Monday, January 5, 2009

The TVA Board That Operates Like A Business

Not to put too partisan of a spin on things here, but when the inspector general issues a report questioning TVA’s regulatory compliance and management practices, and one remembers that the TVA Board of Directors “sets policy and strategy for TVA,” one should also remember the recent changes to the TVA Board, which make it for all intents and purposes a Republican operation.

The TVA board used to consist of three members, nominated by the president and confirmed by the U.S. Senate. In November 2004 the board was expanded to nine members, a scheme concocted by Tennessee Senators Bill Frist and Lamar Alexander to “modernize the management structure” and “lead to more accountability at TVA,” and which was implemented without any congressional hearings of any type.

In 2008 Frist called the new board a resounding success:
Former Senate Majority Leader Bill Frist, the Tennessee Republican who wrote the changes in TVA’s governance, said the new system has been “very positive” and helped the utility run like most businesses with a policy-making board overseeing management under a chief executive officer.
“To have an identity operating under a 1933 structure in 2008 simply would have been unsatisfactory,” Dr. Frist said. “Over time, I think the board should be more nonpartisan and we can get away from using that position as political patronage but having people who are extremely well qualified. The intent was to get politics out of the system, and I think that has been achieved.”

"Over time” being GOP-speak for “the time when Democrats are in the White House.” Right now, the board is comprised almost entirely of Republicans--the only non-Republican being Bishop William H. Graves of Memphis, a senior bishop of the Christian Methodist Episcopal (CME) Church and a registered Democrat who happened to co-chair Shelby County’s Bush-Cheney 2004 re-election campaign. Good Democrat there, rightey-o.

This blatant partisan power grab prompted current Senate Majority Leader Harry Reid to hold up a couple of board confirmatons in the interest of getting more political diversity on the panel. This in turn resulted in much whining and stomping of feet from Tennessee Republican Senators Corker and Alexander. Reid, who’s got the spine of an overcooked linguine, of course caved, resulting in much happy dancing in the offices of Corker and Alexander.

And yes, that would be the same Alexander who sits on the Senate Environment and Public Works Committee, which will conduct hearings into the TVA coal ash spill next week.

Oh my, things are getting curiouser and curiouser. Could we have a conflict of some type, Senator Alexander? You are conducting hearings into an accident at a TVA plant when you basically are one of the architects of the current TVA board, and battled the Senate Majority Leader over the confirmation of some board members? I wonder if his questions will be of the “may I pray for you” variety.

As for the rest of the board , in the grand Republican tradition of “operating government like a business” it is made up of Republican donors and patrons:

Most of those appointed to the TVA board over the past two years by President Bush have been Republican activists and financial supporters of GOP causes. Robert “Mike” Duncan from Kentucky is chairman of the Republican National Committee, and Susan Richardson Williams, who is awaiting confirmation for another term, was previously chairwoman of the Tennessee Republican Party. TVA Chairman Bill Sansom, a Knoxville businessman, served in the Cabinet of U.S. Sen. Lamar Alexander, R-Tenn., when Sen. Alexander was Tennessee’s governor.
Collectively, the eight people appointed or nominated to the TVA board by the Bush White House, and their spouses, gave $592,405 to Republican candidates and organizations since 1994, according to a Chattanooga Times Free Press compilation of campaign records. Four of the board appointees also contributed lesser amounts to Democratic candidates.

The GOP tilt to the new board is one of the unintended consequences of adopting the TVA board change without congressional hearings in 2004, Mr. Crowell said.
“All the board members will now be of the same political party, which I don’t think reflects the diversity of opinion in the Tennessee Valley,” he said. “There also appears to be a lot of importance put in these appointments to where people live, which encourages them to represent those areas and not the broader interests of TVA.”

Getting back to where our story started, it’s interesting to me that Frist and Alexander expanded the TVA board to make it “operate more like a business,” supported President Bush when he filled it with cronies and party patrons, and now we have an inspector general’s report showing this:

According to an IG report dated March 4, 2008, on leaks in the flue gas ductwork at the Widows Creek Fossil Plant in Alabama, TVA put "business operations" ahead of "ethics and compliance issues" at the steam plant.

According to the report, while the duct work problems were addressed and management made efforts to repair the leaks, "the emphasis was on efforts to contain the leaks while keeping the plant operating until the next major outage."

The report says little consideration was given by TVA officials of reporting the "continuous nature and extent of the leaks" to Alabama environmental authorities.

"Rather, the leaks were addressed as a safety or maintenance issue and not a permit issue. We also found no evidence that ethics and compliance issues were considered, presumably because of the emphasis on business operations," the report concludes.


Meanwhile, a February 2008 TVA inspection report of the Kingston steam plant showed a TVA fly ash retention pond has had leaks, seepage and water-logged walls for years before the Dec. 22 failure. The report shows TVA knew about leaks at the site for more than two decades.

Well, that sounds about right. I was shocked when CNN reported that TVA’s priority after the Kingston coal ash accident was “clearing the railroad tracks .. because that's how they get the coal into the plant.”

Remarked Stephen Smith of the Southern Alliance for Clean Energy:

"TVA has the heavy-duty emphasis on cost-cutting, on keeping the plants running without any downtime," he said. "(TVA's emphasis) is on nothing to slow the production of electricity. I don't have the exact set of what all the metrics are that all these executives get bonus pay for, but I'm reasonably confident it's associated with cost-cutting and uptime, not downtime (of plants). Bringing plants down may be frowned on because it may be in conflict with how an employee gets compensation.

And this:

How the Tennessee Valley Authority decided to stabilize Kingston's ash landfill would have implications for its many other elevated waste dumps, an important tool in the agency's strategy to maximize its storage on-site and avoid more costly options.

A Tennessean review of state records and some TVA documents shows that top officials rejected solutions that were deemed "global fixes" because they were simply too costly. The most expensive option was listed at $25 million.

In the end, TVA chose to install a series of trenches and other drainage mechanisms to try to relieve the water pressure and give the walls more stability.

On Dec. 22, the walls gave way.
You’d think the oh-so-business-like TVA Board, were it not filled with cronies and big GOP donors, might put the utility's emphasis on safety, ethics, and accountability, not profits. Because this clean-up is going to cost a lot more than $25 million.

But that’s not “business-like,” I guess.