Tennessee nuclear projects: high-voltage debate; Even in Reagan era, TVA chief is backed on expansion plan

Blasted by critics as "socialistic" when Franklin D. Roosevelt and Congress established it in 1933, the Tennessee Valley Authority has been sailing fairly smoothly during the Reagan administration's first six months.

As the nation's largest electrical utility and scheduled to become the nation's largest producer of nuclear power, the TVA might seem an obvious target for an administration determined to minimize the federal role, especially where private industry might operate effectively.

But not so. Thanks in large part to the support of TVA by Sen. Howard H. Baker Jr. (R) of Tennessee -- the Senate majority leader and a man of whom President Reagan constantly relies to support his programs -- the TVA in the past few months has:

* Survived budget cut reviews, in the sense of being asked to cut back no more than most federal agencies.

* Survived brief congressional oversight hearings with no recommendations for major changes other than going a little slower on nuclear power plant construction to be certain that the last four of 17 planned reactors are needed.

* Acquired a new chairman who strongly backs completion of the scheduled nuclear plants, though favoring a cutback in some of the other TVA activities such as encouraging use of solar power.

The appointment came as thousands of TVA electric customers were rebeling openly over spiraling electric rates, due mostly to the high cost of financing the nuclear plants. Many consumers were angry over the perceived arrogance of the former TVA chairman, S. David Freeman, a Carter appointee, and his desire to turn the TVA into a national energy "showcase" that featured energy conservation and solar projects.

"I'm not antisolar," the new TVA chairman, Charles H. (Chili) Dean Jr. said in an interview in his corner, 12th- floor office. But he says he believes the "pay back" on many solar projects takes too long, and TVA should pay more attention to its more traditional role of helping develop the Tennesee Valley. He also notes he trimmed 30 percent of the jobs -- mostly by not filling vacancies -- while general manager of the Knoxville Utilities Board, a TVA distributor.

That Senator Baker carries the kind of clout needed to defend an agency like the TVA is seen in two recent actions:

1. The appointment of Mr. Dean as chairman of the TVA's three-man board of directors. Dean, a close friend of Baker, got a call from a Baker staffer saying, Dean recalls: "You can have it [the job] if you want it."

Never mind that a US senator can only recommend an appointee, and that the President nominates someone who then is subject to Senate confirmation. The nomination to fill the opening created by the end of a director's term was made quickly. And it was quickly confirmed by the Senate after only a few questions at a sparsely attended confirmation hearing.

2. The release by Senator Baker's office of a draft report based on the Senate TVA oversight committee's hearings before the committee had voted on the recommendations.

Twice in the past the US General Accounting Office has found fault with TVA projections on future electrical demands: TVA reduced its demand forecasts. A new forecast is being prepared now with recommendations on the four plants.

Freeman-appointed planners insist the option to not build the plants -- ever -- is still alive. Dean says it is only a question of when, not whether, to build them. "Sited plants [ones for which a site has been approved by the Nuclear Regulatory Commission] should be built," he said.

About one-third of current electric bills in the TVA area pay for the interest on borrowed money, primarily for nuclear plants, a Reagan transition report says.The same report notes low morale among TVA employes and unrest among consumers. Monthly electric bills are running about $20 higher than a year ago, the TVA reports.

"It looks like we can keep our rate of rate increases very close to inflation ," says Dean. One reason: more nuclear plants are beginning to operate, turning them from a financial drain to a plus on TVA books.

Dean, who predicts electrical power shortages in the 1990s, said he would like to see TVA's last four planned nuclear plants built by another federal agency and have it available for meeting fuel shortages in New England or other areas. But Senator Baker has told him there is l ittle chance of getting federal funding for such an idea.

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