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Tennessee Valley Authority board member and Chairman Bill Sansom, left, with board member Don DePriest.
AP file photo by Wade Payne
Tennessee Valley Authority board member and Chairman Bill Sansom, left, with board member Don DePriest.

Year in review: New leadership at TVA

By Duncan Mansfield
Associated Press Writer

KNOXVILLE — Bill Sansom, a hard-nosed businessman with no previous experience with electric utilities, is proving a quick study on the Tennessee Valley Authority.

“I never thought I would be sitting here, so no I didn’t have an agenda coming in,” the chairman of the country’s largest public utility told The Associated Press in a recent interview at TVA headquarters.

“It didn’t take long, though, to figure out what you needed to do.”

The expanded, part-time, nine-member board of directors that arrived in March to give Franklin D. Roosevelt’s 73-year-old New Deal agency a
corporate-like management makeover, thanks to outgoing Senate Majority Leader Bill Frist of Tennessee, jumped into the fray.

The politically connected group of businessmen, bankers, a church leader and a public relations executive made an offer to let six Kentucky power distributors intent on bolting the TVA system in search of cheaper rates remain at no extra cost.

Significantly, the deal was suggested and supported by representatives of TVA’s 152 other distributors in a show of unity.

The Bowling Green cooperative, the largest of the six, accepted and the others are pending.

Land policy

The board also adopted a new land policy banning the sale of TVA’s remaining 293,000 acres of protected shoreline to residential developers, quieting an anxious public stirred by TVA land swaps that supported two high-end developments in southeastern Tennessee.

Those actions — along with the board’s approval of TVA’s first electric rate cut since 1988 in July after two rate jumps in the past fiscal year — suggest a new cooperation with distributors and the public.

Sansom said other big moves are in store for 2007.

? An engineering study under way will likely support the completion of a second reactor at the Watts Bar Nuclear Plant in Tennessee. TVA set peak power demand records both this summer and winter, and Sansom said the agency clearly needs more capacity.

Watts Bar Unit 2 would give TVA a seventh reactor, assuming Browns Ferry Unit 1 in Alabama restarts on schedule next spring.

? Talks are continuing that, for the first time, could give distributors an ownership stake in a TVA power plant. In 2006, TVA also opened the door to sharing a plant with another power provider, Atlanta-based Southern Co.

? Directors are crafting a new strategic plan for the 12,000-employee, self-financing agency with $9 billion in annual revenues.

The plan will consider power demand, pricing, financing and generation needs for the decade ahead.

Sansom is less concerned about cutting TVA’s $25 billion debt — a priority of past boards and Washington budget writers — than being able to deliver low-cost, reliable, less-polluting electricity to TVA’s 8.7 million consumers in Tennessee, Kentucky, Alabama, Mississippi, Georgia, North Carolina and Virginia.

“Yes, I wish it was $10 billion less debt. It would be a whole lot easier,” he said. “(But) if the lights are out and you don’t have any debts, that’s not pretty.”

Sansom’s mantra for the agency: “rates, rates, rates.”

Sansom’s full-time job is running a major Knoxville-based wholesale distribution company. But he has watched the once-bloated and still heavily indebted TVA from afar during the years. He’s heard the critics.

More to the story

As someone who has worked in government before — he was Tennessee transportation commissioner and later finance commissioner under then-Gov. Lamar Alexander in the 1980s — he also knows there’s more to the story.

“People don’t realize. We take our power (electricity) for granted. We expect it. And we assume it is going to work,” Sansom said.

“What I have learned is that it is not as easy as it looks from the outside. It is pretty complicated. The decisions are pretty complicated. The money is big.”

Sansom, the first TVA chairman chosen by his peers on the TVA board rather than by appointment by the president of the United States, said that so far he is “pretty impressed with TVA. There are some great people, dedicated people, very talented people.”

“I just hope we can give it some leadership to give it some consistency,” he said.

Tom Kilgore, TVA president and recently named the agency’s first chief executive officer responsible for daily management, is eager to make that happen.

“Since the (new) board has gotten here we have gotten off the dime on several things,” Kilgore said. “We are not finished, but we are moving forward.”

TVA 2006 highlights

Tennessee Valley Authority highlights in 2006:

Management: Restructuring brings expanded, part-time, nine-member Board of Directors, including first black member and first Alabama resident, and first chief executive officer responsible for daily management.

Resources: Land use plan bars sale of TVA’s remaining 293,000 acres of protected shoreline for private residential development.

Rates: Agency begins 2006 with its first midyear electric rate increase in at least 25 years and ends the year adopting a fiscal 2007 budget containing first electric rate cut since 1988.

Power: Sets all-time peak power demand record of 32,008 megawatts on July 18. Set new winter peak record of 30,227 on Dec. 8.

Revenues: Revenues reach nearly $9.2 billion, up 18 percent from 2005.

Future: Awards $20 million engineering contract to evaluate completing a second reactor at Watts Bar Nuclear Plant near Spring City, Tenn. It would be TVA’s seventh reactor.

The Associated Press

Copyright 2005 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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