Alexander says TVA sale talk has hurt bond value

The Obama administration’s public discussion of potentially selling the Tennessee Valley Authority has hurt the value of TVA bonds, Sen. Lamar Alexander, R-Tenn., told a Department of Energy (DOE) official May 16.

“Did you know that, as a result of just the random mention of it in the budget, the Tennessee Valley Authority bonds lost a market value of a half-billion dollars?” Alexander asked Acting Secretary of Energy Daniel Poneman.

Alexander questioned Poneman about the administration’s ongoing review of TVA at a Senate Appropriations Subcommittee on Energy and Water Development hearing May 15. The senator said that the loss in value to TVA’s bonds could drive up electric bills for residents throughout the Tennessee Valley, by making it more difficult for TVA to borrow money.

“I think there’s somebody with a green eyeshade down there in the Office of Management and Budget who just thinks it’s a ‘cool’ idea to talk about selling the Tennessee Valley Authority. We don’t appreciate that approach – it’s an ill-conceived, reckless approach,” Alexander said.

The lawmaker from Tennessee also said in a statement that TVA is the nation’s only supplier of tritium – an important component in the production of nuclear weapons – and will operate a small modular reactor that would mark innovation in the production of nuclear energy.

Poneman said he had not personally been consulted, but said that TVA’s importance on a range of fronts would likely be part of the administration’s review. Poneman said the department is “indispensably tied” to TVA’s tritium production at this point.

This is not the first time Alexander has publicly criticized the administration’s review of whether to sell TVA. In mid-April, Alexander called it “one more bad idea in a budget full of bad ideas.”

Alexander has also said that TVA management has assured him that TVA can live within its current debt limit if necessary.

TVA President and CEO Bill Johnson said recently that the federal utility will cooperate fully with OMB as the government investigates the pros and cons of divesting TVA.

Established by the federal government in 1933, TVA celebrates its 80th birthday May 17.

About Wayne Barber 4201 Articles
Wayne Barber, Chief Analyst for the GenerationHub, has been covering power generation, energy and natural resources issues at national publications for more than 20 years. Prior to joining PennWell he was editor of Generation Markets Week at SNL Financial for nine years. He has also worked as a business journalist at both McGraw-Hill and Financial Times Energy. Wayne also worked as a newspaper reporter for several years. During his career has visited nuclear reactors and coal mines as well as coal and natural gas power plants. Wayne can be reached at wayneb@pennwell.com.