Saturday, May 24, 2008

In Opposition to the TVA

In Opposition to the TVA

Why do I oppose the TVA, some have asked. And why do I continue unceasingly writing about it. I started writing about the TVA when we moved for a time to the Shoals area about five years ago. And I was startled to see an irresolute community in despair. Many fewer jobs compared with 40 years earlier in my visits. In an attempt to find out why such a change, all evidence led to the TVA, how the TVA had whip-lashed the community and then deserted it. Fortunately, the Shoals economy is looking up a bit but still has a long way to go.

Just where is the principal office of the TVA? Pointed out last week in a Times Daily article, the TVA pulled the rug from under the Shoals at the very beginning by not establishing the principal office of TVA in Muscle Shoals, Alabama, as required in the TVA Act. Oh, TVA has a post office address in the TVA Reservation, you know, like a Mail Boxes Etc. franchise. It is a sham to say that TVA’s “principal office” is in Muscle Shoals, Alabama.

Here, from personal experience I’ll relate an unpleasant fact. Most of the things we do daily such as opening a door, driving a car or working in the kitchen all are designed for use by right-handed people. Now right-handed people see all of these things as perfectly ordinary and are usually aghast when it is pointed out that left-handers tend to see things differently and usually more analytically.

I think some of this might be at play regarding the TVA. I do see the TVA differently, not from anger, vengeance or any of the other reasons some people like to impute to me (I am left-handed).

I tried to explain the reasons why I believe the TVA should be abolished in much earlier TD Forum posts. It might help to re-read some of them. But here, I will try again, as concisely as I can, to express my reasons.

Experience in the federal government. I learned a lot more about my employer and about American history. The basis of America comes from our founding documents (and don’t let anybody fool you into believing that the U.S. Constitution is “a living document” subject to the whims of change; legislating from the bench).

And that is one of the reasons I believe the TVA is unconstitutional. After much researching of the TVA, I concluded that the TVA exists on very shaky legal grounds. Every ruling that I found about the TVA was divided. A final Supreme Court ruling on its constitutionality is yet to be made. (See Ashwander vs. TVA that dodged the constitutionality question).

TVA Act ill conceived. And it was given a charge to be something it never could be: An organization with all the power of the federal government to take property against the will of the owner and at the same time act like a usual corporation. Repeatedly TVA has proved that the two cannot be mixed no matter how much rhetoric is applied. TVA in the past was given almost free rein but the Congress and several administrations have considerably tightened those reins.

View of the original TVA Act. With amendments (
http://www.tva.gov), it shows that TVA has strayed far from its original charter, moving in whimsical directions under triumvirate leadership for 72 years. I will not recount the very many ways that TVA management has fallen well below the mark. Let’s just say there have been multi-billion dollar mistakes and no one has been held accountable for those mistakes. Ratepayers are left holding the bag or is TVA’s $25 billion debt the taxpayers’ responsibility?

Federal price controls. When the TVA sets rates and “fuel cost adjustments”, it is doing so without the normal checking and approving/disapproving those increases by each states’ public service commission. TVA’s decision on rates is absolute and unassailable. I believe this is an infringement on the basic right of citizens in the seven states in TVA territory to have their own elected or appointed representatives make electricity rate determinations.

TVA territory huge, unmanageable. It covers 80,000 square miles, as large as Great Britain and larger than many other countries. Its size also has proven to be one of its weaknesses. (See GAO Security Report
http://www.gao.gov/new.items/d08526.pdf ).

TVA finances unsustainable. Particularly with the new thrust to conserve electricity, TVA wants its customers to conserve at a point and place that is convenient to the TVA; customers’ habits are hard to change without significant incentives and it is unlikely they will change much without significant ones. TVA’s indebtedness is going up while its revenues will be coming down if conservation works. And billions of dollars more in the near term will be required to fund nuclear construction.

TVA as model for U.S. electricity production. Viewing the TVA as a national model for electricity production would be similar to a European style of a government-owned and run public utility that would set electricity prices throughout America. Another name for that is Socialism and I do not believe Americans want to travel that road.

TVA revenues, restrictions. TVA, a federal government agency, collects about $9 billion annually from electricity sales. its only source of income; there is no “profit and loss” statement. All revenues are returned to operations of its power facilities, maintenance, new construction, and for non-power uses. There are no congressional appropriations. Instead of filtering through the economy like sales and expenses of a regular corporation, the federal government controls all $9 billion of it.

You may be sure that an investor-owned utility would redistribute those billions of dollars differently to everyone’s betterment including more taxes paid to all levels of government, i.e., state, local and federal.

So you see, it is not out of anger or any other emotional reason but out of principle in support of the basic free-enterprise system of opportunities available to all Americans that I oppose the TVA.

Founding documents. I would like us to follow the precepts in our founding documents; nowhere in any of them is there an inking of the idea of the TVA. It was contrived for political expediency; it lives today a thorn in the side of our Constitution and a blight on our free-enterprise system.

(Why should TVA management resign? Read my article on this current issue at
http://norsworthyopinion.com )

Ernest Norsworthy
May 24, 2008
emnorsworthy@earthlink.net