Plausible TVA Auction

According to a Wall Street Journal article from Monday November 15^th, a clean energy group called the Coalition for the Green Bank (CGB) is set to propose an auction of the Tennessee Valley Authority (TVA), a federally owned corporation in charge of electricity generation among other things. There are several companies like Duke Energy and Southern Co. that could potentially be interested in this sort of purchase. The money from the auction would go to green energy projects, to finance tax breaks for renewable energy, or to balance the growing federal budget deficit, a measure that could appeal to the tea party. This effort comes in the wake of the GOP surge on November 2^nd as Democrats are reaching out to Republicans.

Another group, the Center for American Progress (CAP), plans to sign proposals “for how to move beyond legislation to establish a ‘cap and trade’ system,” a bill that never developed in the senate. They are making proposals and announcements to change their strategy, now pushing an agenda that is more investment focused and not reliant on a cap and trade system. The CAP has not endorsed the TVA auction but it relates to its agenda of fostering investment, not forcing it like a cap and trade bill would. As I wrote before, this sort of proposal comes after the November mid-term elections. Environmentalist and clean energy groups have been forced to adapt to a new house majority and compromises will be more important than ever any sort of progress to be made. Both the CAP and the CGB have proposed mandatory investments in clean energy enforced by states and they are beginning a discussion about reclassifying nuclear as clean energy, an argument I have made countless times in this blog. In order to finance these projects, the CAP and the CGB are examining the idea of an Energy Independence Trust that would “provide low-cost financing for ‘clean energy’ and energy efficiency projects,” (WSJ).

I do not think there is anything wrong with this proposed auction. The author of the article, Siobhan Hughes, explained that southern Democrats have been for the auction of the TVA for a long time, and of course Republicans and tea partiers would support it because it would shrink the government. Therefore, it sounds like everybody would agree on this measure. To be honest, the way the proceeds are spent is not the important part of this issue for me. I realize that it would be a huge sum, but the options that I listed in the first paragraph—financing green energy projects, financing tax breaks for renewable energy, or balancing growing federal budget deficit—all sound like pretty logical, wise plans of action to me. I would prefer a smaller government and it seems that every one would agree that the TVA can be auctioned and that the proceeds can finance some useful projects or lighten the debt load.

Hughes, Siobhan. "Shift To Center On Energy: TVA Auction Up For Consideration." Wall Street Journal (2010). Web. 16 Nov 2010.