The Tennessee Valley Authority (TVA) is a multibillion-dollar federally owned and operated corporation that was established in 1933 in an effort to bring electricity and development to some of the most underdeveloped parts of the Southeastern United States. TVA’s nonpower responsibilities include recreational programs, the promotion of public use of federal land and water resources, and the operation of a national fertilizer research center. Congress appropriates nearly $140 million annually for these non-power duties.

As the CBO pointed out in its FY 2011 “Spending and Revenue Options” report, “unlike private utilities, TVA does not have to provide a return to equity holders – in this case, the taxpayers, who are exposed to the risk of having to make up for future revenue shortfalls.” Despite huge debts ($25 billion in 2009), the TVA has not relinquished its hold on electric utilities across the Southeast by turning its duties over to the private sector.

Many TVA supporters mistakenly believe that privatization would lead to rate hikes that might harm consumers, especially in lowincome areas. In reality, the TVA charges rates that are in line with what the private sector would charge. Because of the TVA’s poor financial position, savings would be minimal in the first year after the sale and privatization of TVA assets and functions, but would reach billions of dollars in the future.

Sell the Tennessee Valley Authority

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