By DUNCAN MANSFIELD
The Associated Press
KNOXVILLE, Tenn. – The Tennessee Valley Authority, under new management by an expanded board of directors, outlined plans Wednesday to cut electric rates for the first time since 1988 while questioning the benefits of paying down a $25.5 billion debt accrued over decades.
The suggested rate reduction of 3.5 percent to 5 percent – amounting to $350 million to $500 million from a nearly $9 billion budget – could take effect Oct. 1 if approved next month as part of a fiscal 2007 budget.
The rate break could offset at least one of two TVA rate increases since last fall – a 9.95 percent hike that took effect April 1.
The eight-member part-time board, installed less than three months ago under a restructuring initiative pushed by Senate Majority Leader Bill Frist, R-Tenn., said it is time for a new strategic plan for the country’s largest public utility.
Since 1997, TVA has made a priority of trying to erase the billions of dollars in debt spent on what proved to be an overly ambitious nuclear power program in the 1970s.
But new TVA Chairman Bill Sansom said Wednesday that shouldn’t be the agency’s focus.
“We are not going to start out with the mission is debt reduction,” the Knoxville businessman said. “The mission is … reliable rates, rates, rates, rates.”