TENNESSEE VALLEY AUTHORITY

The Tennessee River, the largest tributary to the Ohio River, drains approximately 41,000 square miles of the eastern United States. With its headwaters in southwestern Virginia, the river flows southwesterly through Knoxville, Tennessee, dipping into northeastern Alabama before turning westward across the full length of the state then northward through western Tennessee into western Kentucky where its meets the Ohio River. The watershed also includes parts of North Carolina, Georgia, and Mississippi.

At the beginning of the twentieth century, the Tennessee River area was one of the poorest in the nation. Floods regularly inundated much of the region in late winter and early spring, logging had stripped the hills of forests, and poor farming techniques led to exceptional topsoil erosion rates. Many rural settlements had no electricity. The population was steadily dwindling as people left seeking employment.

During World War I (1914–1918) the U.S. government built two nitrite plants and a hydroelectric dam on the Tennessee River at Muscle Shoals, Alabama for munitions production. Following the war, the project was largely neglected. Nebraska Senator George Norris lobbied extensively for government operation of the unused facilities for local benefit. Congress twice passed legislation, in 1928 and 1931, only to be vetoed by Presidents Calvin Coolidge (1923–1929) and Herbert Hoover (1929–1933).

With newly-elected President Franklin D. Roosevelt (1933–1945) and Congress tackling a dramatic round of New Deal reform legislation early in 1933, known as the Hundred Days, Norris reintroduced his legislation. Opportunities for large-scale government planning projects offering employment relief keenly interested Roosevelt. The President took Norris' bill and dramatically enlarged the scope of it. The resulting Tennessee Valley Authority Act of 1933 created an unprecedented strategy of regional government planning and development. A novel concept, the newly created Tennessee Valley Authority (TVA) was conceived as an independent corporate agency, a federally owned corporation combining the power of government with the flexibility of private business. The act created a three-member board, appointed by the President, to oversee the autonomous program.

The development of TVA was shaped to a substantial degree by its first administrative board. Arthur Morgan, Harcourt Morgan (no relation), and David Lilienthal argued about the focus and purpose of the agency while it faced court challenges from opponents. Arthur Morgan, the first chairman, wanted to emphasize planning and efforts to eliminate poverty and he wanted electric rates to be set at levels comparable to private industry. Lilienthal was a strong supporter of public ownership and he wanted the agency to compete aggressively with private power companies. Harcourt Morgan, who opposed government planning, allied with Lilienthal and thus TVA emphasized dams for flood control navigation and power generation. In 1936 the Supreme Court upheld the agency's authority to generate and sell electricity at Wilson Dam and in 1939 it held that the agency was constitutional. By then Roosevelt had dismissed Arthur Morgan as chair of the TVA board due to the feuding among the board members and he appointed Harcourt Morgan in his place. When Lilienthal became chairman in 1941, TVA was the leading producer of electricity in the entire nation; that position the agency has maintained.

Designed to be administered through integral regional management, the TVA began with the construction of multipurpose dams and reservoirs. Eventually, a system of forty-two dams affected the economies of seven states. With the increased demand for electrical power, the TVA began constructing steam-generating facilities in the 1940s. By the 1970s large steam plants, fed with coal from extensive strip mining operations, produced over 80 percent of TVA's power. In 1959 the TVA power program became self-financing, running at a profit in the 1960s as the nation's largest electricity producer. Since that time, the TVA paid dividends and repayments to the U.S. Treasury and made payments to states and counties in place of taxes.

During World War II (1939–1945) TVA completed additional dams to generate electricity for aluminum manufacture and the initially secret atomic facilities at Oak Ridge, Tennessee. In keeping with the agency's integral approach to problems, the completion of the dams also completed a 650 mile navigation channel that connected eastern Tennessee with the Ohio River and then down the Mississippi to the sea. The system today includes twenty-nine hydroelectric dams on the Tennessee River and its tributaries.

TVA's efforts led to electrification and a great deal of economic development of what had been a rural backward area during the 1930s and 1940s. By the 1950s demand for electricity in the region exceeded the capacity of the agency's hydroelectric dams. In 1959 Congress authorized TVA to issue bonds to fund the construction of coal-fired plants, using the extensive coal reserves of the region. In the late 1990s TVA operated eleven coal-fired power plants. TVA's power operations were also made self-supporting and federal funds were appropriated only for the non-power areas of the agency. The region continued to experience significant growth in industry and population.

The availability of abundant power at low rates attracted many businesses and industry to the region. To enhance commercial traffic and recreation, the TVA dredged the Tennessee River from its mouth upstream and created a navigation channel over 600 miles in length. The new system of inland waterways greatly facilitated the hauling of coal, construction materials, petroleum, forest products, and grain. By the 1960s per capita income had risen dramatically and population decline had ended due to hundreds of thousands of new jobs

Besides successfully bringing rural electrification and power for businesses to an area twice the size of the Tennessee Valley, other significant TVA programs included flood control, soil conservation, agriculture education through demonstration farms, fertilizer research and production, and recreational developments including the 170,000 acre "Land Between the Lakes" recreational area.

Through its early years, the TVA maintained a respected image promoting a popular image of progress. The TVA became a model for other nations, particularly developing Third World nations. However, increasing attacks over environmental issues grew in the 1960s. But TVA ran into problems in two areas: For one thing, the rise of the environmentalist movement brought a consciousness of the cost to the natural surroundings of such a large and ambitious project. Many considered the TVA a symbol of heavy-handed human conquest over the environment including initial population displacements and removal of thousands of acres of rich bottomlands from potential agricultural production through reservoir flooding. The Tellico Dam construction led to a highly publicized confrontation over environmental issues. A major violator of the Clean Air Act, the TVA spent __BODY__ billion to remove sulfur dioxide emissions from its 12 coal-burning plants and for strip mine reclamation.

Another problem arose with the project to build nuclear facilities to produce electrical power. In the 1960s TVA began construction of several nuclear power plants to meet expected future growth in demand for power. These plants were plagued with problems and cost overruns, some due to the changes in the regulatory environment after the incident at Three Mile Island. Several of the plant projects were abandoned and not completed; three were completed and they remain in operation. The nuclear plants added significantly to TVA's debt and they also renewed opposition to the agency. Safety issues soon arose, triggering a Nuclear Regulatory Commission investigation in 1975. Back on track as a national pacesetter in nuclear plant construction, fourteen plants were under construction by the early 1980s at the cost of over __BODY__ billion annually. Few actually became operational and the TVA was left in debt for billions of dollars by the 1990s.

In spite of these problems, in many ways the TVA was remarkably successful in achieving its original objectives of economic development in a severely depressed region. The TVA's electricity production was also useful as a "yardstick" gauge of the reasonableness of rate-requests charged to consumers by other utilities across the nation. Some observers note that this was the aspect of the system that earned it the enmity of the public utilities. Private utility companies saw the TVA as a threat and unsuccessfully challenged its constitutionality before the Supreme Court.

Roosevelt had envisioned similar authorities in many other river basins. However, the political climate was never again conducive to such projects. Congress was unwilling to grant such autonomy to a federally funded organization. A living legacy of the New Deal, TVA remained the most ambitious development project ever undertaken by the federal government.

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The Tennessee Valley Authority is . . . the most ambitious regional development project ever undertaken by the United States government. . . . It encompassed dam construction, flood control, navigation, power generation and distribution, agricultural development, industrial development, resettlement, housing, community development, and indirectly, health and education. . . . Roosevelt regarded the TVA as the first step towards a system of national planning . . . Franklin Roosevelt had intended TVA to be the first of many regional authorities.

Higgins, Benjamin, "The American Frontier and the TVA," Society, March/April, 1995.

TENNESSEE VALLEY AUTHORITY

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