Plan for TVA

The three commissioners who run the Tennessee Valley Authority face a tough problem. The seven-state TVA region is growing so fast that it needs $150 million a year in new power facilities. But only half of that expansion can be financed by TVA's revenues. And Congress, which has refused for two years to appropriate the difference, seems unlikely to change its mind even though it is now a Democratic Congress. Last week the commissioners submitted to Congress a plan that would 1) get them the additional money needed for expansion, and 2) put TVA on the same operating basis as private utilities.

Under the plan, TVA would issue its own bonds. They would be paid off out of TVA's revenues and would not be guaranteed by the Treasury, hence "would not add to the national debt." TVA also wants authority to work out deals with state, municipal and other bodies, whereby the local groups would build new plants and either sell TVA the power or lease it the plants. To get TVA functioning under the same conditions as private utilities, the commissioners want to raise their rates to cover all expenses. Any surplus would be used to pay off the Treasury's $1 billion investment in TVA and pay interest on the unpaid balance. (TVA has paid back $151 million of the investment, but pays no interest on the remainder.)

First reactions to the plan were good. It looked as if the Administration would endorse it, and even pro-TVA Senators were giving their grudging support simply because it would provide the agency with funds for expansion. Said Tennessee's Senator Albert Gore, top congressional defender of TVA: "In the end our choice may . . . be between something not so good and no expansion." Said the pro-TVA Memphis Press-Scimitar: "TVA has come up with what we believe are good suggestions for financing its own expansion . . . We hope that. . . Congress will permit TVA to sit on its own financial bottom."

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