How to Make the TVA a Clean Energy Juggernaut

A Green New Deal is now on the agenda. Activists should embrace the public ownership option: mass decarbonization, using the Tennessee Valley Authority.

Workers end a shift on a TVA project along the Tennessee River in the 1950s.

When the Great Depression hit in the late 1920s, the whole country went into an economic tailspin. But not all places were affected equally. Less-developed rural areas like the Tennessee Valley were especially hammered by the financial collapse. When President Franklin Delano Roosevelt set out to help this area as part of his New Deal, he hit upon a relatively novel idea: create a massive public enterprise that would directly upgrade much of the area’s economy primarily by producing and distributing cheap electricity to the homes and businesses in the area.

In 1933, the Tennessee Valley Authority (TVA) was born out of this idea. The TVA has been a mainstay of the region’s economy ever since.

Operating under the slogan “Electricity for All,” the TVA immediately set about constructing hydroelectric dams across the region and selling the electricity from those dams to people in Tennessee and six adjacent states. Over the years, it has gradually built up enough energy-producing assets — including nuclear plants, coal-fired plants, oil-fired plants, solar sites, and wind farms — to annually produce 160 billion kilowatt hours of electricity that ultimately finds its way into the homes of ten million people.

As the American left tries to construct and implement a Green New Deal to avoid an imminent climate catastrophe, it should take inspiration from the electrification legacy of the first New Deal. In a paper released today by the People’s Policy Project, I outline reforms that could be made to the TVA Act to transform the TVA into a clean energy juggernaut that works to decarbonize electricity generation across the country.

The reform package consists of four main parts:

  1. Mandating that the TVA decarbonize its energy production by a certain date, e.g. 2027. As part of this transition, the TVA would be required to give workers displaced by the decarbonization efforts first priority for jobs in the TVA’s new clean energy installations.
  2. Authorizing the TVA to operate all over the country, not just in its currently defined service area.
  3. Establishing that the installation of clean energy production across the country is one of the main objectives of the TVA.
  4. Permitting the TVA to issue a new class of green power bonds to finance the capital expenditures required by its clean energy build out. These bonds, unlike those currently issued by the TVA, should be guaranteed by the full faith and credit of the federal government and there should be no limit on how many green power bonds the TVA can issue.

In addition to these reforms to the TVA Act, the paper also proposes that the federal government authorize and appropriate money to the TVA so it can subsidize the price of its carbon-free electricity in order to ensure that it is competitive with carbon-based energy sources. This would ensure that electricity ratepayers do not directly shoulder the costs of the proposed clean energy build out.

This TVA-focused strategy should appeal to the Left, because it uses a state-owned enterprise to directly decarbonize energy production throughout the country. This is contrasted with more indirect mechanisms like clean energy mandates and carbon pricing that operate primarily by shifting private sector behavior.

Since climate change is an existential crisis, these other approaches should also be embraced insofar as they reduce carbon emissions at the margin. But if socialists want something they can get behind that also incorporates left goals like public ownership and direct provision, a Green TVA is that vehicle.

Of course, a Green TVA would not need to be only something of interest to the ideologically committed left. Like so many left-wing projects, once the Green TVA gets going, it will likely become beloved by regular people across the political spectrum. Indeed, we have seen precisely this dynamic unfold with the current TVA.

When President Barack Obama floated privatizing the TVA in 2014, saying that it had already completed its mission, it was the International Federation of Professional and Technical Engineers (IFPTE) and Republican lawmakers from Tennessee who put up the biggest fight to keep the enterprise publicly owned. A public enterprise that provides affordable and reliable energy ultimately sells itself even to those who would otherwise tell you that the government should not be in the business of producing goods and services.

As the aspirations of a Green New Deal gradually get funneled into a concrete agenda, creating a Green TVA should be a no-brainer for activists and lawmakers alike. The TVA is the federal government’s power company and the federal government should use its direct authority to make it into the kind of power company the country and the earth needs.