TENNESSEE VALLEY AUTHORITY

Tennessee Valley Authority

Tennessee Valley Authority

The Tennessee Valley Authority (TVA) is a federally owned corporation in the United States created by congressional charter in May 1933 to provide navigation, flood control, electricity generation, fertilizer manufacturing, and economic development in the Tennessee Valley, a region particularly affected by the Great Depression. The enterprise was a result of the efforts of Senator George W. Norris of Nebraska. TVA was envisioned not only as a provider, but also as a regional economic development agency that would use federal experts and electricity to rapidly modernize the region's economy and society.

TVA's service area covers most of Tennessee, parts of Alabama, Mississippi, and Kentucky, and small slices of Georgia, North Carolina, South Carolina, West Virginia, Indiana and Virginia. It was the first large regional planning agency of the federal government and remains the largest. Under the leadership of David Lilienthal ("Mr. TVA"), TVA became a model for America's governmental efforts to modernize Third World agrarian societies.

As a supplier of electric power, the agency was given authority to enter into long-term (20 years) contracts for the sale of power to government agencies and private entities, to construct electric power transmission lines to areas not otherwise supplied and to establish rules and regulations for electricity retailing and distribution. TVA is thus both a power supplier and a regulatory agency.

Today, TVA is the nation's largest public power company, providing electric power to over nine million customers in the Tennessee Valley. It acts primarily as an electric power wholesaler, selling to 156 retail power distributors and 56 directly served industrial or government customers. Power comes from dams providing hydroelectric power, fossil fuel plants, nuclear power plants, combustion turbines, wind turbines and solar panels.

During the 1920s and the Great Depression years, Americans began to support the idea of public ownership of utilities, particularly hydroelectric power facilities. The concept of government-owned generation facilities selling to publicly owned distribution utilities was controversial and remains so today.

Many believed privately owned power companies were charging too much for power, did not employ fair operating practices and were subject to abuse by their owners (utility holding companies), at the expense of consumers. During his presidential campaign, Roosevelt claimed 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." By forming utility holding companies, the private sector controlled 94 percent of generation by 1921, essentially unregulated. (This gave rise to Public Utility Holding Company Act of 1935 (PUHCA)). Many private companies in the Tennessee Valley were bought by the federal government. Others shut down, unable to compete with the TVA. Government regulations were also passed to prevent competition with TVA.

On the other hand, there were economic libertarians who believed the government should not participate in the electricity generation business, fearing government ownership would lead to the misuse of hydroelectric sites. TVA was one of the first federal hydropower agencies, and today most of the nation's ...