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Obama's moment to overhaul the TVA

The utility, a New Deal icon, is a major polluter.

By William Chandler / February 25, 2009


How can President Obama, a man charged with saving the banks, the environment, and reversing the biggest spike in unemployment since 1974 – all at the same time – avoid being labeled the greatest socialist in American history?

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By completely revamping or selling the Tennessee Valley Authority.

TVA is the nation's largest utility. Federally owned, it is an icon of the New Deal, and yet it has the worst environmental record of any utility in the nation. Three days before Christmas, a sludge dam at its Kingston coal-fired steam plant failed, inundating houses and hundreds of acres with 5 billion gallons of watery ash, and filling the Emory River with coal waste and heavy metals.

Congress created the TVA at the nadir of the Great Depression and the start of the New Deal, 75 years ago. President Franklin Roosevelt's idea – which sounds very familiar today – was to stimulate the economy, create jobs, and conserve natural resources by investing in new energy systems.

TVA didn't live up to its supposed goals. Both during and after the Great Depression, manufacturing jobs were created faster just outside the TVA area than within it.

Non-TVA counties in northern Georgia and Alabama and western North Carolina in 1933 were as poor as or poorer than TVA counties, but by 1953 they were generally better off. Even rural electrification and the use of household appliances grew faster in the non-TVA south.

To be sure, TVA created jobs for some 13,000 workers, but for at least four decades, Depression-era investments in TVA dams, waterways, and recreation areas have failed to pay for themselves by any economic measure.

In the 1950s and '60s, under plans enacted by former chairman David Lilienthal, populist Democrat the agency made its mission to provide electric power, at any environmental or social cost. Within two decades, TVA's coal-fired plants made it the nation's largest violator of the Clean Air Act. A coalition of environmentalists sued the agency in the late 1970s and won, forcing it finally to install air pollution controls. But even today, TVA ranks among the nation's largest sources of greenhouse-gas emissions.