NRECA and American Public Power Association are urging the Trump administration to reconsider its proposal to sell the transmission assets of three federal power marketing associations and the Tennessee Valley Authority and to allow these power suppliers to charge market-based rates.
The trade associations, together representing nearly 100 million consumers, voiced their "strong opposition" to the proposal in the president's FY2019 budget request in a Feb. 26 letter to Energy Secretary Rick Perry.
No evidence exists that the asset sell-off and rate change would create efficiencies, cost savings or investment recovery, NRECA and APPA wrote Perry. Instead, such moves would raise electricity costs for millions of people and businesses, undermine regional economic development and result in litigation from wholesale customers with PMA contracts.
Congress has rejected similar schemes in the past, the trade groups added.
"History has demonstrated repeatedly that initiatives to privatize all or part of the PMAs and TVA do not garner strong support in Congress, because they are both economically unjustified and politically unpopular," wrote the associations' executives, Jim Matheson and Sue Kelly.
PMA and TVA "costs are paid by customers and not the federal government; none of the costs are borne by taxpayers," NRECA and APPA told Perry. A sell-off to private entities would allow new owners "to charge substantially increased transmission rates to the PMA customers for the same service they have historically received."
The PMAs provide millions of Americans served by public power utilities and rural electric cooperatives with cost-based hydroelectric power produced at federal dams. Similarly, TVA provides affordable electric power to more than 9 million people in seven states at no cost to taxpayers.
NRECA and APPA wrote that "these partnerships have been a win-win for the federal government and for public power and rural electric cooperative utilities, their retail customers, and their communities."