Several major news sources are reporting their interpretation of the President’s budget as having language that may suggest that TVA is up for sale.
The Tennessee Valley Administration (TVA) is one of the last great holdovers from the dark days of the Great Depression in America during the 1930’s. Franklin D. Roosevelt, as a new President, saw and understood the need of having a new approach to energy production as well as flooding control.
Thus was born the rationale for a massive experiment in mid-America to tame the mighty Cumberland and Tennessee Rivers and an epic new energy production grid. TVA was started in 1933 to control flooding, create and deliver very cheap electricity. Another reason for TVA was local and regional economic development in the Tennessee Valley.
President Obama’s 2014 budget is calling for a strategic review of the Tennessee Valley Authority, both its debt as well as its resources for supplying energy in the 21st Century. Washington DC insiders see this as a chance for the possibility that the largest U.S. public utility could be sold or privatized. The TVA's debt as of end of 2012 was over $24 billion
Even though the regional electric giant does not receive any federal funds, its debt levels are considered as part of the federal deficit.
President Obama’s budget document section dealing with the TVA, entitled “Reform TVA”, the debt will have to go over the $30 billion dollar debt level. This is important because by federal law, in order to upgrade its aging infrastructure, TVA must meet new environmental regulations.
The cost of replacing, closing, or major retooling of existing power plants could run into the billions of new debt that this administration does not want to have on its budget ledgers.
“Reducing or eliminating the federal government’s role in programs such as TVA, which have achieved their original objectives and no longer require federal participation, can help put the nation on a sustainable fiscal path,” the budget reads.
Every Republican President since Eisenhower has wanted to sell off TVA and privatize the rivers of the Tennessee Valley. Now, a so called liberal Democrat has actually put in place the idea of selling off TVA so that its debt is no longer a part of the federal budget.
So, is the TVA for sale?
The answer is Yes!
And given the political climate in Washington DC, this could become a reality by the end of Obama’s term of office.