Director: TVA debt to be reduced with completion of reactor
By Marty Russell
AMORY – Johnny Hayes, one of three members of the Tennessee Valley Authority’s board of directors, said he expects the agency to set a cap on its current $27 billion debt by October of 1997 and to begin to pay off that debt.
“The decision to stop building nuclear plants puts us on track to end TVA’s debt,” Hayes told the Amory Rotary Club Thursday.
“We will not have any more debt when Watts Bar goes on line. It will become a revenue-maker and since we’ll no longer be in the nuclear construction business, our capital expenditure will be half what it was in 1993.”
TVA, which provides electrical power, economic development assistance and resource management to a seven-state region including north Mississippi, has incurred the $27 billion debt largely because of spending on nuclear power plants.
In the mid-’80s, the federal agency embarked on an ambitious plan to build 17 nuclear reactors but decided last year to halt its nuclear construction program as part of its Energy Vision 2020 plan for providing power over the next 25 years. Currently, TVA operates three reactors at two plants.
Federal law prevents the agency’s debt from going above $30 billion, but officials said they intend to cap the debt below that figure. Hayes said the debt is not out of line compared to private corporations, which have more financing options than the federal agency that is limited to issuing bonds to raise money.
But the huge debt was cited by the 4-County Electric Power Association, which serves Lowndes and other counties in north central Mississippi, as the reason for wanting to terminate its contract with TVA.
“We’re going to do everything we can to keep 4-County,” Hayes said. “We feel we’ll be able to keep them as customers.”
He said he believes the utility can generate enough revenue to pay off its debt once the spending stops despite being in the ninth year of a self-imposed 10-year rate freeze.
“We’re aggressively looking for ways to cut costs,” Hayes said.
In November, however, the agency was handed a $29 million cut in its nonpower budget, which dropped that budget to $109 million for this year and resulted in the elimination of 225 positions. The nonpower budget, which funds the agency’s economic development and resource management activities, is the only part of TVA’s operations that is taxpayer supported.
Hayes expressed continued support for the nonpower programs Thursday, although there has been talk in Congress about eliminating those federal funds.
“TVA’s economic development work is not a luxury, it’s a necessity,” he said. “TVA’s future depends on the economic development and prosperity of the region.”