The Tennessean (Nashville, Tennessee)
January 25, 2009 Sunday
BY Brad Schrade
THE TENNESSEAN
When a TVA dike at the Kingston power plant burst days before Christmas, spilling millions of cubic yards of coal ash waste into the surrounding community, it brought forth a sea of unwanted questions from across the state and beyond - all targeted at the energy producer.
The coal ash disaster was the climax of a year of problems and public relations missteps for the Tennessee Valley Authority. Doubts brought on by the disaster couldn't have come at a worse time for TVA.
It now faces heightened scrutiny from Congress, the uncertainty that flows from a new presidential administration, and increasing calls for cleaner and more efficient electricity. There probably will be great public interest as President Barack Obama chooses as many as five of nine board seats over the next 18 months.
As TVA tries to meet these demands, questions mount about the agency. Is it up to the challenges? What will be the cost to residents of Tennessee, and parts of six other states, where TVA wields power and delivers electricity?
"In TVA's 70-year history they've gone from a yardstick for the world to a laughingstock with the nuclear problems (in the 1970s) to a run-of-the-mill, get-by-with-what-you-can utility," said U.S. Rep. Jim Cooper, a Democrat from Nashville. "I told (TVA Chief Executive) Tom Kilgore and (TVA Chairman) Bill Sansom when they came up (to Washington) that 2008 was a disastrous year for TVA.
"They demanded whopping rate increases from every customer. Paid the top executives fat bonuses. Then virtually on Christmas Eve poured toxic sludge on a lot of good, hard-working Tennesseans and one of our most beautiful valleys. Oh, sure they're apologetic but it's tragic and disappointing that we don't have a first-rate, top-flight utility in the valley."
Others, like U.S. Sen. Lamar Alexander, R-Tennessee, see the coal ash spill as a big mistake, but an isolated problem in an agency that overall has performed well.
Phone calls Friday to Sansom and fellow board member Denny Bottorff of Nashville went unreturned before deadline. Kilgore through a spokesman declined an interview request. The spokesman, John Moulton, said no one in leadership at TVA would be available for this article.
A rep for unaccountability
TVA, which receives no federal funding, has long faced a reputation for being insular and unaccountable to the public.
Unlike most utilities that operate in other states under similar monopoly-like conditions, TVA is a federal entity exempt from state utility regulation. For example, it does not have to seek state approval to increase rates.
Earlier Friday, revelations were still coming out about TVA's handling of the Dec. 22 disaster. Its 50-person public relations staff, in media releases in the hours and days after the spill, seemed to downplay the seriousness of the disaster, and its health and environmental risks, according to an internal memo obtained by The Associated Press. An example was a talking-points memo for news media briefing in which language to describe the spill was changed from "catastrophic" to a "sudden, accidental release."
Moulton told the AP that the language in the memo was based on early information available and that the office took the spill seriously. The spill drew national attention and a congressional hearing, and is costing an estimated $1 million a day in cleanup.
It was the most dramatic in a string of recent issues at TVA.
In October, TVA raised electricity prices to adjust for fuel cost increases in what amounted to about a 20 percent increase to customers - the largest in decades. That came with unemployment on the rise and the country worried about the worst economic downturn since the Great Depression. TVA's board later in the month gave CEO Kilgore a significant pay raise, making his total compensation package with incentives more than $3 million - outraging ratepayers and underscoring the agency's tin ear to public perception.
Earlier this month, coal waste at a TVA plant in Stevenson, Ala., spilled into a nearby waterway. Tennessee state regulators cited TVA when, days earlier, on the Ocoee River in East Tennessee, a dam released a significant amount of sediment sludge. That polluted a scenic whitewater sport area used during the 1996 Olympics.
Also this month, a federal judge in North Carolina issued a decision in a lawsuit the state brought against TVA. The suit, which went to trial in July, claimed pollution from the coal plants was making people sick and cutting lives short, while damaging natural resources such as the Smoky Mountains and hurting tourism.
The ruling requires TVA to retrofit some of its coal-burning power plants with costly air pollution control equipment. It placed the requirements on three coal plants in East Tennessee, including Kingston, and one in northern Alabama; other plants in TVA's system will remain untouched.
Alexander defends TVA
Sen. Alexander, co-chairman of the TVA Congressional Caucus in Washington, said that he thinks its coal plants should reduce pollution, but that placing the requirements on TVA plants alone won't work.
Alexander, who is on the Senate Committee on Environment and Public Works, said the coal ash spill was an embarrassing mistake and TVA needs to work to restore public confidence in its ability to manage the waste. He said he expects additional regulation to follow this year.
However, he said, the spill shouldn't overshadow some of the good strides the agency has made in recent years. He rattled off a series of initiatives, including its leadership on restarting a U.S. nuclear power program, setting goals to conserve energy, and a partnership with automakers to fuel electric cars.
All of these could help Tennessee and its economy, he said.
"If we want to build cars in Tennessee and solar panels in Tennessee, and if we want to have relatively low prices for electricity, which we do compared to California and other places, then we should hope we have a very strong TVA," Alexander said. "I like their direction on nuclear, conservation, renewable energy, electric cars - I think all those are big pluses. They weren't doing those before."
A critical 18 months
Can TVA face the increased scrutiny and deliver on these plans?
Can it live up to the rich tradition of innovation from its early days, which brought flood control, electrification and jobs to the Tennessee Valley? Or will new initiatives suffer the failed execution that marred later efforts, such as the 1970s nuclear program? The legacy of debt from the nuclear failures still hangs over the agency.
TVA could and should play a central role in the national energy policy debate as Obama tries to be a leader in finding cleaner and more efficient energy policies, said Stephen A. Smith, executive director of the Southern Alliance for Clean Energy, based in Knoxville.
Smith said the next 18 months will be critical for TVA's future. The White House appoints the nine-member, part-time board, which now is heavily Republican. The new president could change up to five seats in that period.
Smith remains optimistic those appointments could help fuel a renewed sense of mission in the agency to help lead with energy solutions. Despite its recent problems, Smith said, it's a moment of opportunity for TVA to rise to the challenge.
He'd like to see TVA set ambitious goals on even more energy efficiency, renewable energy and power grid technology to drive consumer efficiency, and innovations for electric vehicle use.
Smith, who has been critical of TVA over the years, said the country needs an entity like TVA that isn't beholden to the shareholder demands faced by private utilities
"I believe with the proper leadership, TVA is one of the best options we have," Smith said.
Brad Schrade can be reached at 615-259-8086 or bschrade@tennessean.com
LOAD-DATE: January 27, 2009
