[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




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         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

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                             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:]  
    
    
    
    
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         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:]  
    
    

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    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.]

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