Everything about The Tennessee Valley Authority totally explained
The
Tennessee Valley Authority (
TVA) is a federally owned
corporation in the
United States created by congressional charter in
May 1933 to provide
navigation,
flood control,
electricity generation,
fertilizer manufacturing, and
economic development in the
Tennessee Valley, a region particularly impacted by the
Great Depression. The TVA was envisioned not only as an electricity provider, but also as a regional economic development agency that would use federal experts and electricity to rapidly modernize the region's economy and society.
The TVA's
jurisdiction covers most of
Tennessee, parts of
Alabama,
Mississippi, and
Kentucky, and small slices of
Georgia,
North Carolina, and
Virginia. It is a political entity with a territory the size of a major state, and with some state powers (such as
eminent domain), but unlike a state, it has no
citizenry or
elected officials. 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 Authority became a model for American efforts to modernize
Third World agrarian societies.(Ekbladh 2002)
Overview
President
Franklin Delano Roosevelt signed the
Tennessee Valley Authority Act (ch. 32,,
codified as amended at, et seq.), creating the TVA on
May 18,
1933.
As a supplier of electric power, the agency was given authority to enter into long term (20 years) contracts for the sale of power to government agencies and private entities, to construct
electric power transmission lines to areas not otherwise supplied and to establish rules and regulations for
electricity retailing and
distribution. The TVA is thus both a power supplier and a
regulator.
Today the TVA is the nation's largest public power company, providing electric power to nearly 8.5 million customers in the Tennessee Valley. It acts primarily as an electric power
wholesaler, selling to 158 retail power distributors and 61 directly served industrial or government customers. Power comes from
dams providing
hydroelectric power,
fossil fuel plants,
nuclear power plants,
combustion turbines and
wind turbines.
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.
Many believed privately owned power companies were charging too much for power, didn't 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
Public Utility Holding Company Act of 1935 (PUHCA)). 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 the TVA.
On the other hand, there were economic
libertarians who believed the government shouldn't participate in the electricity generation business, fearing government ownership would lead to the misuse of hydroelectric sites. The 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 TVA-like regional agencies have failed, such as a proposed Columbia Valley Authority for the
Columbia River.
Regional power consumers may benefit from lower-cost electricity supplied from TVA's network of 29 power-producing hydropower facilities. Supporters of the TVA, though, note that the agency's management of the Tennessee River system without appropriated federal funding saves federal taxpayers millions of dollars annually. Opponents, such as Dean Russell in
The TVA Idea, in addition to condemning the project as being
socialist, argued that the TVA created a "hidden loss" by preventing the creation of "factories and jobs that would have come into existence if the government had allowed the taxpayers to spend their money as they wished." Defenders note that the TVA is overwhelmingly popular in Tennessee among conservatives and
liberals alike, as
Barry Goldwater discovered in 1964, when he proposed selling the agency.
One study says that public utilities are inadequate on maintenance. They note that federally owned power systems spend significantly less than private systems on this. They report that the TVA "spends only five percent of its revenues on maintenance." And, they say that as a consequence, ability to produce power suffers. Privately owned dams produce 20 percent more electricity than federally owned dams. They also report that the TVA charges its preferred customers (publicly owned utilities and cooperatives) more than private utilities charge the same class of customers. Also, they note when the public purchases bond issues from the TVA, they don't have an eye on the viability of the project but are, rather, basing their investment decision on the fact that repayment is guaranteed via taxation. (CBO,
Should the Federal Government Sell Electricity)
The Supreme Court of the United States ruled the TVA to be constitutional in
Ashwander v. TVA, 297 U.S. 288 (1936). The Court noted that regulating commerce among the states includes regulation of streams and that controlling floods is required for keeping streams navigable. The war powers also authorized the project. The argument before the court was that electricity generation was a
by-product of navigation and flood control and therefore could be considered constitutional.
History
Much of this information comes from http://www.tva.gov/abouttva/history.htm, a government website and thus in the
public domain.
Even by Depression standards, the Tennessee Valley was in sad shape in
1933. Thirty percent of the population were affected by
malaria, and the 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.
The TVA was designed to modernize the region, using experts and electricity to combat human and economic problems. 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
appliances made life easier and farms more productive. Electricity also drew industries into the region, providing desperately needed jobs.
None of this was easy. The development of the dams
displaced more than 15,000 families. Naturally, this caused resentment and anti-TVA sentiment in some rural communities. Many local landowners were suspicious of government agencies. But the TVA successfully introduced new agricultural methods into traditional farming communities by blending in and finding local champions.
A Tennessee farmer wouldn't take advice from an official in a suit and tie, so TVA 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'd convinced the leaders, the rest followed.
Beginning with its inception, the TVA was based in
Knoxville, Tennessee in the old Federal Customs House at the corner of Clinch Avenue and Market Street. The building is now a museum.
Employment policy
The unemployed were hired for
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. The workers were categorized into the usual racial and gender lines of the day. The TVA hired a few
African-Americans for janitorial positions. The 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' unions and textile unions. Women were excluded from construction work, although the TVA's cheap electricity attracted
textile mills that hired mostly women. [Long1999]
During
World War II, the U.S. needed
aluminum to build airplanes. Aluminum plants required huge amounts of electricity, and to provide the power, the TVA engaged in one of the largest hydropower construction programs ever undertaken in the U.S. Early in 1942, when the effort reached its peak, 12 hydroelectric and a steam plants were under construction at the same time, and design and construction employment reached a total of 28,000. The largest project of this period was the
Fontana Dam Project. After negotiations led by
Harry Truman ("I want aluminum. I don't care if I get it from Alcoa or Al Capone."), TVA purchased the land from Nantahala Power and Light, a wholly-owned subsidiary of Alcoa, and built Fontana Dam.
Electricity from Fontana was intended for Alcoa factories. By the time the dam generated power in early 1945, the electricity was used for another purpose in addition to aluminum manufacturing. TVA also provided much of the electricity needed for
uranium enrichment at
Oak Ridge, Tennessee, as required for the
Manhattan Project.
By the end of the war, TVA had completed a 650-mile (1,050-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. Political interference kept TVA from securing additional federal appropriations to build coal-fired plants, so it sought the authority to issue bonds. Congress passed legislation in 1959 to make the TVA power system self-financing, and from that point on it would pay its own way.
The 1960s were years of 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. During this decade (and the 1970s), TVA was engaged in what was up to that time its most controversial project - the
Tellico Dam Project. The project was initially conceived in the 1940s but not completed until 1979.
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.
With energy demand dropping and construction costs rising, TVA canceled several nuclear plants, as did other utilities around the nation.
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%, achieve 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.
The
1970s saw the last and most controversial of the TVA's large dam-reservoir projects,
Tellico Dam.
As the electric-utility industry moved toward restructuring and
deregulation, TVA began preparing for competition.
It cut operating costs by nearly $800 million a year, reduced its workforce by more than half, increased the generating capacity of its plants, stopped building nuclear plants, and developed a plan to meet the energy needs of the Tennessee Valley through to the year
2020.
Current situation
TVA has recently made news by again reducing its workforce and by beginning new campaigns to improve its public image. It has also received acclaim from pro-nuclear organizations for its work to restart a previously mothballed
nuclear reactor at
Browns Ferry Unit 1 (since completed). 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. (TVA is the owner and operator of the
Browns Ferry,
Sequoyah and
Watts Bar nuclear power plants.)
In
2004, TVA implemented recommendations from the Reservoir Operations Study (ROS) in how it operates the Tennessee River system (the nation's fifth largest).
TVA facilities
TVA's power mix as of 2004 was 11 fossil-powered plants, 29 hydroelectric dams, three nuclear power plants (with five reactors and one restarting), and six combustion turbine plants.
TVA is one of the largest producers of electricity in the United States and acts as a regional grid reliability coordinator. Fossil fuel plants produced 62% of TVA’s total generation in fiscal year
2005, nuclear power 28%, and hydropower 10%. TVA's
Watts Bar reactor produces
tritium as a byproduct for the U.S.
National Nuclear Security Administration, which requires tritium for
nuclear weapons.
Dams
† Denotes dams with locks
Fossil fuel plants
Allen
Bull Run
Caledonia CT
Colbert
Cumberland
Gallatin
Gleason CT
John Sevier
Johnsonville
Kemper
Kingston
Lagoon Creek
Marshall CT
Paradise
Shawnee
Widow's Creek
Nuclear power plants
TVA nuclear power plants include Browns Ferry, Sequoyah and Watts Bar.
Joint facilities
TVA also assists ALCOA's Tapoco/APGI in regulating several facilities, including Calderwood, Cheoah, Chilhowee and Santeetlah dams.
Administration
TVA's current headquarters are located in downtown Knoxville, with large administrative offices in Chattanooga and Nashville, Tenn.; and Muscle Shoals, Ala.
TVA as national symbol and political football
TVA was heralded by New Dealers and the New Deal Coalition not only as a successful economic development program for a depressed area but also as a democratic nation-building effort overseas because of its alleged grassroots inclusiveness as articulated by director David Lilienthal. The TVA was controversial in the 1930s. Historian Thomas McGraw concludes (1971 p 157) that Roosevelt "rescued the [power] industry from its own abuses" but "he might have done this much with a great deal less agitation and ill will." New Dealers hoped to build numerous other TVAs around the country but were defeated by Wendell Willkie and the Conservative coalition in Congress. The valley authority model didn't replace the limited-purpose water programs of the Bureau of Reclamation and the Army Corps of Engineers. State-centered theorists hold that reformers are most likely to succeed during periods such as the New Deal era, when they're supported by a democratized polity and when they dominate Congress and the administration. However (O'Neill 2002) shows that in river policy the strength of opposing interest groups also mattered. The TVA bill was passed in 1933 because reformers like Norris skillfully coordinated action at potential choke points and weakened the already disorganized opposing electric power industry lobbyists.(Hubbard 1961) In 1936, however, after regrouping, opposing river lobbyists and conservative coalition congressmen took advantage of the New Dealers' spending mood by expanding the Army Corps' flood control program. They also helped defeat further valley authorities, the most promising of the New Deal water policy reforms.
When Democrats after 1945 proclaimed the TVA as a model for third-world countries to follow, conservative critics charged it was a top-heavy, centralized, technocratic venture that displaced locals and did so in insensitive ways. Thus, when the program was used as the basis for modernization programs in various parts of the third world during the Cold War, such as in the Mekong Delta in Vietnam, its failure brought a backlash of cynicism toward modernization programs that has persisted. (Ekbladh 2002)
Then-movie star Ronald Reagan had moved to television as the host and a frequent performer for General Electric Theater. But he was fired by General Electric in 1962 in response to Reagan referring to the TVA as one of the problems of "big government."(External Link
) Reagan would subsequently reiterate his points at the 1964 Republican National Convention, in his well-known speech entitled A Time for Choosing:
One such considered above criticism, sacred as motherhood, is TVA. This program started as a flood control project; the Tennessee Valley was periodically ravaged by destructive floods. The Army Engineers set out to solve this problem. They said that it was possible that once in 500 years there could be a total capacity flood that would inundate some . Well, the engineers fixed that. They made a permanent lake which inundated a million acres (4,000 km²). This solved the problem of floods, but the annual interest on the TVA debt is five times as great as the annual flood damage they sought to correct.
Of course, you'll point out that TVA gets electric power from the impounded waters, and this is true, but today 85 percent of TVA's electricity is generated in coal burning steam plants. Now perhaps you'll charge that I'm overlooking the navigable waterway that was created, providing cheap barge traffic, but the bulk of the freight barged on that waterway is coal being shipped to the TVA steam plants, and the cost of maintaining that channel each year would pay for shipping all of the coal by rail, and there would be money left over.
The publicity Reagan gained in part from this speech paved the way for his election as Governor of California in 1966.
TVA in popular culture
In the 1930s, the building of Norris Dam and the changes it brought to the region inspired films, books, stage plays, and songs. Folk songs from the construction period express enthusiasm for the benefits that the dam project brought to the region.
TVA continues to be a subject for popular culture:
The Coen Brothers' 2000 film O Brother, Where Art Thou? depicts the fictional flooding of an unnamed Mississippi valley by an unspecified TVA dam project in the 1930s.
In an episode of The Simpsons "Grand Pa" uses "What the Tennessee Valley Authority!" as an exclamation when he sees an atom bomb dropped on Japan.
In Alabama's "Song of the South" lyrics in one verse include "Papa got a job with the TVA".
The Everybodyfields song "T.V.A.," from the album is about the Tennessee Valley Authority.
Bibliography
Richard A. Colignon. Power Plays: Critical Events in the Institutionalism of the Tennessee Valley Authority (1997)
Creese, Walter L. TVA's Public Planning: The Vision, the Reality. U. of Tennessee Press, 1990. stresses utopian goals
David Ekbladh, "'Mr. TVA': Grass-Roots Development, David Lilienthal, and the Rise and Fall of the Tennessee Valley Authority as a Symbol for U.S. Overseas Development, 1933–1973" Diplomatic History Summer 2002 Vol. 26 Issue 3 pp 335-374
Erwin C. Hargrove and Paul H. Conkin, eds. TVA Fifty Years of Grass-Roots Bureaucracy (1963)
Erwin E. Hargrove, Prisoner of Myth: The Leadership of the Tennessee Valley Authority, 1933-1990 (1994)
Preston J. Hubbard, Origins of the TVA: The Muscle Shoals Controversy, 1920-1932 Vanderbilt University Press, 1961
David Lilienthal. TVA: Democracy on the March (1944) promoted TVA for cheap power, grassroots regional democracy, environmental conservation, and the peaceful use of energy. Called it model for rest of USA and Europe.
Jennifer Long; "Government Job Creation Programs-Lessons from the 1930s and 1940s" Journal of Economic Issues. Volume: 33. Issue: 4. 1999. pp 903+ on TVA in Knoxville
Michael J. McDonald and John Muldowny. TVA and the Dispossessed: The Resettlement of Population in the Norris Dam (1982), highly critical of TVA
Thomas K McCraw. TVA and the power fight, 1933-1939 (1971)* Arthur E. Morgan. The Making of the TVA (1974) by its first chairman
Steven M. Neuse. "TVA at Age Fifty- Reflections and Retrospect" Public Administration Review, Vol. 43, No. 6 (Nov. - Dec., 1983), pp. 491-499 online at JSTOR
Steve M. Neuse. David E. Lilienthal: The Journey of an American Liberal (1996).
O'Neill, Karen M. "Why the TVA Remains Unique: Interest Groups and the Defeat of New Deal River Planning." Rural Sociology 2002 67(2): 163-182. ISSN 0036-0112
Russell, Dean. The TVA Idea, The Foundation for Economic Education, Irving-On-Hudson, New York, 1949.
Philip Selznick. TVA and the Grass Roots: A Study in the Sociology of Formal Organization (1949)
Edward Shapiro. "The Southern Agrarians and the Tennessee Valley Authority," American Quarterly, Vol. 22, No. 4. (Winter, 1970), pp. 791-806. online at JSTOR shows that these conservatives supported TVA as a counterpoint to northern big businessFurther Information
Get more info on 'Tennessee Valley Authority'.
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