Tennessee Valley Authority

Last updated
Tennessee Valley Authority
Public
Traded as NYSE:  TVC
Industry Electric utility
FoundedSeptember 18, 1933 (1933-69-18)
Headquarters Knoxville, Tennessee, U.S.
Key people
Bill Johnson, CEO
Revenue$11.56 billion USD (FY 2013 ending September 30, 2013)
$1.453 billion USD (FY 2013)
$271 million USD (FY 2013)
Website www.tva.gov
TVA Towers, TVA's headquarters in downtown Knoxville, overlooking the Tennessee River TVA-towers-tennessee-river-tn1.jpg
TVA Towers, TVA's headquarters in downtown Knoxville, overlooking the Tennessee River

The Tennessee Valley Authority (TVA) is a federally owned corporation in the United States created by congressional charter on May 18, 1933, to provide navigation, flood control, electricity generation, fertilizer manufacturing, and economic development to the Tennessee Valley, a region particularly affected by the Great Depression. The enterprise was a result of the efforts of Senator George W. Norris of Nebraska. TVA was envisioned not only as a provider, but also as a regional economic development agency that would use federal experts and electricity to more quickly modernize the region's economy and society.

Corporation separate legal entity that has been incorporated through a legislative or registration process established through legislation

A corporation is an organization, usually a group of people or a company, authorized to act as a single entity and recognized as such in law. Early incorporated entities were established by charter. Most jurisdictions now allow the creation of new corporations through registration. Corporations enjoy limited liability for their investors, which can lead to losses being externalized from investors to the government or general public, while losses to investors are generally limited to the amount of their investment.

United States federal republic in North America

The United States of America (USA), commonly known as the United States or America, is a country composed of 50 states, a federal district, five major self-governing territories, and various possessions. At 3.8 million square miles, the United States is the world's third or fourth largest country by total area and is slightly smaller than the entire continent of Europe's 3.9 million square miles. With a population of over 327 million people, the U.S. is the third most populous country. The capital is Washington, D.C., and the largest city by population is New York City. Forty-eight states and the capital's federal district are contiguous in North America between Canada and Mexico. The State of Alaska is in the northwest corner of North America, bordered by Canada to the east and across the Bering Strait from Russia to the west. The State of Hawaii is an archipelago in the mid-Pacific Ocean. The U.S. territories are scattered about the Pacific Ocean and the Caribbean Sea, stretching across nine official time zones. The extremely diverse geography, climate, and wildlife of the United States make it one of the world's 17 megadiverse countries.

Navigation The process of monitoring and controlling the movement of a craft or vehicle from one place to another

Navigation is a field of study that focuses on the process of monitoring and controlling the movement of a craft or vehicle from one place to another. The field of navigation includes four general categories: land navigation, marine navigation, aeronautic navigation, and space navigation.

Contents

TVA's service area covers most of Tennessee, portions of Alabama, Mississippi, and Kentucky, and small slices of Georgia, North Carolina, and Virginia. It was the first large regional planning agency of the federal government and remains the largest. Under the leadership of David Lilienthal ("Mr. TVA"), the TVA became a model for America's efforts to help modernize agrarian societies in the developing world. [1]

Tennessee State of the United States of America

Tennessee is a state located in the southeastern region of the United States. Tennessee is the 36th largest and the 16th most populous of the 50 United States. Tennessee is bordered by Kentucky to the north, Virginia to the northeast, North Carolina to the east, Georgia, Alabama, and Mississippi to the south, Arkansas to the west, and Missouri to the northwest. The Appalachian Mountains dominate the eastern part of the state, and the Mississippi River forms the state's western border. Nashville is the state's capital and largest city, with a 2017 population of 667,560. Tennessee's second largest city is Memphis, which had a population of 652,236 in 2017.

Alabama State of the United States of America

Alabama is a state in the southeastern region of the United States. It is bordered by Tennessee to the north, Georgia to the east, Florida and the Gulf of Mexico to the south, and Mississippi to the west. Alabama is the 30th largest by area and the 24th-most populous of the U.S. states. With a total of 1,500 miles (2,400 km) of inland waterways, Alabama has among the most of any state.

Mississippi State of the United States of America

Mississippi is a state located in the southeastern region of the United States. Mississippi is the 32nd most extensive and 34th most populous of the 50 United States. It is bordered by Tennessee to the north, Alabama to the east, the Gulf of Mexico and Louisiana to the south, and Arkansas and Louisiana to the west. The state's western boundary is largely defined by the Mississippi River. Jackson, with a population of approximately 175,000 people, is both the state's capital and largest city.

Overview

TVA electricity sign at Franklin D. Roosevelt Presidential Library and Museum in Hyde Park, New York TVA sign at Hyde Park, NY IMG 5665.JPG
TVA electricity sign at Franklin D. Roosevelt Presidential Library and Museum in Hyde Park, New York
Tennessee Valley Authority Surplus/Deficit TVA Surplus.png
Tennessee Valley Authority Surplus/Deficit
Wilson Dam, completed in 1924, was the first dam under the authority of TVA, created in 1933. Wilson Dam.jpg
Wilson Dam, completed in 1924, was the first dam under the authority of TVA, created in 1933.

The Tennessee Valley Authority was initially founded as an agency to provide general economic development to the region through power generation, flood control, navigation assistance, fertilizer manufacturing, and agricultural development, but has evolved primarily into a power utility. Despite its shares being owned by the federal government, TVA operates exactly like a private corporation, and receives no taxpayer funding. [2]

Economic development is the process by which a nation improves the economic, political, and social well-being of its people. The term has been used frequently by economists, politicians, and others in the 20th and 21st centuries. The concept, however, has been in existence in the West for centuries. "Modernization, "westernization", and especially "industrialization" are other terms often used while discussing economic development. Economic development has a direct relationship with the environment and environmental issues. Economic development is very often confused with industrial development, even in some academic sources.

TVA provides electricity to approximately ten million people through a diverse portfolio which includes nuclear, coal-fired, natural gas-fired, hydroelectric, and renewable generation. TVA sells its power to 154 local power utilities, 5 direct industrial and institutional customers, and 12 surrounding utilities. [3] In addition to power generation, TVA provides flood control with its 29 hydroelectric dams, which allow for recreational activities, and provides navigation and land management along rivers within its region of operation. [2] TVA also assists governments and private companies on economic development projects. [2]

Nuclear power power generated from sustained nuclear fission

Nuclear power is the use of nuclear reactions that release nuclear energy to generate heat, which most frequently is then used in steam turbines to produce electricity in a nuclear power plant. As a nuclear technology, nuclear power can be obtained from nuclear fission, nuclear decay and nuclear fusion reactions. Presently, the vast majority of electricity from nuclear power is produced by nuclear fission of uranium and plutonium. Nuclear decay processes are used in niche applications such as radioisotope thermoelectric generators. Generating electricity from fusion power remains at the focus of international research. This article mostly deals with nuclear fission power for electricity generation.

Coal A combustible sedimentary rock composed primarily of carbon

Coal is a combustible black or brownish-black sedimentary rock, formed as rock strata called coal seams. Coal is mostly carbon with variable amounts of other elements; chiefly hydrogen, sulfur, oxygen, and nitrogen. Coal is formed if dead plant matter decays into peat and over millions of years the heat and pressure of deep burial converts the peat into coal.

Natural gas fossil fuel

Natural gas is a naturally occurring hydrocarbon gas mixture consisting primarily of methane, but commonly including varying amounts of other higher alkanes, and sometimes a small percentage of carbon dioxide, nitrogen, hydrogen sulfide, or helium. It is formed when layers of decomposing plant and animal matter are exposed to intense heat and pressure under the surface of the Earth over millions of years. The energy that the plants originally obtained from the sun is stored in the form of chemical bonds in the gas.

TVA has a nine member board of directors, each nominated by the United States President and confirmed by the United States Senate. The part time members serve five year terms and receive an annual stipend of $45,000 ($50,000 for the chairman). The board members choose the chief executive officer (CEO). [4]

President of the United States Head of state and of government of the United States

The President of the United States (POTUS) is the head of state and head of government of the United States of America. The president directs the executive branch of the federal government and is the commander-in-chief of the United States Armed Forces.

United States Senate Upper house of the United States Congress

The United States Senate is the upper chamber of the United States Congress, which along with the United States House of Representatives — the lower chamber — comprises the legislature of the United States. The Senate chamber is located in the north wing of the Capitol, in Washington, D.C.

Chief executive officer highest-ranking corporate officer or administrator

The chief executive officer (CEO), or just chief executive (CE), is the most senior corporate, executive, or administrative officer in charge of managing an organization – especially an independent legal entity such as a company or nonprofit institution. CEOs lead a range of organizations, including public and private corporations, non-profit organizations and even some government organizations. The CEO of a corporation or company typically reports to the board of directors and is charged with maximizing the value of the entity, which may include maximizing the share price, market share, revenues, or another element. In the non-profit and government sector, CEOs typically aim at achieving outcomes related to the organization's mission, such as reducing poverty, increasing literacy, etc.

The Tennessee Valley Authority Police are the primary law enforcement agency for the company. Initially part of the TVA, the TVA Police became a federal law enforcement agency in 1994.

Tennessee Valley Authority Police

The Tennessee Valley Authority Police is a law enforcement agency in the United States. It is a federally commissioned agency that provides protection for Tennessee Valley Authority properties and employees.

Law enforcement in the United States is one of three major components of the criminal justice system of the United States, along with courts and corrections. Although each component operates semi-independently, the three collectively form a chain leading from investigation of suspected criminal activity to administration of criminal punishment.

Federal law enforcement in the United States Wikimedia list article

The federal government of the United States empowers a wide range of law enforcement agencies to maintain law and public order related to matters affecting the country as a whole.

History

Background

During the 1920s and the Great Depression years, Americans began to support the idea of public ownership of utilities, particularly hydroelectric power facilities. The concept of government-owned generation facilities selling to publicly owned distribution utilities was controversial and remains so today. [5] Many believed privately owned power companies were charging too much for power, did not employ fair operating practices, and were subject to abuse by their owners (utility holding companies), at the expense of consumers. During his presidential campaign, Roosevelt claimed that private utilities had "selfish purposes" and said, "Never shall the federal government part with its sovereignty or with its control of its power resources while I'm president of the United States." By forming utility holding companies, the private sector controlled 94 percent of generation by 1921, essentially unregulated. (This gave rise to the Public Utility Holding Company Act of 1935 (P.U.H.C.A.)). Many private companies in the Tennessee Valley were bought by the federal government. Others shut down, unable to compete with the TVA. Government regulations were also passed to prevent competition with TVA.

In the 1920s, a major battle erupted over building an electric power system in the Tennessee Valley, based on the World War I federal dam at Muscle Shoals, Alabama. It would generate electricity and produce fertilizer. [5] Senator George Norris of Nebraska blocked a proposal from Henry Ford in 1920 to use the dam to modernize the valley. Norris deeply distrusted privately owned utility companies. He did get Congress to pass the Muscle Shoals Bill, but it was vetoed as socialistic by President Herbert Hoover in 1931. The idea behind the Muscle Shoals Bill in 1933 became a core part of the New Deal's TVA. [6]

Even by Depression standards, the Tennessee Valley was economically dismal in 1933. Thirty percent of the population was affected by malaria, and the average income was only $639 per year, with some families surviving on as little as $100 per year. 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, with another 10% of forests being burnt each year. [5]

Early history

President Franklin D. Roosevelt signs the TVA Act Roosevelt signing TVA Act (1933).jpg
President Franklin D. Roosevelt signs the TVA Act

President Franklin Delano Roosevelt signed the Tennessee Valley Authority Act (ch. 32, Pub.L.   73–17 , 48  Stat.   58 , enacted May 18, 1933, codified as amended at 16 U.S.C.   § 831, et seq.), creating the TVA.

TVA was designed to modernize the region, using experts and electricity to combat human and economic problems. [7] TVA developed fertilizers, taught farmers ways to improve crop yields and helped replant forests, control forest fires, and improve habitat for fish and wildlife. The most dramatic change in Valley life came from TVA-generated electricity. Electric lights and modern home appliances made life easier and farms more productive. Electricity also drew industries into the region, providing desperately needed jobs.

TVA's first board (L to R): Harcourt Morgan, Arthur E. Morgan, and David Lilienthal TVA-first-board.jpg
TVA's first board (L to R): Harcourt Morgan, Arthur E. Morgan, and David Lilienthal

The development of the dams displaced more than 15,000 families. This created anti-TVA sentiment in some rural communities.[ citation needed ] Many local landowners were suspicious of government agencies, but TVA successfully introduced new agricultural methods into traditional farming communities by blending in and finding local champions.

Tennessee farmers would often reject advice from TVA officials, so the officials had to find leaders in the communities and convince them that crop rotation and the judicious application of fertilizers could restore soil fertility. Once they had convinced the leaders, the rest followed. [ citation needed ]

At its inception, TVA was based in Muscle Shoals, Alabama, but later moved its headquarters to Knoxville, Tennessee, where they remain today. At one point, TVA's headquarters were housed in the Old Federal Customs House at the corner of Clinch Avenue and Market Street. The building is now a museum. [8] TVA was one of the first federal hydropower agencies, and today most of the nation's major hydropower systems are federally managed. Other attempts to create similar regional corporate agencies have failed, such as a proposed Columbia Valley Authority for the Columbia River in the Pacific Northwest.[ citation needed ]

A carpenter (wearing a contractor's employee badge) at work during the 1942 construction of the Douglas Dam in East Tennessee. PalmercarpenterA.jpg
A carpenter (wearing a contractor's employee badge) at work during the 1942 construction of the Douglas Dam in East Tennessee.

The Authority hired many area unemployed to conduct conservation, economic development, and social programs, such as a library service that operated for the surrounding area. The professional staff headquarters was composed of experts from outside the region. By 1934, TVA employed more than 9,000 people. [9] The workers were categorized by the usual racial and gender lines of the day. TVA hired a few African Americans for janitorial or other low-level positions. TVA recognized labor unions; its skilled and semi-skilled blue collar employees were unionized, a breakthrough in an area known for corporations hostile to miners' and textile workers' unions. Women were excluded from construction work. TVA's cheap electricity attracted textile mills to the area, and they hired mostly women as workers. [10]

The Douglas Dam early in its construction in 1942. Douglas Dam Construction.jpg
The Douglas Dam early in its construction in 1942.

During World War II, the U.S. needed greater aluminum supplies to build airplanes. Aluminum plants required large amounts of electricity. To provide the power, TVA engaged in one of the largest hydropower construction programs ever undertaken in the U.S. By early 1942, when the effort reached its peak, 12 hydroelectric plants and one steam plant were under construction at the same time, and design and construction employment reached a total of 28,000. In its first eleven years, TVA constructed a total of 16 hydroelectric dams. [9] The largest project of this period was the Fontana Dam. After negotiations led by Vice-President Harry Truman, TVA purchased the land from Nantahala Power and Light, a wholly owned subsidiary of Alcoa, and built Fontana Dam. Also in 1942, TVA's first coal-fired plant, the 267 megawatt Watts Bar Steam Plant began operation. [11]

The government originally intended the electricity generated from Fontana to be used by Alcoa factories.[ citation needed ] By the time the dam generated power in early 1945, the electricity was directed to another purpose in addition to aluminum manufacturing, as TVA also provided much of the electricity needed for uranium enrichment at Oak Ridge, Tennessee, as required for the Manhattan Project and the making of the atomic bomb.

Increasing power demand

By the end of the war, TVA had completed a 650-mile (1050-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, and so TVA began to construct coal-fired plants. Political interference kept TVA from securing additional federal appropriations to do so, so it sought the authority to issue bonds.[ citation needed ] Several of TVA's coal fired plants, including Johnsonville, Widows Creek, Shawnee, Kingston, Gallatin, and John Sevier, began operations in the 1950s. [12] Coal surpassed hydroelectricity as TVA's top generating source in 1955. [13] On August 6, 1959 President Dwight D. Eisenhower signed into law an amendment to the TVA act which made the agency self-financing. [14]

The 1960s were years of further unprecedented economic growth in the Tennessee Valley. 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 cheap power. [15] During this decade (and the 1970s), TVA was engaged in what was up to that time its most controversial project – the Tellico Dam Project.[ citation needed ] The project was initially conceived in the 1940s but not completed until 1979.

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.

TVA's first nuclear reactor, Browns Ferry Unit 1, began operation in 1974. [16] In the early 1970s, TVA set out to construct a total of 17 nuclear reactors, due to a projection of further increase in power demand. [17] However, ten of these reactors were cancelled in the 1980s. On August 6, 1981 the Tennessee Valley Authority Board voted to defer the Phipps Bend plant, as well as to slow down construction on all other projects. [18] The Hartsville and Yellow Creek plants were cancelled in 1984 and Bellefonte in 1988. [17]

The 1970s saw the last and most controversial of the TVA's large dam-reservoir projects, Tellico Dam. The Tellico Dam project was initially delayed because of concern over the snail darter. A lawsuit was filed under the Endangered Species Act and the U.S. Supreme Court ruled in favor of protecting the snail darter in Tennessee Valley Authority v. Hill .

Marvin T. Runyon became chairman of the Tennessee Valley Authority in January 1988. He claimed to reduce management layers, cut overhead costs by more than 30%, and achieved cumulative savings and efficiency improvements of $1.8 billion. He said he revitalized the nuclear program and instituted a rate freeze that continued for ten years.[ citation needed ]

Recent history

As the electric-utility industry moved toward restructuring and deregulation, TVA began preparing for competition. It cut operating costs by nearly $950 million a year, reduced its workforce by more than half, increased the generating capacity of its plants, and developed a plan to meet the energy needs of the Tennessee Valley through the year 2020.[ citation needed ]

In 1996, Watts Bar Unit 1 began operation. This was the last commercial nuclear reactor to begin operation in the 20th century.

May 2005 map of TVA sites
dam
nuclear
fossil TVA-sites-map.png
May 2005 map of TVA sites
   dam
   nuclear
   fossil

In 2002, TVA began work to restart a previously mothballed nuclear reactor at Browns Ferry Unit 1, which was completed in May 2007. In 2004, TVA implemented recommendations from the Reservoir Operations Study (ROS) in how it operates the Tennessee River system (the nation's fifth largest). In 2005, the TVA announced its intention to construct an Advanced Pressurized Water Reactor at its Bellefonte site in Alabama (filing the necessary applications in November 2007), and in 2007 announced plans to complete the unfinished Unit 2 at Watts Bar.

On December 22, 2008, an earthen dike at TVA's Kingston Fossil Plant broke, spreading one billion gallons of wet coal ash across 300 acres (1.2 km2) of land and into the tributaries of the Tennessee River. [19] While TVA's culture at its fossil fuel plants was not the cause of the Kingston Spill, the culture contributed to the spill, as was noted in the TVA Office of the Inspector General's report, Inspection 2008-12283-02, Review of the Kingston Fossil Plant Ash Spill Cause Study and Observations About Ash Management. [20]

In 2009, TVA signed 20-year power purchase agreements with Maryland-based CVP Renewable Energy Co. and Chicago-based Invenergy Wind LLC for electricity generated by wind farms. [21]

As of 2013, TVA carries $25 billion in debt, near the $30 billion debt limit imposed by Congress. [22] [23] In April 2011 TVA reached an agreement with the Environmental Protection Agency (EPA), four state governments, and three environmental groups to drastically reduce pollution and carbon emissions. [24] Under the terms of the agreement, TVA was required to retire at least 18 of its 59 coal-fired units by the end of 2018, and install scrubbers in several others or convert them to make them cleaner, at a cost of $25 billion by 2021. [24] As a result TVA has closed several of its coal fired power plants in the 2010s, converting some of them to natural gas. These include John Sevier in 2012, Shawnee Unit 10 in 2014, Widows Creek in 2015, Colbert in 2016, Johnsonville and Paradise Units 1 and 2 in 2017, and Allen in 2018. [25]

In October 2016 Watts Bar Unit 2 began commercial operation. Watts Bar Unit 2 is the first, and so far only, new nuclear reactor to enter service in the 21st century. [26]

On October 10, 2018, a federal jury sided with the workers in finding that the TVA failed to keep workers safe during the December 22, 2008, coal ash spill, which left many of them dead and sick. [27]

In 2018, TVA opened a new cybersecurity center in its downtown Chattanooga Office Complex. Over twenty IT specialists monitor emails, Twitter feeds and network activity for cybersecurity threats and threats to grid security. Across TVA's digital platform there are 2 billion activities that occur each day. The center is manned 24 hours a day to spot any threats to TVA's 16,000 miles of transmission lines. [28]

Facilities

The twin cooling towers and reactor containment buildings of TVA's Sequoyah Nuclear Plant north of Chattanooga, Tennessee. Sequoyah Nuclear Power Plant.JPG
The twin cooling towers and reactor containment buildings of TVA's Sequoyah Nuclear Plant north of Chattanooga, Tennessee.

Power stations

With a generating capacity of approximately 35 gigawatts (GW), TVA has the sixth highest generation capacity of any utility company. [29] TVA's power mix as of 2018 is 6 coal-fired power plants, 29 hydroelectric dams, three nuclear plants (with seven operating reactors), nine simple cycle natural gas combustion turbine plants, nine combined cycle gas plants, 1 pumped storage hydroelectric plant, 1 wind energy site (plus contracts to purchase Midwest wind power), and 15 small solar energy sites. [30] In fiscal year 2018, nuclear generation was about 40% of TVA's total, coal 26%, natural gas 20%, hydroelectric 10%, and wind and solar 3%. [30] TVA currently purchases from external power producers about 15% of the power it sells. Purchased power is from natural gas combined cycles, coal, wind, and other renewables. The cost of Purchased Power is part of the "Fuel Cost Adjustment" (FCA) charge that is separate from the TVA Rate. Watts Bar Nuclear Plant produces tritium as a byproduct for the U.S. National Nuclear Security Administration, which requires tritium for nuclear weapons (for "boosted" fission primaries and for fusion secondaries).

Dams and hydroelectric facilities

Fossil fuel plants

Coal-fired power plants