Washington, 12 April (Argus) — The Obama administration's 2014 budget suggests selling all or part of the Tennessee Valley Authority (TVA) because of the utility's large capital expenditures.
“In order to meet its future capacity needs, fulfill its environmental responsibilities, and modernize its aging generation system, TVA's current capital investment plan includes more than $25bn of expenditures over the next 10 years,” President Barack Obama's 2014 budget proposal unveiled this week says. “However, TVA's anticipated capital needs are likely to quickly exceed the agency's $30bn statutory cap on indebtedness.”
The administration's solution is to “undertake a strategic review of options for addressing TVA's financial situation, including the possible divestiture of TVA, in part or as a whole.”
“We will be working with the Office of Management and Budget to provide the information they request regarding the strategic review,” TVA president and chief executive Bill Johnson said.
The federal utility receives no taxpayer money and makes no profits, but its debt, which stood at $24.3bn as of 31 March, counts toward the federal deficit.
“TVA is financially healthy but within 10 years the limit could be reached,” the TVA told Argus. “We cannot exceed that $30bn limit unless Congress passes specific legislation.”
TVA was set up by Congress in 1933 under Democratic President Franklin D. Roosevelt and currently provides electricity to 9mn people in parts of seven southeastern states.
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