The Obama administration may be pulling the plug on plans to sell the Tennessee Valley Authority, created by Franklin D. Roosevelt 81 years ago.
A year after President Barack Obama began a strategic review of the power provider, the administration now says the agency has bolstered its finances. While ending federal ties to the TVA remains possible, the dire language from last year has been replaced by praise for the work of the agency.
“TVA has undergone a major internal review and taken significant steps to improve its future operating and financial performance,” according to the 2015 budget the president proposed today. “In addition, TVA has committed to resolve its capital financing constraints.”
The administration last year fretted that the TVA needed $25 billion over a decade for capital investments, a sum that probably would quickly exceed its legal borrowing limit, according to the 2014 budget.
At the time, the administration said the TVA set up in 1933 had met its goal and ending the federal involvement would help reduce the U.S. deficit. The budget last year didn’t outline a timeline for completing the strategic review.
A possible sale of the TVA, which delivers electricity for nine million customers in seven states, stirred political leaders to block a divestiture. The TVA has more than 12,000 employees.
Sen. Lamar Alexander, a Tennessee Republican and foe of subsidies for energy production, in a statement last year said the proposal was “one more bad idea in a budget full of bad ideas.” A sale might lead to higher energy costs without providing much money to the U.S. to pay down the debt, he said.
Sen. Richard Shelby, a Republican whose state of Alabama gets TVA power, said he would study any proposals to restructure TVA to ensure it wouldn’t affect power prices in the region.
Consumers in Alabama and Tennessee, the TVA’s largest service areas, pay less for electricity than the national average, according to U.S. Energy Information Administration.
“‘‘We are pleased the administration has recognized TVA’s efforts in improving our financial outlook and supports our ongoing operating and financial direction,’’ TVA Chief Executive Officer Bill Johnson said today in a statement. ‘‘The review helped to validate the benefits of the public power model through which TVA provides substantial economic and other benefits for the region.’’
The dire language about mounting debts and widening deficits has been replaced with a more collaborative message:
‘‘The administration supports TVA’s ongoing operating and financial initiatives and intends to closely monitor TVA’s performance,” according to the budget today.
“The administration recognizes the important role TVA serves in the Tennessee Valley and stands ready to work with the Congress and TVA’s stakeholders to explore options to end federal ties to TVA, including alternatives such as a transfer of ownership to state or local stakeholders.”
– Jim Snyder contributed to this report.