In its FY 2014 budget proposed this week, the Obama administration indicated it is looking into the possibility of selling off all or part of the Tennessee Valley Authority, the nation’s largest publicly owned utility.
The president’s budget said the administration “intends to undertake a strategic review of options for addressing TVA’s financial situation, including the possible divesture of TVA, in part or as a whole.”
The historic utility, which serves a vast swath of the American southeast, including parts of Tennessee, Alabama, Georgia, Kentucky, Mississippi, North Carolina and Virginia, is a self-financing, government-owned corporation. Though it funds its own operations through electricity sales and bond financing, as a government-owned entity, it does have a $30 billion statutory cap on indebtedness. TVA’s anticipated capital needs to meet growing capacity, upgrading aging infrastructure, and fulfilling environmental responsibilities, the budget says, are likely to exceed that cap.
“Reducing or eliminating the Federal Government’s role in programs such as TVA, which have achieved their original objectives and no longer require Federal participation, can help put the Nation on a sustainable fiscal path,” the budget said.
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