Travels by TVA Chairman cost ratepayers

I-Team Investigates
Travels by TVA Chairman cost ratepayers

Reported by Nancy Amons
E-mail: namons@wsmv.com
October 30, 2003

The Chairman of the Tennessee Valley Authority is flying high at the ratepayers' expense. Chairman Glenn McCullough, Jr. lives in Tupelo, Mississippi, but commutes to TVA headquarters in Knoxville aboard TVA's private plane.

The WSMV Channel 4 I-Team has calculated McCullough's Tupelo travels have cost ratepayers $291,000 in the last 18 months.

McCullough was appointed to the TVA board in 1999, and accepted the chairmanship in 2001, but he has never moved to Knoxville. Instead, he is flown by two pilots on TVA's twin-engine King Air at a cost of $1500 an hour.

In August, TVA raised the rates it charges local power companies for residential customers by 7.4%. The average electric customer will pay about $6 more per month beginning with the October 2003 bill.

The I-Team asked McCullough how he justifies charging the ratepayers for his commutes.

"Well, you know, I travel on the TVA plane to meet with distributors, economic development professionals, people in Congress who can contribute to TVA's business success," McCullough said. "Tupelo is in the TVA service area, as is Tennessee, and parts of five other states."

The I-Team analyzed flight records from 2002 and the first half of 2003, which show that TVA's plane would typically fly the plane empty from Knoxville to Tupelo early in the week to pick up McCullough. Later in the week, two pilots would fly him back to Tupelo and return to Knoxville empty.

The I-Team calculated the cost of each leg using TVA's stated departure and arrival times. The average flight, including the segment with no passengers, cost around $3400. That's an average round trip of more than $6,000, about the cost of a 1994 Cutlass Supreme the I-Team found at a Car Max car lot.

For what TVA is paying for McCullough's Tupelo travels, someone could buy a used car once a week, drive it, and then throw it away.

For $6,000, a TVA customer could buy enough electricity to power a 100-watt light bulb until the year 13,418.

Stephen Smith, executive director of the Southern Alliance for Clean Energy, said the expensive commute is not appropriate, given TVA's $26 billion debt.

"He's not spending his money; he's spending our money as ratepayers," said Smith.

Smith says if McCullough wants to live in Mississippi, he should pay for his own transportation.

"These are not business expenses. These are in essence personal perks to be able to go back and forth to your home on the other side of your service territory, in a very quick fashion," Smith said.

Federal travel regulations say that federal employees must take a commercial flight, if it's cheaper. The passenger must fly coach, not business or first class.

The I-Team asked AAA's travel agency to run the numbers. The most expense commercial coach seat, a round-trip with no advance purchase or restrictions, was far less than the cost of flying the TVA plane one-way.

Carol Harrigan, AAA's travel manager, found Knoxville to Tupelo flights as low as $505 and as high as $937 round-trip. The commercial flight, on Northwest Airlines, lasted about three hours, including a stop over in Memphis.

"It's a real good connection in the morning," said Harrigan.

TVA's plane takes about 1 hour and 15 minutes.

The I-Team asked McCullough why he doesn't move to Knoxville.

"Well, I travel on business purposes for TVA," McCullough said.

"Mississippi, like six other states, is in the TVA service area. I do my job as chairman of TVA, Nancy."

John Van Mol, whose public relations firm represents 31 industries who purchase power from TVA, feels McCullough's commutes are reasonable.

"In the grand scheme of things, and the relative cost of running a $6 billion power system, an expense like this gets way lost in the rounding," said Van Mol, speaking for the Tennessee Valley Industrial Committee.

"The compensation of a TVA director is probably one-tenth of what is paid to a private power executive. It seems a small matter for ratepayers to cover."

McCullough is paid $142,500 a year, a salary set by federal statute.

Van Mol says the value to the rate payers is "well worth the cost of transportation to his home and family for the weekends."

Clean Energy's director Smith sees it differently.

"Clearly, the way to fix this is to have those individuals who have the honor of being the chairman of the Tennessee Valley Authority, to accept the honor by living in the headquarters," he says.