TVA halts hiring while studying Trump's order on federal freeze on adding workers

TVA halts hiring while studying Trump's order on federal freeze on adding workers

January 31st, 2017 by Dave Flessner in Business Around the Region

The Tennessee Valley Authority has halted hiring of new employees while it evaluates President Donald Trump's executive order issued last week for all federal agencies to impose a hiring freeze on civilian federal workers.

TVA President Bill Johnson said Tuesday that TVA "is still evaluating the order," which still allows government agencies to fill vacant positions if the jobs are "necessary to meet national security or public safety responsibilities."

Johnson said TVA has about 60 or 70 job vacancies it was trying to fill when President Trump signed the memorandum for the federal hiring freeze on his third day in the White House last week. TVA typically hires several hundred new workers every year even though its overall staff size is shrinking in response to relatively stagnant demand, Johnson said.

"We have put all of that on hold as we figure out what to do next," he said. "Our job here is to make sure these things don't create any problems for the public and for our customers, and I think I can guarantee that it won't cause any problems."

Johnson said TVA workers perform a number of duties that affect public safety — and some of its work involves national security. Those jobs could be exempt from the hiring freeze, and TVA also can continue to use contract workers for any short-term staffing needs.

"We do a lot of things like running nuclear plants that have the potential to impact public safety so we will make sure we don't do that [cut any staff needed for nuclear safety]," Johnson said.

TVA is an independent federally owned corporation that no longer receives any direct taxpayer support and is generally not regarded to be part of the executive branch of the federal government. Johnson, an attorney who has headed TVA for the past four years, said it is unclear if TVA has to abide by Trump's directive. But while TVA studies the presidential memo, the agency is following the directive not to hire any new employees that do not affect public safety or national security.

"It's an odd thing here at TVA because we are neither fish, nor fowl," Johnson said. "But we are reading it [ the presidential hiring freeze order] as if it does apply to us and we are trying to figure out the best way for us to respond to this."

TVA has about 10,000 employees across the seven-state region where it operates power plants, transmission lines, hydroelectric dams, recreational properties and other facilities.

TVA has cut its workforce by more than 80 percent from the peak staffing level of 51,709 employees reached in 1981. Since Johnson was appointed TVA president in 2013, TVA has cut about 2,000 TVA jobs as part of an $800 million reduction in annual operating expenses at TVA.

Those reductions in operating costs helped TVA boost its net income in the final three months of 2016 despite higher fuel costs and less rainfall to "fuel" TVA's 29 hydroelectric dams.

The Tennessee Valley Authority earned $102 million for the three months ended Dec. 31, 2016, compared with a net loss of $37 million in the same period a year earlier. The income and sales gains in TVA's first fiscal quarter positioned TVA for an even better fiscal year than the record high net income reached in fiscal 2016, although milder temperatures in January could offset some of the comparative advantage over last year in the winter period.

A colder fall at the end of last year helped boost TVA power sales by a strong 7 percent over last year. The number of heating degree days — a key measure for how weather affects electricity usage — was 29 percent higher last fall than the previous year due to more normal weather across TVA's seven-state region.

Combined with higher fuel cost adjustments and a 2 percent base rate increase last October, overall operating revenues for TVA grew by 12 percent, or $266 million, over the previous year to more than $2.5 billion.

Last year, the Valley experienced some of the mildest temperatures in a half century during October, November and December,

"Unlike last year, when we had an abundance of rainfall, the extended drought conditions that carried over from summer limited power production from TVA's dams," TVA President Bill Johnson said in a conference call to discuss the utility's quarterly earnings. "This resulted in increased use of higher cost generation sources and higher fuel prices. So, while the energy costs of producing electricity were not as favorable, the higher revenues, along with the efficiencies we've been able to build into the business, helped us improve the bottom line."

Non-fuel operating and maintenance costs were relatively flat to that of the same period in the prior year.

"TVA is off-setting inflation and other cost pressures with efficiencies, and maintaining our cost-savings momentum," TVA Chief Financial Officer John Thomas said.

Nonetheless, higher fuel surcharges and the 2 percent base rate increase adopted by TVA last year combined to raise the average price of TVA electricty sold last fall by 4.1 percent over a year ago.

Contact Dave Flessner at or at 423-757-6340.

This story was updated Jan. 31 at 11:30 p.m. with more information.