Tennessee Valley Authority

Tennessee Valley Authority
Government-owned independent corporation
Industry Electric utility
Founded May 18, 1933
Headquarters Knoxville, Tennessee, U.S.
Key people
 Bill Johnson, CEO
Revenue $10.956 billion USD (FY 2013 ending September 30, 2013)
$1.453 billion USD (FY 2013)
$271 million USD (FY 2013)
Website 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 affected by the Great Depression. The enterprise was a result of the efforts of Senator George W. Norris of Nebraska. 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.

TVA's service area covers most of Tennessee, portions of Alabama, Mississippi, and Kentucky, and small slices of Georgia, North Carolina, and Virginia. It was the first large regional planning agency of the federal government and remains the largest. Under the leadership of David Lilienthal ("Mr. TVA"), TVA became a model for America's governmental efforts to seek to assist in the modernization of agrarian societies in the developing world.[1]

Overview

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.

President Franklin D. Roosevelt signs the TVA Act

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 the 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 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 . 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 in the Pacific Northwest.

Wilson Dam, completed in 1924, was the first dam under the authority of TVA, created in 1933.

Regional power consumers may benefit from lower-cost electricity supplied from TVA's network of 29 power-producing hydropower facilities. Supporters of 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 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 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 TVA to be constitutional in Ashwander v. Tennessee Valley Authority, 297 U.S. 288 (1936).[4] 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.

History

Muscle Shoals controversy, 1920-1932

In the 1920s a major battle erupted over building an electric power system in the Tennessee Valley, based on the World War I federal dam at Muscle Shoals, Alabama. It would generate electricity and produce fertilizer.[5] Liberal Senator George Norris of Nebraska blocked a proposal from Henry Ford in 1920 to use the dam to modernize the valley. Norris deeply distrusted privately owned utility companies. He did get Congress to pass the Muscle Shoals Bill, but it was vetoed as socialistic by President Herbert Hoover in 1931. The idea behind the Muscle Shoals Bill in 1933 became a core part of the New Deal's TVA.[6]

1930s

A carpenter (wearing a contractor's employee badge) at work during the 1942 construction of the Douglas Dam in East Tennessee.

Even by Depression standards, the Tennessee Valley was economically dismal in 1933. Thirty percent of the population was affected by malaria, and the average income was only $639 per year, with some families surviving on as little as $100 per year. 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.[7]

TVA was designed to modernize the region, using experts and electricity to combat human and economic problems.[8] 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.

TVA's first board (L to R): Harcourt Morgan, Arthur E. Morgan, and David Lilienthal

None of this was easy. The development of the dams displaced more than 15,000 families. This created anti-TVA sentiment in some rural communities. Many local landowners were suspicious of government agencies. But 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, TVA was based in Muscle Shoals, Alabama, but later moved its headquarters to Knoxville, Tennessee, where they remain today. At one point, TVA's headquarters were housed in the Old Federal Customs House at the corner of Clinch Avenue and Market Street. The building is now a museum.[9]

Employment policy

The Authority hired many area unemployed to conduct 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 by the usual racial and gender lines of the day. TVA hired a few African Americans for janitorial or other low-level positions. 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' and textile workers' unions. Women were excluded from construction work. TVA's cheap electricity attracted textile mills to the area, and they hired mostly women as workers.[10]

1940s

The Douglas Dam early in its construction in 1942.

During World War II, the U.S. needed greater aluminum supplies to build airplanes. Aluminum plants required huge amounts of electricity. To provide the power, TVA engaged in one of the largest hydropower construction programs ever undertaken in the U.S. By 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. After negotiations led by Vice-President 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.

The government originally intended the electricity generated from Fontana to be used by Alcoa factories. By the time the dam generated power in early 1945, the electricity was directed to another purpose in addition to aluminum manufacturing, as TVA also provided much of the electricity needed for uranium enrichment at Oak Ridge, Tennessee, as required for the Manhattan Project and the making of the atomic bomb.

1950s

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.

1960s

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.

1970s and 1980s

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. TVA canceled the construction of 12 nuclear power plants in the 1980s.[11]

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 lawsuit was filed under the Endangered Species Act and the U.S. Supreme Court ruled in favor of protecting the snail darter in Tennessee Valley Authority v. Hill.

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%, and achieved 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.

1990s

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 the year 2020.

2000s

May 2005 map of TVA sites
  dam
  fossil

In 2002, TVA began work to restart a previously mothballed nuclear reactor at Browns Ferry Unit 1, which was completed in May 2007. 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 (1.2 km2) of land and into the tributaries of the Tennessee River.[12] The non-profit Southern Alliance for Clean Energy plans on suing TVA for $165 million on behalf of residents in the area.[13] The Kentucky Sierra Club called the disaster the "worst environmental disaster since Chernobyl".[14] While TVA's culture at its fossil fuel plants was not the cause of the Kingston Spill, the culture contributed to the spill, as was appropriately noted in the TVA OIG's (Office of the Inspector General) report, Inspection 2008-12283-02, Review of the Kingston Fossil Plant Ash Spill Cause Study and Observations About Ash Management.[15]

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.[16]

As of 2013, TVA carries $25 billion in debt, near the $30 billion debt limit imposed by Congress.[17] TVA must retire at least 18 of its 59 coal-fired units by 2017, and install scrubbers in several others or convert them to make them cleaner at a cost of $25 billion over the next 10-years according to the Obama Administration's proposed 2013–2014 budget. The budget also says that "reducing or eliminating the federal government's role in programmes 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" which could mean future privatization for TVA.[18]

Facilities

TVA's power mix as of 2012 is 11 coal-powered plants, 29 hydroelectric dams, three nuclear power plants (with six operating reactors), nine simple cycle natural gas combustion turbine plants, and five combined cycle gas plants. TVA is the largest public power utility in the United States and one of the largest producers of electricity in the country. It acts as a regional grid reliability coordinator. In 2012 coal generation was about 32% of total, nuclear 34%, hydro 9%, and (owned) gas 11%. TVA currently purchases about 10% of its power from merchant plants, mostly natural gas combined cycle, but also some coal, wind, and other renewables. TVA's Watts Bar reactor produces tritium as a byproduct for the U.S. National Nuclear Security Administration, which requires tritium for nuclear weapons (for "boosted" fission primaries and for fusion secondaries).

Dams and hydroelectric facilities

Fossil fuel plants

Coal-fired power plants

Natural gas and dual-fuel combustion turbine (CT) and combined cycle (CC) plants

  • Allen CT
  • Brownsville CT
  • Caledonia CC

  • Colbert CT
  • Gallatin CT
  • Gleason CT
  • John Sevier CC
  • Johnsonville CT
  • Kemper CT

  • Lagoon Creek CC
  • Lagoon Creek CT
  • Magnolia CC
  • Marshall CT
  • Southaven CC

Lagoon Creek Combined Cycle Plant (commercial operation September 2010) was the first combined cycle generating plant in Tennessee.

Nuclear power plants

In the 1980s, TVA set out to build 17 nuclear reactors but finished only five.[11] Canceled nuclear facilities include Phipps Bend, Bellefonte, Hartsville, Yellow Creek, and the Clinch River Breeder Reactor. As of 2012, TVA operated six reactors at three sites: Browns Ferry, Sequoyah, and Watts Bar. Together these nuclear power plants produce about 30 percent of the TVA's energy.[19]

Joint facilities

TVA also assists ALCOA's Tapoco/APGI in regulating several facilities, including the Calderwood, Cheoah, Chilhowee, and Santeetlah dams.

Renewable generation

TVA operates several small-scale facilities that generate electricity from renewable sources other than hydropower. These include:[20][21][22][23][24]

Solar electric generation
Wind farm

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.

Waste-derived methane

Biogas from the Maxson wastewater treatment plant in Memphis is burned in Allen Fossil Plant, accounting for a generating capacity of 4 MW.

Electric transmission

TVA is one of the largest operators of electric transmission in the US with an approximately 16,000-mile (26,000 km) corridor of transmission (13,000 miles (21,000 km) of which is greater than 161kv).[25]

Administration

TVA's headquarters are located in downtown Knoxville, with large administrative offices in Chattanooga (training/development; supplier relations; power generation and distribution) Nashville, Tennessee (economic development), and Muscle Shoals, Alabama.

Recreation

TVA has conveyed approximately 485,420 acres (1,964.4 km2) of property for recreation and preservation purposes including public parks; public access areas and roadside parks; wildlife refuges; national parks and forests; and other camps and recreation areas, which comprises approximately 759 different sites.[26]

Criticism

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 that in river policy, the strength of opposing interest groups also mattered.[27] The TVA bill was passed in 1933 because reformers like Norris skillfully coordinated action at potential choke points and weakened the already disorganized opponents among the electric power industry lobbyists.[28] 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.

Ronald Reagan, fired by General Electric for criticizing TVA.

When Democrats after 1945 proclaimed the Tennessee Valley Authority as a model for countries in the developing world 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".[29]

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 suit was filed in 1984 in U.S. 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 but admitted no wrongdoing.

In popular culture

TVA inscription at the Franklin D. Roosevelt Memorial in Washington, D.C.

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 frequently express enthusiasm for the benefits that the project brought to the region.[30]

TVA continues to be a subject for popular culture:

See also

References

  1. ↑ 1.0 1.1 David Ekbladh, "Mr. TVA: Grass-Roots Development, David Lilienthal, and the Rise and Fall of the Tennessee Valley Authority as a Symbol for U.S. Overseas Development, 1933–1973" Diplomatic History Summer 2002 Vol. 26 Issue 3 pp. 335–374
  2. ↑ Hubbard, pp. 5–27
  3. ↑ Rick Perlstein, Before the Storm: Barry Goldwater and the Unmaking of the American Consensus (2001) p. 226
  4. ↑ Ashwander v. Tennessee Valley Authority, 297 U.S. 288 (1936).
  5. ↑ Preston John Hubbard, Origins of the TVA: the Muscle Shoals controversy, 1920-1932 (Vanderbilt University Press, 1961)
  6. ↑ Norman Wengert, "Antecedents of TVA: The Legislative History of Muscle Shoals." Agricultural History (1952) 26#4 pp: 141-147. in JSTOR
  7. ↑ Hubbard, Origins of the TVA: the Muscle Shoals controversy, 1920-1932 (1961)
  8. ↑ Bruce J. Schulman, Policy, Economic Development, and the Transformation of the South, 1938–1980, 1991 p. 183 ff;
  9. ↑ "East Tennessee Historical Society:ETHS home". East-tennessee-history.org. Retrieved 2012-02-28.
  10. ↑ Jennifer Long; "Government Job Creation Programs-Lessons from the 1930s and 1940s" Journal of Economic Issues. Volume: 33. Issue: 4. 1999. pp. 903+ on TVA in Knoxville
  11. ↑ 11.0 11.1 Matthew Wald (August 18, 2011). "Alabama Nuclear Reactor, Partly Built, to Be Finished". New York Times.
  12. ↑ Dewan, Shaila (January 2, 2009). "Metal Levels Found High in Tributary After Spill". The New York Times.
  13. ↑ Huotari, John. "$165M TVA lawsuit could get bigger – Oak Ridge, TN". The Oak Ridger. Retrieved 2012-02-28.
  14. ↑ http://kentucky.sierraclub.org/newsroom/newsletter/pdf/news0209.pdf
  15. ↑ "TVA Inspector General". Oig.tva.gov. Retrieved 2012-02-28.
  16. ↑ "TVA Wind Farm Leases". Timesfreepress.com. Retrieved 2012-02-28.
  17. ↑
  18. ↑ "The Tennessee Valley Authority: Dammed if you don't". The Economist. 2013-04-27. Retrieved 2013-07-10.
  19. ↑ "Nuclear Energy". TVA. November 2012. Retrieved 22 September 2013.
  20. ↑ TVA in Kentucky, TVA website, accessed January 9, 2009
  21. ↑ TVA in Tennessee, TVA website, accessed January 9, 2009
  22. ↑ TVA in Alabama, TVA website, accessed January 9, 2009
  23. ↑ TVA in Mississippi, TVA website, accessed January 9, 2009
  24. ↑ TVA in Virginia, TVA website, accessed January 9, 2009
  25. ↑ "Vegetation Maintenance FAQ". TVA. Retrieved 2012-02-28.
  26. ↑ "Chapter 8 – Recreation Management" (PDF). Natural Resource Plan. Tennessee Valley Authority. July 2011. p. 113. Retrieved 22 March 2012.
  27. ↑ O'Neill, Karen M., "Why the TVA Remains Unique: Interest Groups and the Defeat of New Deal River Planning", Rural Sociology 2002 67(2): 163–182. ISSN 0036-0112
  28. ↑ (Hubbard 1961)
  29. ↑ "PBS Newshour Reagan biography". Pbs.org. Retrieved 2012-02-28.
  30. ↑ Bob Fulcher, "The Songs of Norris Dam", The Tennessee Conservationist, July 2000.
  31. ↑ Song of the South (song)

American Passages: a History of the United States

Bibliography

External links

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