Is TVA for sale? Government plan hints at possibility

Is TVA for sale? Government plan hints at possibility

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WASHINGTON, D.C. (WATE) - A document released Tuesday by the White House makes a case for possibly selling the Tennessee Valley Authority.

TVA officials call the suggestion "unexpected language."

The report, written by the Government Accountability Office (GAO) and titled "Creating a 21st Century Government," identifies several areas for saving money and reducing waste.

On page 51 of the report, subtitled "Reform TVA," the GAO acknowledges that much has changed since the TVA was created in the Great Depression years of the 1930s.

Going forward, TVA's capital needs are expected exceed a $30 billion statutory cap on indebtedness that is placed on the agency.

The Obama Administration eyes TVA as a way to possibly reduce or eliminate expenses where the federal government is no longer needed.

"Given TVA's debt constraints and the impact to the Federal deficit of its increasing capital expenditures, the Administration intends to undertake a strategic review of options for addressing TVA's financial situation, including the possible divestiture of TVA, in part or as a whole," the report says.

The report has apparently caught TVA officials off guard.

In a statement prepared for 6 News, TVA Chairman of the Board Bill Sansom said, "At this point we don't know what the strategic review might include or what options might be explored. In the meantime, we will continue operating TVA in a sound financial manner in support of the people of the Tennessee Valley and the interests of the Federal Government."

"We are part of the Federal government and we will follow their direction. I anticipate over the next several months, we will be working with the Office of Management and Budget to provide the information they request regarding the strategic review," added TVA President and CEO Bill Johnson.

Tennessee U.S. Sen. Lamar Alexander called the proposal one more bad idea in a budget of bad ideas.

"There is today no federal taxpayer subsidy for TVA, period. There is by law no federal taxpayer liability for TVA debt. And after deducting its debt, selling TVA would probably cost taxpayers money," the senator said in a news release.

"There is no assurance that selling TVA to a profit-making entity would reduce electric bills in the Tennessee valley – which should be the overriding objective – and it could lead to higher electricity rates. While TVA management prefers a flexible debt cap, it has assured me that it can live within the current debt limit if necessary," he continued.

TVA produces low-cost electricity and manages natural resources in most of Tennessee, as well as parts of Alabama, Georgia, Kentucky, Mississippi, North Carolina, and Virginia.

TVA is a self-financing corporation, but is owned by the U.S. Government. Its funds are raised through electricity sales and bond financing.

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