in the Trump administration after it was revealed that he had flown more than two dozen times on expensive private jets, instead of taking commercial flights.
"There seems to be a double standard with TVA and other federal agencies and unfortunately our congressional delegation won't raise this issue or question TVA for its lavish spending on executive travel," Smith said.
Contact Dave Flessner at email@example.com or at 757-6340