Alexander calls proposal to sell TVA assets 'loony idea'

WASHINGTON – President Donald Trump is proposing to sell off the Tennessee Valley Authority’s transmission assets, resurrecting a proposal that was pursued but ultimately abandoned by the previous administration.

Trump’s proposed budget, made public on Monday, calls for TVA and other power utilities to sell off their assets to help pay for his new $1.5 trillion infrastructure program.

“The private sector is best suited to own and operate electricity transmission assets,” the administration wrote in the president’s proposed budget. “Eliminating the federal government’s own role in owning and operating transmission assets encourages a more efficient allocation of economic resources and mitigates unnecessary risk to taxpayers.”

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The Trump administration justifies the proposed sale by noting that the vast majority of the nation’s infrastructure is owned and operated by 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 budget says.

Congressional approval unlikely

Selling off TVA’s assets will require congressional approval. But the proposal drew immediate condemnation from some members of Congress, just as it did when President Barack Obama pushed a similar plan.

“This loony idea of selling TVA’s transmission lines seems to keep popping up regardless of who is president,” said Sen. Lamar Alexander, R-Tenn. “It has zero chance of becoming law.”

When Obama made a similar proposal in 2013, “all it did was undermine TVA’s credit, raise interest rates on its debt, and threaten to increase electric bills for 9 million Tennessee Valley ratepayers,” Alexander said.

Obama wanted to put TVA under state and local control, but abandoned the proposal in 2016 amid opposition in Congress. In scrapping the proposal, the Obama administration also noted that TVA had taken significant steps to improve its operating and financial performance.

Sen. Bob Corker, R-Tenn., said the latest proposal to sell TVA assets is unlikely to go anywhere.

“While it is important to remember that TVA has not received any taxpayer funding since 1999 and has taken positive steps in recent years to pay down its debt, as I’ve said before, I think it’s valuable to evaluate from time to time reforms that could cause TVA to function more effectively for Tennessee taxpayers and ratepayers,” Corker said. “That said, at the end of the day, selling TVA is a very unlikely outcome.”

Rep. Chuck Fleischmann, R-Ooltewah, also raised doubts about Trump’s proposal.

"I have seen the proposal contained in the president's budget to grant TVA authority to divest their transmission assets,” he said. “While I understand the desire to achieve short-term budgetary advantages, I have consistently opposed similar proposals by past administrations due to their long-term harmful impact. TVA has played a pivotal role in the history of our great state, and I am committed to vetting any major structural changes to ensure they do not adversely affect my constituents."

Another transmission assets sale?

Besides TVA, Trump also is proposing to sell the transmission assets held by the Southwestern Power Administration, Western Area Power Administration and Bonneville Power Administration.

The American Public Power Association, which represents nonprofit, community-owned utilities, called the proposal “misguided” and said it would “adamantly oppose” any effort to privatize TVA and other public power assets.

“TVA provides affordable electric power to more than 9 million people in seven states at no cost to taxpayers,” the group said in a statement.

TVA said the transmission assets described in Trump’s budget include more than 16,000 miles of line paid for by the power customers of the Tennessee Valley over the past 85 years.

The utility also noted that, while it was created by an in 1933 act of Congress, it does not receive any funds from the federal government but is funded almost entirely by the sale of electricity.

TVA said it is still reviewing the language in the Trump proposal and will work with the Office of Management and Budget to better understand the proposal’s full implications.

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