Senator Lamar Alexander (R-Tn.) on Wednesday told the U.S. Department of Energy’s top official that the Obama administration’s “ill-conceived, reckless” proposal in the president’s budget to sell the Tennessee Valley Authority damaged the value of the utility’s bonds and failed to account for the impact to ratepayers, taxpayers and nuclear facilities.
“Did you know that, as a result of just the random mention of it in the budget, the Tennessee Valley Authority bonds lost a market value of a half-billion dollars?” Senator Alexander asked Acting Secretary of Energy Daniel Poneman.
“I think there’s somebody with a green eyeshade down there in the Office of Management and Budget who just thinks it’s a ‘cool’ idea to talk about selling the Tennessee Valley Authority. We don’t appreciate that approach – it’s an ill-conceived, reckless approach.”
Senator Alexander questioned Secretary Poneman about the administration’s ongoing review of TVA at a Senate Appropriations Subcommittee on Energy and Water Development hearing. The senator said that the loss in value to TVA’s bonds could drive up electric bills for residents throughout the Tennessee Valley, by making it more difficult for TVA to borrow money.
He also noted that TVA is the nation’s only supplier of tritium – an important component in the production of nuclear weapons – and will operate a small modular reactor that would mark innovation in the production of nuclear energy. Secretary Poneman said he had not personally been consulted, but said that TVA’s importance on a range of fronts would likely be part of the administration’s review. He said the department is “indispensably tied” to TVA’s tritium production at this point.
The senator told Secretary Poneman that TVA’s debt is not backed by federal taxpayers, and that TVA does not receive any federal taxpayer subsidy. He has also said that selling TVA could cost taxpayers money, once its debt is deducted.
Senator Alexander continued, “Don’t you think it would have been wiser, if somebody wanted to sell TVA, that they might sit down and have a private discussion about it first, rather than send the value of the bonds plunging?”
TVA has said it can live within its current debt limit, and Senator Alexander said the administration should consider reforming automatic spending increases on entitlement programs if the president wants to address the federal debt.
In addition to inquiring about the proposal to sell TVA, Alexander expressed his support for exascale computing. He also said he is supportive of the department’s energy hubs – and making sure all of them perform at a high level – and of the need to focus more resources on mercury cleanup at Oak Ridge.