When investment markets tanked in 2008 and TVA's pension fund took a nearly $2 billion dive, the tab for making sure there was enough money to cover commitments to 24,000 retirees fell to electric ratepayers.
Fully funded, TVA's retirement plan should total $11.5 billion.
Instead, it now stands at $7 billion.
TVA has infused it with almost $1.3 billion since 2009 -- ratepayer money.
But this year, the federal utility didn't add money, and Chief Financial Officer John Thomas says the fund's $3.5 billion gap could be made up through market gains in 10 to 15 years.
"TVA is going to stand behind its obligations to employees and retirees," Thomas said, adding that the fund's market investments had a good year in fiscal 2012.
Despite paying out $650 million to retirees over the past year, the fund still gained $500 million from market growth to reach its current $7 billion.
But some TVA retirees are not happy that the utility did not make a board-approved discretionary $300 million contribution in 2012. The utility put $1 billion in the fund in 2009 and an additional $270 million in 2011.
As recently as 1997, the pension fund was overfunded by about $2 billion. For at least six years before 2008, TVA didn't put in any money.
A national pension expert who briefly reviewed TVA's August quarterly report to the U.S. Securities and Exchange Commission said Friday that ratepayers should ask why they must shoulder the burden of meeting pension obligations.
"What they're saying is, 'We're financing our pension with future revenues,'" said Harry Dressler of Dressler Strategic Advisors Inc. in Florida.
TVA's report to the SEC states, "Net amounts capitalized due to actions of the TVA Board include amounts that have been deemed probable of recovery in future rates."
Spokesman Duncan Mansfield said $60 million in retiree medical and other benefits also were funded last year with ratepayer money.
Thomas defends TVA's decision not to add more money to the pension fund in 2012.
The fund performed well in the markets, he said, and in these economic times, with other debt and expenses, not making a contribution was the right thing to do.
"I did not think it was prudent," he said.
TVA rates, once among the lowest in the nation, now are in the middle.
When the utility put $300 million in the pension fund in 2011, officials called it one of the key drivers of last year's $234 million rate increase that upped utility bills by 2 percent.
TVA did not raise rates this year.
Thomas said the fund's liabilities have exceeded its assets since the early 2000s, and he said TVA's situation is not unusual.
"The [TVA] plan today is not at risk, and it will continue to improve," he said.
Retirees in 2010 formed a group known as Save Our Retirement. Eight current and former participants in TVA's retirement system sued, challenging the suspension of contributions for 2010 through 2013.
They also contested a decision to limit retirees' cost-of-living increases through 2013.
Jim Hovious, an organizer of Save Our Retirement, could not be reached for comment.
According to the TVA's August SEC filing, the lawsuit is now in mediation.