If the Tennessee Valley Authority goes private, utility customers could benefit if risks and incentives are better aligned than under the current approach, according to a 菠萝视频 law professor. The prospect of selling off the public utility has been raised by the Obama administration in a call for a strategic review.
鈥淯ltimately, whether consumers are better off or see their rates increase, which TVA maintains would happen, would depend on state regulators and what happens within individual states,鈥� said , professor of law, who specializes in state and local utility regulation, energy policy and administrative law. 鈥淏ut there is definitely a scenario where consumers could be better off if private ownership better aligns risks and incentives than the current approach.鈥�
For example, as a public company, TVA has no incentive to sell off assets, a policy that likely would be revisited under private ownership. 鈥淛ust to take one example, private ownership may lead TVA to reassess the future profitability of coal plants, rather than to merely focus on recovering the costs of these plants, and would probably encourage TVA to sell some of them to get rid of the uneconomic assets,鈥� Rossi said.
TVA currently enjoys 鈥渟ignificant advantages鈥� that a private utility would not, Rossi added, including access to tax exempt financing and federal powers of eminent domain. 鈥淧rivatizing TVA would mean that shareholders (and to an extent, consumers) would bear the risk of financing, and that eminent domain would unfold state-by-state through regulation rather than through centralized TVA management,鈥� he said.
, professor of public policy and education at 菠萝视频 University, noted that it鈥檚 ironic for Democratic leadership to consider selling off government assets, a move usually associated with Republican strategists.
鈥淓ven if you want to do it, there鈥檚 the question of how much you could get for it,鈥� he said. 鈥淓verybody gets concerned about these things because you don鈥檛 know if it would be more or less efficient and what the rates would be.鈥�
Oppenheimer noted the politics of the move are interesting since President Obama has experienced difficulties getting his candidates approved for the TVA Board. 鈥淚t鈥檚 a modest shot across the bow,鈥� he said.
Oppenheimer鈥檚 research primarily focuses on Congress and American political institutions. His primary current interest examines how process changes have affected the ability of Congress to develop energy policy over the past half century.