|home | alphabetical index|
Tennessee Valley Authority
President Franklin D. Roosevelt signs the TVA Act
The Tennessee Valley Authority is a New Deal agency created to generate electric power and control floods in a seven state region around the Tennessee River Valley. President Franklin Delano Roosevelt signed the Tennesse Valley Authority Act creating the TVA on May 18, 1933. The agency is still extant.
The Tennessee Valley Authority is a government-owned agency that competes with private power companies. There is some controversy surrounding the TVA, as government-owned means of production is a socialist concept. Controversy has been a feature of the TVA since its inception.
During the 1920s and the Great Depression years the public of the USA became disenchanted with privately owned power and began to support the concept of Government ownership of utilities, particularly hydroelectric power facilities. The concept of Government owned generation facilities selling to publicly owned distribution utilities was a controversial political issue.
Many believed that the privately owned power companies did not employ fair operating practices and were subject to abuse by their owners, utility holding companies, at the expense of consumers. By forming utility holding companies, the private sector controlled 94% of generation by 1921, and was in fact, unregulated because the States could not regulate interstate holding companies. (This situation gave rise to Public Utility Holding Company Act of 1935 (PUHCA)).
In the years following the Great Depression, the US Congress took steps to alleviate the plight of the farmers and the unemployed and one of those steps was the development of Federally owned power. One of the major schemes was established on the Tennessee River under the Tennessee Valley Authority Act of 1933. Under this law the Federal Government provided electric power to States, counties, municipalities and nonprofit cooperatives. It was a part of the Federal initiatives to provide navigation, flood control, strategic materials for national defence, electric power, relief of unemployment and improvement of living conditions in rural areas. The TVA was more than just a power supplier.
In its power supply role it was given authority to enter into long term (20 years) contracts for the sale of power to government agencies and private entities. It can also construct electric power transmission lines to areas not otherwise suppliee and establish rules and regulations for electricity retailing and distribution. The TVA is both supplier and regulator.
None of this was easy. The TVA officials had to overcome a deep suspicion of government agencies and inculcate what were revolutionary practices into traditional farming communities. They did this by blending in and finding champions. A Tennessee farmer would not take advice from an official in a suit and tie. The TVA people also had to find the leaders in the communities and convince them that crop rotation and the judicious application of fertilizers were the ways to restore the soil's fertility. Once they had convinced the leaders the rest would follow.
Selling the benefits of electricity would have involved convincing the wives of the farmers that their lives would be easier and letting them work on their menfolk. This is another story and belongs more in the electricity marketing history.
|copyright © 2004 FactsAbout.com|