TVA and the PMAs - time to saddle up and ride again

It has been some time since I did a blog post. But that does not mean that we at the American Public Power Association have been home painting our nails. Far from it.

December at the Association is the culmination of our annual budget process. In mid-December, our Executive Committee meets at our offices to review and (hopefully!) approve the proposed budget for the next year. We on staff spend considerable time on the budget. We start the process in September and present the budget in draft form to our Finance and Audit Review Committee before it goes to the Executive Committee. The Executive Committee met on December 14, and approved our 2018 budget (hooray!). The 2018 budget, along with the 2018 strategic workplan that staff presented to the full Board last October, will guide our course this year.

The Executive Committee meeting was followed by one of the Association traditions I like the most. Each December, after the budget meeting, the Executive Committee eats lunch with all the Association staff at a nearby hotel. After lunch, Executive Committee members introduce themselves to the staff, and talk a bit about their utility. It is a great opportunity for staff who do not get to visit our membership to see the EC members in person, and hear about the challenges and issues they face back home. Back in the day when Terry Huval of Lafayette Utilities in Louisiana was on our Executive Committee, he even serenaded staff with his Cajun Fiddle!

January and February are also very busy months for us. We do performance evaluations in January, to talk about the year that just passed, what went well, and what opportunities for improvement exist. Then we move into employee, department, and Association-wide goal setting for 2018, to translate the strategic plan objectives and other initiatives into specifics. Of course, we have to stay flexible during the year, so we can address the unforeseen issues that inevitably arise. We did not know at the beginning of 2017 that we would spend so much of the fall on power restoration and mutual aid after hurricanes, or that we would end the year lobbying a big tax reform bill. We pivoted to deal with these issues as they arose in 2017, and no doubt will have to face new issues we have not fully anticipated again in 2018.

In fact, the pivoting has already commenced. On February 12, the Trump Administration released its FY 2019 budget proposal. Among other things, it proposes to sell the transmission assets of the Tennessee Valley Authority (TVA), and three of the Power Marketing Administrations (PMAs) — Bonneville Power Administration, Western Area Power Administration, and Southwestern Power Administration. The Administration is also proposing that TVA and the PMAs charge market-based rates for their power. If you are thinking to yourself “déjà vu all over again,” you would not be wrong. The Obama Administration proposed to sell TVA, and of course we all remember the Chu memo.

But it goes further back than that. When I went to work for NRECA in 1995 as its regulatory counsel, we were in the middle of an all-hands-on-deck effort to beat back the sale of the PMAs. I did not even know what a PMA was, having spent the first 15 years of my energy law career doing natural gas regulatory work. But I figured it out pretty quickly. Proposing the sale of the PMAs is much like proposing the sale of a public power utility — it is usually an attempt to get a one-time cash pay-out for short-term gain, at the cost of losing a valuable asset that otherwise would continue to benefit customers for many years.

In fact, it goes back even further than 1995. Alex Radin, the Association’s long-time leader and public power icon, wrote a book after he retired called “Public Power, Private Life.” In his book (published 2003) Alex recounted earlier battles to sell the PMAs. He said: “At some time in the future, Congress undoubtedly will be confronted with plans to sell the federal power systems or at the very least reorganize them. Supporters… therefore should be prepared to support the continued existence of this program while examining possible structural changes in the power marketing administrations.”

It is frankly frustrating to have to fight this legislative and budget battle yet again, when there are so many other important issues facing our industry that we need to tackle. But as the fight has come to us, we will have it. And lucky for us, we have 600-plus utility member representatives coming to town at the end of February for our Legislative Rally. There will be plenty to talk about. I look forward to seeing you, and having your help in educating our legislators on this issue, as well as the many other issues we will be dealing with in 2018. Thanks in advance for your strong advocacy, and see you at the Rally!