New Study Finds Government Should Privatize TVA, PMAs

Fortnightly Magazine - May 15 1996
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Recharge the Economy with Renewable Energy Tax Credits

The Reason Foundation, a public policy research organization, has issued a report, Federal Power: The Case For Privatizing Electricity, recommending privatization of the Tennessee Valley Authority (TVA) and the five power marketing administrations (PMAs). The report finds that those entities, along with federally subsidized cooperatives and municipal utilities, are poorly managed, inefficient, and at considerable risk in the emerging competitive environment (em even though the federal government is the nation's largest producer of electric power.

The United States lags behind many other countries in electric power privatization, the report says. In 1995, electricity made up the largest category of privatization worldwide, with two dozen countries launching ambitious privatization programs, usually 1) to raise capital to reduce national debts, and 2) to improve the efficiency and performance of the electric power industries. Although the Clinton Administration's fiscal 1996 budget called for privatizing the four smallest PMAs, that initiative stalled in the 104th Congress; congressional calls for privatization of TVA and the Bonneville Power Administration also were rebuffed.

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