TVA Board Actions Ensure Continuity

KNOXVILLE, Tenn. – The Tennessee Valley Authority board of directors at a special meeting on Monday, Dec. 10, approved delegations of authority to enable TVA to manage with maximum effectiveness while the process for filling board vacancies continues.

“TVA operates in a dynamic business environment, and good management requires that TVA be able to respond to changing conditions and opportunities. We’re making these authorizations and delegations today as contingencies, in case the board does not have a quorum in the coming weeks,” said Chairman Bill Sansom. “These decisions will ensure that TVA continues to operate effectively.”

Whenever five or more of the nine board seats are vacant, the board lacks a quorum. The TVA Bylaws provide that if the board lacks a quorum, the board may still carry out its responsibilities and ensure that operations continue along the lines established when a quorum was in place. Monday’s actions provide additional certainty for TVA’s operations by anticipating some business decisions that may arise and authorizing TVA to address them if the board lacks a quorum. The authorizations and delegations would only go into effect if the board lacks a quorum because of vacancies.

Board members are nominated by the President and confirmed by the U.S. Senate for five-year terms. Three of the board’s nine positions are vacant, and the terms of two other directors will end when the current session of Congress concludes. The pending nominations for all five seats will expire then, as well.

Sansom said the limited number of prudent authorizations and delegations approved by the board address some issues that TVA could face without a quorum in the coming months. These include:

•The CEO could approve new lease, power purchase, or similar arrangements for the Southaven natural gas combined-cycle plant in Mississippi. TVA’s current lease arrangements for Southaven expire on April 30, 2013.

•Financing Resolutions approved by the board in August 2012 for power bonds and other financing arrangements would be extended, up to a maximum of $2 billion, if the board is without a quorum at the end of fiscal year 2013.

•The CEO could extend TVA’s existing power arrangements or approve new arrangements with the United States Enrichment Corporation, TVA’s largest customer.

•Also on behalf of TVA, the CEO also could approve settlements of dispute proceedings and could approve contracts committing TVA to supply new firm power loads greater than 100 megawatts.

In other action, the board authorized a one-time modification of the eligibility and pricing provisions of the previously board-approved Real Time Energy pricing program to address a unique competitive situation and help attract a small industrial customer being recruited by two local power companies. Attracting the business will help support job growth in the region. While the approval will not change the Real Time Energy program beyond the specific one-time application, the Board also directed TVA management to undertake a comprehensive review of the program.

The board expects to conduct its next regular meeting in February 2013; board meetings are open to the public.

The Tennessee Valley Authority, a corporation owned by the U.S. government, provides electricity for business customers and distribution utilities that serve 9 million people in parts of seven southeastern states at prices below the national average. TVA, which receives no taxpayer money and makes no profits, also provides flood control, navigation and land management for the Tennessee River system and assists utilities and state and local governments with economic development.

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Media Contact: Travis Brickey, Knoxville, 865-632-6263

TVA Media Relations, Knoxville, 865-632-6000

(Distributed: Dec. 10, 2012