Would President Obama privatize TVA & Kill the Goose that Laid the Golden Egg?

Shoals: Privatizing TVA is ‘a bad idea’

By Mike Goens
Managing Editor
Matt McKean/TimesDaily
4/21/13

Anglers fish below thousands of feet of power lines that run from TVA’s Wheeler Dam turbine systems. Those from the Shoals who work closely with the Tennessee Valley Authority said the federal agency should not be turned over to private companies. Matt McKean/TimesDaily

If President Barack Obama needs help orchestrating an effort to privatize TVA, he shouldn’t expect much support from the Shoals.

Those from the Shoals who work closely with the Tennessee Valley Authority said the federal agency should not be turned over to private companies. They fear a privately owned TVA will lead to higher electricity rates, job cuts, more flooding problems and navigational issues on the Tennessee River and other waterways under TVA’s jurisdiction.

“The first questions you need to ask are what’s the gain for government and what would be gained by the community,” said Steve Hargrove, manager of Sheffield Utilities. “If the purpose is to make things better and there is reason to think it’s possible, I would be the first one interested in sitting at the table and talking about it. I just don’t see advantages of privatizing at this time.”

Obama brought the issue to the table through his 2014 budget proposal, which was released last week. He said selling TVA should be explored as a means to increase revenue by as much as $25 billion, money that could reduce the federal deficit and pay for other government services.

Hargrove has a unique perspective to the debate, having worked at TVA for 33 years before retiring as plant manager at Colbert Fossil Plant. He became manager of Sheffield Utilities in December.

His department purchases electricity from TVA and provides power to about 19,000 customers in Colbert County.

“I am a believer in the private sector, but I would fear their mission would be different than TVA’s,” Hargrove said. “The mission of TVA is not to make profit, and the mission of the private sector is to make a profit. They have to answer to a board that wants to maximize profits. When your primary goal is to make a profit, that becomes a higher goal than helping the community.

“TVA has had its problems, and bad decisions have been made, but its mission is good and they are an established part of the communities.”

Hargrove said residential rates for TVA customers in the Southeast are among the lowest 25 percent in the country and are about one-third of the rates charged in the Northeast and West. He said a private company would likely have to charge more to make a profit.

Rates TVA charges customers in the seven-state region it covers do not include costs added by power distributors such as Florence, Tuscumbia and Sheffield utilities that also must pay for infrastructure improvements and maintenance.

Muscle Shoals Mayor David Bradford said he doesn’t see the benefits of privatizing TVA. He said the agency doesn’t receive federal appropriations.

“Where would the savings come from?” Bradford asked. “I could see more harm than good (by privatizing). I would be against it for several reasons.

“For the purpose TVA was created, which was to provide reliable and low-cost power, they continue to do so. They do so much more than produce electricity, though. They offer so much to our area and the region through economic development, flood control and land management.”

Bradford said TVA has been a partner with the Shoals on numerous economic development projects and played a role in the community luring companies such as SCA Tissue, North American Lighting and Navistar.

Florence Mayor Mickey Haddock said TVA has through the years been good to the city. Like others, he said services provided by the agency are important to the area’s quality of life.

“In some respects, TVA can be difficult to deal with when you talk about land uses and some other issues, but overall TVA has been wonderful for our area,” he said. “They provide good electricity rates, the in-lieu-of-taxes program helps area entities, river management is huge for our area, and they’ve been good economic development partners. The positives very much outweigh any negatives in their land use policies.

“I just don’t think it’s the right thing to do.”

Haddock said he doesn’t see any positives from privatizing TVA. He also worries what would happen to TVA employees.

TVA, which was formed by a congressional act 80 years ago, has 2,619 employees in Alabama, including 1,500 at Browns Ferry Nuclear Plant near Athens. Colbert Fossil Plant has 250 workers and dozens of others work for TVA in other capacities.

Almost 5,000 TVA retirees live in Alabama, agency officials said.

Tuscumbia Mayor Bill Shoemaker said the area would be losing an asset if TVA was turned over to private companies. He said he has worked closely with TVA officials through the years while working with the Alabama Department of Transportation and now as mayor.

“It’s been my experience that they have some good thinkers who have been willing to help resolve a problem,” Shoemaker said. “They have helped feed the world through their fertilizer research, they do an excellent job of providing a stable energy supply, they manage the waterways and they have helped us recruit industry. They have been a friend to the Tennessee Valley.”

He said more research must be done before considering privatizing TVA.

“It’s too early to make any conclusions,” Shoemaker said. “How would privatizing TVA help anyone? What private company would be willing to write off a $25 billion debt? There are too many questions that need answering. I would be against jumping into something that we don’t know what the end result might be.”

Hargrove said he is concerned how the process of privatizing TVA would work.

“TVA has a lot of assets, and will they allow private companies to cherry-pick what they buy?” he said. “What happens to and who takes care of the assets that companies don’t buy?

“There’s just too many unanswered questions. I would want all of those questions (answered) before considering selling anything.”

Mike Goens can be reached at 256-740-5740 or Mike.Goens@TimesDaily.com.

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