Just in time for the Tennessee Valley Authority’s latest scandal – this one fortunately involving merely breached employee credit-card oversight, not sudden, accidental breaches of dikes and dams – Reason magazine offers up a much dimmer view of the agency than that no doubt favored by the federally-owned corporation’s 50-member public relations staff.
It was heralded as a program to build dams that would control floods, facilitate navigation, lift people out of poverty, and help America recover from the Great Depression. Yet the reality is that the TVA probably flooded more land than it protected; much of the navigation it has facilitated involves barges of coal for coal-fired power plants; people receiving TVA-subsidized electricity have increasingly lagged behind neighbors who did not; and the TVA's impact on the Great Depression was negligible. The TVA morphed into America's biggest monopoly, dominating an 80,000 square mile region with 8.8 million people—for all practical purposes, it is a bureaucratic kingdom subject to neither public nor private controls.
When a private company screws up, someone is held accountable. People stop buying its products. Shareholders fire the CEO. The company goes bankrupt. But when a government-run company has a similar problem, no one takes the blame.Officials at TVA don’t have to answer to shareholders or voters. Government run companies, like the TVA, are interested in one thing; maintaining their own existence. As long as they keep their jobs, they couldn’t care less about the quality – or dangers – of their product.We are learning an important lesson about the differences between what happens when a private company and a public one impact the community negatively. Exxon had to pay over half a billion dollars to fix the mess it caused, and rightfully so. Troublingly, taxpayers will be forced to pay to clean up the TVA’s debacle.
Why should 242 million Americans be forced to subsidize the electricity rates of the 3 percent of Americans who happen to live in the Tennessee Valley?There's little doubt that TVA has become a burden to the nation's taxpayers. What's becoming increasingly apparent is that the status quo also harms the very Tennessee Valley residents that TVA is supposed to serve.