Nashville exec Dennis Bottorff to lead TVA

Nashville exec Dennis Bottorff to lead TVA

Bottorff says raising capital is a priority

By Anne Paine • THE TENNESSEAN • April 17, 2010

Nashville businessman Dennis Bottorff, who in a surprise move Friday was selected to take over next month as the chairman of the Tennessee Valley Authority board, says raising capital is one of the challenges as the power producer moves to cleaner sources of energy.

His leadership comes at a time when TVA is dealing with the need to reduce greenhouse gas emissions from its coal-fired power plants, figure out the potential for energy conservation, and deal with a growing population.

"The energy industry is changing in profound ways that will require major capital investments and different ways of doing business," Bottorff, who is chairman of the Nashville venture capital firm Council Ventures, said Friday in an interview with The Tennessean.

He said stricter environmental regulations being contemplated in Washington are among the issues posing engineering and financial challenges to TVA.

The TVA board voted unanimously Friday to elect Bottorff as chairman when Mike Duncan asked to step down after a year in the position. Duncan cited his new duties as head of a recently formed national Republican political fundraising organization called American Crossroads.

Duncan has been enmeshed in politics for years, serving as general counsel of the Republican National Committee when he first joined the board. He's also a former chairman of the Republican National Committee.

Stephen Smith, with Southern Alliance for Clean Energy, called it appropriate for Duncan to give up the chairmanship, given "the intense nature of his political fundraising," and said his group looks forward to Bottorff's tenure.

"We do have concerns that (Bottorff) has been, we think, overly enthusiastic about raising TVA's debt. We think there should be a significant amount of caution in that direction."

TVA, which has more than $26 billion in debt, has what is now a federally imposed debt ceiling of $30 billion.

Bottorff said that more nuclear power building under consideration to replace old coal-fired plants that spew carbon dioxide into the air would cost more, as would adding more air-pollution controls to coal-fired plants. Other options, such as building more natural-gas-burning plants, would have a price tag, too.

He said he could see a need for $5 billion to $7 billion more.

TVA has provided relatively low-priced electricity compared to much of the nation, and that's partially because of its ability as a federal public power producer to raise capital at lower costs than investor-owned utilities. Their money comes by raising rates or debt spread out over many decades, which makes a small impact on rates.

"The business model for TVA is so valuable," said Bottorff, 65, who has been on the board since 2006. He also has been on the board of directors of 11 companies, including Fortune 500 companies and the Tennessee Lottery.

While the independent federal corporation is dealing appropriately with the massive coal ash spill of December 2008 at its Kingston plant, the agency must still work on improving its internal and external communications, Bottorff said.

Agency is an asset

That's all on top of figuring out the best mix of sources for generating electricity and promoting conservation.

Residents and power distributors that are the middlemen for TVA's electricity must be persuaded to work together on improving energy efficiency and conservation, Bottorff said.

"It's like a jigsaw puzzle to fit it all in there," he said. "TVA is a real asset to the valley where we live."

The public power producer that was started in the 1930s brought electricity, flood control and economic development to the Tennessee Valley, and it still serves as environmental steward of the Tennessee River.

"If we can build on the strength of this business model and use it to build the mission, TVA will be maintained as a real strength, and the place we live will be better," Bottorff said.

TVA provides electricity to most of Tennessee and parts of six other states. Most of the electricity comes from burning coal, with nuclear energy the second-largest source for the electricity. Hydroelectric dams make up about 10 percent.

Anne Paine can be reached at 615-259-8071 or apaine@tennessean.com.

Dennis Bottorff is chairman of Council Ventures, a Nashville firm.