Ex-TVA official says Runyon 'took heart' of agency

Ex-TVA official says Runyon 'took heart' of agency

By KEITH CLINES
DAILY Staff Writer

David Freeman is familiar with the inner workings of the Tennessee Valley Authority.

Twenty years of service as a staff engineer, a position in the legal department and a seat on the agency's powerful board of directors afforded him a view of TVA from several perspectives.

Since leaving the board in 1984, Freeman, now manager of the Lower Colorado River Authority, has watched TVA from a different perspective — outside.

The new view of his beloved agency has him seeing red.

"I think Marvin Runyon will go down in history as the man who took the heart out of TVA," Freeman said.

While many are lauding Runyon, a former automobile executive, for slicing fat from the $5 billion-a-year agency, others say the knife has cut too deeply into parts of the 56-year-old agency's purpose.

The TVA Act passed by Congress in 1933 said the agency was: "To improve the navigability and to provide for the flood control of the Tennessee River; to provide for reforestation and the proper use of marginal lands in the Tennessee Valley; to provide for the agricultural and industrial development of said Valley; to provide for the national defense by creation of a corporation for the operation of government properties at and near Muscle Shoals in the State of Alabama, and for other purposes."

"He's eliminated everything that TVA stands for," Freeman said. "He's eliminated research and development, environmental quality and conservation programs."

Freeman worries that Runyon is slighting those TVA programs in favor of its power programs. He said TVA's economic development programs shaped today's Valley, but that Runyon has "cut the heart and soul" of TVA by cutting economic programs.

"Marvin's reverted TVA to the role of being just another utility," he said.

He said the agency's $18 billion debt is $5 billion more than it was when he left the board in 1984.

This year TVA went to Wall Street to refinance about $8 billion in high-interest debt borrowed from the U.S. Treasury in the 1970s. TVA officials say the move will save about $112 million a year in interest costs.

Freeman said TVA is "fooling people" with the refinancing because $1.3 billion of the amount was borrowed to pay interest that had accumulated on the original debt.

TVA has announced there will be no rate increase in power in 1990, the second year in Runyon's announced goal of no rate hikes for three years. Freeman said Runyon is "showboating it with rates." He said the rate freeze is only delaying the inevitable — paying off the agency's debt, which he says probably will fall to the customers on reckoning day.

Others speculate that the federal government may have to bail out the agency, much as it is doing with the country's savings and loan industry.

"You can be popular for a few years," Freeman said, "but when you're borrowing money, somebody is going to have to pay the debt one day.

"I have a lot of love for TVA. I put 20 years of service in that organization. I'm concerned about what's going to happen.

"At one time I felt so sad I thought about writing a piece saying we should retire the letters 'TVA' and call it Tennessee Electric Power Company."

Freeman said in Runyon's two years he has "closed the place back up" and "isolated" it from outsiders and internally. Freeman said he has been asked by congressmen and TVA staff, "What's going on at TVA?"

William Hopkins of the Tennessee Valley Energy Coalition, a TVA watchdog group that opposed Runyon's appointment in January of 1988, said Runyon "seems to be a nice guy, but he's got his priorities missing."

Hopkins said his group does not like cuts Runyon has made in TVA conservation and environmental programs and is unhappy with the way TVA gets around a federal salary cap. But his strongest criticism is left for the agency's troubled nuclear power program.

TVA once planned to build seven nuclear plants to supply electricity in its eight-state region, but scrapped most of those plans.

Today, only two reactors at Sequoyah nuclear plant are operating. Browns Ferry nuclear plant has been closed almost five years, Watts Bar nuclear plant is still under construction and construction at Bellefonte nuclear plant stopped last year.

Runyon said he'd like to have all the plants on line by the year 2000.

A TVA spokeswoman said the agency estimates it will cost $3 billion to complete Watts Bar and between $2 and $2.5 billion to complete repair work at Browns Ferry. A nuclear consultant hired by TVA to study its nuclear program estimated it would cost $2 billion to complete Bellefonte.

"They say they don't need the power," Hopkins said. "It's almost like insanity to keep talking about bringing the nukes back up."

A TVA spokeswoman said the agency's electrical producing capacity is 32,000 megawatts. The all-time peak demand is 24,627 megawatts set Dec. 22.

The spokeswoman said all of the agency's power producing plants do not operate full time and are not designed to run continuously at full speed. She said the agency's forecasts for power demand show the need for the nuclear derived electricity in coming years.

Freeman said TVA has allowed nuclear consulting and engineering companies to "feed like pigs at the trough," driving the costs of the nuclear program sky-high.

"TVA should get out and cut its losses," Freeman said. "They should have cut their losses long ago at Browns Ferry. They're just throwing good money after bad."

Hopkins likens TVA's pouring of money into the nuclear program to putting money in a pocket with a