Unions Denounce Administration’s Privatization Plan for TVA

March 12, 2014

Bellefonte Nuclear Generating Station, Alabama

America’s building trades unions are strongly opposing President Obama’s recommendation to privatize the Tennessee Valley Authority, calling it a budget gimmick that would set back a model institution that has improved the lives of millions.

Three thousand IBEW members are permanently assigned to jobs in nuclear power plants, coal-fired generators and hydroelectric plants as well as transmission and substation facilities across the TVA region.  Thousands more work on irregular TVA construction projects.  The IBEW has more members working at TVA than any other labor organization.

Today, TVA – established during President Franklin Roosevelt’s administration to help the nation recover from the Great Depression – provides electricity and other services to more than 9 million people spanning over 80,000 square miles. Citizens in Tennessee, as well as millions of others in parts of Alabama, Georgia, Kentucky, Mississippi, North Carolina and Virginia are directly served by the TVA. 

While the TVA is a federal government entity created by Congress in 1933 through the TVA Act, it is a fully self-sustaining utility provider completely supported by the millions of ratepayers it serves. The privatization proposal is part of the administration’s 2015 draft budget.

“Privatization of the TVA would go way beyond IBEW members,” says Tenth District International Vice President Bobby Klein. “The TVA has brought prosperity to our valley. Selling off these assets could put thousands of good middle class jobs at risk, the same kinds of jobs President Obama says we need to build and defend to create a stronger America.”

A story, “TVA’s Browns Ferry Rebuilding Project Could Signal Revival of Industry” (IBEW Journal, May 2005), outlined the commitment of IBEW electricians to the Code of Excellence, job safety and operational security in the rebuilding of an Alabama nuclear reactor that had been taken out of service in 1985, the first nuclear generation of the 21st century.

The TVA operates 29 hydroelectric dams.

“We find this action to be extremely disturbing in light of the fact that the administration has consistently recognized and praised TVA’s efforts in improving its financial outlook, while also acknowledging the benefits of the public power model through which TVA provides substantial economic and other benefits for the Valley,” said Sean McGarvey, president of the Building and Construction Trades, AFL-CIO.

A resolution passed unanimously at the 2013 AFL-CIO Convention opposed any attempts to privatize the TVA and recapped the authority’s history:

“The creation and evolution of the TVA is an integral and inspiring chapter in our nation’s history. As our nation struggled through the Great Depression in the 1930s, President Franklin D. Roosevelt’s administration moved forward with policies that both promoted worker rights and meaningful investment in public interest projects, including state and city governments, railroads and our energy infrastructure.”

A bipartisan group of U.S. senators, including Ron Wyden (D-Ore.) and Lamar Alexander (R-Tenn.), opposed TVA privatization when it was proposed in last year’s federal budget. Alexander said, “There is no assurance that selling TVA to a profit-making entity would reduce electrical bills in Tennessee, and it could lead to higher electricity rates.”

Wyden, chairman of the Senate Energy and Natural Resources Committee, said federally owned energy providers like the TVA and the Bonneville Power Administration, “have been the bedrock of local economies.”

In a story on AlterNet, Gar Alperovitz and Thomas Hanna say the administration’s privatization plan is proposed for “short-sighted budget appearances.”  Because of its aging infrastructure, TVA is expected to need to increase its debt securities to raise funds to modernize operations. Increasing the debt of TVA, they say, could slightly increase the federal deficit in a “purely accounting sense.”  Since 1979, TVA’s debt ceiling has been set at $30 billion by the federal government.

Cherokee Dam, Tennessee

A federal sale of the TVA would help pay down a very small fraction of the nation’s debt. “We challenge the administration to present a case as to why this [privatization] is nothing more than a poorly-crafted, poorly-intended, never to be realized, budget gimmick that won’t save money, but will cost jobs,” McGarvey said.

Instead of privatization, the Building Trades are pushing for Congress to draft and pass TVA reauthorization legislation that will increase the $30 billion TVA debt ceiling so the authority can stay efficient and competitive by continuing to modernize its energy infrastructure.