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Campaign Kicked Off to Fight EPA’s Coal-Burn Regs

Critics of new Environmental Protection Agency limits on coal-plant emissions say they fear the Obama administration is attempting to incrementally phase out coal as an energy source in America.

The Consumer Energy Alliance launched a nationwide public relations campaign last week geared toward convincing the public of coal’s utility as an “affordable and reliable” source of U.S. electricity.

At a regional conference in Nashville Sept. 25, Michael Whatley, the alliance’s executive vice president, said a “full-fledged conversation” is necessary to discuss what detrimental impacts the new rules are going to have on coal-fired power plants.

Whatley said the initial emphasis of CEA’s campaign will be to fan opposition among broad sectors of energy consumers – industry, agriculture and household users.

The regulatory effort that prompted the CEA campaign would require new large natural gas-fired turbines to be limited to 1,000 pounds of CO2 per megawatt-hour, and small natural gas-fired turbines to 1,100 pounds of CO2 per megawatt-hour.

Additionally, new coal-fired plants would be limited to 1,100 pounds of CO2 per megawatt-hour, according to an EPA press release on the new standards. New coal plants could also opt for a tighter limit if they choose to average emissions over multiple years, offering more operational flexibility.

Lacking more advanced emissions control technology, newer power plants produce 1,800 pounds of carbon emissions per megawatt-hour, The Tennessean recently reported.

Whatley told TNReport the EPA’s new regulations “are going to basically require that you cannot build a new coal-fired power plant unless you can capture all of the carbon emissions that come off it, and then sequester them in the ground somewhere.”

He said the the technology doesn’t yet exist to do that.

“What we’re going to see next year is another set of regulations that are going to talk about how they’re going to reduce the emissions from pre-existing plants,” Whatley said. “And unfortunately, right now, we don’t know what the impacts of that are going to look like.”

The EPA release says that the agency will reach out to state and local governments, as well as those in the industry to work to establish the new standards for carbon pollution from existing plants.

This second round of regulations would come about under a separate section of the Clean Air Act as the first set, and although the agency would establish the requirements, the states would be the ones to choose how to enforce the new rules, according to a report by The New York Times.

Dr. David Penn, the director of Middle Tennessee State University’s Business and Economic Research Center, teaches a course on environmental economics and told TNReport that he believes the benefits of restricting pollution from coal will ultimately outweigh the costs.

“It certainly is going to reduce the demand for coal, but the demand for coal … at power plants has been falling anyway as plants switch to natural gas, which is cheaper,” Penn said. “Coal is finding other markets in Europe and in the Far East. Better air quality has a cost, but the benefits typically far exceed the cost of increasing air quality. Benefits in terms of more longevity — (and) you’re sick fewer days.”

This is a view that the Tennessee Environmental Council shares.

“Anything that we do to sequester coal and all the carbon discharges, and all the other toxic pollutants that come out of those smoke stacks is good for human health, and it’s really good for our economy (because it cuts health care costs),” said Executive Director John McFadden.

The intent of the new regulations is to reduce carbon emissions for the purposes of fighting global warming and improving health by restricting the allowable amount of carbon produced by new natural gas and coal-fired power plants, according to the agency press release.

However, the EPA’s proposal, which outlines the regulations, suggests that the expected reduction in carbon emissions will be “negligible” through the year 2022.

TVA Board Approves Budget, Rate Increase

Press release from the Tennessee Valley Authority; August 22, 2013:

KNOXVILLE, Tenn. ― The Tennessee Valley Authority board of directors approved a $10.5 billion fiscal year 2014 budget at its meeting Thursday and a 1.5 percent retail rate increase – TVA’s first increase in two years.

Less than the economy’s modest growth in inflation since TVA’s last rate increase in 2011, the rate adjustment will add about $1.50 to the monthly power bill of a residential consumer using 1,000 kilowatt-hours of electricity.

“While we never like to raise rates, this small adjustment is necessary to meet our 2014 revenue requirements and operate our system safely and reliably,” said TVA President and CEO Bill Johnson. “We will also make critical capital investments to keep reliability high and meet environmental standards and contribute to paying down debt.”

TVA’s fiscal year 2014 budget anticipates 4.6 percent lower sales year over year and is about 6 percent less than 2013, including capital expenditures of $3.3 billion for Watts Bar 2 nuclear plant and clean air controls at Gallatin Fossil Plant.

Johnson said TVA’s priorities include “living within our means” by bringing operations and maintenance expenses in line with recent trends in declining electricity sales and revenues.

“Demand for our product is down and that won’t change anytime soon. The weather, the economy, energy efficiency/demand response, and rate design are all factors,” Johnson said. “We’re working harder than ever to reduce our costs, but they are not declining at the rate of our sales and revenues.”

TVA is executing a plan to reduce O&M costs by $500 million by 2015 with employees and leadership identifying efficiencies, cost reductions and cost avoidance opportunities. Nearly $150 million in reductions have been achieved this fiscal year with plans for an additional $150 million by the end of 2014 and another $200 million in 2015.

“We are taking action to improve TVA’s operations and financial health so it continues to serve the region for years to come,” Johnson said.

Additional priorities include evaluating future operations of the remainder of the coal fleet, preserving the unfinished Bellefonte nuclear plant as an option for future power generation, continuing to explore Small Modular Reactor nuclear technology, promoting economic development in the region and updating the Integrated Resource Plan, the long-term strategy for TVA’s energy supply as they enter FY14.

Johnson said that TVA employees remain focused on delivering outstanding service while carrying out TVA’s unique mission of delivering safe, clean, reliable energy at low rates as well as promoting economic development and providing resource stewardship.

The new budget and rate adjustment go into effect with TVA’s new fiscal year, which begins Oct. 1, 2013.

Additional Board Actions

The board also approved new programs to foster economic growth in the Tennessee Valley. The TVA Valley Commitment Program will give credit to manufacturing customers for their ongoing commitment to the Valley. The Small Manufacturing Rate Program will give small industrial customers a rate alternative for operating during off-peak demand periods. These new programs and enhancements are intended to serve as interim measures while TVA works with customers and other stakeholders on a longer-term rate strategy, Johnson said.

In other action, the board:

  • Approved a five-year extension of the Environmental Adjustment; up to $3.5 billion in contracts for fuel and purchased power, and up to $4 billion of long-term bonds.
  • Approved TVA entering contracts for hydroelectric modernization and transmission system construction and modification services.
  • Approved changes to the annual and long-term employee performance goals incentive programs.

The Tennessee Valley Authority is a corporate agency of the United States that provides electricity for business customers and local power distributors serving 9 million people in parts of seven southeastern states. TVA receives no taxpayer funding, deriving virtually all of its revenues from sales of electricity. In addition to operating and investing its revenues in its electric system, TVA provides flood control, navigation and land management for the Tennessee River system and assists local power companies and state and local governments with economic development and job creation.

Feds, States Reach Agreement on TVA Trout Hatchery Operations

Press release from the Tennessee Valley Authority; May 17, 2013:

NASHVILLE, Tenn. – U.S. Sen. Lamar Alexander and representatives from the Tennessee Valley Authority, the U.S. Fish & Wildlife Service, Tennessee Wildlife Resources Agency and Georgia Department of Natural Resources announced Friday a new agreement that will continue popular trout stocking programs in reservoirs and tailwaters of certain TVA dams across the region.

TVA will provide more than $900,000 per year for the next three years to support federal fish hatchery operations that provide the trout for stocking. During the three-year timeframe, per an agreement signed by the four agencies, a working group will be formed with key stakeholders who benefit from the recreation-based trout stocking to identify a long-term funding source.

Currently, non-native trout stocked near some of TVA’s dams are raised at three federal fish hatcheries operated by the U.S. Fish & Wildlife Service: Erwin National Fish Hatchery in Erwin, Tenn.; Dale Hollow National Fish Hatchery in Celina, Tenn.; and Chattahoochee Forest National Fish Hatchery in Suches, Ga.

“Closing Dale Hollow and Erwin would have been a disaster for 900,000 Tennesseans and visitors who bought fishing licenses last year,” Alexander said. “Dale Hollow helps make Tennessee’s rivers and lakes among the most prized trout fisheries in our country. And the Erwin hatchery provides brood stocks for fishing waters across the country.”

The trout are provided to the Tennessee Wildlife Resources Agency and Georgia Department of Natural Resources for stocking in the colder water of the reservoirs and tailwaters of the TVA dams. TVA supports the stocking programs by enhancing aquatic habitat through oxygenation systems, foregoing electric generation and providing minimum river flows to help adequately maintain cooler water temperatures. However, in most of the waters, the trout cannot naturally reproduce, requiring regular stocking to maintain fishable populations.

“TVA is voluntarily providing three years of stewardship funding for trout hatchery operations because the agencies involved understand the importance of stocked trout waters to recreation, tourism and local economies,” said Joe Hoagland, TVA senior vice president of Policy and Oversight. “At the same time, the working group being formed to look at ongoing, sustainable funding is critical given TVA’s focus on keeping electric rates low and the budget challenges of all the participating agencies.”

“The U.S. Fish and Wildlife Service greatly appreciates TVA’s dedicated funding for the next three years,” said Cindy Dohner, the U.S. Fish and Wildlife Service’s regional director for the Southeast. “We also are encouraged by the commitment by all the agencies to develop a long-term, sustainable funding source for this important conservation, recreational, and economic activity for our citizens.”

Through this three-year hatchery funding agreement, trout will continue to be stocked for recreational fishing in reservoirs or tailwaters at 12 TVA dams in Tennessee and Georgia: Apalachia Dam on the Hiwassee River; Blue Ridge Dam on the Toccoa River; Cherokee Dam on the Holston River; Ft. Patrick Henry Dam on the South Fork Holston River; Normandy Dam on the Duck River; Norris Dam on the Clinch River; Ocoee Dam No. 1 on the Ocoee River; South Holston Dam on the South Fork Holston River; Tellico Dam on the Little Tennessee River; Tims Ford Dam on the Elk River; Watauga Dam on the Watauga River; and Wilbur Dam on the Watauga River.

“The funding of the federal hatchery operations is vital to our agency’s ability to meet the demand for quality trout fishing in Tennessee,” said Ed Carter, executive director of the Tennessee Wildlife Resources Agency. “Their continued operation will help continue providing a tremendous recreational activity to thousands of Tennesseans. An associated but very important side benefit is the significant economic boost to local businesses associated with the fishing and outdoor industry.”

“The Blue Ridge Dam-Toccoa River project is a critical trout fishery for our citizens and the economy of the area,” said Dan Forster, director of the Wildlife Resources Division for the Georgia Department of Natural Resources. “This agreement provides an important step in addressing the long-term continuation of trout production and stocking associated with this fishery.”

Details on the trout hatchery funding working group are currently being developed. The agencies will be seeking representation, ideas and input from angling groups, local and regional businesses, tourism organizations and the local governments that realize the direct and indirect benefits of having fishable trout waters in their communities.

“This is good news for Tennessee fishermen,” Alexander said of the hatchery agreement. “TVA has helped make sure Tennessee’s rivers and lakes will remain among the most prized trout fisheries in our country.”

Press release from U.S. Sen. Lamar Alexander, R-Tenn.; May 17, 2013:

NASHVILLE, May 17—U.S. Senator Lamar Alexander (R-Tenn.) today announced an agreement between TVA and federal and state wildlife agencies that he said will keep open hatcheries that produce 60 percent of the trout stocked in Tennessee rivers and lakes.

During a press conference at the Tennessee Wildlife Resources Agency headquarters, the senator said that budget woes have threatened to close both the Dale Hollow and Erwin national fish hatcheries. The senator credited TVA’s participation in a three-year agreement with federal and state wildlife agencies with keeping the hatcheries open while a permanent solution is being negotiated.

“Closing Dale Hollow and Erwin would have been a disaster for 900,000 Tennesseans and visitors who bought fishing licenses last year. Dale Hollow helps make Tennessee’s rivers and lakes among the most prized trout fisheries in our country. The Erwin hatchery provides brood stocks for fishing waters across the country.”

For several years Alexander has helped provide funds for the U.S. Army Corps of Engineers’ budget to purchase trout from the U.S. Fish and Wildlife Service to mitigate the loss of fish caused by Corps dams. He is the senior Republican on the Senate Appropriations subcommittee that oversees the Corps. TVA will also mitigate for the loss of fish on the Tennessee River system.

Alexander said this had been a week of “good news for Tennessee fishermen.” On Wednesday, the U.S. Senate passed his legislation that would delegate to state wildlife agencies enforcement of safety regulations below Corps of Engineers Dams on the Cumberland River. The senator said he expected the Corps would work with state agencies to create “reasonable regulations that prohibit fishing while water is spilling through the gates of the dams 20 per cent of the time, but allow fishing with appropriate precautions the rest of the time.”

The senator was joined at the press conference by Joe Hoagland, TVA’s senior vice president of policy and oversight; Ed Carter, executive director of the Tennessee Wildlife Resources Agency; Cindy Dohner, regional director, southeast region, of the U.S. Fish and Wildlife Service; and Dan Forster, director, wildlife resources division, of the Georgia Department of Natural Resources.

TVA Announces Cap Reached for Solar Power Purchasing Program

Press release from the Tennessee Environmental Council; May 1, 2013:

TVA has announced it has reached a “cap” and will not purchase power from new midsized solar power generation systems that small businesses, farmers, and homeowners want to install in the Tennessee Valley. TVA’s Green Power Providers has a “cap” on the amount of electricity it will buy based on the size of the system. Systems which generate between 10 kilowatts and 50 kilowatts will no longer be able to sell electricity at a favorable price to TVA until, and if, the program is reopened at some unspecified future date. The program may not be reopened.

“The capacity limits for this segment of TVA’s renewable energy programs for all of 2013 were met in less than four months. An April 24th press release from TVA touts the program as being very successful, but TVA met their target for these programs much earlier than expected due to poor planning. TVA approved over 250 small-scale, renewable energy projects for their Green Power Providers and Solar Solutions Initiative programs in 2013, but the demand and potential is significantly higher,” said John McFadden, Executive Director of the Tennessee Environmental Council.

The Green Power Providers and Solar Solutions programs are a significant driver for mid-size solar installations in Tennessee. Without these incentives, industry leaders believe the losses to the growing solar industry in Tennessee will cost jobs and money for citizens and businesses. Tennessee, which has climbed to 14th in installed solar capacity in the United States, will fall behind instead of gaining ground.

Lightwave Solar, a Nashville-based solar photovoltaic (PV) system design and installation firm has laid off two employees in 2013 because of softening demand. Gary Wolf of Sundog Solar laments, “If Sundog Solar can’t sign up another customer until January of 2014, I’ll be out of business before the end of the year and my crew, trained in solar at a Tennessee state school, will be out of jobs. An annual program that lasts four months has at least one obvious problem – size. The caps don’t respond to market demand, they force homeowners to compete with commercial interests for solar space, and they undermine job creation and steady employment in one of the nation’s fastest growing sectors.”

“The ill-conceived construction of TVA’s incentive programs for small and mid-sized solar PV systems has created an unnecessary stop and go situation. Sadly, it is homeowners, small businesses and regional solar installers that are disproportionately impacted,” says Michael Levesque, Chief Operations Officer of Sustainable Future, in Knoxville. “Since these programs are the only programs for solar in Tennessee it restricts private citizens and businesses from installing solar power plants. No one is going to build a solar system and provide power to TVA for free, and why should they? People seeking some control over their energy future have no solar alternative.”

“Reaching the TVA Green Power Providers program capacity so early in the year has only negative effects on solar businesses and solar clients. This program should be available to TVA customers all year long,” adds Ed Zubko, Chief Operations Officer, Green Earth Solar, LLC. “Some of the benefits of the TVA Green Power Providers program to customers are: reduced tax liability, predictable return on investment for the more than 25 year life of the system, saving money on electricity for over 25 years, reduction in the amount of CO2 required to operate a business or residence, support for Tennessee companies with some Tennessee made products available.”

Tennessee Chapter Sierra Club Repower America Chair, Mary Mastin, commented, ”It makes no sense for TVA to say it has a cap on how much fuel-cost-free electricity it will buy from folks who pay to have a solar system installed at their, home, business or farm. If folks want to dig into their savings to build generation capacity so TVA does not need to borrow money and build power plants and burn coal or uranium we all win. Solar generates no air or water pollution, no coal ash, and no danger from radiation and nuclear waste. TVA has withdrawn support for valley residents and business who want to invest their own money to go solar and this is contrary to TVA’s mission and goals”

The April 24 TVA press release can be found at: http://www.tva.com/news/releases/aprjun13/2013_renewable.html

Beacon Center Tennessee Policy Snapshot for November

Press release from the Beacon Center of Tennessee; November 1, 2012: 

A cure for what ails us

Over the next few months, Tennessee officials will have to make vital choices about the implementation of the Patient Protection and Affordable Care Act. Decisions confronting policymakers include whether to expand Medicaid and to set up a state health insurance exchange. A new Beacon Center report, “A Cure for What Ails Us,” calls on state lawmakers to reject an unaffordable and immoral expansion of Medicaid and reveals the serious consequences a state insurance exchange would spell for taxpayers. You can read the report here.

Nat’l healthcare expert headlines Beacon event

Dr. John Goodman, president and CEO of the National Center for Policy Analysis, headlined a Beacon Center event on healthcare reform at the Downtown Sheraton Hotel in Nashville last week. Widely recognized as the “Father of Health Savings Accounts,” Goodman’s health policy blog is a must read for free marketers interested in healthcare policy. He is the author of Patient Power and, most recently, Priceless: Curing the Healthcare Crisis. TNreport.com caught up with Dr. Goodman prior to the event. A story and exclusive video can be found here.

A shortage of musicians…in Music City?

A new Tennessee Watchdog story addresses city officials’ worry that Nashville, commonly known as “The Music Capital of the World,” has a sudden shortage of creative talent. Officials with Nashville’s Metropolitan Development and Housing Agency are overseeing a new government project called the Ryman Lofts, an apartment complex scheduled to open in 2013 to house aspiring artists. For the full story on this taxpayer-funded luxury, click here.

TVA’s pension shortfall = higher electric bills

In a recent interview with TNReport.com, Beacon CEO Justin Owen explains how electricity consumers will be on the hook for the Tennessee Valley Authority’s massive pension shortfall, which currently totals $4.5 billion. “The (TVA) story is symptomatic of a larger problem,” Owen said. “What it amounts to is political promises. Now we’re seeing that many of those promises… are empty promises.” This shortfall could cost 98 percent of Tennessee households about $450 in higher electricity bills. For the full story and video interview click here.

TVA Ratepayers Make Up Pension Shortfall

The Tennessee Valley Authority is facing a multibillion-dollar pension shortfall, and it appears the federal utility has been scrambling to shore up the losses with ratepayer cash.

From the Chattanooga Times Free Press:

When investment markets tanked in 2008 and TVA’s pension fund took a nearly $2 billion dive, the tab for making sure there was enough money to cover commitments to 24,000 retirees fell to electric ratepayers. 

Fully funded, TVA’s retirement plan should total $11.5 billion.

Instead, it now stands at $7 billion.

TVA has infused it with almost $1.3 billion since 2009 — ratepayer money.

There’s a bigger problem, though, says Justin Owen with the Beacon Center, a Nashville-based free-market think tank: Pension problem are rampant throughout the country, and politicians are moving too slow to apply fixes.

“The (TVA) story is symptomatic of a larger problem,” Owen said. “What it amounts to us political promises. Now we’re seeing that many of those promises… are empty promises.”

Beacon has studied pension problems across the U.S. recently, looking at how pension bailouts across the nation would affect Tennessee taxpayers.

“We have to stop making these promises in the future,” Owen said. “We can’t afford it.”

He said that public entities need to move to retirement plans similar to the 401(k) plans offered in the private sector.

Southerland Holding Out Hope for NE TN Megasite

State Sen. Steve Southerland sounds enthusiastic about the possibility of Upper East Tennessee landing a TVA megasite like the ones taxpayers provided for Volkswagen and Hemlock Semiconductor.

But the Morristown Republican’s enthusiasm may be more a matter of a legislator cheerleading than an indication of any substantive action. Other officials, including some community leaders in the region itself, say they see no hint of a megasite headed to the area, for a variety of reasons.

State Economic and Community Development Commissioner Bill Hagerty said recently he had heard the subject come up in regard to Upper East Tennessee, but he downplayed the potential.

“In terms of a new large-scale megasite like West Tennessee, I think there is a lot of optimism we might be able to do that in other parts of the state, but there is nothing along that magnitude on the drawing board right now,” Hagerty said.

Alan Palmieri, mayor of Jefferson County, said he has heard the subject raised for his region — but only “for years and years and years.” Mayor Bill Brittain of Hamblen County, which includes Morristown, said this week he has not heard the matter come up.

But in talking to a reporter at a recent event in Morristown, Southerland made it sound like efforts are underway for landing a megasite.

“We’ve got sites in the area that could be a megasite,” Southerland said. “It has a good possibility, because our counties are working together. We know it has to be a joint, regional project.

“We approved three megasites. We’ve got one in West Tennessee, Middle Tennessee and then one in Chattanooga. But we have not received one for Upper East Tennessee. It’s our turn. We spent the money down there. If the people are willing to work together up here and we have somebody wanting to come this way we’re going to go for it.”

Megasites have been noteworthy for several reasons recently. Tennesseans have begun to see the fruits of preparing large tracts of land and infrastructure, with Volkswagen opening its manufacturing plant in Chattanooga and Hemlock making an impact in Montgomery County, including ties with Austin Peay State University.

A third megasite, in Haywood County in West Tennessee, has begun to get more attention from government officials, but it remains vacant.

Gov. Bill Haslam has taken some of the glimmer off the headline-grabbing practice of attracting large businesses to the state, pointing out that most of the job growth comes from existing businesses, not high-profile relocations.

Nevertheless, Haslam has repeatedly said that doesn’t mean the state has abandoned the big relocation approach. At an economic development meeting in Morristown, Haslam said the administration is still ready “to move heaven and earth” to get such investments.

Southerland picked up on that line.

“Just like he said, we’d move heaven and earth to get another Volkswagen here,” Southerland said. “When you look at Hamblen County, we’re like a hub for other counties bringing in automotive jobs.”

Taxpayer bill can reach hundreds of millions of dollars

State and local taxpayers typically can end up contributing hundreds of millions of dollars to the development of a megasite.

In the case of the Enterprise South industrial site that attracted Volkswagen to Hamilton County, the government’s bill, including tax breaks, was estimated in one report at $500 million. Volkswagen made an investment of $1 billion, roughly the amount Hemlock put into the megasite in Montgomery County.

Arrangements for the sites can involve help from federal, state and local governments. After that, the value of the investment is widely open to debate. Economic development officials routinely have said the kinds of businesses attracted by the megasites are giant winners for the locations. But increasingly, questions exist as to the return on the investment in attracting jobs, as states have become highly competitive.

Haslam has expressed surprise at what some companies want in return for creating jobs in Tennessee, although he has said his administration remains interested in attracting the types of investments made by Volkswagen and Hemlock.

“In this state, the funding for the megasites has been a combination of local government money and state government money, with some participation from TVA funding the certification process,” said Clint Brewer, spokesman for the Department of Economic and Community Development.

In Montgomery and Hamilton counties local governments handled the purchase of the land. For the Haywood County megasite, where local governments lack such resources, the state has purchased most of the land. Theoretically, private entities could have to assemble the property at a megasite.

“The local communities pay for the site’s due diligence and improvement, such as environmental reviews, infrastructure improvements, etc.,” said Mike Bradley, of the TVA news bureau in Knoxville, by e-mail Thursday. “This sometimes is done even after the site has been certified as a megasite. The effort is usually championed by a local economic developer.”

The Tennessee General Assembly this year passed legislation (SB1239) to allow the East Tennessee Regional Agribusiness Marketing Authority, or ETRAMA, to issue bonds.

The idea of economic development in the region is to enhance development along the I-81 corridor.

Two issues face the region on infrastructure for business development: hooking up a sewer system to accommodate large capacity and getting connectors in place for major rail lines in the region. Plans for the sewer line would involve trunk lines that would feed wastewater into a plant in Lowland, which is in Hamblen County.

The vacant megasite in Haywood County has 1,720 acres. Another vacant TVA megasite in Hopkinsville, Ky., has 2,100 acres. Those kinds of numbers may work against mountainous Upper East Tennessee.

“I was told years ago because of our geography it’s hard to collect 500 flat acres,” said Rep. Tony Shipley, R-Kingsport. “Maybe we don’t get a megasite. Maybe we get a mega-area.

“The same amount of money is being spent in Chattanooga, West Tennessee and the Nashville basin area. Maybe that same amount of money could come here, because we are distinctly different.”

Palmieri, the Jefferson County mayor, makes a similar observation.

“You look at the land, and you say, ‘Where are you going to locate this?’ Terrain would be part of the process because whatever you do, you’ve got to make it economically feasible. If you’re going to have to go in and take down mountains and blast and everything else, it’s going to add to the cost, which everybody wants to avoid.”

In another way, however, geography is a plus for the region. State and local government officials point to the fact the region is within driving distance of a large portion of the nation’s population.

Like Disney World theme park, talk of megasite ‘just conversation’

Palmieri has heard talk of a megasite but sees little in the way of real progress.

“I know various mayors have talked about it for many years. Various chambers (of commerce) have talked about it. Nothing has really developed outside the fact it’s just conversation,” he said.

“Where would you go? Who’s going to bring in something that massive today? It’s probably been put on the back burner, but it’s been going on for I guess probably the last 10-12 years.”

Southerland sees other factors.

“We know with the earthquake in Japan and the value of the U.S. dollar that Japan will be looking more at investing in the United States in automotive plants. And we’re hoping to get one of whatever comes this way,” Southerland said. “You’ve got to be prepared because when they come they’re going to be looking for somebody that’s already ready to go.”

Palmieri said that for years there was talk that the people from Disney World were going to put a theme park in Cocke County.

“I heard that for 20 years,” he said. “That was a hot one there for awhile. It was going to be just a regular theme park, like a Disneyland or Dollywood. That was before Dolly owned Dollywood.”

But if the region were to get a large plant, Palmieri says the automotive or airline industries would make good sense. He said the area’s workforce, which has experience in production lines, would be good for a manufacturing base.

When asked why the airline industry would be a good fit, Palmieri said, “Everything they have is predominantly in a high-tax area. What they’re having to pay the workforce there is probably three or four times what they could have to pay a workforce here in Jefferson County or East Tennessee.

“Transportation-wise, with the Interstate and everything else, easy access in and out, I can see where they could save a lot of money, and it’d be much more profitable for their company.”

Aircraft maker Boeing has recently been involved in a dispute with the National Labor Relations Board over a plant it plans to build in South Carolina. Palmieri said Tennessee should get a look.

“If Boeing ever took a serious look, they could come in, acquire property and build buildings and have a workforce ready to go, and they would save money almost right off the bat,” he said. “South Carolina is more expensive. They have payroll taxes and everything else. I don’t understand that.

“I have family there. It’s a beautiful state. I can’t stand Steve Spurrier (the South Carolina football coach). But why would you go to South Carolina when Interstate access, transportation needs, centralization, taxes, everything is so much better right here in East Tennessee? I don’t understand that.”

Still Draining the Nation

Earlier this year Reason magazine offered up a much dimmer view of the Tennessee Valley Authority than that no doubt favored by the federally owned corporation’s 50-member public relations staff.

In “How Big Government Infrastructure Projects Go Wrong,” the libertarian Cato Institute’s Jim Powell cast “America’s biggest monopoly” in a light that by no means revealed it to be the economic savior and cultural redeemer of its much-publicized promise.

It was heralded as a program to build dams that would control floods, facilitate navigation, lift people out of poverty, and help America recover from the Great Depression. Yet the reality is that the TVA probably flooded more land than it protected; much of the navigation it has facilitated involves barges of coal for coal-fired power plants; people receiving TVA-subsidized electricity have increasingly lagged behind neighbors who did not; and the TVA’s impact on the Great Depression was negligible. The TVA morphed into America’s biggest monopoly, dominating an 80,000 square mile region with 8.8 million people—for all practical purposes, it is a bureaucratic kingdom subject to neither public nor private controls.

Powell’s sentiments are reflective of what seems to be a growing consensus among critics of various ideological stripes who agree on little except that the time has come for the Tennessee Valley Authority to be gone.

Today, TVA, although no longer a beneficiary of direct congressional funding, “pays none of the federal, state, and local taxes that private businesses pay,” Powell said in his article.

“As a government-backed entity similar to Fannie Mae and Freddie Mac, the TVA can borrow money cheaper than private businesses,” said Powell. “Currently, the TVA has about $26 billion of debt.”

In a January 2009 op-ed for a local newspaper, Shaka Mitchell, at the time vice president for the Tennessee Center for Policy Research, observed that the hospitable, appreciative manner in which TVA and its leadership seems always to get handled by state and federal authorities (citizen lawsuits are applying the real heat) is typically (and tragically) symptomatic of government ownership or operation of just about anything.

When a private company screws up, someone is held accountable. People stop buying its products. Shareholders fire the CEO. The company goes bankrupt. But when a government-run company has a similar problem, no one takes the blame.

Officials at TVA don’t have to answer to shareholders or voters. Government run companies, like the TVA, are interested in one thing; maintaining their own existence. As long as they keep their jobs, they couldn’t care less about the quality – or dangers – of their product.

We are learning an important lesson about the differences between what happens when a private company and a public one impact the community negatively. Exxon had to pay over half a billion dollars to fix the mess it caused, and rightfully so. Troublingly, taxpayers will be forced to pay to clean up the TVA’s debacle.

A 2001 paper (highlighted in Powell’s Reason article) from the Northeast-Midwest Institute, a “non-partisan research organization dedicated to economic vitality, environmental quality, and regional equity,” assessed TVA in terms just as damning.

“Sixty-five years after it was created, this giant federal agency can no longer justify its existence,” wrote Richard Munson, now the senior vice president of Recycled Energy Development, in “Restructure TVA: Why the Tennessee Valley Authority Must Be Reformed.”

“Why should 242 million Americans be forced to subsidize the electricity rates of the 3 percent of Americans who happen to live in the Tennessee Valley,” asked Munson, who also testified before Congress on the subject of TVA in 1999. “There’s little doubt that TVA has become a burden to the nation’s taxpayers. What’s becoming increasingly apparent is that the status quo also harms the very Tennessee Valley residents that TVA is supposed to serve.”

Last winter a prominent longtime critic of the Tennessee Valley Authority called on President Obama to embark upon perhaps the most counterintuitive political undertaking an FDR-idolizing stimulator-in-chief could conceive of.

Writing for the Christian Science Monitor back in February, environmental activist William U. Chandler, a graduate of Harvard and the University of Tennessee, offered that if President Obama really wanted to throw his GOP detractors for a real mindbender, he’d take an aggressive run at radically reforming – and perhaps even dispensing with – the granddaddy of all New Deal boondoggles.

Obama will have to grapple with the history and the politics of this question as he ponders how to make TVA a force for more-efficient energy use, better jobs, and a low-carbon future. At the least, Obama could put TVA management on notice of his expectations. He could direct his Department of Energy and Environmental Protection Agency to define steps TVA should take to reform the 75 year-old agency. He could require – and reward – investment in energy efficiency and disincentivize the wasteful use of power. He could require TVA to create the most advanced carbon mitigation measures of any US utility – and then of any utility anywhere in the world. He could inform managers that if by 2011 this plan is not well advanced, they will be replaced, and the agency put up for sale.

Such blasphemies are the sort that once laid low the higher political ambitions of Barry Goldwater, who got himself in Dutch with the Tennessee masses for offhandedly quipping that he’d sell TVA “for a dollar” given half a chance. And speaking of “Dutch,” the plug got summarily pulled on Ronald Reagan’s job as host for General Electric Theater at around the same time, after he expressed similarly contemptuous views of the “big government” powerhouse, which he soon discovered was as “sacred as motherhood” in some quarters.

Of course, all that was long before Dec. 22, 2008, when overnight TVA’s popularity sank to levels rivaling that of a lump of coal in the public’s collective stocking.

For a little perspective on the gargantuan nature of the 5.4 million cubic yards of ash that roared forth from the Kingston Fossil Plant, which as of last summer TVA was estimating would cost up to $1.2 billion to clean up, here’s what Tennessee Department of Environment and Conservation deputy commissioner Paul Sloan told state lawmakers during a hearing last session: “If you took the Great Smoky Mountains and you subdivided it in one-acre tracts – over half a million acres – the amount that spilled (at Kingston) would be sufficient to put about 11 tons of ash on every one of those acres. So that’s the scale that we’re dealing with. So, yes, this is a very long-term cleanup.”

But like the others who have for years criticized the massive agency, it’s not just TVA’s darkest-day disaster that ought to cause America to rethink TVA organization, oversight and even ownership, Chandler argued.

The Tennessee Valley Authority — an “icon of the New Deal” that also happens to have “the worst environmental record of any utility in the nation” — in fact never did “live up to its supposed goals,” he said.  In particular, its promises of bestowing collective prosperity on the region’s inhabitants fell demonstrably short: “Both during and after the Great Depression, manufacturing jobs were created faster just outside the TVA area than within it,” he wrote.

Non-TVA counties in northern Georgia and Alabama and western North Carolina in 1933 were as poor as or poorer than TVA counties, but by 1953 they were generally better off. Even rural electrification and the use of household appliances grew faster in the non-TVA south.

To be sure, TVA created jobs for some 13,000 workers, but for at least four decades, Depression-era investments in TVA dams, waterways, and recreation areas have failed to pay for themselves by any economic measure.

In his 1984 book, “The Myth of TVA,” Chandler observed that “(a)mong the nine states of the southeastern United States, there has been essentially an inverse relationship between income per capita and the extent to which the state was served by TVA.” Furthermore, he wrote, “In a critical measure of economic performance, growth and income, no evidence exists to suggest any special contribution by TVA to the development of the Tennessee Valley.”

Chandler concluded his book with words that no doubt reflect sentiments held today by far more ratepayers and taxpayers than when first published 25 years ago: “The fundamental result of the TVA experiment teaches that buying flexibility by giving away democratic control is a false bargain.”