If the federal government sold the Tennessee Valley Authority (TVA), customers’ electricity rates would increase, while the TVA’s recreation and environmental programs could suffer, according to a federally funded study.
The White House commissioned the $1 million study, after it recently considered selling off the TVA or otherwise divesting the government from the federally owned electric utility that serves Tennessee and other Southern states.
{mosads}“TVA’s current strong financial position, ability to self-fund its construction program and anticipated improvements in cost structure, environmental profile and asset mix as a result of long-term initiatives suggest there is no impetus for the federal government to change course,” accounting firm Lazard Freres & Co. concluded Wednesday, according to the Chattanooga, Tenn.-based Times Free Press.
The Obama administration cited the TVA’s finances as its main reason to consider selling it. A 2013 analysis found the TVA might need to exceed its $30 billion debt ceiling, the Free Press said.
But Lazard found the TVA has improved its finances since then.
“This report confirms that selling TVA would be as bad an idea today as it was when the president first proposed it,” Sen. Lamar Alexander (R-Tenn.) said in a statement. “Hopefully, the Obama administration will now abandon this ill-conceived, reckless idea and start working with Congress to lower, instead of raise, the cost of producing clean, reliable electricity.”
The TVA said it was pleased with Lazard’s findings.
“The review also validated that TVA provides substantial economic and other benefits for the region,” the authority said in a statement.