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Tennessee Valley Authority
Undated

History of the Tennessee Valley Authority (TVA)


President Franklin Roosevelt needed innovative solutions if the New Deal was to lift the nation out of the depths of the Great Depression. And TVA was one of his most innovative ideas. Roosevelt envisioned TVA as a totally different kind of agency. He asked Congress to create “a corporation clothed with the power of government but possessed of the flexibility and initiative of a private enterprise.” On May 18, 1933, Congress passed the TVA Act (PDF file, 175 kb, requires Adobe Acrobat Reader).

Right from the start, TVA established a unique problem-solving approach to fulfilling its mission-integrated resource management. Each issue TVA faced—whether it was power production, navigation, flood control, malaria prevention, reforestation, or erosion control—was studied in its broadest context. TVA weighed each issue in relation to the others.

From this beginning, TVA has held fast to its strategy of integrated solutions, even as the issues changed over the years.

1930s
Even by Depression standards, the Tennessee Valley was in sad shape in 1933. Much of the land had been farmed too hard for too long, eroding and depleting the soil. Crop yields had fallen along with farm incomes. The best timber had been cut. TVA developed fertilizers, taught farmers how to improve crop yields, and helped replant forests, control forest fires, and improve habitat for wildlife and fish. The most dramatic change in Valley life came from the electricity generated by TVA dams. Electric lights and modern appliances made life easier and farms more productive. Electricity also drew industries into the region, providing desperately needed jobs.

1940s

During World War II, the United States needed aluminum to build bombs and airplanes, and aluminum plants required electricity. To provide power for such critical war industries, TVA engaged in one of the largest hydropower construction programs ever undertaken in the United States. Early in 1942, when the effort reached its peak, 12 hydroelectric projects and a steam plant were under construction at the same time, and design and construction employment reached a total of 28,000.

1950s
By the end of the war, TVA had completed a 650-mile (1,050-kilometer) navigation channel the length of the Tennessee River and had become the nation’s largest electricity supplier. Even so, the demand for electricity was outstripping TVA’s capacity to produce power from hydroelectric dams. Political interference kept TVA from securing additional federal appropriations to build coal-fired plants, so it sought the authority to issue bonds. Congress passed legislation in 1959 to make the TVA power system self-financing, and from that point on it would pay its own way.

1960s
The 1960s were years of unprecedented economic growth in the Tennessee Valley. Farms and forests were in better shape than they had been in generations. Electric rates were among the nation’s lowest and stayed low as TVA brought larger, more efficient generating units into service. Expecting the Valley’s electric power needs to continue to grow, TVA began building nuclear plants as a new source of economical power.

1970s and 1980s
Significant changes occurred in the economy of the Tennessee Valley and the nation, prompted by an international oil embargo in 1973 and accelerating fuel costs later in the decade. The average cost of electricity in the Tennessee Valley increased fivefold from the early 1970s to the early 1980s. With energy demand dropping and construction costs rising, TVA canceled several nuclear plants, as did other utilities around the nation.

To become more competitive, TVA began improving efficiency and productivity while cutting costs. By the late 1980s, TVA had stopped the rise in power rates and paved the way for a period of rate stability that would last for the next decade.

1990s
As the electric-utility industry moved toward restructuring, TVA began preparing for competition. It cut operating costs by nearly $800 million a year, reduced its workforce by more than half, increased the generating capacity of its plants, stopped building nuclear plants, and developed a plan to meet the energy needs of the Tennessee Valley through the year 2020.As the electric power industry began changing, TVA continued to provide its core product—wholesale electric power—competitively, efficiently, and reliably. It aimed to set a standard for public responsibility against which private companies could be measured.

Although TVA’s production costs were third-lowest among the nation’s 25 largest electric utilities in 1997, according to Electric Light & Power magazine, it continued to look for additional ways to reduce costs and improve efficiency. TVA began to align the cost of its power with future competitive rates, in accordance with its 10-year business plan. It also initiated a Business Transformation program to further reduce costs, and moved to more flexible contracts with its distributor customers to meet their needs in a competitive marketplace.

In 1998 TVA unveiled a new clean-air strategy to reduce the pollutants that cause ozone and smog. The initiative cut annual nitrogen oxide emissions from TVA’s coal-fired plants by approximately 170,000 tons a year. Modern equipment, representing an investment of $600 million, was added to help states and cities in the Tennessee Valley meet new, more stringent air-quality standards while providing greater flexibility for industrial and economic growth in the region. TVA has invested more than $3 billion in emissions-control equipment at its 11 coal-fired power plants since the mid-1970s.

In short, TVA continued to strengthen its position as an energy leader in price, reliability, efficiency, and environmental stewardship as it helped lead the utility industry into the 21st century.

More on TVA history

The New Deal Network Web site, at http://newdeal.feri.org, has a wealth of information about the early days of TVA.

NDN’s partners and sponsors include the Franklin and Eleanor Roosevelt Institute, the Franklin D. Roosevelt Library, the Institute for Learning Technologies at Columbia University, and IBM.

The site features photographs and texts—including speeches, letters, and other historic documents—from the New Deal period. One of the primary links is “TVA: Electricity For All.” It includes information on the origins of TVA, the people who built the dams, the changes that electricity meant for Valley residents, and Lorena Hickok’s “Letters from the Field.” (Hickok was a journalist who traveled through the Valley in June 1934 recording her impressions of area residents’ reactions to TVA for Harry Hopkins, one of President Roosevelt’s closest advisers, and Eleanor Roosevelt.)

For more information on TVA’s history, contact Patricia Bernard Ezzell, TVA Historian, to her attention at tvainfo@tva.gov or at 865-632-1582. Read archived issues of the monthly TVA Heritage column here.

This document is not necessarily endorsed by the Almanac of Policy Issues. It is being preserved  in the Policy Archive for historic reasons.[an error occurred while processing this directive]

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