This story was updated at 5:27 p.m. on Thursday, Feb. 13, 2020, with more information.
President Trump is again proposing to sell part of the Tennessee Valley Authority even though many of his GOP supporters in Tennessee and agency officials have resisted the idea in the past.
In the White House budget plan unveiled this week, the Office of Management and Budget again recommended the federal government sell the transmission assets of the nation's biggest government utility to help pay down the federal debt.
TVA President Jeff Lyash said Thursday the proposal threatens to undermine TVA's integrated approach to managing the Tennessee River and power generation in its seven-state region.
Following a TVA board meeting in Oxford, Mississippi, Lyash said the integrated public power model created in 1933 for the Tennessee Valley Authority has provided cheaper and more reliable electricity, flood control and environmental stewardship of the Tennessee River and economic development throughout the 41,000 square miles served by TVA.
"We do meet with OMB and others if they have an interest in discussing the merits of a proposal like this and perhaps we will do that again," he said. "But we believe that TVA's approach to this river system to harness the flow of the river, protect against flooding, generate power and protect the environment and promote economic development is an integrated approach that all works together. Pulling one or more pieces from that we don't think is in the best interest of the people of the Valley."
In a letter sent to the president in response to a similar proposal a year ago, Tennessee's two U.S. senators, Lamar Alexander and Marsha Blackburn, and U.S. Reps. Scott DesJarlais , Chuck Fleishmann, David Kustoff, Phil Roe and John Rose said they "strongly oppose" the idea of selling off TVA's 16,000-mile transmission network — one of the biggest for any U.S. electric utility.
The plan to sell TVA's transmission assets — and an even more ambitious proposal was made in 2013 by President Barak Obama to sell all of TVA —were quickly rejected by the Congress.
Alexander, who has labeled such plans in the past as "looney," previously said the idea has "zero chance of becoming law" even among Republicans who often denounce the socialist tendencies of their Democratic rivals.
"Similar proposals under previous administrations to sell TVA or its assets have only undermined TVA's credit, raised interest rates on the agency's debt, discouraged investment and threatened to increase electric bills for 9 million ratepayers we represent," the Tennessee GOP members said in a joint letter to President Trump last year. "Not only is TVA among the most reliable utilities, but TVA has among the lowest power rates in the country. TVA's ability to provide reliable, affordable power is essential to the TVA region's families and businesses."
OMB budget planners said last year that power transmission lines are best owned by the private sector and getting the federal government out of the business "would encourage a more efficient allocation of economic resources and mitigates unnecessary risk to taxpayers."
Former President Franklin Roosevelt helped establish TVA in 1933 as part of his New Deal to help aid the impoverished southern Appalachian region when investor-owned electric utilities at the time failed to serve most of the Tennessee Valley.
TVA helped harness the power of the Tennessee River for power and flood control and electrify the region with the aid of federal taxpayer support through the first half century of its life. But since the 1980s, TVA no longer receives direct taxpayer support to fund its operations.
As a federal agency, TVA's bonds and other borrowings still enjoy the implied backing of the U.S. government, according to bond rating agencies, and TVA's debts are still included in the overall federal deficit.
Contact Dave Flessner at email@example.com or at 423-757-6340