Government to review role in TVA


The President has called for a strategic review of the Tennessee Valley Authority(TVA). The TVA was established during the Great Depression to deal with electrical grid and power concerns in the southern region of the US which was particularly effected by the economic downturn at that time. The TVA is a federally owned corporation that owns and operates 56 power plants in the Tennessee Valley Region, which stretches across parts of six states (Alabama, Georgia, Kentucky, Mississippi, North Carolina, and Tennessee).

According to an update from the US Energy Information Administration, the Obama administration will start taking a look at the role of the federal government in the TVA as the corporation approaches its allowed debt cap of $25bn. The TVA accounts for approximately 3% of the US power supply.

TVA’s plants are primarily hydroelectric, natural gas, nuclear, and coal-fired facilities, including well known locations like the Cumberland Dam in Tennessee. The budget for the corporation in 2014 includes some $25bn in proposed spending, however the TVA already carries about an equivalent amount of debt and is capped at $30bn in total debt.

The TVA supplies power in a wholesale basis to utility providers and that is limiting its revenue. Those utility providers serve nearly 9 million households in the region.

However, some projects have been notoriously troubled. The utility’s largest current project is the completion of the Watts Bar 2 nuclear unit in eastern Tennessee. Construction of this unit began in 1973, was suspended in 1985, and resumed in 2008. The project, which is behind schedule and over budget, is currently expected to be completed by the end of 2015.