While the strategic review of TVA has concluded, the Administration continues to believe that reducing or eliminating the Federal Government's role in programs such as TVA, which have achieved their original objectives, can help mitigate risk to taxpayers.
This story has been revised and updated with new comments by Sen. Lamar Alexander.
The Obama administration has backed off its previous push to sell or transfer the Tennessee Valley Authority to other owners after the federal utility took steps over the past two years to trim its spending and cut its long-term debt.
In the president's spending plan released Monday, budget planners with the U.S. Office of Management and Budget said they still would prefer that TVA was not owned by the federal government to limit the financial risks for federal taxpayers. But OMB praised TVA for taking "significant steps to improve operating and financial performance" and bringing its debt under control.
The White House budget agency, which raised concerns in the past two budget plans about how TVA's $25 billion debt might hurt federal taxpayers, backed off of such criticisms in the fiscal 2016 proposal.
TVA has a $30 billion debt ceiling, but the agency doesn't expect to approach that limit any time in the foreseeable future.
"The Administration supports TVA's ongoing initiatives and will continue to monitor TVA's performance, including the achievement of critical milestones contemplated in TVA's long-term financial plan and the pursuit of efforts to enhance governance and increase transparency of TVA's decision-making on important agency actions," OMB said in its budget plan. "While the strategic review of TVA has concluded, the Administration continues to believe that reducing or eliminating the Federal Government's role in programs such as TVA, which have achieved their original objectives, can help mitigate risk to taxpayers."
U.S. Sen. Lamar Alexander, R-Tenn., on Monday welcomed the change in OMB's assessment of TVA.
"I'm glad the Obama administration has abandoned its ill-advised proposal to sell TVA," he said. "Now we can get back to letting TVA do what it was created to do: providing low-cost, reliable electricity to families and businesses in the Tennessee Valley."
Over the past two years, TVA has cut its annual operating budget by $500 million and expects to cut, rather than increase, its overall debt through 2020. TVA cut 2,000 jobs, deferred work on the Bellefonte Nuclear Plant and scrapped nearly two dozen coal-fired units since former Duke Energy CEO Bill Johnson was hired in 2012 to run TVA. The agency is still spending more than $3 billion this year to finish its Watts Bar Nuclear Plant and to start or continue building new gas-fired power plants in Tennessee and Kentucky.
"TVA remains financially healthy and we continue to improve our overall financial metrics," Johnson said Monday.
TVA Chief Financial Officer John Thomas said he was pleased by the OMB budget review and he welcomed the ongoing review by OMB.
"This work will be essential in continuing the benefits of the public power model through which TVA provides substantial economic and other value for the region," he said. "Although TVA is owned by the federal government, it does not receive taxpayer dollars and its debt is not taxpayer funded," said Chief Financial Officer John Thomas.