TVA Quarterly Meeting - November 17, 2011 in Starkville, Ms. **Pension Plan Woes, $4.7 Billion Unfunded**

The TVA held its Quarterly Board Meeting yesterday at the Mississippi State University Campus in Starkville, Ms. (Last update Nov 21, 2011)

 Prior to each board Meeting the TVA Board conducts a listening session for citizen stakeholders to express their concerns. There were 9 speakers who spoke including myself. Many spoke on Energy Efficiency. One member of the Mississippi Public Service Commission spoke to the Board about his and others concern about TVA debt. At one point the Mississippi PSC commissioner compared TVA debt accountability to the activities of Enron.

 Below you will find the text of my presentation to the TVA Board. Click on image for an expanded view.

Next you will find the agenda of the meeting with my notes attached. Click on the image for an expanded view.

The following pictures demonstrate TVA's performance. Click on image for an expanded view. (TVA slide presentation link: TVA Presentation  )

DIFFERENT PEN STROKES FOR DIFFERENT FOLKS
At yesterdays TVA Board meeting it was reported that TVA's Statutory debt was $24.431 (long and short term debt). TVA's estimated values of financial instruments on page 116 of TVA's Financial Report reflect the following data as of Sep 30, 2011. Long term debt net: Carrying amount of the long term debt- $23.949 billion; Fair Value of the long term debt- $29.190 billion.

Page 63 of the 10K reflects the following Long Term Commitments and Contingencies: Debt-$24.659 billion; interest on the debt-$25.190 billion. Total long term commitments which includes fuel contracts, leases, environmental agreements, litigation, debt, interest and other-$67.415 billion.
Link for 2011 10K http://investor.shareholder.com/tva/secfiling.cfm?filingID=1376986-11-74  (link is no longer valid) 
NOTE - April 23, 2015, The TVA has changed their financial  accounting location address link, The 2011 10K may be found at 2011 Annual Report on Form 10-K

Note: TVA's Chief Financial Officers comment and question: The Chief Financial Officer of the TVA, John Thomas, III, stated regarding debt and reporting of financial disclosures, (paraphrased) "we need to perform 'technical accounting' to reflect our financial status." What does "technical accounting" mean vs accurate-lawful accounting?  Was the Mississippi PSC Commissioner's comment above correct?


MORE PENSION PLAN WOES?
On page 121 of the current 10K TVA's Pension Plan demonstrates a $4.709 billion unfunded shortage. Current Pension fund obligations for 2011- $11.255 Billion; fair value of pension fund assets- $6.546 Billion; this leaves a Pension fund shortage of $4.709 Billion. TVA pension plan obligations have increased by $1.1 billion over the FY2010 year.

TVA has stated they intend on selling 2 assets to fund the finishing of the Bellefonte Nuclear Power Plant. On this mornings Financial Call the TVA stated they have gained approval for the sale of the Sevier combined Cycle Gas Plant and Watts Bar Nuclear generation assets from Congress. That is not what the TVA Act allows. Note the link and excerpt from the TVA Act below.

TENNESSEE VALLEY AUTHORITY ACT  Section 4(K)(c), quote: "That no land shall be conveyed, leased, or transferred, upon which there is located any...power plants...That no transfer authorized herein...shall be made without the approval of the President of the United States..." The intent of the law is clear to a reasonable person. Prevent the sale of any current or future electrical generation assets and associated properties without the approval of the President of the United States. Congressional approval is not mentioned in the paragraph.


BELLEFONTE CASE before the U.S. Federal Appeals Court, Washington D.C.
Legal case relating to Bellefonte Nuclear Power Plant: Pg 138 in TVA's 10K Report; "Case Regarding Bellefonte Nuclear Plant Units 1 and 2...Final briefs have been submitted, and oral arguments took place on October 20, 2011."


The TVA under its current leadership is unable to manage the organization without massive debt. TVA's debt must be brought under control. TVA's continued unwise moves into expensive nuclear power will continue to increase TVA's debt.  More images to follow.

TVA IG Report on its debt: September 30, 2011 - History, Status, and Alternatives: TVA Financial Flexibility - 2009-13007-01  Full Report

Energy Efficiency Programs. Click on image for an expanded view.

Article from the Chattanooga Times Free Press by Pam Sohn: "One of TVA’s key goals is to produce low-cost electricity, but the utility’s rates rank 40th in the nation rather than in the top 25 percent where it traditionally had been." Article link: http://timesfreepress.com/news/2011/nov/18/tva-ceo-gives-nuke-program-poor-grade/?print

TVA News release link with info concerning the Starkville Meeting: Header- "TVA Cites 2011 Performance, Enhances EnergyRight Program; CEO Pay Unchanged for 2012 "http://www.tva.com/news/releases/octdec11/nov_board/board_meeting.htm

Three Board Members terms expired this year, a departure resolution was presented to these members for appreciation of their service. 1) Chairman Dennis Bottorff of Nashville, Tenn., serves as chairman and partner of Council Ventures, a venture capital firm. He was chairman of AmSouth Bancorporation in Nashville until his retirement in 2001 and previously was chief executive officer of First American Bank. His term expired May 18, 2011. 2) Mike Duncan of Inez, Ky., is chairman, chief executive officer, and director of Community Holding Co.; chairman, CEO, and director of Inez Deposit Bank. He is a director of the regional Center for Rural Development. His term expired May 18, 2011. 3) Tom Gilliland of Blairsville, Ga., recently retired as executive vice president, general counsel and secretary of United Community Banks Inc. He is a former chief of staff to Georgia Lt. Gov. Pierre Howard and served as chairman of the Stone Mountain Authority under Georgia Gov. Roy Barnes and Gov. Sonny Perdue. His term expired May 18, 2011.


Press updates to story: Knox News AP Report: "One day after the Tennessee Valley Authority board extended a pay freeze for a second year, a report shows TVA President and CEO Tom Kilgore's compensation increased by $352,000 in fiscal 2011, to $3.95 million." http://www.knoxnews.com/news/2011/nov/18/despite-freeze-tvas-kilgore-up-352000-in-2011/?partner=newsletter_headlines
Chattanooga Times Free Press report: "The Tennessee Valley Authority will give its average worker a year-end incentive check worth nearly $8,300 next week." http://www.timesfreepress.com/news/2011/nov/18/tva-pay-typical-employee-8300-bonus-next-week/ 

TVA's 2 minute film highlighting the year in review. TVA News Channel link: http://www.youtube.com/user/TVANewsVideo