Larger TVA board may lead to increased lobbying efforts

Larger TVA board may lead
to increased lobbying efforts

BY DAVE FLESSNER
AND ANDY SHER
STAFF WRITERS

A bigger board for the Tennessee Valley Authority could also bring more pressure from customers and environmentalists to be involved in picking agency directors, officials said Monday.

"In the past, we have tended to stay neutral and out of the board selection process," said EPB President Harold DePriest, chairman of the Tennessee Valley Public Power Association.

"But there is a feeling with a larger board, we need to become more involved in the political process. We need to make our voices heard."

The U.S. House and Senate are preparing to vote on a major energy bill adopted over the weekend by congressional conferees. At the urging of Senate Majority Leader Bill Frist, R-Tenn., the energy package would replace the current three-member, full-time TVA board with a nine-member, part-time board. The transition will begin once TVA Chairman Glenn McCullough's nine-year term ends in May 2005.

The new TVA board would appoint and oversee a chief executive officer, who will be responsible for running the $7 billion-a-year federal utility. Many of the TVA distributors represented by TVPPA endorsed the board change.

"A majority of our members that we surveyed said they wanted the bigger board," said Richard Crawford, executive director of the Chattanooga-based TVPPA. "We've had some real concerns about TVA's latest rate increase and the way the current board has related to distributors. We'd like to have some involvement in selecting the new board."

The proposal by Sen. Frist calls for the president to appoint the board, with at least five members coming from the seven states served by TVA. The nominations must be confirmed by the U.S. Senate.

The new directors will serve

TVA's new board

If the Senate and House approve the energy conference report, the board and management of the Tennessee Valley Authority will begin to change by 2005.

■ Board size: The current three-member, full-time TVA board will be replaced with nine part-time directors.

■ Board role: The new board will set policy, approve budgets and hire a chief executive but not manage daily operations.

■ Appointments: TVA directors will be appointed by the president and confirmed by the U.S. Senate. The current three directors will serve out the remainder of their nine-year terms, but the president may begin immediately appointing six new directors, subject to Senate confirmation.

■ Board makeup: At least five of the new directors must be residents of one of the seven states served by TVA.

■ Board compensation: The board chairman will be paid annual stipends of $50,000; board committee chairman annual pay of $46,000, and other directors will be paid $45,000.

five-year terms, compared with the nine-year terms for the existing board.

"The kind of board structure TVA seems to be moving toward has been effective among the distributors across the valley and most businesses in the country," Mr. DePriest said.

But Stephen Smith, executive director of the Southern Alliance for Clean Energy, urged senators who may nominate board candidates and the president who will appoint the new TVA directors to remember TVA's unique role. The federal utility is a multipurpose agency responsible for managing the Tennessee River as well as generating electricity.

"TVA is more than a power company," Mr. Smith said. "They need to make sure that they don't just put business-minded people on the board of an agency that has a larger mission. It would be appropriate for us to require that some segment of that board have actual stewardship credentials."

The proposed change is endorsed by TVA director Bill Baxter. The other two directors, Skila Harris and Mr. McCullough, said they would defer to the will Congress.