[Congressional Record Volume 148, Number 129 (Friday, October 4, 2002)]
[Senate]
[Pages S9994-S9995]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. LOTT:
  S. 3061. A bill to impose greater accountability on the Tennessee 
Valley Authority with respect to capital investment decisions and 
financing operations by increasing Congressional and Executive Branch 
oversight; to the Committee on Environment and Public Works.
  Mr. LOTT. Mr. President, the Tennessee Valley Authority has long 
served as an engine for economic development in my part of the country 
and has enjoyed widespread support for its efforts to provide power 
that is needed to fuel the economy and enhance the quality of life of 
those it serves. It is my desire to assist the TVA in continuing its 
legacy and carrying out its mission. To provide that assistance, the 
Congress, the Administration, and the TVA itself must determine whether 
TVA's policies, practices, and long-term strategies are consistent with 
the realities of today's marketplace.
  The TVA is at a crossroads in its illustrious history. The United 
States taxpayer and the power consumers in the TVA service area have 
provided the capital necessary to develop, finance, and operate one of 
the largest, if not the largest, public power systems in history. The 
TVA is now facing a number of challenges with respect to its existing 
generating system in the form of environmental compliance, aging and 
obsolete plants, and the urgent need to provide additional generating 
capacity to meet the demands of the future. It is my belief that the 
United States taxpayer is unwilling and unable to continue to bear the 
financial burden and risks associated with addressing these challenges.
  The reality of the marketplace for energy and the political 
imperatives with which we are confronted mandate that any new financing 
strategies and supplemental sources of capital be considered and 
utilized by the TVA. Likewise, we need to review and analyze the short-
term and long-term financing and risk management strategies employed by 
the TVA with respect to its almost $26 billion of debt.
  During 2002, we have witnessed the results of risky and sometimes 
corrupt corporate financing and management practices. Although I have 
no reason to believe that TVA has been involved in any such practices, 
I believe we have a responsibility to the taxpayers to examine the 
financing and disclosure practices of the TVA to ensure that their 
investment is being protected. I note that TVA has utilized short-term 
financing facilities and derivative securities as hedging and interest 
rate management techniques. We need to better understand the risks and 
rewards associated with these strategies.
  The legislation that I am introducing today would require that the 
TVA provide the Congress and the Administration with a 10-year business 
outlook and strategic plan with respect to its development and 
financing needs, as well as an analysis of its ongoing financing and 
risk management strategies. During the period in which the

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TVA is responding to this Congressional mandate, the TVA would be 
required to cease and desist from incurring new obligations or entering 
into any arrangements for the development or financing of new, 
additional, or replacement plant, equipment, or capacity. Likewise, 
during this period the TVA would be required to gain the concurrence of 
the Director of the Office of Management and Budget and the appropriate 
Senate and House Committee leaders before undertaking any additional 
financing or refinancing activities. The legislation specifically 
provides for the necessary flexibility for the TVA to continue normal 
operations and fund necessary maintenance activities while complying 
with this Congressional mandate.
  I strongly support the TVA and I recognize its importance to the 
economic health of several states in the southeastern United States, 
including my own. Indeed, the TVA is a critical component of the 
infrastructure that supports the economy of the entire United States. 
It is my desire in introducing this legislation that the TVA be 
positioned to meet the challenges of the 21st Century. Introduction of 
this legislation is the first step to help the TVA achieve that goal.
                                 ______