Chattanooga Times Free Press
By Dave Flessner and Herman Wang
Published: May 19, 2008
Three and a half years after Congress voted to revamp and expand the board of the Tennessee Valley Authority, TVA’s governing panel is yet to reach full strength. Even without all board seats filled, the new governing structure is credited with bringing a more streamlined and centralized approach to managing the nation’s largest government utility. The new board, comprising bankers and business leaders who have been major donors to Republican efforts, surprised environmentalists by adopting stronger conservation and land-protection policies over the past couple of years.
“Initially, we were worried about the new board when we saw primarily Republican campaign donors who didn’t have any experience on utility or land management issues,” said Gil Melear-Hough, Tennessee director of renewable programs for the Southern Alliance for Clean Energy. “But we’ve been pleasantly surprised by this board.”
TVA loses its only Democratic director today following a board meeting in Muscle Shoals, Ala. The departure of Skila Harris, TVA’s first female director and the last holdover from the agency’s former smaller managing board, will leave the nine-member board with only six members.
Geographic and partisan fights delayed appointments and confirmation of TVA directors to the part-time, policy-making board that was established by Congress in 2004. The part-time board hired TVA’s first chief executive in 2006 but there were only three months and one TVA board meeting with all nine members before one member quit. Shortly after the terms of two other directors expired.
For its first 72 years, TVA had three equal directors who managed and set policy for the agency.
Former Senate Majority Leader Bill Frist, the Tennessee Republican who wrote the changes in TVA’s governance, said the new system has been “very positive” and helped the utility run like most businesses with a policy-making board overseeing management under a chief executive officer.
“To have an identity operating under a 1933 structure in 2008 simply would have been unsatisfactory,” Dr. Frist said. “Over time, I think the board should be more nonpartisan and we can get away from using that position as political patronage but having people who are extremely well qualified. The intent was to get politics out of the system, and I think that has been achieved.”
Dr. Frist’s proposal picked up an unexpected ally in the past two years. Ms. Harris, who said she initially opposed the change, said she believes the new structure has worked well for TVA.
“I think it’s been very helpful to have centralized authority in a chief executive officer, and we’ve had the added benefit of having as that person Tom Kilgore, who I think is ideally suited for the role,” she said. “It’s helped focus the leadership and the staff no longer has to worry who their boss is.”
But former TVA Chairman Craven Crowell, a Knoxville Democrat who opposed the change in the board, insists that TVA didn’t need a larger board to centralize management authority. In the past, he noted, the TVA board employed a general manager to oversee the daily operations of the agency.
Ms. Harris said she would prefer a more bipartisan balance on the board, “but for the most part this board has not been partisan and has acted in the best interest of the valley.”
Most of those appointed to the TVA board over the past two years by President Bush have been Republican activists and financial supporters of GOP causes. Robert “Mike” Duncan from Kentucky is chairman of the Republican National Committee, and Susan Richardson Williams, who is awaiting confirmation for another term, was previously chairwoman of the Tennessee Republican Party. TVA Chairman Bill Sansom, a Knoxville businessman, served in the Cabinet of U.S. Sen. Lamar Alexander, R-Tenn., when Sen. Alexander was Tennessee’s governor.
Collectively, the eight people appointed or nominated to the TVA board by the Bush White House, and their spouses, gave $592,405 to Republican candidates and organizations since 1994, according to a Chattanooga Times Free Press compilation of campaign records. Four of the board appointees also contributed lesser amounts to Democratic candidates.
The GOP tilt to the new board is one of the unintended consequences of adopting the TVA board change without congressional hearings in 2004, Mr. Crowell said.
“All the board members will now be of the same political party, which I don’t think reflects the diversity of opinion in the Tennessee Valley,” he said. “There also appears to be a lot of importance put in these appointments to where people live, which encourages them to represent those areas and not the broader interests of TVA.”
But the larger board helped ensure all of the major states in the TVA region have a representative on the board. In March, Blairsville, Ga., banker Tom Gilliland became the first Georgian to serve on the TVA board.
U.S. Sen. Johnny Isakson, R-Ga., who pushed for Georgia representation on the board, said his vote in favor on the larger, part-time board in 2004 was one of his first votes in the U.S. Senate.
“I'm delighted we have somebody of Thomas Gililand’s stature on the board,” he said.
But U.S. Rep. Jim Cooper, D-Tenn., who once led the TVA Congressional Caucus, said the TVA board still needs professionals with experience in the electric power industry and Democrats and independents who will push for greater environmental stewardship.
“No one party has a monopoly on wisdom, and it wouldn’t be very representative of the Tennessee Valley to have only Republicans on the board,” he said.
The Republican control of the TVA board has spurred Senate Majority Leader Harry Reid, D-Nev., to block Senate votes to confirm the reappointment of Ms. Williams, a Knoxville public relations agency owner, and Bishop William Graves, the first black to serve on TVA’s board.
Sen. Reid’s block on the votes drew sharp criticism from the White House and Tennessee’s Republican senators.
“The Democratic leader is playing petty, kindergarten politics with the Tennessee Valley’s secret weapon for energy prices,” said Sen. Alexander. “It’d be like locking up two all-star players before the NCAA Final Four.”
Sen. Alexander praised the new board for moving TVA forward and criticized the old governing structure.
“The nation’s largest public utility deserves a modern governance structure,” he said. “It had been a committee of three to run a $9 billion-a-year company, and that’s not a good way to do things.”
U.S. Sen. Bob Corker, R-Tenn., called Sen. Reid’s actions to block a vote on the TVA nominees “absolutely inappropriate.”
“If a Democrat is elected president, I would expect that they are generally speaking going to appoint Democrats to the TVA board,” he said. “I just hope that whoever is president politically, they will appoint people who are professional and will lead TVA into the future in a positive way.”
White House spokesman Blair Jones said Mr. Graves and Ms. Williams “are both well qualified and have significant experience dealing with TVA issues.
“Unfortunately, it’s been nearly a year since the president renominated them to their post and yet the Senate still has not scheduled an up or down vote,” he said. “We urge the Senate to end their delays and move these and the rest of more than 240 individuals the president has nominated for important positions.”
U.S. Rep. Zach Wamp, R-Chattanooga, said the new board “is effective” and he called CEO Tom Kilgore “outstanding.”
“TVA is under very good management,” he said.
Even Kentucky’s U.S. Sens. Jim Bunning and Mitch McConnell, both Republicans, have agreed for now not to push legislation they introduced in 2007 that would bring TVA under regulation of the Federal Energy Regulatory Agency and order the U.S. Government Accountability Office to conduct a study on privatizing TVA.
Sen. Bunning said he introduced the measure when five Kentucky distributors of TVA wanted to break from the federal agency but TVA balked on transmission line connections for such a move. But the new TVA board and staff last year worked out an agreement with the distributors and two of them ultimately agreed to stick with TVA.
“After this bill was introduced and with the expansion of the TVA board, our Kentucky customers were able to reach a deal with TVA on their issues after years of negotiations,” said Sen. Bunning, who said he “is not actively pushing” his TVA bill.
Mr. Crowell, who came under fire by Republican members of Congress when he was TVA chairman, questioned why members of Congress haven’t exercised as much oversight of the new board.
“I had only one rate increase when I was on the board for eight years and continued to pay down the debt,” he said. “But there were still a lot of questions about our activities from Congress.”
TVA rates have jumped by more than 30 percent in the past five years, and its debt is rising again this year for the first time in a decade “but you don’t hear anything from Congress,” Mr. Crowell said.
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