Tennessee Valley Authority
The Tennessee Valley Authority is a New Deal agency created to generate electric power and control floods in a seven-U.S.-state region around the Tennessee River Valley. President Franklin D. Roosevelt signed the Tennessee Valley Authority Act creating the TVA on May 18, 1933. The agency still exists and has grown to become America's largest public power company.
The Authority, whose headquarters lie in Knoxville, Tennessee, is a government-owned corporation that is now completely self-financing. TVA is primarily a wholesaler, selling to 158 retail power distributors and several directly served industrial or government customers. There is some controversy surrounding the TVA, as a government-owned means of production is a statist concept feared by some. Controversy has been a feature of the TVA since its inception.
During the 1920s and the Great Depression years the public of the USA became disenchanted with privately owned power and began to support the concept of Government ownership of utilities, particularly hydroelectric power facilities. The concept of Government owned generation facilities selling to publicly owned distribution utilities was a controversial political issue.
Many believed that the privately owned power companies did not employ fair operating practices and were subject to abuse by their owners, utility holding companies, at the expense of consumers. By forming utility holding companies, the private sector controlled 94% of generation by 1921, and was in fact, unregulated because the States could not regulate interstate holding companies. (This situation gave rise to Public Utility Holding Company Act of 1935 (PUHCA)).
On the other hand there were many who believed that the Government should not participate in the electricity generation business because they believed that government ownership leads to the exploitation of hydroelectric sites. However, most of the nation's major hydrological systems are federally managed. Regional power consumers may benefit from lower-cost electricity supplied from TVA's network of 29 power-producing hydro power facilities. Supporters of TVA, though, point out that the agency's management of the Tennessee River system without appropriated federal funding saves federal taxpayers millions of dollars annually.
In the years following the Great Depression, the US Congress took steps to alleviate the plight of the farmers and the unemployed and one of those steps was the development of Federally owned power. One of the major schemes was established on the Tennessee River under the Tennessee Valley Authority Act of 1933. Under this law the Federal Government provided electric power to States, counties, municipalities and nonprofit cooperatives. It was a part of the Federal initiatives to provide navigation, flood control, strategic materials for national defense, electric power, relief of unemployment and improvement of living conditions in rural areas. The TVA was more than just a power supplier.
In its power supply role it was given authority to enter into long term (20 years) contracts for the sale of power to government agencies and private entities. It can also construct electric power transmission lines to areas not otherwise supplied and establish rules and regulations for electricity retailing and distribution. The TVA is both supplier and regulator.
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1930s
Even by Depression standards, the Tennessee Valley was in sad shape in 1933. Much of the land had been farmed too hard for too long, eroding and depleting the soil. Crop yields had fallen along with farm incomes. The best timber had been cut. TVA developed fertilizers, taught farmers how to improve crop yields, and helped replant forests, control forest fires, and improve habitat for wildlife and fish. The most dramatic change in Valley life came from the electricity generated by TVA dams. Electric lights and modern appliances made life easier and farms more productive. Electricity also drew industries into the region, providing desperately needed jobs.
None of this was easy. The development of the dams involved people moving from their homes and the flooding of their land. This naturally led to resentment and an anti-TVA sentiment among some rural communities. Local landowners were naturally suspicious of government agencies. But the TVA successfully introduced new agricultural methods into traditional farming communities. They did this by blending in and finding local champions.
A Tennessee farmer would not take advice from an official in a suit and tie. The TVA people had to find the leaders in the communities and convince them that crop rotation and the judicious application of fertilizers were the ways to restore the soil's fertility. Once they had convinced the leaders, the rest followed.
Selling the benefits of electricity would have involved convincing the wives of the farmers that their lives would be easier and letting them work on their menfolk. This is another story and belongs more in the electricity marketing history.
1940s
During World War II, the United States needed aluminum to build bombs and airplanes, and aluminum plants required electricity. To provide power for such critical war industries, TVA engaged in one of the largest hydropower construction programs ever undertaken in the United States. Early in 1942, when the effort reached its peak, 12 hydroelectric projects and a steam plant were under construction at the same time, and design and construction employment reached a total of 28,000. TVA also provided much of the electricity needed for uranium separation using Calutrons at the Y-12 National Security Complex at Oak Ridge, as required for the Manhattan Project.
1950s
By the end of the war, TVA had completed a 650-mile (1,050-kilometer) navigation channel the length of the Tennessee River and had become the nation's largest electricity supplier. Even so, the demand for electricity was outstripping TVA's capacity to produce power from hydroelectric dams. Political interference kept TVA from securing additional federal appropriations to build coal-fired plants, so it sought the authority to issue bonds. Congress passed legislation in 1959 to make the TVA power system self-financing, and from that point on it would pay its own way.
1960s
The 1960s were years of unprecedented economic growth in the Tennessee Valley. Farms and forests were in better shape than they had been in generations. Electric rates were among the nation's lowest and stayed low as TVA brought larger, more efficient generating units into service. Expecting the Valley's electric power needs to continue to grow, TVA began building nuclear reactors as a new source of economical power.
1970s and 1980s
Significant changes occurred in the economy of the Tennessee Valley and the nation, prompted by an international oil embargo in 1973 and accelerating fuel costs later in the decade. The average cost of electricity in the Tennessee Valley increased fivefold from the early 1970s to the early 1980s. With energy demand dropping and construction costs rising, TVA canceled several nuclear plants, as did other utilities around the nation.
1990s
As the electric-utility industry moved toward restructuring and deregulation, TVA began preparing for competition. It cut operating costs by nearly $800 million a year, reduced its workforce by more than half, increased the generating capacity of its plants, stopped building nuclear plants, and developed a plan to meet the energy needs of the Tennessee Valley through to the year 2020.
2000s
TVA has recently made news by again reducing its workforce and by beginning new campaigns to improve its public image. It has also received acclaim from pro-nuclear organizations for its work to restart a previously mothballed nuclear reactor at Brown's Ferry (unit 1). (As of 2005, TVA was the owner and operator of the Browns Ferry, Sequoyah and Watts Bar nuclear power plants.) In 2004, TVA implemented recommendations from the Reservoir Operations Study (ROS) in how it operates the Tennessee River system (the nation's fifth largest).
TVA is one of the largest producers of electricity in the United States and acts as a regional grid reliability coordinator. TVA's power mix as of 2004 was 11 fossil-powered plants, 29 hydroelectric dams, three nuclear power plants (with five reactors and one restarting), and six combustion turbine plants. Fossil fuel plants produced about 61 percent of TVA’s total generation in fiscal year 2004 - Nuclear power produced about 29 percent of TVA’s generation, and hydropower produced 9 percent [1].
On 25 July, 2005, with temperatures approaching 100°F (38°C) over much of its operating area, the TVA was reported to have generated over 31,703 megawatts, breaking a one-day record. The following day, TVA reported that it had broken that record by genereating 31,935 megawatts. [2] [3] TVA has maintained 99.999 percent reliability in serving its power customers over the past six years.
On September 22, 2005, NuStart Energy Development LLC announced that it had selected TVA’s Bellefonte site near Scottsboro, Alabama as one of the two best sites in the country for a new nuclear plant and that it will seek a combined construction and operating license for the site (see Nuclear Power 2010 Program).
References
- David Ekbladh, "'Mr. TVA': Grass-Roots Development, David Lilienthal, and the Rise and Fall of the Tennessee Valley Authority as a Symbol for U.S. Overseas Development, 1933–1973" Diplomatic History Summer 2002 Vol. 26 Issue 3 pp 335-374
- Arthur E. Morgan. The Making of the TVA (1974) by its first chairman
- Philip Selznick. TVA and the Grass Roots: A Study in the Sociology of Formal Organization (1949)
