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Tennessee Valley Authority

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Tennessee Valley Authority
Company typeGovernment-owned independent corporation
Industryelectric utility
Founded1933
Headquarters
Knoxville Edit this on Wikidata
,
United States Edit this on Wikidata
Key people
Tom Kilgore (current CEO)
Revenue$11.26 billion USD (FY 2009 ending September 30, 2009)
$1.97 billion USD (FY 2009)
$726 million USD (FY 2009)
Websitewww.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 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, parts of Alabama, Mississippi, and Kentucky, and small slices of Georgia, North Carolina, South Carolina, West Virginia, Indiana 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 modernize Third World agrarian societies.[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 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. TVA is thus both a power supplier and a regulator.

Today, TVA is the nation's largest public power company, providing electric power to over nine million customers in the Tennessee Valley. It acts primarily as an electric power wholesaler, selling to 156 retail power distributors and 56 directly served industrial or government customers. Power comes from dams providing hydroelectric power, fossil fuel plants, nuclear power plants, combustion turbines, wind turbines and solar panels.

File:TVA Act Signing.jpg
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 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.

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. 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.

History

Much of this information comes from http://www.tva.gov/abouttva/history.htm, a government website and thus in the public domain.

1930s

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 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]

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 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 in time, 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.[5]

Employment policy

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. TVA hired a few African-Americans for janitorial 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' unions and textile unions. Women were excluded from construction work, although TVA's cheap electricity attracted textile mills that hired mostly women. [6]

1940s

The Douglas Dam early in its construction in 1942.

During World War II, the U.S. needed aluminum to build airplanes. Aluminum plants required huge amounts of electricity, and to provide the power, 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.

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. 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.

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 to the year 2020.

2000s

May 2005 map of TVA sites; Key: red: dam purple: nuclear orange: fossil

TVA has recently[when?] 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] The Kentucky Sierra Club called the disaster the "worst environmental disaster since Chernobyl". [7]

The disaster continues to poison lakes and stream as well as potentially the drinking water of millions. As reported in the Tuscaloosa news [4] on January 3, 2010, "Eight river systems have come in contact with the disaster ash. The Emory, Clinch and Tennessee rivers flow into the Mississippi. The disaster ash is literally being railroaded into the Perry County community. The landfill lies in the Chilatchee and Tayloe Creek watersheds and flows into the Alabama River. Leachate from the landfill was being shipped to Marion, where it was discharged into the Cahaba River Basin. It is being trucked into Demopolis, where it goes to the Tombigbee River that flows into the Mobile River. That adds up to 8 rivers with two separate entries to the Gulf of Mexico. It is spreading through our rivers like cancer flows through the blood steam."

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.[8]

TVA facilities

TVA's power mix as of 2007 was 11 fossil-powered plants, 29 hydroelectric dams, three nuclear power plants (with six operating reactors), 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%. [9] TVA's Watts Bar reactor produces tritium as a byproduct for the U.S. National Nuclear Security Administration, which requires tritium for nuclear weapons.

Dams and hydroelectric facilities

Fossil fuel plants

Coal-fired power plants
Gas-fired combustion turbines
  • Caledonia
  • Gleason
  • Kemper
  • Lagoon Creek
  • Marshall

Nuclear power plants

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.

Joint facilities

TVA also assists ALCOA's Tapoco/APGI in regulating several facilities, including 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:[10][11][12][13][14]

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

Methane gas from a Memphis wastewater treatment facility is burned in Allen Fossil Plant, accounting for a generating capacity of 4 MW.

Administration

TVA's current headquarters are located in downtown Knoxville, with large administrative offices in Chattanooga and Nashville, Tennessee, and Muscle Shoals, Alabama.

Controversies

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[15] 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.[16] 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 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".[17] Reagan would subsequently reiterate his points at the 1964 Republican National Convention, in his speech "A Time for Choosing"[18]:

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.[citation needed]

The publicity Reagan gained in part from this speech paved the way for his election as Governor of California in 1966.[19]

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.

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.[20]

TVA continues to be a subject for popular culture:

  • Director Elia Kazan's 1960 film, Wild River, depicts a fictional confrontation between TVA and a Tennessee landowner who refuses to evacuate her soon-to-be-inundated property.
  • The Coen Brothers' 2000 film O Brother, Where Art Thou? depicts the fictional flooding of an unnamed Mississippi valley by an unspecified TVA dam project in the 1930s.
  • In an episode of The Simpsons Young Grandpa Simpson uses "What in the name of the Tennessee Valley Authority!" as an exclamation when he sees an atom bomb dropped on Japan.
  • In Alabama's "Song of the South" lyrics in one verse include "Papa got a job with the TVA".
  • The Everybodyfields song "T.V.A.," from the album Halfway There: Electricity and the South rejects the Tennessee Valley Authority, saying "I don't need no dam or no damn FDR."
  • North Carolina bluegrass band Chatham County Line have a song entitled "Tennessee Valley Authority."
  • The Drive-By Truckers have recorded a number of songs that either directly or indirectly address the TVA, including "TVA" sung by Jason Isbell on the band's 2009 album "The Fine Print."

See also

References

  1. ^ a b 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. ^ Bruce J. Schulman, Policy, Economic Development, and the Transformation of the South, 1938-1980, 1991 p. 183 ff;
  5. ^ East Tennessee Historical Society:ETHS home
  6. ^ 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
  7. ^ http://kentucky.sierraclub.org/newsroom/newsletter/pdf/news0209.pdf
  8. ^ TVA Wind Farm Leases [1]
  9. ^ TVA: TVA Power Facts
  10. ^ TVA in Kentucky, TVA website, accessed January 9, 2009
  11. ^ TVA in Tennessee, TVA website, accessed January 9, 2009
  12. ^ TVA in Alabama, TVA website, accessed January 9, 2009
  13. ^ TVA in Mississippi, TVA website, accessed January 9, 2009
  14. ^ TVA in Virginia, TVA website, accessed January 9, 2009
  15. ^ 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
  16. ^ (Hubbard 1961)
  17. ^ PBS Newshour Reagan biography
  18. ^ "A Time for Choosing" (The Speech – October 27, 1964)
  19. ^ "Ronald Reagan". PBS. Retrieved 2007-11-27.
  20. ^ Bob Fulcher, "The Songs of Norris Dam", The Tennessee Conservationist, July 2000.

American Passages: a History of the United States

Bibliography

  • Richard A. Colignon. Power Plays: Critical Events in the Institutionalism of the Tennessee Valley Authority (1997)
  • Creese, Walter L. TVA's Public Planning: The Vision, the Reality. U. of Tennessee Press, 1990. stresses utopian goals
  • Erwin C. Hargrove and Paul H. Conkin, eds. TVA Fifty Years of Grass-Roots Bureaucracy (1963)
  • Erwin E. Hargrove, Prisoner of Myth: The Leadership of the Tennessee Valley Authority, 1933-1990 (1994)
  • Preston J. Hubbard, Origins of the TVA: The Muscle Shoals Controversy, 1920-1932 Vanderbilt University Press, 1961
  • David Lilienthal. TVA: Democracy on the March (1944) promoted TVA for cheap power, grassroots regional democracy, environmental conservation, and the peaceful use of energy. Called it model for rest of USA and Europe.
  • Michael J. McDonald and John Muldowny. TVA and the Dispossessed: The Resettlement of Population in the Norris Dam (1982), highly critical of TVA
  • Thomas K McCraw. TVA and the power fight, 1933-1939 (1971)
  • Arthur E. Morgan. The Making of the TVA (1974) by its first chairman
  • Steven M. Neuse. "TVA at Age Fifty- Reflections and Retrospect" Public Administration Review, Vol. 43, No. 6 (Nov. - Dec., 1983) , pp. 491–499 online at JSTOR
  • Steve M. Neuse. David E. Lilienthal: The Journey of an American Liberal (1996).
  • Russell, Dean. The TVA Idea, The Foundation for Economic Education, Irving-On-Hudson, New York, 1949.
  • Philip Selznick. TVA and the Grass Roots: A Study in the Sociology of Formal Organization (1949)
  • Edward Shapiro. "The Southern Agrarians and the Tennessee Valley Authority," American Quarterly, Vol. 22, No. 4. (Winter, 1970), pp. 791–806. online at JSTOR shows that these conservatives supported TVA as a counterpoint to northern big business
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