[Senate Hearing 115-250]
[From the U.S. Government Publishing Office]
S. Hrg. 115-250
NOMINATION OF JOHN L. RYDER OF TENNESSEE
TO BE A MEMBER OF THE BOARD OF DIRECTORS
OF THE TENNESSEE VALLEY AUTHORITY
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON CLEAN AIR
AND NUCLEAR SAFETY
OF THE
COMMITTEE ON
ENVIRONMENT AND PUBLIC WORKS
UNITED STATES SENATE
ONE HUNDRED FIFTEENTH CONGRESS
SECOND SESSION
__________
MARCH 20, 2018
__________
Printed for the use of the Committee on Environment and Public Works
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Available via the World Wide Web: http://www.fdsys.gov
__________
U.S. GOVERNMENT PUBLISHING OFFICE
29-560PDF WASHINGTON : 2018
COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS
ONE HUNDRED FIFTEENTH CONGRESS
FIRST SESSION
JOHN BARRASSO, Wyoming, Chairman
JAMES M. INHOFE, Oklahoma THOMAS R. CARPER, Delaware
SHELLEY MOORE CAPITO, West Virginia BENJAMIN L. CARDIN, Maryland
JOHN BOOZMAN, Arkansas BERNARD SANDERS, Vermont
ROGER WICKER, Mississippi SHELDON WHITEHOUSE, Rhode Island
DEB FISCHER, Nebraska JEFF MERKLEY, Oregon
JERRY MORAN, Kansas KIRSTEN GILLIBRAND, New York
MIKE ROUNDS, South Dakota CORY A. BOOKER, New Jersey
JONI ERNST, Iowa EDWARD J. MARKEY, Massachusetts
DAN SULLIVAN, Alaska TAMMY DUCKWORTH, Illinois
RICHARD SHELBY, Alabama CHRIS VAN HOLLEN, Maryland
Richard M. Russell, Majority Staff Director
Mary Francis Repko, Minority Staff Director
----------
Subcommittee on Clean Air and Nuclear Safety
SHELLEY MOORE CAPITO, West Virginia, Chairman
JAMES M. INHOFE, Oklahoma SHELDON WHITEHOUSE, Rhode Island
JOHN BOOZMAN, Arkansas BENJAMIN L. CARDIN, Maryland
ROGER WICKER, Mississippi BERNARD SANDERS, Vermont
DEB FISCHER, Nebraska JEFF MERKLEY, Oregon
JERRY MORAN, Kansas KIRSTEN GILLIBRAND, New York
JONI ERNST, Iowa EDWARD J. MARKEY, Massachusetts
RICHARD SHELBY, Alabama TAMMY DUCKWORTH, Illinois
JOHN BARRASSO, Wyoming (ex officio) THOMAS R. CARPER, Delaware (ex
officio)
C O N T E N T S
----------
Page
MARCH 20, 2018
OPENING STATEMENTS
Alexander, Hon. Lamar, U.S. Senator from the State of Tennessee.. 1
Corker, Hon. Bob , U.S. Senator from the state of Tennessee...... 2
Capito, Hon. Shelley Moore, U.S. Senator from the State of West
Virginia....................................................... 3
Whitehouse, Hon. Sheldon, U.S. Senator from the State of Rhode
Island......................................................... 11
Wicker, Hon. Roger , U.S. Senator from the state of Mississippi.. 36
WITNESSES
Ryder, John L., Nominee to be a Member of the Board of the
Tennessee Valley Authority..................................... 12
Prepared statement........................................... 15
Responses to additional questions from:
Senator Carper........................................... 18
Senator Whitehouse....................................... 28
NOMINATION OF JOHN L. RYDER OF TENNESSEE TO BE A MEMBER OF THE BOARD OF
DIRECTORS OF THE TENNESSEE VALLEY AUTHORITY
TUESDAY, MARCH 20, 2018
U.S. Senate,
Committee on Environment and Public Works,
Subcommittee on Clean Air
and Nuclear Safety,
Washington, DC.
The committee met, pursuant to notice, at 10:07 a.m. in
room 406, Dirksen Senate Office Building, Hon. Shelley Moore
Capito (chairwoman of the subcommittee) presiding.
Present: Senators Capito, Whitehouse, Boozman, Wicker,
Fischer, Ernst, and Gillibrand. Also present: Senator Carper.
Senator Capito. I want to thank everyone for being here
today. This hearing is of the Clean Air and Nuclear Safety
Subcommittee and it is now called to order.
I am going to reverse the order of my written statement out
of deference to the fact that a very distinguished Senator from
Tennessee is here with us to make an introduction.
So, Senator Alexander, I recognize you for the purpose of
making an introduction. Thank you.
OPENING STATEMENT OF HON. LAMAR ALEXANDER, U.S. SENATOR FROM
THE STATE OF TENNESSEE
Senator Alexander. Thank you, Madam Chairman, Ranking
Member Whitehouse, Senator Ernst. It is a privilege to be here
and thank you for your courtesy.
I am here today to introduce John Ryder, of Memphis, who
has been nominated to serve as a member of the Board of the
Tennessee Valley Authority.
John Ryder is a good man and the TVA is on a good path. Its
leadership over the last few years have made sound decisions
that will benefit ratepayers and our region; it will keep
electric rates at a reasonable cost; it will keep our air
clean; and will keep industry coming to the Valley. John Ryder
is a great choice to continue on that path.
TVA's mission is to provide safe, clean, reliable, and
affordable power for the region's homes and businesses. To do
that, it is placing pollution control equipment on all of its
coal plants by 2020, building new natural gas plants, and
opening the first nuclear power reactor in the 21st century.
It also opened the last nuclear power reactor of the last
century, so we have a great benefit in our region because of
that.
TVA has done this while reducing its debt and reducing
electric rates, which is good news for jobs and economic
development in the Tennessee Valley.
As a west Tennessean, John understands how important it is
for TVA to continue to provide cheap, clean, reliable
electricity for homes and businesses in the seven States that
comprise the TVA region.
John has a broad background in public affairs. He has
significant litigation experience and has earned numerous
awards as an attorney. He has been recognized by Business
Tennessee Magazine as being among the 101 best lawyers in
Tennessee and has been listed in Best Lawyers since 1987.
I am convinced he will make an excellent TVA Board member.
I strongly support his nomination. I encourage the members of
the Committee to support his nomination, as well, so his
nomination can quickly be considered by the full Senate.
Thank you.
Senator Capito. Thank you, Senator.
Now I will recognize our other Senator, distinguished
Senator from the State of Tennessee, Senator Corker.
OPENING STATEMENT OF HON. BOB CORKER,
U.S. SENATOR FROM THE STATE OF TENNESSEE
Senator Corker. Junior Senator. Thank you.
Senator Capito. Junior Senator.
Senator Corker. Chairman Capito and Senator Whitehouse,
Senator Ernst, thank you for letting me be here. It is a
pleasure to be here with Lamar and with our outstanding
nominee. John Ryder has been nominated to serve, as you know,
on the Board of the Tennessee Valley Authority, and I would
like to extend a warm welcome to him and his wife, Lane, and
those here supporting his nomination.
With over 9 million customers, TVA is the largest public
power utility in the Nation, and it is critical for the region
that it remain a low-cost, reliable producer of electricity not
only for ratepayers, but also for our State's business
recruitment efforts. To continue serving the region, TVA needs
a full, well-qualified Board, and I was proud to support the
previous four nominees put forward by the President and thank
this Committee for swift action on those individuals.
John Ryder has been nominated to fill the current vacancy
on the Board. With wide-ranging legal background, John's
experience as an attorney will be of great value to the TVA
Board.
After graduating from Vanderbilt Law School, John began his
career working in Shelby County, and since that time he has
developed an extensive practice covering election and
commercial law. His law practice has been consistently
recognized, as Lamar said, as one of the most respected in the
Volunteer State and throughout the Country. As a lifelong
Memphian, John understands the important role that TVA plays in
our communities and the demands of a growing Tennessee Valley.
In addition to his distinguished career, John has
demonstrated a true commitment to the Memphis community; served
on numerous boards, including the Opera of Memphis, the YMCA of
Greater Memphis, as well as volunteering his time to many other
organizations.
Lamar and I both have known John for many, many years, and
I wholeheartedly support his nomination. I am confident his
diverse background will give him the necessary qualifications
to serve TVA's important mission.
So, thank you. Thank you for letting us be here, and I hope
that you will support his nomination and confirmation. Thank
you so much.
OPENING STATEMENT OF HON. SHELLEY MOORE CAPITO,
U.S. SENATOR FROM THE STATE OF WEST VIRGINIA
Senator Capito. Thank you. Thank you both.
John, if you want to move forward and take a seat, I will
get us back on our regular track here. I am going to recognize
myself for a brief opening statement, and then the Ranking
Member, Senator Whitehouse, for his opening statement.
Senator Capito. As we have heard both distinguished
Senators from Tennessee talk about the TVA, we know the broad
jurisdiction, both geographically and in terms of the
responsibilities. It is important to remember 9 million people
are served by the TVA across the seven States, providing
affordable electricity, flood prevention, navigation access,
and economic development.
Before the TVA, much of the region suffered from a chronic
lack of economic development resulting from insufficient energy
resources and the constant flooding of the Tennessee River
Watershed. The transformation of the region into a growing
population and a growing economic base is in large part thanks
to the TVA's policies.
Today, however, the TVA is under pressure. Its aging coal
and nuclear units require upgrades to extend their service
lines and, as with private sector coal and nuclear units, they
face regulatory pressures and price competitions from cheap
natural gas. TVA's fuel mix and ability to provide reliable
baseload power is essential in fulfilling its mission of
providing its customers with affordable electricity at
essentially production costs.
The TVA's growing variable renewable resources, led by its
traditional hydropower, also pose challenges for TVA's rate
modeling. Dams and levees dating back several decades,
representative of our Nation's broader infrastructure
challenges, will need rehabilitation or outright replacement.
Balancing funding those priorities with keeping rates low will
pose a special challenge to our nominee, but it is one that
historically TVA has been successful in meeting.
As I mentioned in our last TVA nomination hearing, like
government entities at the local, State, and Federal level, the
Authority is under serious pressure to meet its pension
obligations. The GAO has noted that the TVA retirement system
is underfunded by about $6 billion. The $7.1 billion currently
available is only sufficient to cover 54 percent of its
expected obligations.
While the TVA's debt has been stable, unfunded pension
obligations have increased over the past decade. I am
encouraged that the TVA is in the process of transitioning to a
401(k) defined contribution system, and this Committee will
continue to monitor TVA's fiscal health as it balances all of
these investment challenges.
If confirmed, Mr. Ryder will serve as TVA's Board of
Directors for 5 years. I believe his accomplished background in
business law will be a strong compliment to the Board. I look
forward to hearing how you plan to help steering the Board to
keep TVA a viable engine for economic development and flood
control through its second century of experience.
Not being influenced personally where I live, in my general
geographic area, by the TVA, I have come to gain great respect
for the vision that was put forward in creating the TVA and the
importance that it has to many not just citizens, but
government entities throughout the States. We have had the
privilege to have some of the already confirmed members before
our Committee and I can tell you, Mr. Ryder, when you are
confirmed, as my great hope is, you will be joining a very
dedicated Board of citizens.
So, I will recognize the Ranking Member, Senator
Whitehouse, for an opening statement.
[The prepared statement of Senator Capito follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
OPENING STATEMENT OF HON. SHELDON WHITEHOUSE,
U.S. SENATOR FROM THE STATE OF RHODE ISLAND
Senator Whitehouse. Thank you very much, Chairman.
I welcome our nominee here today and I want to thank our
Tennessee colleagues for appearing on his behalf. They are
extremely well regarded in the Senate and their voices in favor
of your nomination carry great weight, Mr. Ryder.
As the Nation's largest public utility, the TVA is uniquely
positioned to lead the development of clean, reliable, American
energy. Three years ago, TVA completed a long-term planning
process to identify future energy needs. Its plan would add
between 150 and 800 megawatts of large-scale solar by 2023, for
instance, and between 3,150 and 3,800 megawatts of large-scale
solar by 2033. These renewable goals are in line with recent
developments across the energy sector.
In 2017, renewables provided nearly 20 percent of
electricity generation in the United States. As wind and solar
costs fall, utilities across the Country, even in very red
States, have invested heavily in both. The renewable energy
industry has hit 3.3 million jobs, more than all fossil fuel
jobs combined. The five States that get the largest percentage
of their electricity from wind are Iowa, Kansas, South Dakota,
Oklahoma, and North Dakota.
In Texas, wind generation hit a record 15 gigawatts in
December 2016, at one point meeting 45 percent of the State's
power needs. Eighteen thousand megawatts has been installed and
another 5,000 megawatts is under construction in Texas.
In Iowa, Mid-American Energy is planning to add 2,000
megawatts of new wind by 2019, on top of Iowa's already nation-
leading investment in wind energy. Once that is all installed,
85 percent of the energy Mid-American generates will be
renewable.
Corporate America is going in on renewables. AT&T recently
signed two agreements with NextEra Energy for wind power, one
for 220 megawatts from an Oklahoma wind farm and the other for
300 megawatts from a Texas wind farm.
I wish Rhode Island had more land so we could get more of
these windfarm projects. We have to build it offshore, which is
a bit more complicated. That is one of the largest corporate
renewable energy purchases in history.
So here is my worry, Mr. Ryder. I will be perfectly candid
with you. Notwithstanding the nationwide success of renewables,
this Administration seems, with unerring solicitude, to look
only at the welfare of the fossil fuel industry.
Our politics have been powerfully influenced by the fossil
fuel industry. One means of that industry influence since the
Citizens United decision has been unlimited spending and
threats of spending by fossil fuel industry forces.
As general counsel at the Republican National Committee, I
suspect you were, in various ways, intimately involved with
that operation. Additionally, your background is a little
unusual for someone nominated to be a director of an electric
utility like the TVA, so I want to assure that you will be
undertaking your duties at the TVA with no preconceptions and
not, not as an agent for fossil fuel industry influence within
TVA.
I look forward to your convincing me that, if confirmed,
you will be fair and act in the best interest of TVA
ratepayers, including providing attention to environmental
consequences and giving wind, solar, storage, distributed
generation, and other technologies a fair shake against fossil
fuel.
I look forward to hearing your perspective on TVA's long-
term plan and whether you will undertake to undo the ambitious
renewable energy goals that the TVA set in 2015.
Thank you, Chairman.
Senator Capito. Thank you, Senator.
And thank you, Mr. Ryder. I want to recognize you for 5
minutes for your opening statement and recognition of any
family or friends that you may have with you, and I want to
remind you that your full written testimony will be a part of
the record.
Through this hearing and via questions for the record, our
Committee members will have an opportunity to learn more about
your commitment to public service and our great Nation. I would
ask that throughout this hearing you would please respond to
the questions today and those for the record in a direct and
timely fashion.
So, I have to ask the following questions we ask of all
nominees on behalf of the Committee.
Do you agree, if confirmed, to appear before this Committee
or designated members of this Committee, and other appropriate
committees of the Congress, and provide information subject to
appropriate and necessary security protection with respect to
your responsibilities?
Mr. Ryder. Absolutely.
Senator Capito. Do you agree to ensure that testimony,
briefings, documents, and electronic and other forms of
information are provided to this Committee and its staff, and
other appropriate committees of jurisdiction, in a timely
manner?
Mr. Ryder. Yes.
Senator Capito. Do you know of any matters which you may or
may not have disclosed that might place you in any kind of
conflict of interest if you are confirmed?
Mr. Ryder. I do not.
Senator Capito. All right. Mr. Ryder, we look forward to
your statement.
STATEMENT OF JOHN L. RYDER, NOMINEE TO BE A MEMBER OF THE BOARD
OF THE TENNESSEE VALLEY AUTHORITY
Mr. Ryder. Thank you, Chairman Capito, Ranking Member
Whitehouse, members of the Committee. I am John Ryder. With me
today is my wife of 45 years, Lane. We wish our younger
daughter could have been here. Nancy Kate Ryder worked on the
staff of the Committee of Environment and Public Works from
2005 to 2007. However, happily, she is on her way to Memphis
for a visit, bringing with her our grandson, who is a little
over two.
I am honored to have been nominated by President Trump to
serve as a member of the Board of Directors of the Tennessee
Valley Authority, and I am especially honored to have been
recommended to the President by my two State Senators, Lamar
Alexander and Bob Corker. I thank them for their very kind
remarks, and I can assure Senator Whitehouse that they are well
regarded in Tennessee, as well as in this body.
My office in Memphis is situated at the intersection of
Union Avenue and November the 6th, 1934 Street, which is a
curious name for a street. November the 6th Street is named
after the date on which the people of Memphis voted for a bond
issue that enabled them to buy the utility and create the
public utility, Memphis Light, Gas and Water, which today is
TVA's largest customer, serving 10 percent of the total
population served by TVA and accounting for 12 percent of its
load.
For many years I have been involved in civic, political,
and community affairs, and have a keen appreciation of Memphis
community and West Tennessee and its needs and interests. I
have also traveled throughout the region and understand that,
as a Board member, I would be representing the interests of the
9 million people in seven States, covering 80,000 square miles,
who are served by TVA.
While Memphis Light, Gas and Water is TVA's largest
customer, there are over 150 other municipal providers served
by TVA, in an industry which, as Chairman Capito has noted,
faces major challenges; declining demand for electricity,
environmental concerns, the growing difficulty of finding the
right mix of generation and fuel.
I am keenly aware of the role played by TVA in economic
development through its support of local development efforts.
There are increasing economic opportunities for the region and
a real chance to make a difference by bringing good paying jobs
to a part of the Country that needs good paying jobs.
TVA has a strong responsibility for environmental
stewardship. Both as a custodian of public lands and as a major
industry in its own right, it has an obligation to protect the
natural environment for the benefit of future generations.
TVA has an obligation to maintain the recreational use of
TVA lands and lakes. I have had the opportunity, over my life,
to swim, boat, hunt on TVA lands, and I hope that my grandson
will have that same opportunity.
Practicing law for over 40 years, I have represented
corporations large and small, and appreciate that the
appropriate role of a Board member is setting the strategic
direction for the corporation, while allowing the officers to
run the organization on a daily basis. My understanding of
these differing roles was reinforced by my service with various
not-for-profit organizations. Some were as small as the Board
of Opera Memphis; some as large as the Republican National
Committee or the Republican National Lawyers Association.
Those experiences also inform my understanding of the need
to separate the political from the governmental. I fully
appreciate that the role of a member of the Board of TVA is
outside of politics. At the same time, my political experience
has given me greater appreciation for the wants, needs, and
aspirations of those served by TVA.
My law practice has largely been in the area of bankruptcy,
workouts, and restructuring. This has given me experience in
evaluating businesses and their viability. I don't think anyone
doubts the viability of TVA, but it is always a useful exercise
to examine closely the value of the different activities and
services of any organization. Where changes are needed, changes
should be made.
I will be ready to take a look at the operations of TVA and
participate in the discussions over its present condition and
future direction.
If confirmed, it will be a great honor for me to be able to
serve my community, my region, and our Country in this
position.
I thank the Senators for their consideration.
[The prepared statement of Mr. Ryder follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Senator Capito. Thank you.
I will begin the questioning. Thank you, Mr. Ryder, for
your opening statement.
You mentioned in your testimony the challenges I think I
mentioned in my opening statement as well, that TVA's
generation assets are in a changing energy and environmental
regulatory climate. Can you speak a bit about the important
role that coal and nuclear play in providing not just reliable
baseload energy, but also at a predictable and affordable cost?
Mr. Ryder. Well, TVA maintains a diverse mix of energy
sources: coal, natural gas, nuclear, hydro, and renewables; and
I think it is important that TVA continue to maintain a diverse
portfolio of energy sources. As technologies change and as
commodity prices for fuels change, that gives TVA the ability
to adjust its fuel mix so as to meet its mandated mission of
providing low-cost energy for the entire region.
Senator Capito. Some would argue that hydropower should not
be considered a renewable energy source from a policy
perspective, the same way that wind and solar are. Can you
speak about the importance of TVA's hydroelectric assets, their
need for upgrades, and how they help the Authority meet its
environmental stewardship goals?
Mr. Ryder. Well, hydro is the original source of power for
TVA, and there are 29 operating units today. In the last few
weeks, we have gotten a lot of renewal of that resource
throughout the Tennessee Valley, so, from my commonsense
perspective, it looks to me like it gets renewed every time we
have a tremendous amount of rain, snow, snow melt, and whatever
else brings the water down the river and enables those hydro
plants to work.
My office overlooks the Mississippi River. The Mississippi
River is not part of TVA, but I am very familiar with watching
the ebb and flow of rivers, the flood stages of rivers. I do
this on a daily basis, and this exists not only on the
Mississippi, but throughout the Tennessee.
Senator Capito. Thank you.
I mentioned in my opening statement the unfunded pension
liabilities and the overall indebtedness relative to the
statutory cap. Do you have any perspectives on this and what
your priorities might be for reducing that burden?
Mr. Ryder. They do have a tremendous burden, and I have
just begun to look at that. TVA has taken some steps to address
that, both through increase in the investment yield on the
portfolio and in contributions from earnings. They have a long
way to go, and that is something that, if I am confirmed, I
look forward to looking, well, I don't know if I look forward
to it; there are very tough decisions that may have to be made
there.
Senator Capito. You mentioned in your law practice that you
did a lot of bankruptcy work.
Mr. Ryder. Corporate.
Senator Capito. Do you have any experience with handling
the pension funds outside, in a corporate bankruptcy?
Mr. Ryder. That often is an issue in a Chapter 11
bankruptcy, where there is an underfunded pension liability.
Under the bankruptcy code, that takes priority. Here, we are
trying to address the problem before we get to insolvency.
Senator Capito. Well, for those hardworking folks, I am
sure that is deep in your mind.
Let's go back to coal and nuclear. I know I know this, but
I can't recall it up into my mind. Are there scheduled
retirements of certain nuclear and coal plants, I am certain
coal, within the TVA? Are you familiar with that?
Mr. Ryder. The coal plants, yes. The schedule is to
convert, and they are actively in the process of doing that.
Senator Capito. Convert to natural gas?
Mr. Ryder. Convert the coal plants to natural gas. In fact,
the plant in Memphis is being converted from coal to natural
gas, and I think that gas plant comes online either next year
or the year after. They have been working on that for some
time. But that is part of an overall program of increasing the
amount of energy derived from natural gas, which is now, I
think, about 14 percent and is going to rise to as much as 29
percent. The amount of coal declines by a similar amount over
the same period.
Senator Capito. And what is the mix for nuclear, do you
happen to know?
Mr. Ryder. The mix right now is about 29 percent coal,
about 31 percent nuclear. Nuclear and natural gas increase
under the plan; coal decreases.
Senator Capito. Does nuclear increase because of
modernization of existing plants?
Mr. Ryder. It is modernization. It is principally the Watts
Bar Plant that was just brought online and getting that up to
full yield.
Senator Capito. Well, thank you.
Senator Whitehouse.
Senator Whitehouse. Thank you very much.
Mr. Ryder, welcome. It is a little odd to even have to ask
these basic questions, but let me just get them out of the way.
Do you accept and understand that the carbon emissions from
fossil fuel power plants are greenhouse gases that contribute
to climate change?
Mr. Ryder. Senator, climate change occurs. Whether it is a
result of carbon emissions or not doesn't matter to me.
Senator Whitehouse. Do you think there is a question
whether carbon emissions contribute to climate change?
Mr. Ryder. I don't know. I am somewhat of a skeptic. I
don't know the science that well on that issue. What I do know
is that as a consumer, as a resident of the Tennessee Valley, I
am in favor of clean air and clean water, so I think steps
should be taken, as they have been taken by TVA, to make sure
that our air is clean and our water is pure.
Senator Whitehouse. As a lawyer and as a member of the
Board, you may be asked to weigh in on legal questions that the
TVA is presented with. There is, I think at this point,
unanimous Federal court precedent that when decisions are made
that relate to carbon emissions, it is incumbent upon the
agency to take into account the social costs, including
pollution, that relate to those carbon emissions.
I think we have, at this point, the Ninth Circuit, the
Seventh Circuit, and the D.C. Circuit all arrayed on the ``yes,
you must'' side of that, with nobody on the other side, and a
considerable array of district court decisions that have
corrected agency action where they failed to take that social
cost into account or where they presumed that it was zero.
If you are presented by your lawyers a recommendation that
decisions by the Board need to take into account that social
cost of carbon, will you follow their legal advice and will you
accept that, or is there some reason why you would have
difficulty with that?
Mr. Ryder. Follow the legal advice of our counsel and
follow the precedents that are set by the courts? As a lawyer,
that would always be my advice to my client.
Senator Whitehouse. Yes. It is pretty logical advice, isn't
it?
What would you suggest to us as markers that we could look
to in your performance as a director that you have given
renewables, storage--there is a new FERC storage rule TVA is
going to have to react to--distributed generation, which
empowers consumers to take a much bigger hand in their own
power control and their own economics, what would be the
markers that we should look to you have given those
technologies a fair shake against natural gas or coal-generated
power?
Mr. Ryder. Well, I am coming here today as a resident of
Memphis and west Tennessee, an area that feels that it has been
underrepresented on the Board of TVA, even though we account
for, as I said, 10 percent of the total population of TVA and
12 percent of its load.
Memphis is uniquely situated in that it has one of the
largest urban poor populations in the Country. We have a lot of
people that have trouble paying their light bill, so the TVA
mission of providing affordable power is very important to my
community; it is a very significant concern.
Senator Whitehouse. Facilitating distributed generation can
be an extremely empowering way of addressing that issue.
Mr. Ryder. I want the Board, I want TVA to look at all
opportunities to provide low-cost power to the people of my
community.
Senator Whitehouse. Including in that cost analysis the
social cost of carbon, as your lawyers will recommend to you?
Mr. Ryder. I think when I was taking my economics course in
college, those were referred to as neighborhood effects.
Senator Whitehouse. Yes.
Mr. Ryder. And those need to be taken into account.
Senator Whitehouse. Negative externalities, neighborhood
effects, whatever, need to be taken into account.
Mr. Ryder. Right.
Senator Whitehouse. Great. OK, I appreciate it, and I will
reemphasize that Senator Corker and Senator Alexander have
great respect here in this body. I had the pleasure of serving
with my Chairman Alexander on the HELP Committee until I just
vacated it to move to the Finance Committee.
The legend in Washington is that the Finance is the more
powerful committed, but moving away from Chairman Alexander is
a step that one takes reluctantly, because he is a man who
likes to get things done and works well with his colleagues, so
I appreciate their support for you.
Mr. Ryder. Thank you, Senator.
Senator Capito. Thank you.
Senator Boozman.
Senator Boozman. Thank you.
I would agree, I think we all would agree with your
assessment of Senator Alexander and Senator Corker; it is good
to have those guys on your team, and we do appreciate the fact
that you are willing to do this.
In your opening statement you mentioned the challenges
ahead in the energy sector with declining demand in
electricity, environmental concerns, which Senator Whitehouse
was talking about, the growing importance of the appropriate
mix of generation of fuel.
How do you see TVA balancing keeping low rates in the
Valley in the face of such challenges?
Mr. Ryder. That is an interesting challenge. At the present
time, TVA produces more energy, in fact, than it needs, so it
is not looking to outside of its present resources under the
present plan of restructuring coal, natural gas, bringing up
nuclear to reach outside for any additional sources of energy.
Senator Boozman. That is interesting. I am glad you brought
up the fact that--well, again, coming from Arkansas, your
neighbor, there are areas of significant growth in the region,
but also there are significant areas of poverty, and keeping
rates low for people on fixed income, single moms, the list
goes on and on, is so, so very important.
TVA provides electricity for over 9 million people in the
southeast; however, they are tasked with much more than just
providing efficient and affordable electricity. You are also
tasked with providing flood control, navigation, land
management, economic development for the southeastern region.
In your opinion, how does TVA's management of waterways,
transportation, forestlands spur the economic development in
these areas that desperately need economic development?
Mr. Ryder. Well, Senator, my office looks over the
Tennessee River. I look at Arkansas all day, and it is a
beautiful State, but Tennessee is also a beautiful State, and
it is one of the largest tourist States in the Country, so
tourism is a huge industry. Tourism and recreation are huge
industries for Tennessee, employing thousands of people, and
maintaining those public lands for recreational use is
important to the economy of Tennessee, as well as the enjoyment
of the citizens of the Tennessee Valley region.
Senator Boozman. You mentioned being from Memphis, being
active in that regard, TVA's largest customer. Tell me about
your philosophy about TVA working with State and local
partners.
Mr. Ryder. I have a strong belief that TVA needs to work
very closely with State and local authorities. In fact, one of
the reasons I became interested in this position is that I felt
that perhaps on our end of the TVA distribution network we were
not always being heard and that it needed to step up its game
in terms of working with State and local authorities.
So, my hope is that, if I am confirmed as a member of the
Board, that I can help guide the TVA in doing that for those of
us who are from areas that are not where TVA has major offices.
TVA's corporate office is in Knoxville, Tennessee; its
operating facility is in Chattanooga, Tennessee; and over in
Memphis we are kind of, well, kind of the red-headed stepchild
in Memphis. Senator Wicker knows what I am talking about
because he is from the same part of the world as Memphis and I
am, and we feel like we kind of get left behind, so I would
urge the TVA to step up its game in that regard.
Senator Boozman. Well, I agree with you totally in that
regard.
Thank you, Madam Chair.
Senator Capito. Thank you.
Senator Gillibrand.
Senator Gillibrand. Thank you, Madam Chairwoman.
Cybersecurity of the electric grid is a critically
important issue. Just last week, DHS and FBI again confirmed
that Russian hackers have carried out deliberate and ongoing
operations targeting the U.S. energy industry.
The energy grid continues to be a target for those who
would wish to do us harm, and we must continue to ensure that
we are doing everything possible to protect the electric grid
from cyberthreats.
How will you prioritize cybersecurity as a member of the
TVA Board?
Mr. Ryder. Well, cybersecurity and physical security walk
hand-in-hand here, and that has obviously got to be a priority
in an era in which cyberattacks are possible from whether it is
the random hacker in the Ukraine who is just searching for
identity theft or whether it is an act perpetrated by a foreign
government.
I appreciate the Senator's question. I think that should be
a major concern and priority of the Board.
Senator Gillibrand. As it is a major concern and priority,
what specific things do you intend to do to secure the safety
of the electric grid?
Mr. Ryder. If I am confirmed, that would be something that
the Board would have to consider directing the staff to
undertake and prioritize.
Senator Gillibrand. I request that you write a letter to
this Committee, after you do get confirmed and after you do
meet with your Board, about what your actual decisions are,
what you intend to do. For example, will you hire experts?
Which experts will you hire? Will you put in new technology?
Will you have fail-safe technology? I would like to know a
plan, a specific plan. Once you are in a position to create
that plan, will you inform this Committee?
Mr. Ryder. We will absolutely inform the Committee any time
we are asked to inform the Committee and keep the Committee
apprised.
Senator Gillibrand. I would be very grateful for that by
letter. Thank you.
The growth and development of renewable energy technology
has created great potential for individuals to become energy
entrepreneurs by generating their own energy at their home and
at their businesses. Currently, the Tennessee Valley Authority,
through the Green Power Providers Program, encourages the
installation of small-scale renewables and pays a retail rate
to homeowners and businesses that participate in this program
for every kilowatt hour generated by their system.
Do you support continuing and expanding programs like the
Green Power Providers Program, which incentives homeowners and
businesses to invest in renewable energy systems on their
properties, including solar and wind?
Mr. Ryder. Our part of the world, Senator, is probably more
favorably suited for solar than wind, but I think TVA should
continue to use renewables as part of its overall mix of energy
sources.
Senator Gillibrand. Great. And do you intend to support
greater investment in renewable energy technology in the region
served by the Tennessee Valley Authority? Why or why not?
Mr. Ryder. One of the mandates under the Act for TVA is to
be a leader in innovation, and I would support that.
Senator Gillibrand. That would be terrific.
Energy efficiency is an important component in lower energy
costs for consumers by reducing the amount of energy we use. Do
you support policies that promote greater use of energy-
efficient technologies?
Mr. Ryder. Yes.
Senator Gillibrand. And what role do you envision for the
TVA in the energy efficiency space if you are confirmed?
Mr. Ryder. Well, TVA has had a longstanding program of
encouraging energy efficiency. Of course, they work through
local providers, and I think as long as I have been conscious
of the fact, I have received mailers from TVA in my home
showing me how to make my home more energy efficient, and that
is one of the reasons we face declining demand for electricity.
Senator Gillibrand. It is helpful. Even in my own State,
when we have done tours around the State of people who are
using energy efficiency, we show how much money homeowners can
save, and it is just such a value added, from putting in better
windows to having more efficient appliances. It just makes
sense, and I hope you will be a leader in that area because it
really helps working families.
Mr. Ryder. It is a matter of energy education.
Senator Gillibrand. Thank you.
Thank you, Madam Chairwoman.
Senator Capito. Thank you.
Senator Wicker.
Senator Wicker. Thank you very much. Glad to be here.
If you don't mind, Madam Chairman, let me make a statement
and then I will perhaps----
Senator Capito. Well, OK.
OPENING STATEMENT OF HON. ROGER WICKER,
U.S. SENATOR FROM THE STATE OF MISSISSIPPI
Senator Wicker. All right. I don't hear any objections.
I want to congratulate Mr. Ryder for his nomination and
thank him for his willingness to serve on this important Board.
I want to highlight the impact TVA has had on the quality of
life and economic well-being of residents in Mississippi and
across the south over the course of its history.
In 1930, nearly 85 percent of homes in large urban areas
had electricity, but only 10 percent of rural homes had the
same access. In Mississippi, only 1.5 percent of farm homes had
electricity, the lowest in the Country.
The creation of TVA as a result of the Act of 1933 was a
game changer. The goal was simple: to improve the living and
economic conditions of seven southeastern States. My hometown
of Tupelo, Mississippi is, of course, the first TVA city and we
are still proud of that. By providing affordable electricity to
rural communities, TVA was an important economic boost,
delivering a needed commodity to one of the Country's poorest
regions.
From 1930 to 1940, the number of farm homes in Mississippi
with electricity increased from less than 4,700 to more than
27,000 in just a decade.
TVA's positive impact on Americans throughout the south
continues to this day. Anyone who has experienced a power
outage can attest to our reliance on electricity; it touches
almost every aspect of our lives.
TVA currently provides reliable, clean, and low-cost energy
to more than 332,000 households in my State of Mississippi and
serves approximately 9 million customers across the seven
States. TVA has continued to improve its power generation
portfolio, including hydroelectric, coal, natural gas, nuclear,
and renewable energy, and I think the previous question touched
on that.
In October 2016, TVA announced the completion of the Watts
Bar Nuclear Plant in Ray County, Tennessee, a major step for
nuclear energy in the United States. This was the first nuclear
plant to come online in this century and provides power to
approximately 4.5 million homes. TVA's service and efficiency
have garnered a remarkable 99.999 percent reliability rating.
So, I look forward to working with you, Mr. Ryder, and want
to participate and do what we can at the senatorial and
congressional level in TVA's continued success.
Now, let me ask you, if I might, Madam Chair, to just touch
on one aspect, and that is the fact that TVA provides power to
154 local power companies, that in turn serve over 9 million
homes in the Tennessee Valley. So, in that sense, its customers
are actually local power companies that distribute the power at
retail. How do you see this relationship evolving? And what do
you envision as the role for the local power companies that are
part of the public power model in the Tennessee Valley?
Mr. Ryder. Senator, you are absolutely right, TVA does not,
except for some industrial customers, provide power directly to
the end-user, it is all through intermediaries, through the
local power providers. So they become the focal point for
setting rates and for encouraging energy education, energy
efficiency. It is important that TVA have a close working
relationship with those providers to make sure that TVA is
providing them with safe, reliable, reasonably priced energy
and that they in turn can pass that on to their consumers.
I am from Memphis, and I am your neighbor.
Senator Wicker. You sure are.
Mr. Ryder. We understand that. Memphis, north Mississippi,
west Tennessee are tremendous consumers of the end-product, and
we also are home to a lot of people who cannot afford to pay
high rates and need to be sure that they are provided with low-
cost energy.
We are also, fortunately, home to growing industries,
particularly in the automotive world, which have tremendous
energy needs. Their need is for reliable power, and the ability
to continue to provide power with 99.99 percent reliability is
very important to them and important to making sure that there
are good paying jobs for the people of our region.
I also want to note that not only did Tupelo produce the
first TVA city, but it is home to The King, and we are very
proud of him. We are glad you sent him up our way.
Senator Wicker. Well, we gave him a good foundation in
Tupelo and then we sent him on up to Memphis, I guess because
there were more guitars up there.
[Laughter.]
Mr. Ryder. Thank you.
Senator Wicker. Thank you very much, Mr. Ryder, and thank
you, Madam Chairman.
Senator Capito. Thank you.
Senator Carper. I want to just pick up from our
conversation yesterday when we talked about music and ask you
to just share with us some of the recordings, famous recording
studios in Memphis that we should be mindful of.
Mr. Ryder. Well, you have Sun Studio.
Senator Carper. And who recorded there, whoever recorded
there, any idea?
Mr. Ryder. I have not recorded anywhere.
Senator Carper. No, no, no, but who has? Sun is one of the
most famous recording studios in the world and it is in
Memphis. Who has recorded there?
Mr. Ryder. Johnny Cash.
Senator Carper. OK, The Man in Black.
Mr. Ryder. Elvis.
Senator Carper. The King.
Mr. Ryder. The King.
Senator Carper. Jerry?
Mr. Ryder. Jerry Lee Lewis.
Senator Carper. Carl?
Mr. Ryder. Carl Perkins.
Senator Carper. Roy?
Mr. Ryder. Roy Orbison.
Senator Carper. ``Only the Lonely.'' Those are all my
questions.
[Laughter.]
Senator Carper. Now for the tough questions.
Thank you for the time you spent with us yesterday. You
mentioned to my staff and me that you thought it was important
for TVA to have somebody on the Board from Memphis, and you
explained why. Is there anybody already on the Board from
Memphis?
Mr. Ryder. Yes, there is.
Senator Carper. Who is that?
Mr. Ryder. Ron Walter.
Senator Carper. And is Ron Walter doing an adequate job, do
you think, representing the interests of Memphis?
Mr. Ryder. I am sorry?
Senator Carper. Is Ron Walter doing an adequate job in
representing the interests of Memphis on the Board?
Mr. Ryder. Ron Walter is. He is a good friend of mine. I
have known him for many years.
Senator Carper. You are not going to throw him under the
bus?
Mr. Ryder. No.
Senator Carper. OK. All right.
For some time, I have encouraged TVA, as I said in our
conversation yesterday, to be an industry leader, not a
laggard, especially when it comes to clean energy and to energy
efficiency. I have been pleased over the last several years
with TVA's commitment to retiring some of their older, dirtier
coal power plants and to investing in clean energy. We talked
about converting one of the plants there to natural gas.
These clean energy investments have resulted in cleaner air
and new economic opportunities for the people of the Tennessee
Valley and surrounding areas. For example, I believe Google is
starting to break down on a $600 million investment to build a
data base at one of TVA's retired coal plants in northern
Alabama. Google chose the location in part because the company
wants the data base to run on 100 percent renewable energy and
knew TVA would provide the clean power. This one project is
expected to create about 100 jobs or more.
My question, if confirmed, will you commit to continuing
these clean energy investments? Will you commit to ensuring
that TVA is a national leader in technological innovation and
environmental stewardship?
Mr. Ryder. TVA has a mandate under the TVA Act to be a
leader in innovation, and I think it should continue to be a
leader in innovation and should move in those directions. Part
of the way it does that is by balancing its portfolio of energy
resources among a variety of sources and employing the best
available technology to ensure that that energy is produced
both in a clean and efficient way so as to deliver reasonably
priced energy to the ratepayers.
Senator Carper. All right.
We talked a little bit yesterday about coal ash and the
terrible incident that occurred several years ago. We talked
also about why you wanted to join the TVA Board. You admitted
you didn't have any experience in the energy field, but
discussed your desire to work on a local issue involving the
Allen Fossil Power Plant being converted from a coal plant to a
natural gas plant.
You raised the issue of the Allen Coal Plant having an
online coal ash pond close to a water source important to
Memphis water supply. Here are a couple questions I have that
relate to this.
Without any relevant experience, what would you bring to
the TVA Board that would make it better than it is today? What
would you have done differently in the Allen Coal Plant
situation? Do you support TVA lining all of their coal ash
ponds that are near bodies of water that supply drinking water
to local communities? Please.
Mr. Ryder. Well, you have touched on a very important issue
to the people of Memphis, and that is the conversion of the
Allen Coal Plant to a natural gas plant, and it illustrates
some of the cost tradeoffs and the problems with any energy
source. The Allen Coal Plant is in the process of being
converted to natural gas. In order to provide the cooling water
for the natural gas at the new plant, TVA drilled a series of
wells into the Memphis Sands Aquifer, which is the source of
drinking water for the city of Memphis and the surrounding
area.
This aquifer is a precious resource for Memphis for
generations to come. The aquifer is many hundreds of feet below
the surface; it is protected by a barrier of clay, and the
water in that aquifer is so pure that you can drink it without
treatment. It does not need to be treated at all; you can drink
it straight from the aquifer.
Senator Carper. I am going to interrupt.
Mr. Ryder. Yes, sir.
Senator Carper. We had a good conversation about this
yesterday, and I appreciate that.
Mr. Ryder. OK.
Senator Carper. Let me come back to my three questions. I
will just go back.
What would you have done differently in the Allen Coal
Plant situation? What would you have done differently, had you
been a Board member? What would you have the Board do
differently in the Allen Coal Plant situation?
Mr. Ryder. I think I would have brought a sensitivity to
the concerns of the local community of that, the potential
contamination of the water supply, which seemed to be
overlooked by TVA.
Senator Carper. Do you support TVA lining all of its coal
ash ponds that are near bodies of water, like the one you are
talking about, that supply drinking water to local communities?
Mr. Ryder. I think that would have to be examined.
Senator Carper. OK.
Madam Chairman, my time has expired. I have a question for
the record about political contributions. I am going to submit
that for the record. But I have just one last question, if I
could.
Madam Chairman, when I was Governor of Delaware, I served
in the National Governors Association, and every year the
Governors met in different States. One year we met in Las Vegas
and I was telling our nominee yesterday that maybe one of the
best concerts I ever heard in my life was at that conference.
Governor Bob Miller lined up for us a show we went to, all
the Governors and spouses and families, and the opening act was
Gladys Knight and the Pips. They were followed by the original
Righteous Brothers, and they were followed by the original Four
Tops. The guy who closed the show was Chuck Berry, and he
closed the show with an encore with a song called ``Memphis,
Tennessee,'' and it started off, ``Long distance information,
give me Memphis, Tennessee.''
Would you complete that, please?
Mr. Ryder. It is a great song and my office is just a half
a mile from the Mississippi Bridge.
Senator Carper. Fair enough. Thank you.
Senator Capito. You got me on that one.
OK, thank you, Senator Carper.
I see no more questioners here, so, if there are no more
questions for today, members may submit followup written
questions, which I believe Senator Carper said he was going to
do, for the record by the close of business on Thursday, March
the 22nd.
So, Mr. Ryder, will you please respond to those written
questions by close of business on Wednesday, March the 28th?
Mr. Ryder. I can do that.
Senator Capito. Thank you.
I say this hearing is adjourned. Thank you very much.
Mr. Ryder. Thank you, Chairman.
[Whereupon, at 11:02 a.m. the subcommittee was adjourned.]
[all]