Lawmakers laud plan to tighten TVA

THE KNOXVILLE JOURNAL Wednesday, April 27, 1988

Lawmakers laud plan to tighten TVA
Rate freeze, massive cuts called necessary; agency officials unsure of impact
By J. VORIS WILLIAMS
The Knoxville Journal

Tennessee Valley members of Congress are hailing TVA Chairman Marvin Runyon's pledge to freeze electric rates for three years by cutting costs and personnel, but TVA managers aren't sure how the initiative will affect their programs.

"I think it's long overdue and badly needed, and I applaud Marvin Runyon and the board for their work," Rep. Jimmy Quillen said Tuesday. "I think it's time we all tightened our belts. I don't think the people can stand many more rate increases."

Sen. Jim Sasser lauded TVA "for establishing some ambitious and very commendable goals. While it's too early to evaluate the details, . . . Chairman Runyon and the agency are clearly on the right track in attempting to cut costs and keep down rates."

Billy Bond, manager of TVA's Office of Natural Resources and Economic Development, said, "We don't know what the impact will be yet."

In addition to ordering a $300 million cut from TVA's power budget by Oct. 1, Runyon called for reductions in the overhead costs of the agency's non-power programs funded by Congress, such as economic, chemical and agricultural development.

"The more of this money we spend on TVA overhead, the less there is for programs and services," Runyon said. "At TVA, we need to live with less so our region can live with more."

Bond said he agreed with Runyon's call to shift resources from personnel to services.

"I think we've all known for quite some time that the resources we have to work with the people in the region have been shrinking," Bond said.

Charles Davis, assistant manager of agricultural and chemical development in Muscle Shoals, Ala., said he wasn't sure how his program would be affected but added, "I certainly have confidence in Mr. Runyon's plan."

Although his office has already been trying to reduce overhead, Davis said, "Our operations are being looked at just like other parts of TVA."

Richard Crawford, assistant power manager in Chattanooga, said the cuts from the power budget are "going to be painful, but I think we'll come up with a way to deal with it."

Crawford said his office will explore every option available to meet the budget constraints but continue to deliver services.

Rep. Marilyn Lloyd said she regrets that thousands of TVA employees will have to be laid off, but she suggested that if the agency's rates aren't made more competitive with surrounding utilities, a greater number of jobs may ultimately be lost.

"We have to look at the big picture over the long run," Lloyd said. "The status quo of TVA is unacceptable. I feel like (Runyon) is looking out for the best interests of TVA, although I regret the loss of jobs."

Jobs were also on Rep. Jim Cooper's mind. "The jobs of the future will depend on TVA electricity. We've got to have cheap.

Establishing a more businesslike organization focused on efficiency, productivity and accountability.

Runyon's overall goal is to make TVA more competitive with utilities which offer lower rates and threaten to take the agency's customers. The new chairman, sworn in Jan. 25, has undertaken an intensive study of TVA.

His announcement was praised by congressional leaders, power distributors and a former TVA chairman. One union leader warned that layoffs should first be made among contract employees and TVA managers.

Congressman Jim Cooper, D-Shelbyville, said Runyon made a popular move.

"If our rates are non-competitive, our kids are not going to have jobs," Cooper said. "Nothing is more popular than keeping the rates down, and few things are more important to the future of the Tennessee Valley."

Cooper agreed with Brakebill about the layoffs: "Such a move is long overdue. Bureaucracy does not have a right to grow forever. There is a general sense that TVA has wasted a lot of money."

William Brakebill, TVA employee for 35 years, said: "It's no shock. It's been a long time coming."

Tennessee's senators Jim Sasser and Albert Gore Jr. concurred.

"I applaud TVA for establishing some ambitious and very commendable goals," Sasser said. "Chairman Runyon and the agency are clearly on the right track."

Gore agreed but said TVA should "soften the blow" and provide fair benefits to affected workers. "We should look at any effort to improve TVA's efficiency and competitiveness as a positive approach to getting TVA's house in order," Gore said.

Not everyone, however, was full of praise.

"My main concern is that the contract employees hit the door before full-time employees," said Tim Witt, a TVA worker and president of Local 268 of the Office and Professional Employees International Union.

The union represents 775 TVA clerical workers.

Witt also said cuts should come from TVA's management rank.

Mark Siegel, director of Tennessee Valley Energy Co., called Runyon's goals worthwhile but said the new chairman is "oversimplifying the complexities of dealing with the nuclear program."

Siegel suggested TVA delay the restart of the Browns Ferry Nuclear Plant in Northern Alabama as a way to reduce rates. "I think it would be very difficult to keep the rates down, primarily because of the bind that the clear program has TVA in," without such a step, he said.

All TVA's five nuclear plants are shut down for safety problems, and the agency is spending millions of dollars to return reactors to service.

S. David Freeman, former TVA chairman who is now general manager of the Lower Colorado River Development Authority in Austin, Texas, agrees that Runyon must look at the nuclear program.

"The first thing he should do is shut down Browns Ferry," Freeman said. "He's going to have to stop spending money on nuclear power plants that TVA doesn't need."

Still, Freeman believes Runyon is on the right track.

"I say, 'Hurray for the chairman,'" Freeman said. "I think he's putting TVA back on the survival path."