Seldom has the release of public information lit such a firestorm. Even now, the decade-old controversy stirs troubling memories for journalist Alison Gerber.
Back in 2012, her newspaper asked the Tennessee Valley Authority for salary data via a formal Freedom of Information Act (FOIA) request.
The federally owned utility — created by Congress and built with a massive infusion of taxpayer funds to erect its dams, power plants and related infrastructure — complied.
It released the salaries of its employees, from janitors and clerks on up to accountants, engineers and executives — some 12,000 workers in all — every one of them published on the website of the Chattanooga Times-Free Press.
“We received hundreds of complaints,’’ said Gerber, the paper’s editor. But the pushback involved more than mere complaints. The newspaper endured insults and personal attacks from TVA employees contending their privacy had been violated.
Now, ten years later, TVA refuses to disclose all but a handful of its salaries, releasing only the compensation of its CEO and four or five other top executives in annual reports. Despite repeated requests, the agency has failed to identify any law change since 2012 allowing it to withhold most of its salaries, which it now treats as confidential business information.
As TVA wrestles with its dual identity as a government agency and a competitive business, an examination of its salaries could inform the ongoing power supply debate in Memphis, where critics contend that extravagant spending and generous pay lead to higher electricity rates despite the agency’s recent success at reining in costs.
“They have built up a gigantic bureaucracy,’’ said Karl Schledwitz, a leading voice calling for Memphis to sever ties with TVA.
Measuring such claims is complicated, in part, because TVA refuses to release salary tables.
“…There is no justification for intruding on the privacy of the thousands of TVA employees whose compensation you have requested,’’ TVA FOIA officer Denise Smith wrote to the Institute for Public Service Reporting last month in denying a request similar to the 2012 Times-Free Press query.
The denial was the second in as many months by TVA in answer to FOIAs filed by The Institute. And it follows a pattern of denials of requests for public information from other entities and individuals, including elected federal officials.
Just this March, TVA denied a request for the salaries of four new vice president positions, including one based in Memphis. The federal utility created the Memphis vice presidency last year to help shore up relations here after local officials began searching for other power suppliers that might replace TVA as Memphis’s exclusive source of electricity. Such a move could cost TVA $1 billion a year in revenue.
What role, if any, the 2012 FOIA controversy in Chattanooga plays in TVA’s current salary secrecy is unclear.
TVA critics like Stephen Smith believe the secrecy is part of a culture of arrogance and unaccountability at TVA that comes with being a monopoly in most of Tennessee and parts of six other Southern states.
“The public has a right to know what’s going on,’’ said Smith, executive director of the Knoxville-based Southern Alliance for Clean Energy.
“It is part and parcel for working for a federal public entity that you need just own the fact that your salary is going to be public. Because it is part of being part of the federal government. And if TVA wants to be a private company, then let’s privatize TVA.”
Reining in costs
TVA spokesman Scott Brooks declined to discuss TVA’s refusal to release salary data to The Institute.
“I understand you have also filed an appeal on these denials and posed similar questions in that process,’’ Brooks wrote in an email last month. “Our responses will be provided in due course as part of that process.’’
However, in a separate email this week, Brooks countered critics’ contentions of a runaway TVA bureaucracy built up under past leaders like former CEO Bill Johnson, who retired in 2018.
“TVA has reduced our operating expenses since that time by $800 million a year,’’ Brooks said.
“That included a comprehensive review of staffing levels, which led to positions being reevaluated as people retired or moved on from TVA in the last five years.’’
Indeed, TVA is much leaner now than when the salaries of its then-12,515 employees landed on the website of the Times Free-Press in 2012, when newspapers across the country began publishing government salaries on the Internet as part of a broad public service mission to promote transparency.
TVA now has 10,192 employees, according to its latest annual report.
TVA also is aggressively pushing back at its Memphis critics.
In a recent interview, TVA’s current CEO Jeff Lyash disputed claims that TVA is overcharging Memphis Light, Gas & Water, the city-owned utility that buys wholesale electricity from TVA and distributes it to more than 400,000 residential and commercial customers in Shelby County.
“We provide some of the lowest costs in the country,’’ Lyash said on WKNO public television’s “Behind The Headlines,” referring to TVA studies that show its rates are lower than 80 percent of utilities across the country.
Still, the cost of electricity is hotly disputed in Memphis.
Critics embrace a 2020 study commissioned by MLGW that found Memphis could save more than $120 million a year if it exited TVA and purchased power from the Midcontinent Independent System Operator or MISO, a nonprofit power consortium operating in all or parts of 15 states in the West, Midwest and South, including Arkansas.
Questions about accountability
And though most of the 153 local power companies that purchase electricity from TVA appear satisfied, Memphis is not alone when it comes to questioning costs and transparency.
Anxiety over rising power costs led East Tennessee utility executive Rody Blevins to begin seeking answers from TVA about five years ago. But Blevins said he never could get any straight answers.
“We just want TVA to do the right thing,’’ said Blevins, the now semi-retired CEO of Volunteer Energy Cooperative, a rural power company in Decatur, Tennessee, about an hour northeast of Chattanooga.
“But for whatever reason, they got their own motives. And they won’t do it.’’
Blevins is among a growing number of critics who contend TVA has lost its way.
Formed by the federal government in 1933 at the height of the Great Depression to create jobs, stop flooding and provide electricity to the rural South, TVA dammed the Tennessee River and took control of thousands of acres of land.
President Franklin Roosevelt called for TVA to strike a delicate balance as “a corporation clothed with the power of government but possessed of the flexibility and initiative of a private enterprise.’’
Critics like Marc Hyden of the conservative-leaning public policy think tank R Street Institute see TVA now as more a “hulking government organization’’ that has neither shareholders, competition, nor government regulators to keep its empire building in check.
“As it stands, the TVA not only stifles necessary competition, it squanders money,’’ Hyden wrote in a guest column in The Commercial Appeal in 2018.
That year marked an iconic moment when the public learned TVA had spent $29 million to buy two corporate jets and a Mercedes Benz-style helicopter once used by Dallas Cowboys owner Jerry Jones — acquisitions that the Southern Alliance’s Smith labeled “flashy toys for millionaire executives’’ and “the very definition of corruption of the TVA mission.’’
But it’s the compensation of TVA’s top executives that critics most often highlight.
TVA paid Lyash, its CEO, $9.9 million in salary, bonuses and benefits last fiscal year. As a corporate entity of the federal government, TVA is required to provide salary data for a handful of top executives in annual reports filed with the Securities and Exchange Commission. The latest report for the fiscal year that ended Sept. 30 shows it paid five others compensation ranging from $1.5 million to $4.6 million.
By law, TVA adopts a competitive compensation plan that annually considers salaries among similar positions in private industry, public electric utilities and the government. President Donald Trump contended in 2020 that Lyash is “ridiculously overpaid’’ as a public official, though studies show his compensation is lower than many peers among investor-owned utilities.
Nonetheless, Rep. Steve Cohen of Memphis believes comparisons to investor-owned utilities are invalid, triggering an ever-rising escalation of salaries.
The Democratic Congressman introduced legislation last week that would require Knoxville-based TVA to consider not just salaries in the United States but those in Canada, where power company CEOs reportedly receive far less. Cohen said in a press release that Ontario Power Generation Inc., the Canadian power supplier where Lyash worked before coming to TVA in 2019, pays its CEO $3.8 million annually.
“It is past time to get realistic about TVA salaries and to do so fairly and transparently,’’ Cohen said. “Electricity generation and transmission managed from Knoxville should not earn its CEO three times what a typical Canadian utility CEO makes. The comparison I am suggesting may open some eyes and restore some reality to compensation at TVA.”
Cohen filed another bill in March that would require TVA to release salary and benefit data for employees making 120 percent of the GS-15, the government’s pay scale for top professionals, technical specialists and supervisors.
The bill followed repeated unsuccessful efforts by Cohen and others to obtain salary data from TVA.
“Salary information for government-owned entities like the Tennessee Valley Authority should be readily available as a matter of course,’’ Cohen said in a statement then.
Blevins, the East Tennessee utility executive, recently wrangled with TVA for months trying to obtain salary data.
His interest was kindled in recent years amid rising electricity rates and an observation: It seemed to Blevins that TVA kept expanding the number of executives carrying the title of vice president.
“There’s a lot more people (who) have vice president titles than ever before,’’ he said. “And just after a while you get thinking, well how many vice presidents do we need?’’
So, Blevins filed a FOIA request in March 2021 seeking a list of names and compensation paid “for all TVA employees that have Vice President as part of their job title.’’
In December, TVA denied Blevins’ request. The agency cited employee privacy and an obscure provision of FOIA law that protects trade secrets and commercial information from disclosure. TVA also cited that provision when denying The Institute access to the salaries of it four regional vice presidents. FOIA law expert Adam A. Marshall, senior staff attorney with the Reporters Committee for Freedom of the Press, said he believes TVA is misapplying the exemption, which is known in FOIA parlance as Exemption Five.
The Southern Alliance’s Smith said he’s encountered similar difficulties getting information from TVA. Smith helped unearth details in 2018 about TVA’s jets and helicopter, but said he couldn’t get relevant information from TVA. So, he turned to the Federal Aviation Administration.
“TVA is probably the most frustrating entity to FOIA because they just immediately circle the wagons and start locking everything down,’’ Smith said. “And they are incredibly abusive of the federal FOIA.”
In denying The Institute’s request for the salaries of West Region Vice President Mark Yates and three other vice presidents, TVA contended the release would cause it harm by giving insight to competing power suppliers like Entergy, Duke and Southern regarding TVA’s “confidential pay and business plans’’ that could allow them to steal away talent.
TVA also maintained it “is different than other federal agencies in that it self-funds from revenues (earned through energy sales) and receives no tax dollars.’’
But, critics counter, TVA is buoyed by taxpayers. As a federally owned corporation, it doesn’t pay taxes, though it does make smaller payments in lieu of taxes. The agency enjoys a competitive advantage, too, in the favorable bond ratings it receives. Even though TVA’s debt is not explicitly backed by the U.S. government, rating agencies bet Congress would bail out the agency if it couldn’t pay its debt.
Additionally, the government spent millions of taxpayer dollars between 1933 and 1959 building TVA’s dams and power plants.
“The federal taxpayer built the TVA infrastructure,’’ said Southern Alliance’s Smith “[TVA] continued to get federal appropriations all the way up until the late 1990s. So, it’s really only been in the last 20 years that they have not been technically getting appropriations.’’
Utility executive Blevins said TVA’s “excuses’’ for not releasing salary data don’t add up.
“TVA’s excuse that ‘We’re not federally funded by the taxpayers,’ that makes no sense to me because the rate payers have to pay it. So, why’s it any better for the ratepayers to pay it versus the taxpayers when it’s the same person,’’ Blevins said. “That’s just ridiculous.”
This story first appeared at dailymemphian.com under an exclusive use agreement with The Institute.