TVA critic seeks policy probe

TVA critic seeks policy probe
By Jerry Dean 4.27.97
News-Sentinel business writer

In a recent letter to U.S. Attorney General Janet Reno, a TVA critic alleged the agency is "engaging in ratemaking policy in violation of the TVA Act" and has asked for an investigation.

Stephen A. Smith, executive director of the Tennessee Valley Energy Reform Coalition, alleged in an April 23 letter seeking a Justice Department inquiry that TVA contracted to supply power to Trico Steel of Decatur, Ala., "at rates substantially below rates charged domestic consumers."

Smith also alleged TVA of "undercutting" the Bristol, Va., Utilities Board and Cinergy Corp. by offering industrial customers lower rates. BVUB and Cinergy replaced TVA as the area's power supplier effective Jan. 1.

The letter states Smith is "concerned about recent activities of TVA upper-level management," including Chairman Craven Crowell, Directors Bill Kennoy and Johnny Hayes and "senior vice presidents," engaging in "a deliberate attempt to undermine intent of the TVA Act."

Smith said the act states TVA projects will "be considered primarily (to) benefit the people" and that "sale to and use by industry shall be secondary."

Smith noted a suit by an Alabama power company in which a federal court ruled TVA violated a congressionally-mandated "fence" by marketing power beyond its service area. Another suit, filed April 10 by The Southern Co., alleges similar violations.

When asked for comment on Smith's letter, TVA spokesman John Moulton said, "From what we know about Stephen Smith's regard for the law, we are surprised that he would be writing the U.S. attorney general on any matter, particularly the finer points of the TVA act."

Smith is not alone in questioning the legality of the TVA board's actions.

Dr. John G. Stewart, a retired TVA vice president for economic development said ending non-power programs "flies in the face of TVA's legal mandate" requiring the agency to give navigation and flood control precedence over power generation.

"Neither TVA nor Congress can simply ignore the TVA Act," Stewart said. "If TVA is to terminate its (nonpower) responsibilities, Congress should first amend the TVA Act" to permit it. A change in the TVA Act would fundamentally change TVA."