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The Tennessee Valley Authority has made the final scheduled payment on Congress’ original $1 billion investment in building TVA’s power program decades ago.
“This may be as close to a mortgage-burning milestone as you can have in the federal government,” TVA president and CEO Bill Johnson said. “TVA has now repaid the U.S. Treasury for the cost of its creation while continuing to invest in improving the quality of life for the people of the Tennessee Valley every day.
“The federal government’s original investment in TVA amounted to “Ëœventure capital’ in what came to be known as “Ëœthe Great Experiment’ in the Tennessee Valley,” Johnson said. “It showed that the unified development of a region’s resources could help bring the region out of the Depression. Today, more than 80 years later, we continue to serve the people of the region through our work in energy, environmental stewardship and economic development.”
The payment terms were part of an amendment to the TVA Act in 1959 that ended federal appropriations to TVA’s power program, while giving TVA authority to secure its own financing for capital expansion under a statutory debt limit.
“We encounter folks who still believe we receive taxpayer funding,” Johnson said. “The reality is that TVA has been sending money back to Washington for more than five decades.”
TVA has made payments of $10 million to $20 million a year — plus interest — to the U.S. Treasury since 1961. The final $10 million payment came in the closing days of fiscal year 2014, which ended Sept. 30. Payments totaled more than $3.6 billion.
“It is worth noting that despite the many changes that have occurred at TVA over the years, we have never wavered in meeting this financial commitment to, effectively, our one shareholder — the federal government,” CFO John Thomas said.
Given the flexibility to raise low-cost financing through TVA bonds and other forms of debt, TVA has expanded the capacity of the TVA generating system from about 11,000 MW in 1959 to more than 34,000 MW today and greatly reduced its environmental impact.
TVA continues to make smaller, annual payments to the U.S. Treasury as return on the government’s permanent equity investment of $258 million in the power program.
“TVA is charged with making life better in the Tennessee Valley and that’s what we’re doing,” Johnson said. “Our mission is still as viable and unique today as it was in 1933 — providing low-cost, reliable electricity, environmental stewardship and economic development to the Tennessee Valley.”
TVA has not received any appropriations from Congress for any activities since 1999. Since that time, TVA has funded stewardship activities, which include oversight of public lands, reservoirs and cultural resources, primarily with power revenues.