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400 W. Summit Hill Dr. Knoxville, TN 37902-1499 TN Tel. 865-632-2101 Fax 888-633-0372 |
Type: Government-owned
On the web:
http://www.tva.gov
Employees:
11,584
Employee growth: (3.6%)
The Tennessee Valley Authority (TVA) may not be an expert on Tennessee attractions like Dollywood and the Grand Ole Opry, but it is an authority on power generation. TVA is the largest publicly owned power producer in the US, with more than 35,000 MW of generating capacity. Its facilities include 11 fossil-powered plants, 29 hydroelectric dams, three nuclear plants, and six combustion turbine plants. The federal corporation transmits electricity to about 160 local distribution utilities, which in turn serve some nine million consumers, as well as industrial facilities and government agencies, in most of Tennessee and neighboring parts of Alabama, Georgia, Kentucky, Mississippi, North Carolina, and Virginia.
Key numbers for fiscal year ending September, 2008:
Sales: $10,382.0M
One year growth: 12.3%
Net income: $817.0M
Income growth: 113.3%
Officers:
President and CEO: Tom D. Kilgore
EVP Financial Services, CFO, and Chief Risk Officer: Kimberly (Kim) Scheibe-Greene
Freedom of Information Act Officer: Denise Smith
| Company History: Tennessee Valley Authority |
NAIC: 221111 Hydroelectric Power Generation; 221112 Fossil Fuel Electric Power Generation; 221113 Nuclear Electric Power Generation; 221119 Other Electric Power Generation; 221121 Electric Bulk Power Transmission and Control; 221122 Electric Power Distribution
Established by the U.S. Congress in 1933 as a critical component of President Franklin Roosevelt's Depression-era "New Deal," the Tennessee Valley Authority (TVA) was initially created primarily to manage the Tennessee River's navigation and flood control problems, to encourage reforestation and proper land use, and to foster agricultural and industrial development. In time, the TVA grew to become the nation's largest public power provider serving more than 8 million customers over an 80,000-square mile region covering the Tennessee Valley. This area includes most of Tennessee and portions of Mississippi, Kentucky, Alabama, Georgia, North Carolina, and Virginia. Following decades of operations as a massive bureaucracy, the TVA has dramatically streamlined itself in recent years in order to boost its competitiveness in preparation for the anticipated onset of deregulation.
The federal government purchased a site in 1916 on the Tennessee River in Muscle Shoals, Alabama, where a sudden drop in river depth resulted in strong rapids that inhibited ships from progressing further upstream. Dam construction began in this location to produce power for the manufacturing of explosives needed during World War I, but the war had concluded before this new project was operational. During the 1920s, Congress considered whether the property should remain a public site or be sold to the private sector.
Nebraska Senator George W. Norris fought for the property to remain under public control. He had little support from his Congressional colleagues, until the advent of the Depression, when government economic assistance became more widely accepted. President Franklin Roosevelt supported Senator Norris' plan, and envisioned it as one way to help achieve the success of his "New Deal," which aimed to save the U.S. economy from the Depression. With a lack of national investment in the Tennessee Valley region, President Roosevelt requested that Congress create "a corporation clothed with the power of government but possessed of the flexibility and initiative of a private enterprise." In agreement with the President's goal, Congress passed the Tennessee Valley Authority Act on May 18, 1933. Through this legislation, which far exceeded Norris' initial plan, TVA was established as a federal agency charged with improving the navigation and flood control of the Tennessee River, encouraging reforestation and proper land use in the area, leading regional agricultural and industrial development, and operating national defense-related properties in Muscle Shoals, Alabama.
By June 1934, 9,173 people were already employed by the TVA, and 16 dams were built by the agency between 1933 and 1944. Before the TVA, dams were engineered exclusively for either electricity generation or flood control. The agency was able to address both needs within a single dam, which soon became the global standard.
At the time, the Tennessee Valley included some of the most under-served areas of the South. While 90 percent of Americans in urban areas had electricity by the 1930's, merely 10 percent of rural Americans enjoyed the same benefit. Most utility companies avoided powering rural areas due to the significant expense of setting up electric lines over such expansive areas, and because of a concern that rural Americans would not be able to afford electricity. This inequity between urban and rural communities in the United States led to President Roosevelt's resolve that the government must become involved.
Private power companies took issue with the cheaper energy the federally-subsidized TVA provided. President Roosevelt saw the TVA as a benchmark by which the rates of private utility companies could be evaluated. Seen as a threat to the private sector, the TVA was sued by many power companies during the 1930s. One such suit claimed that the government had overstepped its Constitutional powers by creating an electric utility corporation. Testifying before Congress regarding the TVA in 1935, John D. Battle, Executive Secretary of the National Coal Association, stated that, "we are willing to be put out of business if it can be done in a plain straightforward business-like manner, but we do object to our government putting us out of business." The TVA was victorious in a case ruled on by the Supreme Court in February 1936, and in 1939, the TVA Act was upheld by the Supreme Court as constitutional.
Beyond the electricity generated by newly built dams, the founding of the TVA soon resulted in a variety of other important benefits to the Tennessee Valley. The agency provided farmers with advice to boost crop yields, aided in reforestation and forest fire control, and developed fertilizers. Rather than carrying out a predetermined federal master plan, the TVA aimed to develop the region by working with community members and their state and local agencies.
From its inception until 1938, the three members of the TVA's board jockeyed for control of the overall vision for the Authority. President Roosevelt removed Arthur E. Morgan as the TVA's chairman in March 1938 due to internal organizational conflicts, obstruction of the work of the agency, and unsubstantiated allegations Chairman Morgan made against fellow directors.
In the 1940s during World War II, the TVA conducted a remarkable hydropower construction program, one of the largest ever in the United States, to provide electricity for aluminum plants that supplied the much-needed metal to manufacturers of bombs and planes. The TVA had finished a 650-mile navigation channel as long as the Tennessee River by the conclusion of World War II. It had also become the largest supplier of electricity in the country, although demand still exceeded the capacity of its hydroelectric dams.
During the 1950s, unable to secure federal funding of coal-fired plant construction, the TVA lobbied Congress for the ability to issue bonds. President Dwight Eisenhower was not enamored of the TVA, however, citing the agency in 1953 as an example of "creeping socialism." Nonetheless, in 1959, Congress passed legislation which made the TVA a self-financing operation, provided that the TVA would restrict its operations to the existing Tennessee Valley region. More than a dozen public operations similar to the TVA had been created around the world since its creation, with thousands of international visitors having visited the Tennessee Valley to learn about the agency's integrated regional development.
Strip mining and coal burning increased significantly in the 1950s as the TVA worked to meet energy demand--actions that a later chairman of the TVA, S. David Freeman (1978-1981), cited in Environment in April 1985 as causing "environmental problems that spoiled land, degraded waters, and polluted air." Chairman Freeman added that although the TVA's dams protected against flooding, they also created lakes that in turn flooded farmland.
In the early 1960's, the TVA developed "Land Between the Lakes," a 170,000-acre national park on a 40-mile strip of wooded land located between two reservoirs in western Kentucky and Tennessee. This outdoor education and recreation area attracts 2 million visitors annually.
The Tennessee Valley experienced strong economic growth throughout the 1960s, as farms and forests were in top condition and residents enjoyed some of the lowest electric rates in the nation. To address the continued growth in demand for economical power, the TVA designed a colossal plan in 1966 calling for the eventual construction of 17 nuclear power plants throughout the region.
The international oil embargo in 1973 dramatically altered the Tennessee Valley's economy, along with that of the rest of the country. Fuel costs continued to rise for the remainder of the decade. In some regions of the Tennessee Valley, alternative energy sources were virtually eliminated over the years, and this became clear with the spiraling energy costs of the 1970s. Many environmentalists opposed the TVA's coal and nuclear power programs, and environmental organizations initiated lawsuits against the TVA with a variety of allegations--including violations of the National Environmental Protection Act of 1969 and the Endangered Species Act of 1973. A serious fire at the Browns Ferry, Alabama nuclear plant in 1975 could have resulted in a catastrophe, but the situation was controlled before reaching that level. The TVA had become the worst United States sulfur dioxide polluter by 1977 (2 million tons emitted annually and one-tenth of U.S. emissions), putting it in violation of the Clean Air Act. In 1978, the TVA began a billion-dollar cleanup initiative to reduce sulfur dioxide emissions from its 12 coal-fired plants. Six years later, sulfur dioxide emissions were cut in half and all plants had become compliant with the Clean Air Act.
By the end of the 1970s, the TVA's new leadership headed by Chairman S. David Freeman began to steer the agency in a new direction with conservation programs, experiments in alternative energy sources like solar power, and strengthened relationships with the international community. The TVA started to focus on conservation rather than power-plant construction as a top priority for its customers--offering free audits and low-interest financing in order to foster the winterization of buildings to save energy. The agency's investment in nuclear power was also reduced significantly. Soil erosion due to inferior farming techniques, a problem in the early years of the TVA, returned as a concern in the 1970s and 1980s, which led the TVA to offer technical advise on the problem once more. This work resulted in 1.2 million tons of topsoil saved each year. With the TVA's tree planting projects, the valley reached a forestation level of 60 percent. The TVA's renewed commitment to conservation was also exemplified in a 1983 board policy that halted construction of additional dams or structures along the Tennessee River, and ended the channeling of more streams in the Tennessee Valley.
By the early 1980s, Tennessee Valley electric rates were five times higher than a decade earlier. As was the case with other U.S. utilities, several nuclear plant construction projects were terminated due to lower energy demand and higher construction costs, with billions already spent on these sites. The TVA's management of its nuclear power program came under serious attack in the mid-1980s. The agency had received 12 Nuclear Regulatory Commission fines since 1980, and was under Congressional investigation for alleged mismanagement and cover-ups. The TVA had to shut down its five functioning reactors in 1985, due to tough new federal nuclear regulations. The TVA's plans to recover from these closings were in disarray, and responsibility for the nuclear power program had been shared across multiple divisions, making it difficult to proceed with an integrated plan. Eventually, the TVA obtained new consultants and staff with expertise in nuclear power. During 1988, almost one-third of the TVA's 33,000 employee workforce was laid off and management salaries were frozen. By 1989, two nuclear reactors were operational. The massive borrowing practices of the TVA, keeping the agency on the verge of bankruptcy, led to $20 billion of nuclear debt. Congress placed a debt ceiling of $30 billion on the TVA.
In an effort to return to a stronger position in the industry, the TVA's Chairman Marvin Runyon focused the agency on cutting costs and boosting efficiency and productivity. Electric rates stabilized in the late 1980s, and this stability continued well into the 1990s. Much of the TVA's lauded 1985 energy conservation program was scrapped, in favor of a renewed interest in nuclear power to meet anticipated growth in energy demand, much to former Chairman S. David Freeman's dismay. By 1991, three inactive nuclear reactors went back on-line after years of inactivity.
In May 1992, the TVA purchased emissions allowances from Wisconsin Power and Light, considered one of the cleanest operations in the United States This type of transaction, enabling the TVA to emit 10,000 tons of sulfur dioxide, became permissible under the 1990 Clean Air Act and was cheaper than using alternative fuels. The TVA's 1992 net income of $120 million had fallen significantly from the previous year's total of $286 million. By 1993, having exceeded requirements of the Clean Air Act, the TVA earned its own emissions allowances for its use and sale.
The TVA continued to pursue adding additional nuclear power capacity in 1994, with three reactors operational at the time. Two reactors in Watts Bar, Tennessee remained under construction, originally budgeted at $625 million 22 years previously, with $7.7 billion spent as of 1994. In February 1995, the TVA announced plans to terminate its three remaining nuclear reactor construction projects, which would have required at least another $8.8 billion to complete, if not more. This decision brought an end to a 28-consecutive-year program of nuclear reactor construction. The TVA sought partners to help convert one of those sites into a gas-firing plant. One reactor at Watts Bar was still able to begin operations later that year, with commercial power generation starting the following year.
The U.S. General Accounting Office questioned the TVA's long-term sustainability in 1995, but with its recent change in direction, the TVA was optimistic about its prospects for achieving a more competitive position. As the $208 billion electric power industry moved towards deregulation as an inevitability, the TVA formed a Public Power Alliance with Municipal Electric Authority of Georgia, Old Dominion Electric Cooperative of Virginia, and the Municipal Energy Agency of Mississippi in order to serve as an effective lobbying entity and to share strategies and innovations with each other. A deregulated industry would create a free market environment where customers and distributors could openly select utilities regardless of their location in the country.
During the 1990's, the TVA significantly reduced its operating costs, cut its workforce by more than 50 percent, and boosted plant capacity, earning the company a third place ranking for lowest production costs by a major electric utility in 1997. Early that year, the TVA Chairman Craven Crowell offered, but soon retracted, a suggestion that Congress spin off the TVA's non-power-related operations to other public agencies and eliminate the federal funding it received for those programs--enabling it to focus on the electric utility industry. The TVA had been receiving just over $100 million from Congress each year, which was less than 2 percent of the agency's $5.7 billion budget. The TVA's private utility competitors argued that the public agency's indirect subsidies, mostly tax exemptions, totaled $1.2 billion annually--making it difficult for private utilities to compete. Southern lawmakers were shocked that such a proposal could be suggested by someone within the TVA, rather than by the agency's opponents, as was usually the case. They worried that this situation would lead Congress to eventually sell off the TVA as a private utility, which might bankrupt the organization due to the agency's $27 billion of debt.
In July 1997, the TVA settled a lawsuit with several private utilities that accused the TVA of selling electricity beyond its limited region mandated by Congress. As part of the settlement, the TVA promised to cooperate in future deregulation efforts by the electric industry. With especially high energy demands during the summer of 1997, the TVA found that purchased power was not as reliable as it needed. This led the TVA to plan on establishing firm contracts with others for power and exploring the possibility of purchasing other utility operations entirely to guarantee reliability.
The U.S. Department of Energy decided in 1999 it would eventually produce radioactive tritium gas at one of the TVA's nuclear reactors for use in nuclear weapons--anticipated to begin during 2003. This would mark the first time a commercial U.S. nuclear reactor would be used for military purposes--a prospect that led critics of the decision to express grave concern about the blurring of the separation between civilian and military operations. The TVA switched to cleaner coal for its plants in June 1999, helping the agency adhere to environmental regulations. In September, the TVA announced it would not raise rates for the following year, and planned to keep rates stable for the following decade through increased productivity and controlled operating costs.
The Environmental Protection Agency (EPA) charged the TVA in November with violating pollution regulations of the Clean Air Act in seven coal-fired plants, with a cleanup that would cost upwards of $1 billion. The TVA challenged the EPA's interpretation of the Clean Air Act, and a U.S. Court of Appeals ordered in 2002 that the two parties use a mediator to resolve the issue, though this approach failed which put the case back to the court. The TVA's Congressional appropriations were terminated for fiscal year 1999, though the TVA was permitted to refinance some of its high interest debt, which will result in significant savings in the future. Despite the loss of Congressional appropriations, the TVA posted net income of $119.3 million in 1999.
In 2000, a new Public Power Institute was formed by the TVA, marking a return to its past conservation and energy development initiatives. The TVA began to explore means to produce electricity drawn from the sun, wind, and landfill gas sources, while charging customers a premium price for "green power." A $3.4 million wind-powered generator construction project was announced in September 2000 for Knoxville, Tennessee, and demand for cleaner energy continued to grow. Five nuclear reactors were operational in 2000, although $10 billion of investment from terminated reactors had not yet been written off. Debt reduction was not progressing as rapidly as planned, but $1.7 billion had been cut since 1996's debt cap of $27 billion.
The TVA's board voted in May 2001 to invest in the upgrading of two nuclear power plants in order to meet growing demand for electricity and avoid relying on outside providers. Having been among the nation's worst nuclear programs in the 1980's, the TVA had made significant progress in the 1990s and, by 2001, was ranked in the top quartile in the United States Partnering with the British corporation Innogy PLC, the TVA also announced plans to construct a $25 million energy storage plant--the first of its kind in the United States--using regenerative fuel cell technology to store energy in bulk. In July 2001, President George W. Bush named TVA board member Glenn McCullough to replace outgoing Chairman Craven Crowell. Later in the year, Chairman McCullough voiced his support for an electric utility deregulation bill that would provide competition and choice throughout the TVA's current region, and this bill was under consideration by Congress in 2002.
The TVA wrote off $3.4 billion in assets from unfinished nuclear reactors, resulting in a $3.3 billion deficit for fiscal year 2001. With a $7.1 billion budget adopted for fiscal year 2002, the TVA launched a $2.5 billion capital spending plan--its largest since the mid-1990s--focused on new transmission lines, pollution reduction from coal-fired plants, and increased productivity from current and future plants. At this point, residential customers' rates had only been raised once since 1987. Chairman McCullough pledged to improve industrial rates, which had been kept at an average level over the years.
In April 2002, the TVA partnered with Southern Co. of Atlanta, Entergy of New Orleans, and Midwest Independent Transmission System Operator of Carmel, Indiana in an agreement to provide "seamless wholesale power trading" in the Southeast and Midwest, providing uniform access and more effective transmission of electricity. In May, the TVA's board approved restarting the Browns Ferry nuclear reactor, the agency's oldest, which was shut down in 1985 due to safety concerns and would cost an estimated $1.8 billion to restart. Repairs were slated to begin in 2003, with the reactor expected to restart in 2007. A 2002 U.S. General Accounting Office study of the TVA found that its customers rates were between 14 and 22 percent less than competitors, and that the agency functions with a smaller staff than other electric utilities.
The Tennessee Valley Authority has faced a variety of significant challenges and controversies over the course of its lengthy history. Although the TVA began as a dynamic new model for regional integrated resource development and ballooned into an immense bureaucratic agency with billions in debt that remain today, it has transformed itself in recent years into a much leaner operation that appears to be committed to debt reduction and is preparing for the arrival of deregulation.
Further Reading
Dumaine, Brian, "Nuclear Scandal Shakes the TVA," Fortune, October 27, 1986, p. 40.
Freeman, S. David, "The Nine Lives of TVA," Environment, April 1985, pp. 6-11.
Higgins, Benjamin, "The American Frontier and the TVA," Society, March/April 1995, p. 34.
Hodge, Clarence Lewis, The Tennessee Valley Authority: A National Experiment in Regionalism, New York: Russell & Russell, 1968.
Martin, Roscoe C., TVA: The First Twenty Years, Knoxville: University of Alabama Press and University of Tennessee Press, 1956.
Moore, J. R., The Economic Impact of TVA, Knoxville: University of Tennessee Press, 1967.
Neuse, Steven M., "TVA at Age Fifty: Reflections and Retrospect," Public Administration Review, November/December 1983, pp. 491-499.
Sheffield, Christopher, "TVA Looks to New Alliances, Both Foreign and Domestic," Mississippi Business Journal, November 25, 1996, p. 18.
Upbin, Bruce, "The Tennessee Valley Anachronism," Forbes, May 19, 1997, p. 52.
— Christopher W. Frerichs
| US History Encyclopedia: Tennessee Valley Authority |
The Tennessee Valley Authority (TVA), a federal corporation responsible for power generation in the Tennessee Valley, serves roughly 8.3 million people through 158 municipal and cooperative power distributors. TVA furnishes power to an 80,000-square-mile area, including the state of Tennessee and parts of Kentucky, Virginia, North Carolina, Georgia, Alabama, and Mississippi, thus making the corporation one of America's largest electrical power producers.
Born of President Franklin D. Roosevelt's innovative solution to help stimulate the area's economy during the Great Depression, the TVA development began after World War I (1914–1918). A government-owned dam and nitrate-producing facility at Muscle Shoals, on the Tennessee River in northwestern Alabama, became the seedling of the audacious experiment. Nebraska Senator George W. Norris hoped at the time to build more dams similar to the Wilson Dam at Muscle Shoals, bringing public control to the Tennessee River. Almost single-handedly, Norris held the dam in government ownership until President Roosevelt's vision expanded it into a broader concept of multipurpose development and regional planning. On 18 May 1933, Congress responded to Roosevelt's prodding and enacted the Tennessee Valley Act.
TVA was to be more than a flood control and power agency. It was seen as having a wide mandate for economic development, recreation, reforestation, and the production of fertilizer. But the agency was in sad shape at its start. The best timber had already been cut, the land had been farmed too long, and crop yields were declining.
Controversy also surrounded TVA. Private utilities fought the agency's power policies, and an internal feud between Chairman Arthur Morgan and directors David Lilienthal and Harcourt Morgan unsettled TVA's direction until 1938.
Nevertheless, the agency pushed forward. By 1941, it operated eleven dams with six more under construction, and it was selling low-cost electric power to 500,000 consumers throughout six states. TVA technicians developed fertilizers, and 25,000 demonstration farms taught local citizens the benefits of more scientific farming. Additionally, the agency helped replant forests, controlled forest fires, and improved habitat for wildlife. During World War II (1939–1945), 70 percent of TVA power went to defense industries, among them the Oak Ridge atomic project. At the war's end, TVA had completed a 652-mile navigation channel, becoming the largest electricity supplier in the United States.
Attacked for being too radical, TVA also found itself criticized for being too conciliatory to established interests and ideas. Director Lilienthal claimed that TVA practiced "grassroots democracy" by reaching out in a massive educational effort to involve the rural population of the valley. However, critics saw mostly manipulation in this approach.
The 1960s saw unprecedented growth in the Tennessee Valley. At the same time, TVA began building nuclear plants as a new source of power. The agency survived reproach from both conservatives and environmentalists and, by the early 1970s, claimed an impressive record. In 1972, an estimated $395 million in flood damages had been averted by TVA dams. Power revenues came to $642 million, of which TVA returned $75 million to the U.S. Treasury. Along with industrial customers, 2 million residential consumers used TVA power.
The TVA manages an integrated, technically advanced system of dams, locks, and reservoirs in the Tennessee River watershed. The balanced system facilitates navigation, controls flooding, and provides hydropower to benefit users. As of 2002, it included three nuclear generating plants, eleven coal-fired plants, twenty-nine hydraulic dams, five combustion turbine plants, a pumped-storage plant, and roughly 17,000 miles of transmission lines, making the TVA the largest public power system in the nation. TVA's generation mix consisted of 63 percent coal, 31 percent nuclear, and 6 percent hydroelectric.
The agency serves 158 local municipal and cooperative power distributors that deliver power to homes and businesses within the seven-state area. Also involving itself in technical assistance to communities and industries, TVA conducts economic research and analysis, industrial research, and conceptual site engineering and architectural services. It also provides technical and financial support to small and minority-owned businesses as well as working with regional industrial development associations to recruit new industry and develop strategies for creating jobs.
Preserving wildlife habitat, TVA oversees more than 122,000 acres of public land designated for natural-resource management. Forty percent of it is administered by other agencies, while the remainder falls under TVA management. The agency launched the Natural Heritage Project in 1976, with the help of the Nature Conservancy, to analyze and manage biodiversity on TVA lands and to improve compliance with federal environmental regulations. The project monitors threatened and endangered plant and animal species in the TVA service area. Since its beginnings, the Natural Heritage Project has supplied environmental data on TVA activities ranging from transmission-line construction to economic development.
TVA has also developed a land-use system of 10,700 acres classified as TVA Natural Areas. The specified sites are designated as Habitat Protection Areas, Small Wild Areas, Ecological Study Areas, or Wildlife Observation Areas and include limitations on activities that could endanger important natural features.
Throughout the Tennessee Valley, TVA operates roughly 100 public recreation facilities, including campgrounds, day-use areas, and boat-launching ramps.
Bibliography
Callahan, North. TVA: Bridge Over Troubled Waters. South Brunswick, N.J.: A. S. Barnes, 1980.
Chandler, William U. The Myth of TVA: Conservation and Development in the Tennessee Valley, 1933–1983. Cambridge, Mass.: Ballinger, 1984.
Conkin, Paul K., and Erwin C. Hargrove. TVA :Fifty Years of Grass-Roots Bureaucracy. Chicago: University of Illinois Press, 1983.
Creese, Walter L. TVA's Public Planning: The Vision, The Reality. Knoxville: The University of Tennessee Press, 1990.
Tennessee Valley Authority Web Site. Home page at http://www.tva.com/.
| Columbia Encyclopedia: Tennessee Valley Authority |
The establishment of the TVA marked the first time that an agency was directed to address the total resource development needs of a major region. TVA was instructed to take on the problems presented by devastating floods, badly eroded lands, a deficient economy, and a steady outmigration-all in one unified development effort. The act provided for the integrated development of the whole Tennessee River basin, an area of about 41,000 sq mi (106,200 sq km) that covers parts of seven states. The TVA is governed by a three-person board of directors. The fact that its main offices are located in the region, rather than in Washington, D.C., allows the TVA to maintain a close working relationship with the people of the region.
Facets and Activities of the TVA
In 1998 the TVA generated more electricity than any other U.S. utility, supplying 8 million residents. The most noteworthy feature of TVA is the system of multipurpose dams and reservoirs that have contributed greatly to the economic life of the area. There are some 50 dams in the hydroelectric system with an installed capacity in excess of 6 million kW. To meet the growing demand for power over and above the hydroelectric capacity of the system, the TVA began in 1940 to construct steam-generating facilities. By the late 1990s, 62% of the TVA's installed capacity was provided by coal-burning steam plants.
Steadily mounting power demands encouraged TVA to add nuclear power plants in the early 1970s. Design and management flaws and a 1975 accident at Browns Ferry resulted in plant closures and construction delays, but by 1996 three facilties (Watts Bar, Sequoyah, and Browns Ferry) were open and operating.
Electric power from all sources is allocated with a view to promoting the widest possible use of electricity throughout the area-with local municipalities, state and federal agencies, and farmer cooperatives receiving priority over private utility companies and industries. The availability of low-cost electricity has attracted large numbers of businesses and industries to the area, and a 630-mi (1,014-km) navigation channel extending from the mouth of the Tennessee River to Knoxville, Tenn., has been responsible for an enormous increase in river traffic, chiefly in coal, construction material, grain, petroleum, chemicals, and forest products.
Other TVA activities, carried out in cooperation with local authorities, include land conservation; environmental research; tree planting; malaria control; the development of fish, wildlife, and mineral resources; social and educational programs; and the establishment of recreational facilities along the banks of its reservoirs, including the Land Between the Lakes, in W Kentucky and W Tennessee.
Financing the TVA
Throughout much of the history of the TVA, opponents of the authority have argued that it is too costly and that government should not compete with private enterprise. In 1959, Congress authorized the TVA to issue bonds and notes to be used in financing needed additions to power system capacity. The power system became self-financing and by the early 1990s had paid back more than $2.5 billion into the U.S. Treasury. Congressional funding of the TVA's nonpower programs was phased out in the late 1990s, leaving it totally self-supporting.
The TVA Today
By the 1960s many of the regional problems of underdevelopment had been overcome, per capita income had increased dramatically, and rapid outmigration had ended. However, the TVA continues to seek ways to make the largely rural area an attractive alternative to overcrowded cities. In the late 1960s and early 70s the TVA began to place greater emphasis on environmental protection as industrialization and rising living standards resulted in greater demands on the environment. In the conflict between economic and environmental objectives the TVA sought a suitable balance, particularly in its power program. Despite the TVA's environmental protection efforts, the agency has been criticized principally by environmental groups. Controversial issues have involved construction of the Tellico Dam and Reservoir on the Little Tennessee River, the nuclear power program, and the TVA's purchase of pollution credits from Wisconsin Power and Light in 1992.
Bibliography
See P. J. Hubbard, Origins of the TVA (1961, repr. 1968); J. Moore, ed., The Economic Impact of TVA (1967); N. Callahan, TVA: Bridge over Troubled Waters (1980); W. U. Chandler, Myth of TVA: Conservation and Development in the Tennessee Valley, 1933-1983 (1984).
| Law Encyclopedia: Tennessee Valley Authority |
In 1933, U.S. President Franklin Delano Roosevelt approved the passage of the Tennessee Valley Authority Act (16 U.S.C.A. § 831 et seq.). The act provided for a source of hydroelectric power, control of a troublesome flood situation, revitalization of forest areas, and navigation and economic benefits for the region. These goals, announced during a devastating nationwide depression, made the Tennessee Valley Authority (TVA) an ambitious project of the era.
The idea for the project was originally developed in 1918, when two nitrate facilities and a dam were constructed at Muscle Shoals, Alabama, on the Tennessee River. Previously the area had been prone to severe floods, and water travel was impeded by sandbanks. The area had abundant natural resources, but the surrounding basin was depleted, and the region had experienced a depressed economy even before the hard times suffered throughout the nation in the Depression of the 1930s.
Politicians and developers of the project envisioned a growth of industry and water power in the Tennessee Valley, as well as the manufacture of low-priced fertilizer and public control of the valuable resources. Debates over whether the project area should be rented to private parties or be controlled by the government continued throughout the 1920s. Senator George W. Norris of Nebraska was instrumental in the passage of measures by Congress advocating government control, but these bills did not receive presidential approval until 1933, when Roosevelt based his Tennessee Valley plan on the Norris proposals.
Roosevelt's Tennessee Valley Act authorized the establishment of a corporation owned by the federal government and directed by Arthur E. Morgan, the chairman, and Harcourt A. Morgan, and David Lilienthal. The early years of TVA were fraught with adversity, particularly when its constitutionality was questioned. Disputes between the directors and an investigation conducted by Congress hampered its initial achievements, but the TVA continued its work despite these difficulties.
The TVA succeeded in its projected goals. Since the development of its dams and reservoirs, the region has not been subjected to serious floods. The electrical system developed by the TVA afforded the region power at a low cost, and throughout the decades, power development has been extended to include coal and nuclear systems. The TVA also benefited agrarian interests by encouraging conservation, replenishment of forests, and agricultural and fertilizer research. Although the power program of the TVA is financially self-supporting today, other programs conducted by the authority are financed primarily by appropriations from Congress.
| History Dictionary: Tennessee Valley Authority |
A corporation created by the federal government in the Great Depression to promote the economic development of the Tennessee River and adjoining areas. The TVA, known as a builder of dams, is responsible for flood control, the generation of electric power, soil conservation, and other areas of economic development. The TVA was part of the New Deal.
| Wikipedia: Tennessee Valley Authority |
| Type | Government-owned independent corporation |
|---|---|
| Founded | 1933 |
| Headquarters | Knoxville, Tennessee, USA |
| Key people | Tom Kilgore (current CEO) |
| Industry | electric utility |
| Revenue | $10.38 billion USD (FY 2008 ending September 30, 2008) |
| Operating income | $2.18 billion USD (FY 2008) |
| Net income | $817 million USD (FY 2008) |
| Website | www.tva.gov |
The Tennessee Valley Authority (TVA) is a federally owned corporation in the United States created by congressional charter in May 1933 to provide navigation, flood control, electricity generation, fertilizer manufacturing, and economic development in the Tennessee Valley, a region particularly impacted by the Great Depression. The TVA was envisioned not only as a provider, but also as a regional economic development agency that would use federal experts and electricity to rapidly modernize the region's economy and society.
The TVA's jurisdiction covers most of Tennessee, parts of Alabama, Mississippi, and Kentucky, and small slices of Georgia, North Carolina, and Virginia. It is a political entity with a territory the size of a major state, and with some state powers (such as eminent domain), but unlike a state, it has no citizenry or elected officials. It was the first large regional planning agency of the federal government and remains the largest. Under the leadership of David Lilienthal ("Mr. TVA"), the Authority became a model for America's governmental efforts to modernize Third World agrarian societies.[1]
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President Franklin Delano Roosevelt signed the Tennessee Valley Authority Act (ch. 32, 48 Stat. 58, codified as amended at 16 U.S.C. § 831, et seq.), creating the TVA on May 18, 1933.
As a supplier of electric power, the agency was given authority to enter into long-term (20 years) contracts for the sale of power to government agencies and private entities, to construct electric power transmission lines to areas not otherwise supplied and to establish rules and regulations for electricity retailing and distribution. The TVA is thus both a power supplier and a regulator.
Today the TVA is the nation's largest public power company, providing electric power to nearly 8.5 million customers in the Tennessee Valley. It acts primarily as an electric power wholesaler, selling to 158 retail power distributors and 61 directly served industrial or government customers. Power comes from dams providing hydroelectric power, fossil fuel plants, nuclear power plants, combustion turbines and wind turbines.
During the 1920s and the Great Depression years, Americans began to support the idea of public ownership of utilities, particularly hydroelectric power facilities. The concept of government-owned generation facilities selling to publicly owned distribution utilities was controversial and remains so today.[2]
Many believed privately owned power companies were charging too much for power, did not employ fair operating practices and were subject to abuse by their owners (utility holding companies), at the expense of consumers. During his presidential campaign, Roosevelt claimed that private utilities had "selfish purposes" and said, "Never shall the federal government part with its sovereignty or with its control of its power resources while I'm president of the United States." By forming utility holding companies, the private sector controlled 94 percent of generation by 1921, essentially unregulated. (This gave rise to Public Utility Holding Company Act of 1935 (PUHCA)). Many private companies in the Tennessee Valley were bought by the federal government. Others shut down, unable to compete with the TVA. Government regulations were also passed to prevent competition with the TVA.
On the other hand, there were economic libertarians who believed the government should not participate in the electricity generation business, fearing government ownership would lead to the misuse of hydroelectric sites. The TVA was one of the first federal hydropower agencies, and today most of the nation's major hydropower systems are federally managed. Other attempts to create TVA-like regional agencies have failed, such as a proposed Columbia Valley Authority for the Columbia River.
Regional power consumers may benefit from lower-cost electricity supplied from TVA's network of 29 power-producing hydropower facilities. Supporters of the TVA, though, note that the agency's management of the Tennessee River system without appropriated federal funding saves federal taxpayers millions of dollars annually. Opponents, such as Dean Russell in The TVA Idea, in addition to condemning the project as being socialist, argued that the TVA created a "hidden loss" by preventing the creation of "factories and jobs that would have come into existence if the government had allowed the taxpayers to spend their money as they wished." Defenders note that the TVA is overwhelmingly popular in Tennessee among conservatives and liberals alike, as Barry Goldwater discovered in 1964, when he proposed selling the agency.[3]
The Supreme Court of the United States ruled the TVA to be constitutional in Ashwander v. TVA, 297 U.S. 288 (1936). The Court noted that regulating commerce among the states includes regulation of streams and that controlling floods is required for keeping streams navigable. The war powers also authorized the project. The argument before the court was that electricity generation was a by-product of navigation and flood control and therefore could be considered constitutional.
Much of this information comes from http://www.tva.gov/abouttva/history.htm, a government website and thus in the public domain.
Even by Depression standards, the Tennessee Valley was in sad shape in 1933. Thirty percent of the population were affected by malaria, and the income was only $639 per year, with some families surviving on as little as $100 per year.[citation needed] Much of the land had been farmed too hard for too long, eroding and depleting the soil. Crop yields had fallen along with farm incomes. The best timber had been cut, with another 10% of forests being burnt each year.[citation needed] Much of the population were living in conditions that would be similar to present-day developing countries.[citation needed]
The TVA was designed to modernize the region, using experts and electricity to combat human and economic problems.[4] TVA developed fertilizers, taught farmers ways to improve crop yields and helped replant forests, control forest fires, and improve habitat for fish and wildlife. The most dramatic change in Valley life came from TVA-generated electricity. Electric lights and modern home appliances made life easier and farms more productive. Electricity also drew industries into the region, providing desperately needed jobs.[citation needed]
None of this was easy. The development of the dams displaced more than 15,000 families. This caused resentment and anti-TVA sentiment in some rural communities.[citation needed] Many local landowners were suspicious of government agencies. But the TVA successfully introduced new agricultural methods into traditional farming communities by blending in and finding local champions.
A Tennessee farmer would not take advice from an official in a suit and tie, so TVA officials had to find leaders in the communities and convince them that crop rotation and the judicious application of fertilizers could restore soil fertility. Once they had convinced the leaders, the rest followed.
At its inception, the TVA was based in Knoxville, Tennessee in the old Federal Customs House at the corner of Clinch Avenue and Market Street. The building is now a museum.[5]
The unemployed were hired for conservation, economic development, and social programs such as a library service that operated for the surrounding area. The professional staff headquarters was composed of experts from outside the region. The workers were categorized into the usual racial and gender lines of the day. The TVA hired a few African-Americans for janitorial positions. The TVA recognized labor unions; its skilled and semi-skilled blue collar employees were unionized, a breakthrough in an area known for corporations hostile to miners' unions and textile unions. Women were excluded from construction work, although the TVA's cheap electricity attracted textile mills that hired mostly women. [6]
During World War II, the U.S. needed aluminum to build airplanes. Aluminum plants required huge amounts of electricity, and to provide the power, the TVA engaged in one of the largest hydropower construction programs ever undertaken in the U.S. Early in 1942, when the effort reached its peak, 12 hydroelectric plants and one steam plant were under construction at the same time, and design and construction employment reached a total of 28,000. The largest project of this period was the Fontana Dam Project. After negotiations led by Harry Truman ("I want aluminum. I don't care if I get it from Alcoa or Al Capone."), TVA purchased the land from Nantahala Power and Light, a wholly-owned subsidiary of Alcoa, and built Fontana Dam.
Electricity from Fontana was intended for Alcoa factories. By the time the dam generated power in early 1945, the electricity was used for another purpose in addition to aluminum manufacturing. TVA also provided much of the electricity needed for uranium enrichment at Oak Ridge, Tennessee, as required for the Manhattan Project.
By the end of the war, TVA had completed a 650-mile (1,050-kilometer) navigation channel the length of the Tennessee River and had become the nation's largest electricity supplier. Even so, the demand for electricity was outstripping TVA's capacity to produce power from hydroelectric dams. Political interference kept TVA from securing additional federal appropriations to build coal-fired plants, so it sought the authority to issue bonds. Congress passed legislation in 1959 to make the TVA power system self-financing, and from that point on it would pay its own way.
The 1960s were years of unprecedented economic growth in the Tennessee Valley. Electric rates were among the nation's lowest and stayed low as TVA brought larger, more efficient generating units into service. Expecting the Valley's electric power needs to continue to grow, TVA began building nuclear reactors as a new source of cheap power. During this decade (and the 1970s), TVA was engaged in what was up to that time its most controversial project - the Tellico Dam Project. The project was initially conceived in the 1940s but not completed until 1979.
Significant changes occurred in the economy of the Tennessee Valley and the nation, prompted by an international oil embargo in 1973 and accelerating fuel costs later in the decade. The average cost of electricity in the Tennessee Valley increased fivefold from the early 1970s to the early 1980s. With energy demand dropping[citation needed] and construction costs rising, TVA canceled several nuclear plants, as did other utilities around the nation.
Marvin T. Runyon became chairman of the Tennessee Valley Authority in January 1988. He claimed to reduce management layers, cut overhead costs by more than 30%, achieve cumulative savings and efficiency improvements of $1.8 billion. He said he revitalized the nuclear program, and instituted a rate freeze that continued for ten years.
The 1970s saw the last and most controversial of the TVA's large dam-reservoir projects, Tellico Dam. The Tellico Dam project was initially delayed because of concern over the snail darter, a fish protected by the Endangered Species Act.
As the electric-utility industry moved toward restructuring and deregulation, TVA began preparing for competition. It cut operating costs by nearly $950 million a year, reduced its workforce by more than half, increased the generating capacity of its plants, stopped building nuclear plants, and developed a plan to meet the energy needs of the Tennessee Valley through to the year 2020.
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TVA has recently made news by again reducing its workforce and by beginning new campaigns to improve its public image. It has also received acclaim from pro-nuclear organizations[citation needed] for its work to restart a previously mothballed nuclear reactor at Browns Ferry Unit 1 (since completed). In 2005 the TVA announced its intention to construct an Advanced Pressurized Water Reactor at its Bellefonte site in Alabama (filing the necessary applications in November 2007), and in 2007 announced plans to complete the unfinished Unit 2 at Watts Bar. (TVA is the owner and operator of the Browns Ferry, Sequoyah and Watts Bar nuclear power plants.)
In 2004, TVA implemented recommendations from the Reservoir Operations Study (ROS) in how it operates the Tennessee River system (the nation's fifth largest).
On December 22, 2008, an earthen dike at TVA's Kingston Fossil Plant broke, spreading one billion gallons of wet coal ash across 300 acres of land and into the tributaries of the Tennessee River. [2] The non-profit Southern Alliance for Clean Energy plans on suing TVA for $165 million on behalf of residents in the area. [3]
In 2009, TVA signed 20-year power purchase agreements with Maryland-based CVP Renewable Energy Co. and Chicago-based Invenergy Wind LLC for electricity generated by wind farms.[7]
TVA's power mix as of 2004 was 11 fossil-powered plants, 29 hydroelectric dams, three nuclear power plants (with five reactors and one restarting), and six combustion turbine plants. TVA is one of the largest producers of electricity in the United States and acts as a regional grid reliability coordinator. Fossil fuel plants produced 62% of TVA’s total generation in fiscal year 2005, nuclear power 28%, and hydropower 10%. [8] TVA's Watts Bar reactor produces tritium as a byproduct for the U.S. National Nuclear Security Administration, which requires tritium for nuclear weapons.
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TVA embarked on a very ambitious program of reactor construction in the 1970s. Currently, operational TVA nuclear power plants include Browns Ferry, Sequoyah and Watts Bar.
There were several plants that were planned or in various stages of construction before they were halted and eventually canceled. Canceled nuclear facilities include Phipps Bend, Bellefonte, Hartsville, Yellow Creek, and the Clinch River Breeder Reactor.
Recently however, construction has been restarted at the Bellefonte location.
TVA also assists ALCOA's Tapoco/APGI in regulating several facilities, including Calderwood, Cheoah, Chilhowee and Santeetlah dams.
TVA operates several small-scale facilities that generate electricity from renewable sources other than hydropower. These include:[9][10][11][12][13]
At Buffalo Mountain in Oliver Springs, Tennessee, TVA operates three wind turbines with a combined generation capacity of 2 MW and purchases the output of 15 additional wind turbines owned by Invenergy that have a combined capacity of 27 MW.
Methane gas from a Memphis wastewater treatment facility is burned in Allen Fossil Plant, accounting for a generating capacity of 4 MW.
TVA's current headquarters are located in downtown Knoxville, with large administrative offices in Chattanooga and Nashville, Tennessee, and Muscle Shoals, Alabama.
TVA was heralded by New Dealers and the New Deal Coalition not only as a successful economic development program for a depressed area but also as a democratic nation-building effort overseas because of its alleged grassroots inclusiveness as articulated by director David Lilienthal. The TVA was controversial in the 1930s. Historian Thomas McCraw concludes (1971 p 157) that Roosevelt "rescued the [power] industry from its own abuses" but "he might have done this much with a great deal less agitation and ill will." New Dealers hoped to build numerous other TVAs around the country but were defeated by Wendell Willkie and the Conservative coalition in Congress. The valley authority model did not replace the limited-purpose water programs of the Bureau of Reclamation and the Army Corps of Engineers. State-centered theorists hold that reformers are most likely to succeed during periods such as the New Deal era, when they are supported by a democratized polity and when they dominate Congress and the administration. However it has been shown[14] that in river policy the strength of opposing interest groups also mattered. The TVA bill was passed in 1933 because reformers like Norris skillfully coordinated action at potential choke points and weakened the already disorganized opposing electric power industry lobbyists.(Hubbard 1961) In 1936, however, after regrouping, opposing river lobbyists and conservative coalition congressmen took advantage of the New Dealers' spending mood by expanding the Army Corps' flood control program. They also helped defeat further valley authorities, the most promising of the New Deal water policy reforms.
When Democrats after 1945 proclaimed the TVA as a model for third-world countries to follow, conservative critics charged it was a top-heavy, centralized, technocratic venture that displaced locals and did so in insensitive ways. Thus, when the program was used as the basis for modernization programs in various parts of the third world during the Cold War, such as in the Mekong Delta in Vietnam, its failure brought a backlash of cynicism toward modernization programs that has persisted.[1]
Then-movie star Ronald Reagan had moved to television as the host and a frequent performer for General Electric Theater during 1954. Reagan was later fired by General Electric in 1962 in response to his publicly referring to the TVA (TVA being a major customer for GE turbines) as one of the problems of "big government".[15] Reagan would subsequently reiterate his points at the 1964 Republican National Convention, in his speech "A Time for Choosing"[16]:
One such considered above criticism, sacred as motherhood, is TVA. This program started as a flood control project; the Tennessee Valley was periodically ravaged by destructive floods. The Army Engineers set out to solve this problem. They said that it was possible that once in 500 years there could be a total capacity flood that would inundate some 600,000 acres (2,400 km2). Well, the engineers fixed that. They made a permanent lake which inundated a million acres (4,000 km²). This solved the problem of floods, but the annual interest on the TVA debt is five times as great as the annual flood damage they sought to correct. Of course, you will point out that TVA gets electric power from the impounded waters, and this is true, but today 85 percent of TVA's electricity is generated in coal burning steam plants. Now perhaps you'll charge that I'm overlooking the navigable waterway that was created, providing cheap barge traffic, but the bulk of the freight barged on that waterway is coal being shipped to the TVA steam plants, and the cost of maintaining that channel each year would pay for shipping all of the coal by rail, and there would be money left over.
The publicity Reagan gained in part from this speech paved the way for his election as Governor of California in 1966.[17]
In 1981 the TVA Board of Directors broke with previous tradition and took a hard line against white-collar unions during contract negotiations. As a result a class-action lawsuit was filed in 1984 in US Court charging the agency with sex discrimination under Title VII of the Civil Rights Act based on the large number of females in one of the pay grades negatively impacted by the new contract. An out-of-court settlement of the lawsuit was reached in 1987 in which TVA agreed to contract modifications and paid the group $5 million while admitting no wrongdoing.
On December 22 2008, the Kingston Fossil Plant coal fly ash slurry spill spilled over 1 billion gallons of coal ash into tributaries of the Tennessee River near Kingston, Tennessee. The Kentucky Sierra Club called the disaster the "worst environmental disaster since Chernobyl" [18]
In the 1930s, the building of Norris Dam and the changes it brought to the region inspired films, books, stage plays, and songs. Folk songs from the construction period rarely express enthusiasm for the dam project brought to the region. Many more condemn the TVA for the losses it brought to local farmers.[19]
TVA continues to be a subject for popular culture:
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