In early March, President Barack Obama proposed the end of federal ties with the Tennessee Valley Authority by transferring ownership to state or local stakeholders in an effort to relieve the federal deficit, estimated to reach $418 billion in 2015, as part of his 2015 fiscal year budget, which begins in October.
TVA's debt, totaling $26.9 billion at the end of 2012, is calculated as part of the federal deficit. Although removing federal responsibility of the company would relieve a portion of the national deficit, some politicians think cuts are needed elsewhere.
"The president's budget writers should spend more time figuring out how to reduce runaway entitlement spending instead of thinking up new ways to sell TVA," Sen. Lamar Alexander, R-Tenn., said in a statement.
According to the Office of Management and Budget, reduction or elimination of the federal government's stake in TVA would lessen risk to taxpayers and ensure the efficient use of government dollars.
According to the corporation's website, TVA is a not-for-profit company that is not aided by taxpayer dollars, instead relying on electricity sales and bond financing.
"TVA hasn't received federal funding in decades – either to make and distribute electricity or to manage resources," said Duncan Mansfield, public relation aide for TVA.
Serving approximately 9 million residents across an 80,000 square mile area of the Southeast, TVA has provided electric, land management and flood control services to residents in Tennessee and areas of Georgia, Alabama, Mississippi, Kentucky, Virginia and North Carolina since its creation in 1933.
The TVA production system includes three nuclear power plants and 19 coal- or gas-fired power plants. The hydroelectric system consists of 49 reservoirs, 29 conventional hydroelectric dams and one pumped storage facility.
Unions with thousands of members employed by TVA are worried that a move from government ownership could threaten jobs. In Mansfield's opinion, the job market's reaction to privatization is unclear.
In 2014's fiscal year budget, the same initiative to privatize TVA's approximately $45 billion in assets – at the end of 2013 – was put forward, sparking a UT Baker Center fellow to write a policy brief on the proposed piece of legislation.
"If the federal government decides to keep TVA but sell some of its assets, who should get the proceeds of these sales: TVA or the federal government?" questioned Mary English, Baker Center fellow for energy and environmental policy, in her policy brief.
In her opinion, this is one of many issues that must be considered before divesting TVA, in part or as a whole.
The budget request, released by the president on March 4, is the first step toward passing a federal budget. The measures proposed by the White House will be examined and deliberated by Congress before the final budget is passed in October.
To read the president's proposals regarding TVA, view page 41 of the published budget here.