Responding to a call by Tennessee Valley Authority's Chairman Craven Crowell to eliminate the $106-million, annual appropriation provided to it, Representatives Bob Franks (R-NJ.) and Marty Meehan (D-Mass.) on Feb. 5 introduced a bill to end that federal payment.

The congressmen, who also co-chair of the Northeast-Midwest Congressional Coalition, distributed a study outlining the $1.2 billion in annual indirect taxpayer subsidies provided to TVA.

"We urge you to conduct an investigation into the costly tax breaks enjoyed by the investor-owned utilities at the expense of the American people," Crowell wrote. Crowell disagreed with the congressman's statements on TVA's "indirect subsidies" and said that TVA's power system had been self-financing since 1959 and receives no financial support from the federal government.

The legislation, the "TVA First-Step Reform Act," while codifying Crowell's deficit-reducing proposal, also calls for further efforts to eliminate other subsidies. It would direct the Office of Management and Budget to provide the information needed by law-makers to make more comprehensive reforms to save taxpayer money while bringing the economic benefits of competition to Tennessee Valley.

"Members of Congress need to know the historical and current size of taxpayer subsidies provided to TVA," said Rep. Mechan. "We also need to understand how TVA could operate fairly in a competitive electricity market. The TVA [bill] will provide that valuable information."

Crowell urged the two congressmen to investigate more than $100 billion in subsidies that Crowell claims investor-owned utilities receive through deferred taxes. Crowell said data compile by the Edison Electric Institute showed that the utilities receive more than $103 billion in tax breaks.

Lori A. Burkhart is an associate legal editor of PUBLIC UTILITIES FORTNIGHTLY.

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