TVA Decreases Current Debt but Proposes Future Debt Increase - TVA Board of Director's Report 3rd Qtr. 2014 - Energy Efficiency Slashed in Budget by 25%

Big News: TVA decreases its overall debt by $1.05 billion dollars for FY 2014,  but the board approved a $3 billion increase in Power Bond sales - 2015 budget, $1 billion in nuclear power debt; a rate increase was approved at 1.5% ; energy efficiency budget slashed by 25%.

KEY PRESENTATION POINTS - TVA BOARD APPROVED:

1) a $10.7 billion budget for fiscal 2015; 2)  a rate increase was approved at 1.5%; 3) increase debt by $3 billion-power bond sales; 4) TVA will spend $3.5 billion on new projects in fiscal 2015 -- the highest capital budget in TVA's history. 5) $1 billion approved for 2015 nuclear expansion; 6) TVA's debt increase by $1 billion next year, this will  increase TVA's total debt obligations above $28 billion. TVA has a $30 billion statutory debt limit. 7) TVA will have eliminated 2000 jobs by September of 2014. 8) Reduce energy efficiency measures by 25%. This resulted in a comment from board member Dr. Marilyn Brown, an Energy Efficiency Expert from Georgia Tech. She said: "TVA Energy efficiency provides a significant benefit to TVA and its customers and I believe this cut is a reflection of a false economy, it is penny wise and pound foolish...co-generation and combined heat to power is an untapped asset." 

Dr, Marilyn Brown

Although Dr. Brown raised questions, there was no stand for what is right. Justifying bad decisions with a speech does not provide confidence in the TVA Board. It is not Dr. Browns fault, at least she spoke up, all bare responsibility. Folks, slashing that which saves money for rate payers in order to make TVA Executives feel good is ridiculous and a dangerous precedent for those who are suppose to govern the TVA. This confirms the notion of "rubber stamp decision making," all has been discussed and approved before hand.

ENERGY EFFICIENCY GETS THE AX!

Why do leaders on this board, who should know better, vote for that which benefits executives instead of the people whom they serve. Did the CEO or any executive agree to cut their pay and bonuses by 25%???

                                          TVA CEO

 2015 PRIORITIES as expresed by TVA's CEO/President Bill Johnson

(CLICK ON IMAGES BELOW FOR AN EXPANDED VIEW)

OLD STORY FOR TVA

TVA rate increases were a primary reason for the closing of the Revere Copper Brass and Aluminum facility in Scottsboro, Alabama and the subsequent Scottsboro Aluminum. TVA refused to negotiate with the company, they closed their doors.

""Charles Chapman, group manager of energy and reliability at the Dalton, Ga. -based Shaw Industries, said TVA rates are higher for Shaw than those of Southern Co. or Duke. Shaw operates about 50 plants nationwide, including more than 30 in the Southeast. Three years ago, Shaw moved a plant three miles to relocate from TVA to Southern's territory to save more than 25 percent on its energy costs.In the past, TVA had more competitive rates, but we've seen a substantial ebb up over the past eight or nine years," Chapman said. "Bill Johnson has done a great job, but we'd like to see more.""  http://www.timesfreepress.com/news/2014/aug/22/tva-cuts-staff-spending-but-boost-rates-15/

                                             TVA FINANCES

From the Chattanooga Times Free Press (link above)

 By the numbers - TVA 2015 Budget

* $10.7 billion - Budget for fiscal 2015, down from the $11.2 billion budget in the current fiscal year when cold winter pushed up sales

* $199 million - Increase from 2 percent wholesale rate increase (1.5 percent at the retail level)
* $3.5 billion - Capital budget, the highest in TVA history
* $1.02 billion - Increase in TVA debt
* $500 million - Amount of annual operating expenses cut from TVA's budget compared with three years ago
*$594 million - Projected net income
Source: Tennessee Valley Authority

Outstanding - the $634 million excess in the cash flow was utilized to pay down the debt.

TVA PENSION WOES

TVA pension plan is $4 billion  short:  http://www.timesfreepress.com/news/2014/jun/28/tva-ends-traditional-pension-for-new-hires/

ENERGY ASSET BREAKDOWN

TVA "nuclear dog" is the cause of TVA's debt. TVA plans for additional nuclear expansion by borrowing $1 billion in power bond sales.

TVA BOARD MEETING August 21, 2014

Power Point slides link: Presentation

VIDEO OF CITIZEN PRESENTATIONS AND BOARD MEETING

On-demand video

BREDL/BEST/MATRR Member Sandy Kurtz Presentation

TVA Board Meeting - Listening Session - Environmental Groups' Press Conference

Tennessee Valley Authority Board of Directors Meeting February 16, 2012 in Chattanooga, Tn. (photo by G. Morgan)

TVA Agenda shown above. On demand video link to the Board Meeting: On-demand video (Windows Media) 

TVA Board Chairman Bill Sansom (above) and TVA CEO/President Tom Kilgore (below) (photos by G. Morgan).

TVA slide presentations link: TVA Presentations 

TVA Chief Financial Officer John M. Thomas, III (above) presents the Financial Report (below) (photos by G. Morgan).

"The financial report shows TVA revenues so far this year are down because of milder weather, and a mild second quarter also is expected."

"Milder temperatures and lower prices for purchased power meant TVA used less generation from coal in the first quarter. Coal accounted for 31 percent of generation, with nuclear at 32 percent. Natural gas, hydro, purchased power, renewables and energy efficiency were the balance. TVA announced earlier this month it is idling four coal units at Johnsonville Fossil Plant ahead of schedule."

"Mike Skaggs, TVA senior vice president for Nuclear Construction (pictured above, G. Morgan photo), said two new senior level managers hired at Watts Bar 2 and TVA’s Bellefonte Nuclear Plant Unit 1 “will increase experience levels and improve the span of control. These actions create a more direct line-of-sight to top management.”"

"Skaggs also provided the board with an update on Watts Bar 2, stating that when the review is completed, the result will be a high-confidence cost estimate and milestone schedule."

Watts Bar Issues (analysis = reason for failures)

 "“This review is a rigorous process that will help provide efficiency, productivity and high-quality work as we move toward completion of Watts Bar,” Skaggs said. “We are also developing independent assessments to improve our level of confidence.”"  Full TVA Press Release concerning Board Meeting: http://www.tva.com/news/releases/janmar12/feb_16_board.html

LISTENING SESSION ISSUES

Prior to each board meeting the TVA provides an opportunity for citizens to express concerns. Several Environmental Groups' concerns were represented. 9 environmental groups presented a letter to the TVA Board and the CEO. This letter was covered in area press releases. Report in Scottsboro's Daily Sentinel: http://thedailysentinel.com/news/article_49a58c0e-59cb-11e1-95bf-001871e3ce6c.html

Other issues included: Browns Ferry GE Mark 1 defective reactor and cooling pool design; dangers of Plutonium MOX fuel proposed to be used in the defective Browns Ferry Reactors; biomass inceneration hazards.

County Leaders Voice Frustration With TVA: http://www.newschannel9.com/news/county-1009087-tva-recreation.html


Previous blog listings on the coal ash spills listing dangers, deceit, TVA's negligence etc: http://arklite.blogspot.com/search/label/TVA%20Coal%20Ash%20Spill


Request for the TVA to fulfill its responsibilities under the Federal Sunshine Act.

PRESS CONFERENCE -After the TVA Board Meeting we had a joint Environmental Group Press Conference in front of TVA in Chattanooga, Tn. on Market Street.  Representing, 15,000 members of the endorsing organizations: Tennessee Environmental Council, the Tennessee and Cumberland (Kentucky) Chapters of the Sierra Club, Tennessee Clean Water Network, Tennessee Alliance for Progress, Appalachian Voices, BEST/MATRR, Urban Century Institute, Solar Valley Coalition and the many Valley citizens who wish to see TVA generate more renewable energy.

 Sierra Club Attorney Ms. Mary Mastin (above photo by G. Morgan) delivers group introduction and outline of our request to the TVA Board. "We are concerned about TVA‟s recent changes in its renewable energy incentive programs and with TVA‟s continued failure to fully recognize renewable energy, and particularly solar power, as a viable and substantial part of its energy portfolio. We believe that if TVA committed to developing and achieving greater levels of renewable energy and efficiency, no other new sources of energy generation would be necessary and TVA could further reduce its reliance on dirty and inefficient coal plants," said Ms. Mastin.

Dr. John McFadden, (above photo by G. Morgan)Tennessee Environmental Council Director discusses the advantages of Solar Power and bringing manufactoring jobs to the Tennessee River Valley. Dr McFadden Commented: "The new energy economy is the single best economic engine we have to create jobs and drive ourselves out of the current recession. Solar is a key component of the new energy economy with over 6,000 solar jobs already in Tenn. and more on the way with Sharp, Hemlock and Wacker investing in solar manufacturing jobs."

Bellefonte Efficiency Sustainability Team/Mothers Against Tennessee River Radiation ( http://www.matrr.org ) spokesperson Garry Morgan. (above photo by J. McFadden for Garry Morgan) "“We ask the TVA to implement sustainable-renewable energy technology,” Garry Morgan a member of BEST said. “In our letter we list seven advantages of renewable energy over nuclear and coal power generation options.”

Seven Advantages:

• Unlike nuclear or fossil fuels, wind and solar have no fuel costs. Citizens invest in the purchase and installation of photovoltaic panels for their homes or businesses with their own money. Minimal incentives from TVA and/or the government increases TVA‟s power generation capacity without the huge cost and need for financing of new nuclear power plant construction.

• Savings in transmission lines - Solar power from our own rooftops supplements electricity from big power plants, which has to be transported across long distances with line losses and therefore is more expensive when it comes out of the socket. Traditional fossil fuel sources of energy also require spending massive amounts for grid repair and expansion.

• The record is clear that solar energy equipment production and installation have produced many new green jobs in Tennessee over the past few years.

• The sun and wind are infinite sustainable energy sources compared to the finite availability of coal or uranium for nuclear production.

• Storage of radioactive waste from nuclear generation for up to a million years, or for coal ash from coal-fired power plants, is very costly ($1 million each for dry casks to hold spent fuel) and poses huge environmental risks. In the event of a serious incident, as we have seen with Kingston - or Fukushima- the damage can escalate to catastrophic proportions.
• Renewables don't require us to use destructive extraction methods such as mountaintop removal coal mining. Surface mining in Central Appalachia has been linked with job loss, poverty, sickness, and early death in mountain communities.

• Both solar and wind are much cleaner energy sources in terms of both air emissions and water discharges. The lack of need for cooling water is also a huge advantage. As TVA must recognize, clean water is becoming a more and more important and rare resource.

“Energy efficiency and sustainable-renewable energy technology saves money for citizens and business while energy efficiency generates local jobs for citizens and serves to expand business by saving money and by creating new job growth,” Morgan said.

J.W. Randolph Director of Appalachian Voices (pictured above, photo by G. Morgan). “Mountaintop removal means fewer jobs, higher healthcare costs, damaged property values, and the destruction of Tennessee and Appalachia's proud mountains forever. TVA produces less than 2% of their electricity from mountaintop removal coal. On behalf of Appalachian citizens' health and economic well-being TVA should become the first major utility in the country to step away from the use of mountaintop removal coal."

Area Press coverage of TVA event and Press Conference links: Chattanooga Times Free Press-  http://timesfreepress.com/news/2012/feb/17/work-watts-bar-nuclear-plants-second-reactor-behin/  Scottsboro's The Daily Sentinel-  http://thedailysentinel.com/news/article_49a58c0e-59cb-11e1-95bf-001871e3ce6c.html  The Chattanoogan.com- http://www.chattanoogan.com/2012/2/16/219646/Environmental-Organizations-Seek-25.aspx

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

City of Scottsboro - Green Energy Programs- "Waste to Energy Project"

Today at Scottsboro's Martintown Landfill, Green Energy Project ribbon cutting, "Waste to Energy Project". (click on any image for an expanded view)

PHOTO- U.S. Congressman Mo Brooks, (R) Huntsville, Al., 5th Congressional District, attends ribbon cutting at the Scottsboro Landfill "Waste to Energy Project" today at Scottsboro's Martintown Landfill. Photo description: Congressman Brooks and the Mayor of Scottsboro hold scissors in the ribbon cutting ceremony. Participants (left to right): TVA- Mr. Robbie Jones, Energy Efficiency Engineer; North Alabama Electric Co-Op Manager-Mr. Bruce Purdy; Scottsboro Waste Management Director- Mr. Eddie Blizzard; Scottsboro Mayor- Melton Potter; Congressman Mo Brooks; Department of Energy- Ms. Judy Wilson, Oak Ridge Office; Alabama Department of Economic Development- Ms. Judy Hornsby, Energy Director; CDG Engineering consultants- Mr. Daniel Wells project engineer; ladies on the end holding the ribbon, are Chamber of Commerce Ambassadors for our community. The Daily Sentinel's article http://thedailysentinel.com/news/article_e37989a4-0a55-11e1-9256-001cc4c03286.html The Clarion's September article about the project http://www.theclarion.org/index.php?option=com_content&view=article&id=2441:landfill-produces-electricity&catid=42:clarion-rotation-stories&Itemid=142

The Eagle Power Systems 500 Kilowatt Generator may be seen in the background. The NOx, nitric oxide and nitrogen dioxide,  emission level for this generator system is less than 50ppm according to the engine manufacturer, Hanatech Co., Ltd of Inchon, S. Korea.

Project Brochure, click on image for an expanded view.

Mayor of Scottsboro receives check from TVA. Photo left to right: North Alabama Electric Co-Op Manager-Mr. Bruce Purdy; Scottsboro Waste Management Director- Mr. Eddie Blizzard;  Alabama Department of Economic Development- Ms. Judy Hornsby, Energy Director; Scottsboro Mayor- Melton Potter; TVA- Mr. Robbie Jones, Energy Efficiency Engineer; CDG Engineering consultants- Mr. Daniel Wells project engineer; Department of Energy- Ms. Judy Wilson, Oak Ridge Office.

More photos