Chatt TFP: Trump budget does not privatize TVA
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Trump budget does not propose privatizing TVA as utility’s debt rises
12 hours, 39 minutes ago by Daniel Dassow
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Staff File Photo / Chris Delmas holds a sign for motorists to read outside the TVA offices on Market Street, to call for the protection the agency from the Trump administration. Several groups speculated the president wanted to privatize TVA, though the White House did not propose a sale in its new budget.
The first full budget from the second Trump administration did not propose selling off assets of the Tennessee Valley Authority after multiple groups speculated last year the president wanted to privatize the New Deal agency.
Several budgets from the Office of Management and Budget during President Donald Trump's first term suggested selling TVA's transmission system to a private operator. The proposal was met with strong opposition from Tennessee members of the U.S. Senate and House of Representatives and never advanced.
TVA is owned by the U.S. government, and its assets were worth $61 billion as of Sept. 30, according to a report the utility submitted to Congress in March. The agency, which is the largest public utility in the U.S., generates and transmits electricity used by more than 10 million people and businesses across seven states.
"We look forward to continuing to work with the White House in our shared goal of unleashing American energy and providing affordable, reliable power for the 10 million people we serve," TVA spokesperson Scott Fiedler said in an email.
TVA officials have said the utility is achieving Trump's energy agenda by investing in new power plants and new nuclear development, although the effort comes at a price. The budget released Friday estimated the federal utility's debt would soon rise by $3.5 billion, from $23.8 billion at the beginning of 2026 to $27.3 billion by the end of 2027.
Staff File Photo / From left, Noah Abbas, Braxton Stratton and Trent Waters protest outside the TVA offices on Market Street, to call for the protection of the agency from the Trump administration. Several groups speculated the president wanted to privatize TVA, though the White House did not propose a sale in its new budget.
(READ MORE: TVA faces MAGA anger as it works to achieve Trump's energy agenda)
Congress placed a debt limit of $30 billion on TVA in 1979 and has not raised the limit or adjusted it for inflation since. Around $1.7 billion of TVA's current debt is not counted toward its legal debt limit, according to the budget.
The numbers track TVA's report to Congress that showed its debt would increase by around $1.5 billion in 2026 and $2 billion in 2027. TVA's debt is not guaranteed by the U.S. government, although it is included in the federal deficit. TVA is almost entirely self-funded by sales of power to major industrial customers and local utilities that distribute it to homes and businesses.
Past administrations have recommended selling some or all of TVA's assets to help pay down the federal debt or make the utility more efficient. A budget released under former President Barack Obama in 2013 announced the White House would review whether the U.S. government should completely divest from TVA in response to the utility's debt limit and rising costs.
The Obama administration pulled back on the privatization push after an independent report said the move would harm ratepayers in the region and TVA reduced its debt and cut operational spending.
Selling TVA would require an act of Congress, and most elected officials from the region oppose the idea, saying it would raise energy costs. TVA's residential power rates are lower than what 80% of customers of the top 100 U.S. utilities pay, according to the federal budget.
Labor unions, climate groups and left-wing political organizations released statements and rallied last year to oppose any effort to privatize TVA. The campaign came after Trump fired several board members and a White House official pressured the board to call for TVA CEO Don Moul's resignation.
Moul informed the board on Friday that he will retire July 1 after a brief tenure marked by political upheaval. The executive has presided over only one board meeting with a quorum after four Trump nominees were confirmed by the Senate in December.
The Office of Management and Budget has not responded to a request for comment about why the office did not renew the recommendation of the first Trump administration to sell off TVA assets.
The utility is finishing a three-year effort to cut $950 million in planned operational spending by the end of September. Around 600 TVA employees took a voluntary buyout last year as part of the cost savings. The agency's workforce will remain steady at 10,635 employees through 2027, the White House budget said.
Contact business reporter Daniel Dassow at dda...@timesfreepress.com or 423-757-6318.
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Daniel Dassow is a business reporter for the Chattanooga Times Free Press. He earned degrees in English and religious studies from the University of Tennessee, Knoxville in 2023, where he served as editor-in-chief of The Daily Beacon. He previously worked as a tech and energy reporter for the Knoxville News Sentinel. He is the youngest of six siblings. Contact him at 423-757-6318 or dda...@timesfreepress.com.