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Institute for Public Service Reporting – Memphis


A Dim View: Critics Assail TVA’s Secrecy, Marketing

As the Tennessee Valley Authority vies to keeps its $1 billion Memphis contract, concerns mount over transparency and messaging

The Tennessee Valley Authority is trying to retain its $1 billion a year contract as Memphis’s exclusive supplier of electricity. (Daily Memphian file)

Mark Yates stepped confidently to the podium and launched into what was supposed to have been just another speech touting the Tennessee Valley Authority.

“Bringing jobs and capital investment to this region is what we do,’’ the TVA vice president told Memphis City Council last month.

Yet before he left, Yates and his team would be blistered by council members openly critical of TVA’s claims and its repeated failure to disclose information.

TVA regional vice president Mark Yates addresses Memphis City Council on May 10. (Memphis City Council records)

The pushback was part of a growing uneasiness over the federal utility’s messaging as it vies to retain its $1 billion-a-year contract as Memphis’s exclusive supplier of electricity.

“There are a lot of things that ticked the council off,’’ TVA critic and former Memphis Light, Gas & Water CEO Herman Morris Jr. said later, “but I really think it was just: Enough of trying to come in and talk to us like we’re stupid. Enough of that. Enough of trying to come in and talk to us like we are unsophisticated, backwater hicks.”

The frustration goes beyond what TVA is saying.

It’s what it’s not saying.

It’s the details that TVA refuses to release to the public, to news organizations, even City Council, critics claim.

As a federal agency created by Congress and built with a massive infusion of taxpayer funds, TVA is subject to the Freedom of Information Act or FOIA. Yet it has rejected a series of FOIA requests for information since local officials began taking bids from competing power suppliers in search of cheaper electricity rates.

The latest denial came last month in response to a query from the Institute for Public Service Reporting seeking details about TVA’s creation last year of a Memphis-based vice presidency aimed at improving relations here and its decision to fill the post with Yates, a longtime Memphis businessman and political operative.

Asked for internal memos and other documents connected to Yates’ hiring, Vice President for Communications Buddy Eller said TVA could find just a single two-page email that was “responsive’’ to The Institute’s FOIA request. Even then, the utility opted to withhold that document for privacy reasons, Eller said in a May 13 decision upholding TVA’s denial of a request seeking the same information a month earlier.

Eller’s answer came on the heels of news days earlier about TVA’s delay in telling the public last year of plans to dispose of hazardous coal ash in a Shelby County landfill.

“It’s almost insulting the way they go about this,’’ Memphis advertising executive John Malmo said of TVA’s secrecy.

“If they continue to stonewall … people aren’t going to believe anything else they say.”

As the founder of a legendary Memphis advertising agency and the voice of a popular audio feature on WKNO-FM public radio, Malmo has a fairly deep understanding of effective messaging.

And he thinks the federal utility is alienating many Memphians with its tactics.

“Listen, I’m a fan of TVA. The original concept was a breakthrough idea and development for such a big geographic area of the United States,’’ Malmo said of President Franklin Roosevelt’s Great Depression initiative that brought electricity to the rural South, amounting in many ways to a massive anti-poverty and economic development program.

“I really still think we benefit,’’ Malmo said, contending TVA is undercutting its powerful message through missteps and its reticence on inconvenient matters.

 “They don’t tell anybody anything unless they’re forced to.’’

TVA’s controversial messaging 

Nonetheless, TVA knows how to communicate.

“We use energy in powerful ways,’’ says a TVA commercial that aired recently in the Memphis area.

Featuring bright music and down-home images of families, workers, educators, farmers and others, the 60-second spot highlights what TVA sees as the role of electricity in supporting job creation, local education and local businesses.

“But for our region, there’s more to it than keeping the lights on. Because we’re served by public power owned by the people who live here. It’s for all of us,’’ the commercial says before ending with the logos of TVA and Memphis Light, Gas & Water, the city-owned utility that buys electricity from the federal wholesale power supplier and distributes it to more than 400,000 residential and commercial customers.

TVA recently ran a similar billboard campaign locally featuring images of Memphis scenes, everyday people and the logos of TVA and MLGW along with the message, “Together we live brighter. Low-cost, reliable power you can trust.’’

It’s uncertain how much these marketing campaigns have cost.

TVA spokesman Scott Brooks did not respond to questions aimed at determining how much the federal agency spends on advertising.

But Brooks said in an email that TVA is engaged in a public awareness campaign with MLGW and 29 other local power companies to promote the concept of community energy.

“All of our marketing efforts are focused on the value of public power and are certainly not limited to Memphis,’’ Brooks said.

Criticism was sharp in East Tennessee in 2020 when TVA aired a series of ads that it said was aimed at thanking first responders during the pandemic.

“These slick TV ads are antithetical to TVA’s historical mission,” Stephen Smith told the Chattanooga Times-Free Press then. A vocal TVA critic, Smith, executive director of the Knoxville-based Southern Alliance for Clean Energy, told the newspaper he believed TVA was using the ads to win public support in Memphis in hopes of retaining its exclusive contract here.

TVA spokesman Jim Hopson told the Chattanooga paper in response that the ads were designed to assure the 10 million people served by the federal utility across seven states that it was “standing by them during this difficult time.’’

Still, criticisms continue to flare over TVA’s messaging.

City Council flare up

Tensions erupted in City Council committee meetings on May 10 when TVA’s Yates appeared to present the findings of an economic impact study the utility had commissioned for $75,000.

The study, conducted by the Memphis Greater Chamber’s Center for Economic Competitiveness, concluded that TVA had helped create nearly 22,000 jobs in Shelby County between 2015 and 2020 through its support of economic development here, including both temporary construction jobs and permanent jobs. The study focused on corporate offices and manufacturing and distribution facilities in which, the report said, “TVA played a significant role in recruiting new companies and expanding existing businesses’’ by offering a variety of incentives and services.

The report appears to mirror the findings of other studies that have identified TVA as an effective leader in economic development efforts.

Site Selection magazine repeatedly has placed TVA in its top economic development performers among the nation’s 3,300 utilities. In the September 2021 edition of the magazine, TVA was credited with helping create 67,000 jobs across TVA’s seven-state service area.

“We actually invest in companies that are looking to expand or locate into Memphis and Shelby County,’’ John Bradley, TVA’s senior vice president for economic development, told the Memphis City Council as he presented a slide that said TVA has invested $86 million in such companies here between the 2017 and the 2021 fiscal years.

<strong>TVA senior vice president for economic development John Bradley. </strong>(Submitted)
John Bradley.

Bradley said “a few notable wins’’ included expansions of FedEx’s sorting facility, creating 689 jobs, and St. Jude Children’s Research Hospital, creating 1,000 jobs.

“We have incentives that we put into companies to recruit them. Not all utilities do that,’’ Bradley said, directing attention to TVA’s Investment Credit program that rewards companies for performance – number of jobs added or retained, amount of capital investment and average wages paid – by reducing power bills by 10 to 20 percent a year. 

Several council members appeared unimpressed.

“The timing of this seems more political than informative,’’ said Councilman Jeff Warren.

Under questioning, the TVA team conceded it had not presented such an impact study here before.

Council member Cheyenne Johnson questioned if the presentation was intended to give an unfair advantage to TVA, which is one of more than 20 companies now bidding to replace TVA.

“I think you realize you have to have an impact in this community. Let’s just keep it fair all the way across the board until this decision is made. Okay?” Johnson said.

But the most intense criticisms came from councilman Chase Carlisle who derided TVA’s “jockeying” and “continual public lobbying effort.’’ He questioned TVA’s true economic impact here and suggested Memphis might negotiate for similar economic development initiatives from a replacement power supplier. 

City Councilman Chase Carlisle questions TVA representatives at the May 10 meeting. (City Council records)

Carlisle appeared to grow agitated when TVA vice president Bradley declined to provide details on how much TVA had reduced power bills for companies receiving economic development incentives.

“I can’t give you the details on each individual company,’’ Bradley said, citing non-disclosure agreements, “but I can tell you aggregately it’s almost $90 million’’ over the five-year study period.

“I deal in details,’’ Carlisle responded, saying the information is essential to understanding just how much TVA is helping average businesses here.

Bradley irritated Carlisle again when he said TVA is better equipped than investor-owned utilities to provide economic development incentives because “we’re public power.’

“So, you’re a public power company?’’ Carlisle asked.

When Bradley responded affirmatively, Carlisle asked why, then, was it so hard to get information from TVA through “open records requests.’’

“You have to be careful when you use terms like public to your benefit, but then you don’t disclose information to the public,’’ Carlisle said.

FOIA denials

TVA has rejected a series of FOIA requests, the most recent coming on April 15 when it denied a request by The Institute for records related to Yates’ hiring and again May 13 when TVA denied an appeal of that decision.

The Institute had sought copies of any advertisements, public notices, job postings, invitations to apply, shortlists, job interview records, internal memos, evaluations of applicants and communications with candidates.

In response, TVA FOIA officer Denise Smith said she had located “one two-page email responsive to your request.’’ Smith declined to release the record.

“This email was submitted to TVA by an outside consulting firm that was engaged to help TVA with the search and selection of the West Regional Vice President and was marked confidential,’’ Smith wrote.

Filing an appeal, The Institute clarified that the internal memorandum it sought should include any discussion of the creation of new, Memphis-based vice presidency.

TVA’s Eller responded on May 13, upholding Smith’s decision.

“While (Smith) found some documents, she determined that only one record was responsive to your specific request,’’ Eller said. That document was submitted by an outside party who “informed TVA that the document contained confidential commercial information that would put the submitter at a competitive disadvantage if released.’’

TVA created the west region vice presidency months after the MLGW board of commissioners voted to hire a Georgia firm to oversee bidding from wholesale power suppliers that might replace TVA as Memphis’s exclusive supplier of electricity.

TVA then hired Yates to fill the post in January 2021. A longtime businessman and political hand who once served as chief of staff to former Congressman Harold Ford Jr., Yates is well connected in Memphis. His wife operates a popular Memphis restaurant with Carlee McCullough, who was an MLGW commissioner when Yates was hired but has since left the board.

TVA has pointed out that while Yates is based in Memphis, his responsibilities as West Region vice president include interacting with 51 local power companies stretching from western Kentucky to West Tennessee and central Mississippi. TVA said the new post was the “pilot’’ in a larger bid to improve relations across its seven-state service area by creating four new regional vice presidencies. 

Still, critics are skeptical.

“I think the West Tennessee vice presidency was to create the illusion of TVA having an interest other than extracting money in Memphis,’’ said Morris, an attorney and the onetime CEO of MLGW who now represents the environmental group Friends of the Earth, which advocates for Memphis to leave TVA in favor of cheaper renewable energy.

“They now say, well, we’ve got a vice president in Memphis. I think it’s probably the first time in 80 years. And frankly, I think it’s too little and too late.’’

Advertising executive Malmo said he believes TVA is making a huge public relations mistake by withholding details about Yates’ hiring and other matters. TVA recently rejected a FOIA request for the salaries of its four regional vice presidents and another seeking the salaries of all of its employees.

 “I would let people in and I would let them know what people get paid,’’ Malmo said, calling TVA’s contention that such a release would put them at a competitive disadvantage with other power suppliers, “hogwash.’’

“In any category of business, people who are competing for jobs know what the levels are. And so do the employers,’’ he said.

Written By

Marc Perrusquia is the director of the Institute for Public Service Reporting at the University of Memphis, where graduate students learn investigative and explanatory journalism skills working alongside professionals. He has won numerous state and national awards for government watchdog, social justice and political reporting.

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