Obama Budget Raises Possible Sale of TVA

The Obama administration may consider selling the Tennessee Valley Authority, which provides electricity to most of Tennessee and six other states, according to a deficit-reduction proposal in the president's 2014 budget.

According The Wall Street Journal, the budget calls for a strategic review of the struggling federal agency to include "options for addressing TVA's financial situation, including the possible divestiture of TVA, in part or as a whole."

The proposal drew strong criticism from Tennessee Republican Sen. Lamar Alexander, who said federal taxpayers have no liability for TVA's debt, which is capped at $30 billion under federal law. He said TVA has assured him it can live within its current debt limits.

The TVA was created by Congress during the Great Depression as part of President Franklin Roosevelt's New Deal public works program. It built dams and later nuclear power plants to generate electricity for one of the poorest regions of the country at the time. While the government still owns the TVA, it now pays for its own operations.

John Thomas, the authority's chief financial officer, said the TVA remains financially healthy, the Journal reported. But its debt was more than $24 billion last year, when it reported a $60 million net income on $11.2 billion in revenues. The income was re-invested into the company instead of being returned to taxpayers.