TVA Rate Increases

The TVA reports that it will increase its rates by double digits. http://www.knoxnews.com/news/2008/aug/06/tva-says-big-rate-increase-coming/ The question, are they being truthful in the reason for their rate increases, higher costs for coal is the reason listed? Since they refuse to disclose the proposed financial costs and their financing plans for Bellefonte Nuclear Construction in their Nuclear License Application, how do we know they are being truthful about the reason for double digit rate increases?

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There is their buy-sell-leaseback program which hides true debt. A quote from this article, http://www.rsmenergy.com/AugustReport.PDF . "The Bush administration has criticized TVA for its excessive debt and lack of plans to reduce it. TVA has now announced a plan to avoid going further into debt by having its distributors issue tax-free bonds, and then prepay TVA for future power deliveries. TVA already has in place a leaseback program to reduce debt – at least for accounting purposes. Since 2000, TVA has leased 24 combustion turbine power plants to private investors in exchange for cash up front; TVA leased the plants back for the generation output. Both these leaseback and prepay plans have substantially the same impact as debt on TVA’ s financial condition. In fact, this is very costly debt at that. Further, the distributors will become more financially leveraged. So rather than developing and implementing a plan to work itself out of debt, TVA is digging itself and its distributors deeper into financial trouble."

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National Policy changes depending on the amount of money pouring into campaign coffers. The Bush Administration's "secret energy policy" now seems to support TVA further increasing its debt. The NEI, Nuclear Energy Institute, has been successful in funneling millions of dollars into political campaign coffers via their Political Action Committee.

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TVA's presentation concerning the rising costs of coal. http://web.knoxnews.com/pdf/080608tva-presentation.pdf It is interesting to note that TVA fails to mention in this presentation the rising costs of uranium and subsequent processing and enrichment for nuclear fuel. They also fail to mention how the rising costs of nuclear construction will result in higher rates. Very convenient omissions on the part of TVA. Only a government agency could get by with the mismanagement and intentional misinformation. TVA's total financial obligations are in excess of $56 billion dollars (TVA's, SEC Form 10Q). TVA's debt is backed by the resources of the Federal Government thus contributing to our national debt.