Environmental, ratepayer groups call for TVA CEO to resign after discovering lavish company assets – Knoxville News Sentinel


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The Tennessee Valley Authority is a federally owned electricity corporation.
An act of Congress established the company in 1933 to help the Tennessee Valley overcome environmental and economic problems.
Now TVA provides power for the entire state of Tennessee and parts of six bordering states.
The corporation also provides flood control, navigation and management for the Tennessee River System.
The company has a diverse power plant portfolio that includes nuclear, fossil, diesel, hydroelectric, natural gas, solar and wind energy.
The corporation funds its own operations by the sale of its electricity to power distributors.
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The Tennessee Valley Authority’s pair of $13 million corporate jets and its $7 million luxury helicopter have spurred calls for CEO Bill Johnson’s resignation. 

Representatives from the Southern Alliance for Clean Energy, conservative political groups and the National Association for the Advancement of Colored People said Johnson “is out of touch” with Tennessee valley and the TVA Act, which mandates responsible spending of ratepayer dollars.

More: Study: TVA service costs burden residential customers over industry

According to the FAA registry, which has a record of 19 aircraft TVA has owned, the most recent three were purchased in the last 2-1/2 years. 

The executive director of the Southern Alliance for Clean Energy Stephen Smith, who is a pilot, said the three aircraft are priced at $40 million when new.

TVA spokesman Jim Hopson said the purchases came out of TVA’s yearly operating and maintenance budget, which the TVA board approves each August. According to TVA, about 30 percent of customers’ rates fund that budget.

The Mercedes Benz-style helicopter, formerly used by Dallas Cowboys owner Jerry Jones, has hardwood paneling and is featured on “The Billionaire Shop” alongside speedboats, Ducati motorcycles and high-end New York properties. 

Hopson said TVA operates helicopters for transmission line inspection and maintenance as well as “economic development activities,” which he said the new helicopter is more suited to because of its larger interior. Hopson did not define what “economic development activities” entail.

TVA recently purchased two new Cessna mid-sized jets, which it said are safer than its previous turbo-prop aircraft. Environmental group representative Stephen Smith, who is also a pilot, said he doesn’t believe the jets are any safer than turbo-props. (Photo: Southern Alliance for Clean Energy)

The utility also purchased two new Cessna Citation Excel aircraft, trading out its previous turbo-prop aircraft, which Hopson said were not as safe as the jets.

Both types of aircraft have turbine engines, making them virtually the same, except they are even better suited to landing on small airstrips, according to 

The Aircraft Owners and Pilots Association estimates comparable mid-sized jets cost around $2,000 per hour to operate. 

Hopson said most of the places the jets visit do not have commercial air service, so flying from McGhee Tyson Airport in Knoxville is not an option. 

“They are in the Southeast region. They can get in an automobile like a lot of people do when they want to travel to the next state,” said Debbie Dooley, Tea Party Co-Founder and President of Conservatives for Energy Freedom. “It sets a bad example, especially when you’re asking more money of your customers.”

TVA rates, executive compensation called out

Smith blasted TVA for the lavish purchases and high executive compensation packages while the utility’s rate increases negatively impact Tennessee Valley residents.

Knoxville Utility Board records show the portion of customer rates paid to TVA has nearly doubled since 1997, contributing to an 80 percent increase in KUB customers bills. 

More: Why your Knox utility bill keeps going up — and why it may keep climbing

More: TVA rate change could penalize ratepayers for low energy use

Energy surveys estimate some Memphians pay between 13 and 25 percent of their annual income to keep the lights on. The city has the largest energy burden in the United States. 

“When people’s rates are being impacted the way they are and people are struggling to pay their power bills and these guys are living the lifestyles of the rich and famous, how can they justify it? ” Smith said. 

CEO Bill Johnson’s, the highest-paid federal employee in the country, has a $6.5 million compensation package, which the utility has said is below-median pay for comparable CEO’s in the utility industry. 

More: TVA approves $10.37 billion budget, 1.5 percent rate increase

Private utilities have comparable aircraft as well. 

But, Smith said, a public utility should be more frugal with ratepayers’ dollars.

“You don’t need a Mercedes Benz helicopter for economic stimulus,” Smith said. “You don’t have to have six zeroes after your salary in order to be a competent leader. There used to be a time when being the head of TVA was about public service and bringing a sense of commitment to the region.”

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