Electricity Markets

Lawmakers urge OMB to reconsider TVA asset sale plan

Several senators and House members on April 17 sent a letter to President Trump urging that the Office of Management and Budget reconsider its proposal to sell the Tennessee Valley Authority’s transmission assets.

The letter to Trump seeking reconsideration of his Fiscal Year 2019 budget request proposal to sell TVA’s transmission assets was sent by Sen. Lamar Alexander, R-Tenn., and several other lawmakers including the entire Tennessee congressional delegation.

Trump recently proposed to divest the transmission assets held by TVA and three of the Power Marketing Administrations -- Southwestern Power Administration, Western Area Power Administration and Bonneville Power Administration and change the current cost-based rate structure for the PMAs to market-based rates. The American Public Power Association has voiced opposition to these proposals.

Previous administrations have proposed selling TVA and its assets “and these proposals have all been soundly rejected by Congress,” the letter noted. “When President Obama proposed selling TVA in 2013, all it did was undermine TVA’s credit, raise interest rates on TVA’s debt, and threaten to increase electric bills for 9 million ratepayers,” Alexander and the other lawmakers said.

They noted that TVA’s debt is not backed by federal taxpayers and it does not receive any federal taxpayer subsidy or federal appropriations. “TVA has among the lowest power rates in the country which, along with its reliability, help bring numerous new businesses to the region. In the last five years, TVA has supported the creation or retention of 400,000 jobs and $48 billion in new capital investment in our region.” The letter goes on to point out that TVA’s transmission assets that the budget request proposes to sell include more than 16,000 miles of line paid for by TVA ratepayers, not federal taxpayers.

“TVA is on a good path,” the letter said. “Its leadership has made sound decisions that will benefit ratepayers and our region.” Alexander and the other senators and House members noted that TVA has opened the first nuclear power reactor in the 21st century. Also, it is “placing pollution control equipment on all its coal plants – so that coal remains a viable part of TVA’s power generation – and it is completing new natural gas plants. TVA has done this while reducing its debt and reducing its electric rates, which is good news for jobs and economic development in the Tennessee Valley.”

Alexander was joined in the letter by Sens. Bob Corker, R-Tenn., Doug Jones, D-Ala., and Roger Wicker, R-Miss., and Reps. Diane Black, R-Tenn., Marsha Blackburn, R-Tenn., Steve Cohen, D-Tenn., James Comer, R-Ky., Jim Cooper, D-Tenn., Scott DesJarlais, R-Tenn., John Duncan, R-Tenn., Chuck Fleischmann, R-Tenn., David Kustoff, R-Tenn., Phil Roe, R-Tenn., and Trent Kelly, R-Miss.

In March, 23 senators and 59 House members voiced their opposition to Trump’s plans divest the transmission assets held by TVA and the three PMAs, as well as the plans to shift the current cost-based structure for the PMAs to market-based rates.