TVA Wants Out

January 23, 1997
THE DAILY FED

TVA Wants Out

By Margaret Kriz
From CongressDaily

Tennessee Valley Authority Chairman Craven Crowell is asking Congress to eliminate $106 million in federal funding to the quasi-governmental energy company by the year 1999.

Crowell's startling proposal, which was disclosed during a series of post- inaugural meetings with key members of Congress, is part of the TVA's master plan to become an aggressive participant in the coming competitive electricity marketplace.

Crowell's recommendation that Congress end the Knoxville-based corporation's federal subsidies surprised its Capitol Hill supporters, who steadfastly have fought budget cuts and efforts to sell off or privatize the company.

Now Crowell is suggesting that the TVA focus on its core electricity sales business by cutting federal funds and by transferring several of the company's other programs, such as overseeing navigation and flood control along the Tennessee River, to state or federal agencies. Exactly how that transmission would be accomplished would be decided by a TVA task force, according to company officials.

The TVA, the country's largest electric power company, was created with federal funds during the New Deal to spur economic development in the rural South. Today it operates in seven states and has annual electricity revenues of $5.7 billion.

The company's massive power program, which serves 8 million people, has been self-supporting since 1959. The federal subsidies have been used to underwrite the company's Tennessee Valley watershed management and regional economic development programs.

Crowell long has sought to jump into the increasingly competitive electricity market by selling some of the company's cheap electricity outside of the company's congressionally mandated regional boundaries.

But in August 1996, a U.S. District Court judge in Birmingham blocked an attempt by the TVA to sell electricity to a Virginia- based power company.

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