A day after TVA's chief executive said he is stepping down, U.S. Sen. Bob Corker, R-Tenn., warned Friday that the board that will pick a new TVA head includes too many directors without corporate experience or the financial skills to oversee a complex agency like TVA.
"As you look at TVA today as an $11 billion-a-year company with tremendous challenges, it has a board of directors with the qualifications that I think would cause most Tennesseans to be very concerned," Corker said. "We have only one person on the board, to my knowledge, who even has any corporate board experience."
Currently, only six of the nine seats on TVA's board are filled and, unless Congress acts to confirm new members, the TVA board could shrink to only four members and lack a quorum by the end of the year.
Corker said he personally likes the members of the TVA board. But he said too many directors were appointed based upon geographic or partisan politics, not the person's experience and skills to oversee America's biggest government utility. Corker said in the past one TVA director admitted he didn't know what was a "P&L statement" of profits and losses.
U.S. Sen. Lamar Alexander, R-Tenn., said in a statement Friday that he agrees with Corker that "the new governance structure [adopted for TVA in 2004] has not worked out as well as I had hoped.
"But I believe it can work if the president will nominate well-qualified board members who then pick a strong chief executive and allow that executive plenty of latitude to lead TVA," Alexander said.
Members of the TVA board are appointed for five-year terms by the president and must be confirmed by the U.S. Senate. The board must hire a new chief executive by the end of the year to replace Tom Kilgore, the 64-year-old engineer who announced his retirement Thursday after six years as TVA's top officer.
President Barack Obama has nominated another financial expert to serve on the TVA board -- Hilliard Lyons Financial Services Chairman Peter Mahurin of Kentucky -- but the U.S. Senate has yet to confirm the appointment.
The terms of three retired bankers -- Dennis Bottorff, of Nashville, Mike Duncan of Kentucky and Tom Gilliland of Blairsville, Ga., -- ended last December.
Only TVA Chairman Bill Sansom now is qualified to meet federal regulations for TVA's audit committee. Sansom, a former member of then Gov. Lamar Alexander's cabinet, has served on several corporate boards, including First Tennessee Bank and Astec Industries in Chattanooga.
SANSOM PRAISES KILGORE
Sansom, who said he was "not terribly surprised by Kilgore's decision" to retire, praised Kilgore and said the board is already taking steps to find his successor.
"Tom's done a great job getting consistency in TVA," Sansom said.
Corker said TVA's historically low energy costs and economic development efforts make the federal utility one of the top attributes for the Tennessee Valley. But TVA's board, in Corker's view, is not comparable to other multibillion-dollar utilities in the South such as Progress, Entergy and Southern Co.
Former TVA Chairman Craven Crowell, a Democrat who also worked on Capital Hill, said the qualifications of board members should have been better described in the reforms Congress adopted to replace the original three-member full-time TVA board with its current nine-member, part-time board.
"When the board was enlarged there were no congressional hearings to consider the unintended consequences of the change," he said. "We ended up with a major restructuring of the board without any requirement for a balance of experience and politics on the board and with part-time board members who don't always have the time for the steep learning curve involved with leading TVA."
NO NUCLEAR EXPERIENCE
Although TVA is one of the nation's biggest nuclear utilities, there are no board members with any experience in nuclear energy.
Crowell said when he left TVA under the former three-member board structure, the nuclear program was getting top marks from federal regulators. But TVA recently has been flagged a half dozen times for safety violations at its nuclear plants.
Corker said he may push for new qualification standards for board appointments. But he said he doesn't want to go back to the three-member, full-time board, which he called a "silly" governing structure.