Posted on November 20, 2004
WASHINGTON, D.C. - U.S. Senators Bill Frist (R-TN) and Lamar Alexander (R-TN) today announced that legislation to expand and restructure the Tennessee Valley Authority (TVA) Board of Directors has been included in the Fiscal Year 2005 Omnibus Appropriations Conference Report, which is expected to pass the House and Senate on Saturday. The legislation was originally drafted by Frist and introduced this Congress with Alexander's support. It has been endorsed by the Tennessee Valley Public Power Association (TVPPA), the organization representing TVA's power distributors. "For more than seven decades, TVA has played a vital role in the lives of all Tennesseans," Senator Frist said. "However, its Board structure has not kept pace with its development into one of the nation's largest electric utilities. It's time to modernize TVA's management structure to bring it in line with other corporations of similar size and scope. These reforms will help to increase accountability and oversight, which will be good for both TVA and for its ratepayers." "This is the most important change to TVA's structure in the past 45 years," said Alexander, who serves as chairman of the TVA Congressional Caucus. "A $7 billion a year business needs a chief executive officer. This was a major subject of our TVA caucus hearing in Knoxville last year. A new management structure should improve executive decision making and help to create a stronger TVA." The Frist/Alexander legislation will create a nine-member, part-time TVA Board made up of individuals with management expertise. Board members will continue to be nominated by the President and confirmed by the Senate. At least seven of the nine Board members must be residents of the TVA service territory. Board members will serve five-year terms, instead of the current nine-year terms, and will receive an annual stipend of $45,000 ($50,000 for the Chairman) adjusted for the cost of living. The new Board will hire a Chief Executive Officer (CEO) to manage the day-to-day operations of the corporation. The CEO, who will not be a member of the Board, must have senior executive-level management experience, and should have expertise in the electric industry and strong financial skills. TVA does not currently have a CEO. The legislation will not alter the terms of the three current TVA Board members. However, on the later of the date on which the President has nominated and the Senate has confirmed enough new Board members to constitute a quorum, or May 18, 2005, the current Board members will revert from full-time status to part-time status, to conform with the new Board structure. At that time, the members of the Board will elect a Chairman of the Board, and the new Board will hire the CEO. Frist first introduced legislation to expand and modernize the TVA Board in 1997. Alexander chairs the TVA Caucus and the Senate Subcommittee on Energy.