TVA Turns 80

Guest Blog | May 17, 2013 | Energy Policy
Roosevelt and Norris at Muscle Shoals

It all started with bombs. During the First World War, the federal government built two nitrate plants at Muscle Shoals, Alabama, for making explosives. Wilson Dam was built to supply electricity to these plants. After the war ended, there was disagreement over what to do with the site. Industrialists like Henry Ford envisioned the rise of a new Detroit in the South, centered on the hydroelectric power provided by Wilson Dam. Utility holding companies, controlling over 90% of generation in the area, fought against the competition. Conservationists wanted to keep this and other natural areas in the public domain.

When Franklin Roosevelt became president in March of 1933, he had a grander vision. He saw “a corporation clothed with the power of Government but possessed of the flexibility and initiative of a private enterprise.” Along with George Norris, a progressive Republican Senator from the state of Nebraska who had been promoting a similar idea for years, Roosevelt was able to form a coalition to support this bold new plan. TVA was born in an expression of bipartisanship from a bygone era. President Roosevelt signed the TVA Act into law on May 18, 1933. TVA is 80 years old tomorrow.

FDR Signs the TVA Act, May 18, 1933

TVA was founded with a broad vision of social benefit. The preamble to the TVA act says the purpose of the TVA is “To improve the navigability and to provide for the flood control of the Tennessee River; to provide for reforestation and the proper use of marginal lands in the Tennessee Valley; to provide for the agricultural and industrial development of said valley; to provide for the national defense by the creation of a corporation for the operation of Government properties at and near Muscle Shoals in the State of Alabama, and for other purposes.” In his campaign for president, Roosevelt had said, “It [TVA] should be charged with the broadest duty of planning for the proper use, conservation and development of the natural resources of the Tennessee River drainage basin, and its adjoining territory for the general social and economic welfare of the Nation. This authority should also be clothed with the necessary power to carry these plans into effect. Its duty should be the rehabilitation of the Muscle Shoals development and the coordination of it with a wider plan. Many hard lessons have taught us the human waste that results from lack of planning. Here and there a few wise cities and counties have looked ahead and planned. But our Nation has “just grown.” It is time to extend planning to a wider field, in this instance comprehending in one great project many States directly concerned with the basis of one of our greatest rivers.” In its early years, TVA faced many of the same issues it’s facing today. At that time, the private sector controlled most of the electrical generation capacity in the region. Many thought that these private companies, at the time essentially unregulated, were charging too much, using unfair practices, and serving the interests of their corporate owners at the expense of their customers. Roosevelt felt that private utilities had “selfish purposes” and said, “Never shall the federal government part with its sovereignty or with its control of its power resources while I’m president of the United States.” As the current administration ponders the effects of privatizing TVA, history might provide a lesson.

David Lilienthal

From the beginning, although it was a government entity, TVA was structured as a corporation. It was to be run by a board of three members. FDR appointed Arthur E. Morgan as TVA’s first chairman and asked him to suggest the other two board members. Morgan proposed Harcourt A. Morgan (no relation), president of the University of Tennessee, and David E. Lilienthal, a young firebrand from the Wisconsin Public Service Commission. Lilienthal would later chair the TVA board and become known as the prime architect of the modern TVA. After leaving TVA Lilienthal became the first chairman of the U.S. Atomic Energy Commission.

In the 80 years since its inception, the Tennessee Valley Authority has become the nation’s largest public power provider. TVA’s service territory includes most of Tennessee and parts of Alabama, Georgia, Kentucky, Mississippi, North Carolina and Virginia, covering 80,000 square miles and serving more than 9 million people. TVA sells electricity to 155 power distributors and 56 directly served industries and federal facilities. Federal appropriations for TVA have been phased out. All of TVA’s operations, including power generation, flood control, recreation and environmental stewardship, are now fully funded through electricity sales and power system revenue. As TVA enters its ninth decade, it faces a number of new challenges. Lower demand, economic malaise, cost overruns, an impending debt ceiling and the threat of privatization all loom.

The Southern Alliance for Clean Energy has been a part of TVA’s history for almost 30 years now, in various incarnations. Although many may feel that we have been overly critical of TVA during that time, SACE supports the grand vision of TVA from its early days. As a “living laboratory”, TVA must continue to lead the way into a new and modern era by embracing and promoting the development of clean, renewable energy sources and energy efficiency while encouraging economic development and overseeing the conservation of our natural resources.

Congratulations to the Tennessee Valley Authority on the occasion of this historic milestone.

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