LAST NOVEMBER, Energy Secretary Federico Peña asked the DOE

to study what to recommend about the Tennessee Valley Association in drafting proposed legislation on electric restructuring for the Clinton Administration. He referred the project to a committee of the Secretary of Energy Advisory Board, led by former South Carolina Congressman Butler Derrick.

The committee issued its report on March 31. The DOE had already released its legislative guidelines on March 25, six days earlier.

DOE said that any federal bill should apply the FERC's open-access transmission rules to the TVA (and munis, co-ops and the federal PMAs), and perhaps include special stranded cost rules to recognize the unique nature of federal investments and loans. The report itself was more outspoken, with committee members agreeing on some ideas but splitting on others:

TRANSMISSION. Mandate FERC jurisdiction, comparable to that for other transmitting utilities. (All agree.)

WHOLESALE RATES. Current law lets TVA raise rates unilaterally to its distribution customers (e.g., muni systems in Memphis, Nashville, Knoxville, etc.), subject to Congressional hearings. Members suggest two alternatives: (1) appellate court review (TVPPA), (2) FERC review (TVA Watch, NGC, IBEW). Others want status quo, saying third-party review would hurt bond rating and give TVA less freedom than investor-owned utilities.

LABOR RELATIONS. Current law puts TVA employees in "no man's land," lacking protection under the National Labor Relations Board or the Federal Labor Relations Authority. Teamsters accept current structure, but IBEW wants laws to guarantee collective bargaining, with rules similar to NLRB.

OVERALL MISSION. Most members (TVA, TVPPA, IBEW, Teamsters, TVERC, TVIA, AVI) say TVA should be able to sell surplus power on the wholesale market with no restrictions, while maintaining preferences to public power entities in the Tennessee Valley. Others, however (Enron, NGC, TVA Watch) would bar TVA from building any new generation, forcing it to take competitive bids for construction, or to turn to the purchased power market.

- Bruce W. Radford, editor

Source: "Report of the Tennessee Valley Electric System Advisory Committee," March 31, 1998, see, www.hr.doe.gov/seab/tva.html. Committee included representatives from TVA, NGC Corp., Enron Corp., International Brotherhood of Teamsters, International Brotherhood of Electrical Workers, Tenn. Valley Public Power Association, TVA Watch, Tenn. Valley Energy Reform Coalition, Tenn. Valley Industry Committee and Associated Valley Industries.

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