On December 12, 1994, Craven Crowell, chairman of the board of the Tennessee Valley Authority (TVA), issued two well-publicized announcements. First, TVA would not finish three of the nuclear units it has had under construction since the 1970s, unless it could find partners willing to share their construction costs (a prospect he subsequently characterized as "very slim,").1 Second, TVA planned to set an internal cap on its total debt at a level $2 to $3 billion below the $30-billion limit imposed by the Congress. Both pronouncements struck many TVA-watchers as the proverbial pledge to lock the barn door after the cow has made her escape.
TVA's enduring nuclear woes and enormous (relative to its competitors) debts are clearly serious. But more than that, both are symptoms of a more fundamental, long-standing structural disorder (em one that will remain unaffected by TVA's new plans and policies.
From its inception at the low point of the Great Depression, TVA financed its dams and power plants with general revenues appropriated by Congress. But in 1959 the TVA power system was made "self-financing." The agency took direct responsibility for its own borrowing, and arrangements were stipulated for TVA to repay the U.S. Treasury for the initial, cumulative, pre-1959 federal appropriation or investment. When this was done, Congress set a limit of $750 million on TVA's total indebtedness, and then proceeded to raise the limit periodically: to $1.25 billion in 1966, $5 billion in 1970, and $15 billion in 1975. In 1979, Congress raised TVA's debt limit to its current level of $30 billion.