Obama Tries to Privatize TVA
According to a recent article by Gar Alperowitz, Obama has inserted a proposal to sell the Tennessee Valley Authority (TVA) in his 2014 budget. The TVA was established by the Roosevelt administration during the Depression. The largest public power provider in the US, it employs more than 12,500 people and provides educational, training and other services (such as navigation and land management, flood control, and economic development) in the Tennessee River basin. This region encompasses seven states: Tennessee, Kentucky, Virginia, South Caroline, Georgia, Alabama and Mississippi.
Alperowitz finds it ironic that the most vehement opposition comes from free market Republicans:
- Sen Lamar Alexander (R Tennessee) – fears higher energy costs for his constituents, “one more bad idea in a budget full of bad ideas.”
- Rep John L. Duncan, Jr. (R-Tennessee) – “something that has been proposed in the past and been determined to be a very bad idea.”
- Sen Richard Shelby (R-Alabama – will “carefully study any proposals to restructure TVA” in order to make sure that it won’t result in a price hike.
- Sen Bob Corker (R-Tenn) – “I doubt this idea gains much traction.”
Weird isn’t? Republicans are supposed to take the line that Big Government is Socialism and Bad. When they advocate privatization of schools, prisons, Medicare, Medicaid and Social Security, they tell us that the free market reduces costs by introducing competition. There appears to be a big discrepancy between theory and reality. The experience with utilities, at least, is that privatization increases the costs to the consumer – in addition to operating costs, privately run utilities are obliged to cover profits, advertising and CEO salaries.
Republican lawmakers in states served by the TVA are well aware that it’s an extremely popular federal agency, mainly because it sells power at much lower prices than private power companies. An analysis by the U.S. Energy Information Administration found that consumers in Alabama and Tennessee pay considerably less for electricity than the national average.
Alperovitz concludes his article by pointing out that “socialist” municipally and regionally owned power companies – more than 2,000 in all – can be found in every single state in the US. Like the TVA, they are all immensely popular, even in conservative rural areas. Public ownership of vital transportation facilities (such as roads, ports and airports) is also extremely common. Moreover approximately a third of the nation’s total land surface (and the minerals beneath and forests above) is owned and managed by the government.
So why, Alperowitz asks, is a Democratic president proposing to increase power rates for millions of customers by privatizing the TVA? All I can say is that his answer is much kinder than mine would be. Read more here.
photo credit: Pete Zarria via photopin cc