Privatizing the Tennessee Valley Authority and federal power marketing administrations may be the best way to enhance the efficiency of power markets and produce budgetary savings, the Congressional Budget Office said in a report released Wednesday.
The CBO looked at three options for the federal energy programs: privatization, transferring responsibility to local governments, or legislating market-based reforms. Trying to "address all the management failures inherent in federal ownership may not be possible, and local governments may fall prey to the same problems that now hamper federal management," the report said.
While the CBO did not issue an official cost estimate of any privatization legislation, it did say the energy agencies are worth $45 billion to $62 billion on the open market.
However, the sale would only generate a maximum of $16 billion in budget savings--and could result in a $200 million loss--because the government would lose revenue from the facilities.
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