Once again, the White House is proposing to sell transmission assets owned by the Tennessee Valley Authority and three Power Marketing Administrations—and NRECA and electric cooperatives are pushing back.
“Eliminating or reducing the Federal Government’s role in owning and operating transmission assets, and increasing the private sector’s role, would encourage a more efficient allocation of economic resources and mitigate unnecessary risk to taxpayers,” the Trump administration wrote in “Delivering Government Solutions in the 21st Century. Reform Plan and Reorganization Recommendations,” released June 21.
Noting that the feds own, operate and maintain “over 50,000 miles of electricity transmission lines and related assets,” the report states that this “creates unnecessary risk for taxpayers and distorts private markets that are better equipped to carry-out this function.”
Seeming to forget the role of electric cooperatives and other public power entities, the report goes on to say that “the vast majority of the Nation’s electricity needs are met through for-profit investor-owned utilities. Ownership of transmission assets is best carried out by the private sector, where there are appropriate market and regulatory incentives.”
The report cites fiscal 2019 budget estimates as saying that selling the transmission assets of TVA, Bonneville Power Administration, Southwestern Power Administration and Western Area Power Administration would save $9.5 billion over 10 years.
The idea of selling TVA assets brought a swift response from David Callis, executive vice president and general manager of the Tennessee Electric Cooperative Association.
“The federal government’s original investment in TVA has been fully repaid with interest by the people served by TVA, and these assets should not be sold to outside investors. If the administration wishes to divest of TVA transmission assets, they should be transferred to their rightful owners—the consumers of TVA power,” said Callis.
“Tennessee’s electric co-ops are owned by the people we serve, and we will pursue all options, including purchase of TVA assets, to protect our rate payers and the transmission lines they have paid to build,” added Callis.
The Trump administration proposed a PMA selloff in its fiscal 2018 budget, and at the time, NRECA CEO Jim Matheson said it would “jeopardize affordable and reliable power for more than 100 million people across the nation.”
“In fact, this proposal would have a devastating impact on rural economies with absolutely no benefit to the federal budget,” Matheson wrote in an op-ed published in The Hill.
“These proposals are all the more misguided considering that the federal hydropower program pays its own way, at no cost to U.S. taxpayers,” added Matheson.
Michael W. Kahn is a staff writer at NRECA.