TVA denies 'deals' on Watts Bar power

TVA denies 'deals' on Watts Bar power

By Jerry Dean
News-Sentinel staff writer

TVA Chairman Craven Crowell on Wednesday denied allegations the power-producing agency struck deals with steel mills near Memphis and in northern Alabama to justify TVA's start-up of Watts Bar Nuclear Plant near Spring City.

Stephen A. Smith, president of the Tennessee Valley Energy Reform Coalition, alleged that residential customers will pay more for electricity because TVA "cut deals" and offered "sweet rates" to such industries.

At TVA's regular board meeting, Crowell said the agency remains "committed to economic development" in the region. He said it is no secret the utility offers "innovative rates to help attract industry" to spur jobs for residents of the TVA service area.

Crowell said such rates have "nothing to do with Watts Bar," which TVA plans to bring on line in 1996.

But Smith said he suspects the electricity TVA plans to produce at Watts Bar for 3 cents a kilowatt-hour will be sold to such industries for 2 cents a kilowatt-hour to justify the $6.8 billion TVA spent on the power plant over two decades. He also accused TVA of deception in saying that Watts Bar would supply energy to 250,000 homes. In fact, he said, most of the power is earmarked for industry.

Also on Wednesday, TVA Chief Financial Officer David Smith reported that TVA net income for fiscal 1995, which ended Sept. 30, was about $10 million.

Net income is revenue above operating costs. The year's net income had been forecast at $25 million as recently as August.

A year ago, TVA's net income was nearly $151 million.

David Smith said the initial $25 million income projection shrank when millions were spent to buy out TVA employees' contracts in efforts to reduce TVA's work force.

He called it "commendable" that TVA's net income declined from $151 million to $10 million because the drop reflects a smaller margin between power production costs and the rates charged TVA's customers.

Michelle Neal of Knoxville also criticized TVA for its advertising, which she said soon will be awarded a mock Oscar for "most deceptive energy ads," to be presented at a Washington ceremony.

Neal said campaign, which has cost $4.6 million since May 1994, encourages wasteful use of electricity by convincing ratepayers TVA electricity is "so cheap you can afford to run your television, even if no one is watching."

Neal said the "myth, deception and denial" in the ads are tied to TVA's "nuclear zealousness."

Neal predicted that Watts Bar and other aspects of TVA's finances would "bring a rate increase like we've never seen before" once TVA's planned 10-year hiatus on rate increases ends.

Paul Efird/News-Sentinel staff

Tennessee Valley Energy Reform Coalition president Stephen Smith brought a lemon to TVA's board meeting Wednesday to make a point about management practices.