[Congressional Record Volume 145, Number 96 (Thursday, July 1, 1999)]
[Senate]
[Pages S8108-S8111]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. McCONNELL (for himself and Mr. Bunning):
  S. 1323. A bill to amend the Federal Power Act to ensure that certain 
Federal power customers are provided protection by the Federal Energy 
Regulatory Commission, and for other purposes; to the Committee on 
Environment and Public Works.


                    THE TVA CUSTOMER PROTECTION ACT

  Mr. McCONNELL. Mr. President, I have come to the Senate floor today 
to introduce a bill known as the TVA Customer Protection Act. This 
legislation will implement a number of consumer protections that will 
make TVA accountable to ratepayers and better prepare TVA to compete in 
a restructured electricity market. I am pleased to have Senator Bunning 
as an original cosponsor on this bill.

  The legislation I am introducing, which is virtually identical to the 
legislation I introduced in the 105th Congress, provides Valley 
ratepayers protections against unchecked and unjustified increases in 
their power rates. Included in this bill are checks against future 
increases in TVA's massive debt. This bill will put an end to TVA's 
ability to compete unfairly with its regional distributors and will 
prohibit TVA from sticking ratepayers with the bill for its 
international forays that have no relevance to its responsibility to 
provide low-cost power to the Valley. Finally, this bill also codifies 
an agreement between TVA and several industry associations to limit 
TVA's authority as a government entity to compete with small businesses 
in non-electric services.
  Mr. President, TVA is a federal corporation that was first 
established in 1933, to tame the Tennessee River, our nation's fifth 
largest river, and to bring economic development to this once poverty 
stricken region. Today, TVA provides power to nearly all of Tennessee 
and to parts of six other states covering over 80,000 square miles and 
serving eight million consumers. The bulk of TVA's power sales are made 
through municipal and cooperative distributors, which in turn are 
responsible for delivering that power to every home, office and farm in 
the Valley. TVA has exclusive power contracts with its distributors and 
the three-member TVA board sets the retail rates offered by 
distributors.
  Mr. President, while TVA has achieved significant success, it has not 
come without a price. Today, TVA customers are paying a premium for 
TVA's excesses and mismanagement. For example, TVA has accumulated an 
enormous debt of nearly $26 billion, despite its monopoly status and 
the Board's unilateral rate making authority. As a result, in 1998, TVA 
customers paid an astronomical 30 cents of every $1 to interest 
expenses. When you match TVA's interest charge of 30 cents to the 11 
cents paid by the Federal Government, it makes Uncle Sam look like a 
conservative financial planner. When compared to the average regulated 
public utility, which pays a mere 7 percent in finance cost, it is 
obvious that this isn't a good deal for TVA ratepayers.
  In a 1994 study, the General Accounting Office determined that TVA's 
financial condition ``threatens its long-term viability and places the 
federal government at risk.'' Only through years of unaccountability 
and fiscal irresponsibility could a power company have ever reached 
this level of debt, despite the fact that TVA is a monopoly provider of 
electricity.
  As a result of TVA's fiscal mismanagement and bloated budgets, TVA 
rates are higher than those of FERC-regulated utilities in Kentucky. 
Since 1988, wholesale power rates of regulated utilities in Kentucky 
have steadily fallen, while TVA has maintained the same level, albeit 
higher than Kentucky utilities. Then, in 1997, TVA was forced to raise 
rates by 7 percent in an effort to get its fiscal house back in order. 
It is apparent that due to TVA's past financial mismanagement, 
thousands of Kentucky residents are paying more for power than Kentucky 
residents who are outside the TVA fence.
  Mr. President, another way to quantify the impact of TVA's fiscal 
irresponsibility is to compare the electric rates paid by Kentuckians. 
Mr. President I have a chart here that displays the rate premiums paid 
by the 211,427 TVA customers living in Kentucky. I have used the rates 
filed by Kentucky Utilities and TVA's publicly disclosed rates between 
1999 and 2003. Based on these rates, Kentuckians will pay an average of 
$50 million more annually for the privilege of being served by TVA. 
Over the next five years this amounts to a $250 million ``TVA 
membership fee.'' It is painfully clear the Kentuckians who are served 
by TVA are getting a raw deal from this New Deal program.

[[Page S8109]]

  Mr. President, I have come to the conclusion that TVA needs to be 
made more accountable for its actions. Not more accountable to Congress 
or the President, but the people TVA is charged to serve--Valley 
customers.
  Mr. President, it is my desire to provide TVA customers with a clear 
picture of TVA's financial situation including its rates, charges and 
costs. The Federal Energy Regulatory Commission (FERC) is authorized 
under the Federal Power Act with regulating electric utilities. FERC 
currently provides regulatory oversight to over 200 utilities for 
wholesale and transmission power rates to ensure that their electric 
rates and charges are ``just and reasonable and not unduly 
discriminatory or preferential.'' At present, TVA is entirely exempt 
from these necessary regulations allowing it to operate as a self-
regulating monopoly, with no such mandate for openness, fairness or 
oversight.
  Mr. President, I am not alone in this belief. The distributors 
serving Memphis, Tennessee, Knoxville, Tennessee, and Paducah, 
Kentucky, share my views that TVA should fully comply with the FERC 
authority. Recently, before the House Commerce Committee, Mr. Herman 
Morris, Jr., President and CEO of the Memphis Light, Gas and Water 
Division testified on behalf of MLGWD and the Knoxville Utilities Board 
that FERC would ``provide a neutral forum for resolving disputes 
regarding TVA transmission, wholesale sales pricing, terms and 
conditions.'' Mr. Morris went on to say that FERC jurisdiction is 
``necessary to provide Tennessee Valley distributors the same level of 
protection that the rest of the country enjoys.''
  Requiring TVA to comply with FERC regulations will serve two 
purposes. First, it will allow customers to accurately evaluate TVA's 
wholesale and transmission pricing to ensure the rates charged are 
``just and reasonable'' and will provide customers with a forum for 
challenging future rate increases just as every other regulated utility 
does.
  Second, this information will provide FERC with a better 
understanding of the costs TVA has accumulated. Understanding the full 
scope of these costs will be critical in an open transmission and 
wholesale market. It will also have a significant impact in determining 
how competitive TVA will be in the future.
  Another measure which I have added this year builds on the full 
disclosure provisions by requiring FERC to conduct an investigation to 
determine TVA's total stranded cost liability. I have heard from a 
number of distributors who are very concerned about the potential 
stranded cost liability they might be assessed. They adamantly oppose 
paying for any costs or services they haven't paid for. For example, 
residents of Paducah, Kentucky don't want to pay for the costs TVA 
incurred in providing service to Nashville. Unfortunately, nobody has 
any idea of the total stranded cost liability TVA has incurred or can 
be recovered. This investigation will uncover those costs that were 
prudently incurred and are eligible for recovery as stranded costs.
  In order to ensure that TVA keeps its promise of lowering its debt, I 
have proposed that TVA be required to meet four need-based criteria 
before it is able to add costly generating capacity. For my colleagues 
who are not familiar with TVA, it is important to note that TVA's 
tremendous level of debt is a result of TVA's aggressive and unchecked 
plan to add new generating capacity in the Valley. In 1966, TVA 
announced a plan to build 17 nuclear facilities throughout the Valley. 
Today less than half of these facilities are in commercial service.
  As a result, TVA is $26 billion in debt and has invested $14 billion 
in non-performing nuclear assets which have driven rates up in the 
Valley. To prevent history from repeating itself, I believe it is 
necessary to apply safeguards against overbuilding. TVA must 
demonstrate a legitimate need before committing such significant 
resources again.
  This legislation will also prohibit TVA from using Valley ratepayers 
to subsidize power sales outside the Valley in the future. All new 
generation will be required to meet the needs of Valley ratepayers.
  Mr. President, let me take a moment to go through the other important 
customer reforms included in the bill. Section Four of the bill 
prohibits TVA from continuing to subsidize their foreign endeavors at 
ratepayer's expense. Quarter million dollar conferences in China and 
other points on the globe are not consistent with either TVA's deficit 
reduction goals or its mission to be a low-cost power provider to the 
Valley.
  Another provision that I have included is a measure proposed by the 
TVA distributors. Section Five in the bill protects distributors from 
unfair competition by ending TVA's ability to directly serve large 
industrial customers. In the past, TVA has been able to directly serve 
some of the valley's largest industrial customers. Through this 
loophole, TVA is able to use its considerable market power to unfairly 
compete with distributors.
  Section Seven of this bill will increase TVA's level of 
accountability by applying all federal antitrust laws and penalties. I 
have included this provision in response to heavy-handed tactics used 
by TVA to punish the City of Bristol, Virginia, for signing a contract 
with another energy provider.
  TVA applied heavy-handed tactics by predicting unreliable electricity 
services as a disincentive to leaving, and TVA attempted to syphon-off 
Bristol's industrial customers by offering direct-serve power contracts 
at 2 percent below any rate offered by Bristol. I find these predatory 
practices to be entirely unacceptable, especially applied to one of its 
own customers. It is my belief that since TVA's activities were 
performed in a commercial endeavor, they should be held to the same 
standards as any other corporation under the antitrust laws.
  I understand that TVA is willing to subject themselves to federal 
antitrust laws, so long as they aren't subject to any penalties. Mr. 
President, I have some advice for TVA.
  If you can't pay the fine, don't do the crime.
  Finally, this legislation limits TVA's ability to branch out into 
other businesses beyond power generation and transmission. TVA has 
attempted to diversify into equipment leasing as well as engineering 
and other contracting services in direct competition with other Valley 
businesses. I don't believe that TVA should be permitted to use its 
considerable advantages, like its tax-exempt status, to compete against 
Valley businesses. TVA has signed a Memorandum of Agreement with Valley 
businesses not to compete against them.
  My legislation codifies that agreement. Mr. President, I hope these 
reforms will offer TVA customers--both distributors and individuals 
alike--the means to make TVA more accountable and put an end, once and 
for all, to TVA's unaccountability and unchecked fiscal 
irresponsibility. I want to put an end to TVA membership premium and 
let all Kentuckians benefit from some of the lowest power rates in the 
nation.
  Mr. President, I ask unanimous consent that additional material be 
printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                S. 1323

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``TVA Customer Protection Act 
     of 1999''.

     SEC. 2. INCLUSION IN DEFINITION OF PUBLIC UTILITY.

       (a) In General.--Section 201(e) of the Federal Power Act 
     (16 U.S.C. 824(e)) is amended by inserting before the period 
     at the end the following: ``, and includes the Tennessee 
     Valley Authority''.
       (b) Conforming Amendment.--Section 201(f) of the Federal 
     Power Act (16 U.S.C. 824(f)) is amended by striking 
     ``foregoing, or any corporation'' and inserting ``foregoing 
     (other than the Tennessee Valley Authority) or any 
     corporation''.

     SEC. 3. DISPOSITION OF PROPERTY.

       Section 203 of the Federal Power Act (16 U.S.C. 824b) is 
     amended by adding at the end the following:
       ``(c) TVA Exception.--This section does not apply to a 
     disposition of the whole or any part of the facilities of the 
     Tennessee Valley Authority if--
       ``(1) the Tennessee Valley Authority discloses to the 
     Commission (on a form, and to the extent, that the Commission 
     shall prescribe by regulation) the sale, lease, or other 
     disposition of any part of its facilities that--
       ``(A) is subject to the jurisdiction of the Commission 
     under this Part; and
       ``(B) has a value of more than $50,000; and

[[Page S8110]]

       ``(2) all proceeds of the sale, lease, or other disposition 
     under paragraph (1) are applied by the Tennessee Valley 
     Authority to the reduction of debt of the Tennessee Valley 
     Authority.''.

     SEC. 4. FOREIGN OPERATIONS; PROTECTIONS.

       Section 208 of the Federal Power Act (16 U.S.C. 824g) is 
     amended by adding at the end the following:
       ``(c) Tennessee Valley Authority.--
       ``(1) Limit on charges.--
       ``(A) No authorization or permit.--The Commission shall 
     issue no order under this Act that has the effect of 
     authorizing or permitting the Tennessee Valley Authority to 
     make, demand, or receive any rate or charge, or impose any 
     rule or regulation pertaining to a rate or charge, that 
     includes any costs incurred by or for the Tennessee Valley 
     Authority in the conduct of any activities or operations 
     outside the United States.
       ``(B) Unlawful rate.--
       ``(i) In general.--Any rate, charge, rule, or regulation 
     described in subparagraph (A) shall be deemed for the 
     purposes of this Act to be unjust, unreasonable, and 
     unlawful.
       ``(ii) No limitation on authority.--Clause (i) does not 
     limit the authority of the Commission under any other 
     provision of law to regulate and establish just and 
     reasonable rates and charges for the Tennessee Valley 
     Authority.
       ``(2) Annual report.--The Tennessee Valley Authority shall 
     annually--
       ``(A) prepare and file with the Commission, in a form that 
     the Commission shall prescribe by regulation, a report 
     setting forth in detail any activities or operations engaged 
     in outside the United States by or on behalf of the Tennessee 
     Valley Authority; and
       ``(B) certify to the Commission that the Tennessee Valley 
     Authority has neither recovered nor sought to recover the 
     costs of activities or operations engaged in outside the 
     United States by or on behalf of the Tennessee Valley 
     Authority in any rate, charge, rule, or regulation on file 
     with the Commission.''.

     SEC. 5. TVA POWER SALES AND PROPERTY VALUATION.

       (a) In General.--Part II of the Federal Power Act (16 
     U.S.C. 824 et seq.) is amended by adding at the end the 
     following:

     ``SEC. 215. TVA POWER SALES.

       ``(a) In General.--The Tennessee Valley Authority shall not 
     sell electric power to a retail customer that will consume 
     the power within the area that, on the date of enactment of 
     this section, is assigned by law as the distributor service 
     area, unless--
       ``(1) the customer (or predecessor in interest to the 
     customer) was purchasing electric power directly from the 
     Tennessee Valley Authority as a retail customer on that date;
       ``(2) the distributor is purchasing firm power from the 
     Tennessee Valley Authority in an amount that is equal to not 
     more than 50 percent of the total retail sales of the 
     distributor; or
       ``(3) the distributor agrees that the Tennessee Valley 
     Authority may sell power to the customer.
       ``(b) Retail Sales.--Notwithstanding any other provision of 
     law, the rates, terms, and conditions of retail sales of 
     electric power by the Tennessee Valley Authority that are not 
     prohibited by subsection (a) shall be subject to regulation 
     under State law applicable to public utilities in the manner 
     and to the extent that a State commission or other regulatory 
     authority determines to be appropriate.
       ``(c) Assurance of Adequate Electric Generation Capacity.--
       ``(1) In general.--Notwithstanding any other provision of 
     law, after the date of enactment of this section, the 
     Tennessee Valley Authority shall not construct or acquire by 
     any means electric generation capacity, or sell the output of 
     electric generation capacity constructed or acquired after 
     that date, unless the Commission has issued to the Tennessee 
     Valley Authority a certificate of public convenience and 
     necessity authorizing the construction or acquisition of 
     electric generation capacity.
       ``(2) Criteria for issuance of certificate.--The Commission 
     shall issue a certificate of public convenience and necessity 
     under paragraph (1) only if the Commission finds, after 
     affording an opportunity for an evidentiary hearing, that--
       ``(A) the reserve power margin of the Tennessee Valley 
     Authority for the area within which the Tennessee Valley 
     Authority is permitted by law to be a source of supply--
       ``(i) is less than 15 percent; and
       ``(ii) is expected to remain less than 15 percent for a 
     period of at least 1 year unless new capacity is constructed 
     or acquired;
       ``(B) the Energy Information Administration has submitted 
     to the Commission, with respect to issuance of the 
     certificate of public convenience and necessity, a 
     determination that--
       ``(i) there is no commercially reasonable option for the 
     purchase of power from the wholesale power market to meet the 
     needs of the area within which the Tennessee Valley Authority 
     is permitted by law to be a source of supply; and
       ``(ii) the proposed construction or acquisition is the only 
     commercially reasonable means to meet the firm contractual 
     obligations of the Tennessee Valley Authority with respect to 
     the area within which the Tennessee Valley Authority is 
     permitted by law to be a source of supply;
       ``(C) the electric generation capacity or the output of the 
     capacity proposed to be authorized will not make the 
     Tennessee Valley Authority a direct or indirect source of 
     supply in any area with respect to which the Authority is 
     prohibited by law from being, directly or indirectly, a 
     source of supply; and
       ``(D) the electric generation capacity proposed to be 
     authorized is completely subscribed in advance for use by 
     customers only within the area for which the Tennessee Valley 
     Authority or distributors of the Authority were the primary 
     source of power supply on July 1, 1957.

     ``SEC. 216. VALUATION OF CERTAIN TVA PROPERTY.

       ``(a) Evidentiary Hearing.--Not later than 120 days after 
     the date of enactment of this section, notwithstanding any 
     other provision of law, the Commission shall commence a 
     hearing on the record for the purpose of determining the 
     value of the property owned by the Tennessee Valley 
     Authority--
       ``(1) that is used and useful; and
       ``(2) the cost of which was prudently incurred in providing 
     electric service, as of July 1, 1999, to--
       ``(A) the distributors of the Authority; and
       ``(B) the customers that directly purchased power from the 
     Authority.
       ``(b) Procedures and Standards.--In making the 
     determination under subsection (a), the Commission shall use, 
     to the maximum extent practicable, the procedures and 
     standards that the Commission uses in making similar 
     determinations with respect to public utilities.
       ``(c) Timing of Final Order.--The Commission shall issue a 
     final order with respect to the determination under 
     subsection (a)--
       ``(1) not later than 1 year after the date of commencement 
     of the hearing under subsection (a); or
       ``(2) not later than a date determined by the Commission by 
     an order supported by the record.
       ``(d) Timing of Order Awarding Recovery of Stranded 
     Costs.--The Commission may issue an order awarding recovery 
     to the Tennessee Valley Authority of costs rendered 
     uneconomic by competition not earlier than the date on which 
     the Commission issues a final order with respect to the 
     determination under subsection (a).''.
       (b) Transition.--Not later than 180 days after the date of 
     enactment of this Act, the Tennessee Valley Authority shall 
     file all rates and charges for the transmission or sale of 
     electric energy and the classifications, practices, and 
     regulations affecting those rates and charges, together with 
     all contracts that in any manner affect or relate to 
     contracts that are required to be filed under Part II of the 
     Federal Power Act (16 U.S.C. 824 et seq.) (as amended by 
     subsection (a)) and that are in effect as of the date of 
     enactment of this Act.

     SEC. 6. FILING AND FULL DISCLOSURE OF TVA DOCUMENTS.

       Part III of the Federal Power Act (16 U.S.C. 825 et seq.) 
     is amended--
       (1) by redesignating sections 319 through 321 as sections 
     320 through 322, respectively; and
       (2) by inserting after section 318 the following:

     ``SEC. 319. FILING AND FULL DISCLOSURE OF TVA DOCUMENTS.

       ``(a) In General.--The Tennessee Valley Authority shall 
     file and disclose the same documents and other information 
     that other public utilities are required to file under this 
     Act, as the Commission shall require by regulation.
       ``(b) Regulation.--
       ``(1) Timing.--The regulation under subsection (a) shall be 
     promulgated not later than 1 year after the date of enactment 
     of this section.
       ``(2) Considerations.--In promulgating the regulation under 
     subsection (a), the Commission shall take into consideration 
     the practices of the Commission with respect to public 
     utilities other than the Tennessee Valley Authority.''.

     SEC. 7. APPLICABILITY OF THE ANTITRUST LAWS.

       The Tennessee Valley Authority Act of 1933 (16 U.S.C. 831 
     et seq.) is amended by inserting after section 16 the 
     following:

     ``SEC. 17. APPLICABILITY OF THE ANTITRUST LAWS.

       ``(a) Definition of Antitrust Laws.--In this section, the 
     term `antitrust laws' means--
       ``(1) an antitrust law (within the meaning of section (1) 
     of the Clayton Act (15 U.S.C. 12));
       ``(2) the Act of June 19, 1936 (commonly known as the 
     `Robinson Patman Act') (49 Stat. 1526, chapter 323; 15 U.S.C. 
     13 et seq.); and
       ``(3) section 5 of the Federal Trade Commission Act (15 
     U.S.C. 45), to the extent that the section relates to unfair 
     methods of competition.
       ``(b) Applicability.--Nothing in this Act modifies, 
     impairs, or supersedes the antitrust laws.
       ``(c) Antitrust Laws.--
       ``(1) TVA deemed a person.--The Tennessee Valley Authority 
     shall be deemed to be a person, and not government, for 
     purposes of the antitrust laws.
       ``(2) Applicability.--Notwithstanding any other provision 
     of law, the antitrust laws (including the availability of any 
     remedy for a violation of an antitrust law) shall apply to 
     the Tennessee Valley Authority notwithstanding any 
     determination that the Tennessee Valley Authority is a 
     corporate agency or instrumentality of the United States or 
     is otherwise engaged in governmental functions.''.

[[Page S8111]]

     SEC. 8. SAVINGS PROVISION.

       (a) Definition of TVA Distributor.--In this section, the 
     term ``TVA distributor'' means a cooperative organization or 
     publicly owned electric power system that, on January 2, 
     1998, purchased electric power at wholesale from the 
     Tennessee Valley Authority under an all-requirements power 
     contract.
       (b) Effect of Act.--Nothing in this Act or any amendment 
     made by this Act--
       (1) subjects any TVA distributor to regulation by the 
     Federal Energy Regulatory Commission; or
       (2) abrogates or affects any law in effect on the date of 
     enactment of this Act that applies to a TVA distributor.

     SEC. 9. PROVISION OF CONSTRUCTION EQUIPMENT, CONTRACTING, AND 
                   ENGINEERING SERVICES.

       Section 4 of the Tennessee Valley Authority Act of 1933 (16 
     U.S.C. 831c) is amended by adding at the end the following:
       ``(m) Provision of Construction Equipment, Contracting, and 
     Engineering Services.--
       ``(1) In general.--Notwithstanding any other provision of 
     this Act, except as provided in this subsection, the 
     Corporation shall not have power to--
       ``(A) rent or sell construction equipment;
       ``(B) provide a construction equipment maintenance or 
     repair service;
       ``(C) perform contract construction work; or
       ``(D) provide a construction engineering service;
     to any private or public entity.
       ``(2) Electrical contractors.--The Corporation may provide 
     equipment or a service described in subparagraph (1) to a 
     private contractor that is engaged in electrical utility work 
     on an electrical utility project of the Corporation.
       ``(3) Customers, distributors, and governmental entities.--
     The Corporation may provide equipment or a service described 
     in subparagraph (1) to--
       ``(A) a power customer served directly by the Corporation;
       ``(B) a distributor of Corporation power; or
       ``(C) a Federal, State, or local government entity;

     that is engaged in work specifically related to an electrical 
     utility project of the Corporation.
       ``(4) Used construction equipment.--
       ``(A) Definition of used construction equipment.--In this 
     paragraph, the term `used construction equipment' means 
     construction equipment that has been in service for more than 
     2,500 hours.
       ``(B) Disposition.--The Corporation may dispose of used 
     construction equipment by means of a public auction conducted 
     by a private entity that is independent of the Corporation.
       ``(C) Debt reduction.--The Corporation shall apply all 
     proceeds of a disposition of used construction equipment 
     under subparagraph (B) to the reduction of debt of the 
     Corporation.''.

     SEC. 10. AUTHORIZATION OF APPROPRIATIONS.

       There are authorized to be appropriated to the Federal 
     Energy Regulatory Commission such sums as are necessary to 
     carry out this Act and the amendments made by this Act.
                                  ____


          TVA Board Spent More Than $85,000 To Travel in 1998

       Knoxville, Tenn.--Credit card receipts show Tennessee 
     Valley Authority board members spent more than $85,000 in 
     1998 on travel expenses, a newspaper reported on Sunday.
       Among the charges are lodging at the Ritz-Carlton hotel 
     near Washington, a casino resort in Nevada and a golf club in 
     Mississippi. TVA Chairman Craven Crowell alone took 92 trips, 
     including 12 to foreign countries, The Knoxville News-
     Sentinel reported.
       Crowell's charges totaled $49,541. Crowell, who is 
     currently in England with other Tennessee business leaders, 
     declined to discuss the issue with the newspaper last week.
       Among Crowell's duties while traveling are promoting TVA 
     bonds, meeting with utility officials and attending 
     conferences, according to TVA officials.
       ``These are not pleasure trips,'' said TVA spokesman Steve 
     Bender. ``The chairman is working on these trips.''
       The U.S. General Accounting Office, the investigative arm 
     of Congress, is probing how TVA Inspector General George 
     Prosser spent TVA expense money, after a written request from 
     Crowell. In question are more than $10,000 in travel and 
     entertainment charges.
       Prosser maintains the expenses are legitimate and he is the 
     victim of retaliation by TVA officials because he 
     investigated TVA executive Joe Dickey for fraud.
       Prosser's expenses include a $500 hotel bill from a 
     Mississippi casino, $4,500 at attractions with golf courses 
     and more than $200 in liquor.
       Crowell currently is the only member of the three-member 
     TVA board. Johnny Hayes left in January to work in Vice 
     President Al Gore's presidential campaign, and Bill Kennoy's 
     nine-year term ended May 18.
       In 1998, Kennoy spent $17,935 on 69 trips, and he didn't 
     return phone calls from the newspaper seeking comment. Hayes 
     spent $17,268 on 155 trips.
       ``I never charged golf, a meal or anything else where I 
     wasn't on TVA business,'' Hayes said.
       ``I was out with customers constantly,'' he said. ``I 
     fished with them. I golfed with them. I went to every major 
     convention they had.''
       U.S. Rep. Harold Ford, Jr., D-Memphis, said the travel 
     expenses seemed high at first glance.
       ``The real measure is how much they accomplish on the 
     trips,'' Ford said.
                                  ____



                                         Paducah Power System,

                                        Paducah, KY, July 1, 1999.
     Senator Mitch McConnell,
     Russell Building, Washington, DC.
       Dear Senator McConnell: Having reviewed the ``TVA Customer 
     Protection Act of 1999,'' the Board and management of Paducah 
     Power System are supportive of the bill.
       Specifically, the protection from TVA competing with the 
     distributors for retail customers as long as at least half of 
     the distributors wholesale power requirements are purchased 
     from TVA is very important.
       The provision for identifying and establishing the 
     methodology and value of stranded cost is extremely 
     important. This information will assist future planning for 
     distributors.
       Additionally, the protection of Valley ratepayers from 
     subsidizing off system sales provides distributors within the 
     Valley to continue to provide energy at the lowest practical 
     cost.
       Thank you for your efforts and continuing interest in the 
     people of Western Kentucky and all the Tennessee Valley.
       Feel free to call if I can be of any assistance.
           Respectfully,
                                                       Don Fuller,
                                                  General Manager.
                                 ______