Rep. Davis upset over TVA rate hike
WASHINGTON (AP) — Some members of Congress are upset with the Tennessee Valley Authority for deciding to raise rates for the first time since 1997.
Congress has oversight authority of TVA, and Rep. Jim Cooper, a Nashville Democrat, said he is so angry he is considering backing efforts in Washington to reorganize the public utility.
TVA’s three-person board on Wednesday did a ‘terrible job explaining the need for an increase,’ Cooper said.
He also accused the board of keeping the public out of the decision-making process. ‘I think it’s unfortunate that TVA, a public utility, discloses less information than a private utility when it increases rates,’ Cooper said.
TVA board member Bill Baxter said the public power company held hundreds of meetings about the rate increase with consumer and environmental groups and power distributors.
‘I think TVA had exhaustive meetings and dialogues with all of the interested parties,’ Baxter said.
John Shipp, TVA’s vice president of environmental policy and planning, said the $365 million raised annually from the hike would go toward reducing pollution emitted from TVA power plants.
TVA critics speculate the agency also is raising rates to help restart a mothballed nuclear reactor in Alabama and pay down the agency’s $25.3 billion debt.
Under the new rates, homes and businesses will see a 7.4 percent rate jump.
‘I firmly believe during this time of economic downturn that it is inappropriate for an increase of this size,’ said Rep. Lincoln Davis, a Pall Mall Democrat.
The plan also included a 2 percent rate cut for 1,500 industrial customers.
Baxter said the industrial rate cut was needed to address a ‘long standing imbalance’ between low residential rates and higher industrial rates.
But Rep. John Tanner, D-Union City, said it was unfair to only give industrial customers a break.
‘It is hard to understand why the largest corporations are having their rates reduced at the expense of higher rates for residential customers and small-business owners,’ Tanner said. ‘I have heard of no large corporation leaving the region because of high utility costs.’
One member of the Tennessee delegation defended the TVA board.
‘I think when it comes down to setting rates, that is the board’s prerogative,’ said Rep. Zach Wamp, a Chattanooga Republican.
He said it wasn’t possible to raise the money needed through cost cuts. ‘There’s no where else to turn,’ he said. ‘TVA has streamlined its operations.’
Cooper said he previously opposed efforts to change TVA’s management structure but now was considering backing such proposals.
Among the proposals that would change the way TVA operates is an initiative by Sen. Majority Leader Bill Frist, a Tennessee Republican, that would expand TVA’s board from three to nine members. It also would require a CEO to manage the public power company on a day-to-day basis.
Some TVA critics have pushed to give the Federal Energy Regulatory Commission oversight of TVA’s rate-setting practices.
Baxter said Wall Street views TVA bonds favorably — allowing the company to borrow money cheaply — precisely because the TVA board can raise rates to get money without seeking approval from a regulatory body.
‘I think it’s very important for TVA to retain its ratemaking authority, and that’s one of the major reasons that we have a triple-A bond rating,’ Baxter said.
TVA provides power to industries and 158 power distributors that serve 8.3 million consumers in seven states.
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TVA: http://www.tva.gov/