Background In the late 19th century, the
Army Corps of Engineers first recognized a number of potential dam sites along the Tennessee River for electricity generation and navigation improvements. The
National Defense Act of 1916, signed into law by
President Woodrow Wilson, authorized the construction of a hydroelectric dam on the Tennessee River in
Muscle Shoals, Alabama, for the purpose of producing nitrates for ammunition; that dam was completed in 1924. During the 1920s and the 1930s, Americans began to support the idea of
public ownership of utilities, particularly hydroelectric power facilities. Many believed privately owned power companies were charging too much for power, did not employ fair operating practices, and were subject to abuse by their owners--utility holding companies--at the expense of consumers. The concept of government-owned generation facilities selling to publicly owned distribution utilities was controversial, and remains so today. The private-sector practice of forming utility holding companies had resulted in them controlling 94 percent of generation by 1921, and they were essentially unregulated. In an effort to change this, Congress and Roosevelt enacted the
Public Utility Holding Company Act of 1935 (PUHCA). During his 1932 presidential campaign, President Franklin D. Roosevelt expressed his belief that private utilities had "selfish purposes" and said, "Never shall the federal government part with its sovereignty or with its control of its power resources while I'm President of the United States." U.S. Senator
George W. Norris of
Nebraska also distrusted private utility companies, and in 1920 blocked a proposal from industrialist
Henry Ford to build a private dam and create a utility to modernize the Tennessee Valley. In 1930, Norris sponsored the
Muscle Shoals Bill, which would have built a federal dam in the valley, but it was vetoed by President
Herbert Hoover, who believed it to be
socialistic. The idea behind the Muscle Shoals project became a core part of President
Franklin D. Roosevelt's
New Deal program that created the Tennessee Valley Authority. Even by Depression standards, the Tennessee Valley was in dire economic straits in 1933. Thirty percent of the population was affected by
malaria. The average income in the rural areas was $639 per year (equivalent to $ in ), with some families surviving on as little as $100 per year (equivalent to $ in ). Much of the land had been exhausted by poor farming practices, and the soil was
eroded and depleted.
Crop yields had fallen, reducing farm incomes. The best timber had been cut, and 10% of forests were lost to fires each year. TVA developed fertilizers, and taught farmers ways to improve crop yields. The workers were classified by the usual racial and gender lines of the region, which limited opportunities for minorities and women. TVA hired a few
African Americans, generally restricted for janitorial or other low-level positions. TVA recognized
labor unions; its skilled and semi-skilled blue collar employees were unionized, a breakthrough in an area known for corporations hostile to miners' and textile workers' unions. Women were excluded from construction work. With the goal of providing further economic relief to TVA employees, Knoxville TVA Employees Credit Union was formed. In 1934, Knoxville TVA Employees Credit Union established a place for TVA employees to store their money when the Great Depression shuttered many traditional banks. ,
Arthur E. Morgan, and
David E. Lilienthal Many local landowners were suspicious of government agencies, but TVA successfully introduced new agricultural methods into traditional farming communities by blending in and finding local champions. Tennessee farmers often rejected advice from TVA officials, so the officials had to find leaders in the communities and convince them that
crop rotation and the judicious application of fertilizers could restore soil fertility. Once they had convinced the leaders, the rest followed. , the first hydroelectric dam built by the TVA, TVA immediately embarked on the construction of several hydroelectric dams, with the first,
Norris Dam in upper
East Tennessee, breaking ground on October 1, 1933. These facilities, designed with the intent of also controlling floods, greatly improved the lives of farmers and rural residents, making their lives easier and farms in the Tennessee Valley more productive. They also provided new employment opportunities to the poverty-stricken regions in the Valley. At the same time, however, they required the
displacement of more than 125,000 valley residents or roughly 15,000 families, The projects also inundated several
Native American archaeological sites, and graves were reinterred at new locations, along with new tombstones. The available electricity attracted new industries to the region, including
textile mills, providing desperately needed jobs, many of which were filled by women. A few regions of the Tennessee Valley did not receive electricity until the late 1940s and early 1950s, however. TVA was one of the first federal
hydropower agencies, and was quickly hailed as a success. While most of the nation's major hydropower systems are federally managed today, other attempts to create similar regional corporate agencies have failed. The most notable was the proposed Columbia Valley Authority for the
Columbia River in the
Pacific Northwest, which was modeled on the TVA, but did not gain approval.
World War II , wearing a contractor's employee badge, at work during the 1942 construction of
Douglas Dam in
East Tennessee In order to provide the power for essential industries during
World War II, TVA engaged in one of the largest hydropower construction programs ever undertaken in the U.S. This was especially important for the energy-intensive
aluminum industry, which was used in airplanes and munitions. By early 1942, when the effort reached its peak, 12 hydroelectric plants and one coal-fired steam plant were under construction at the same time, and design and construction employment reached a total of 28,000. In its first eleven years, TVA constructed a total of 16 hydroelectric dams. During the war, the agency also provided 60% of the elemental
phosphorus used in munitions, produced maps of approximately of foreign territory using
aerial reconnaissance, and provided mobile housing for war workers. The government originally intended the electricity generated from Fontana to be used by
Alcoa factories for the war effort. However, the abundance of TVA power was one of the major factors in the decision by the U.S. Army to locate
uranium enrichment facilities in
Oak Ridge, Tennessee, for the world's first
atomic bombs. This was part of an effort codenamed the
Manhattan Project.
Increasing power demand in
Hawkins County, Tennessee, By the end of World War II, TVA had completed a navigation channel the length of the Tennessee River and had become the nation's largest electricity supplier. Even so, the demand for electricity was outstripping TVA's capacity to produce power from
hydroelectric dams, and so TVA began to construct additional coal-fired plants. Political interference kept TVA from securing additional federal appropriations to do so, so it sought the authority to issue bonds. Several of TVA's coal-fired plants, including
Johnsonville,
Widows Creek,
Shawnee,
Kingston,
Gallatin, and
John Sevier, began operations in the 1950s. In 1955 coal surpassed hydroelectricity as TVA's top generating source. On August 6, 1959, President
Dwight D. Eisenhower signed into law an amendment to the TVA act, making the agency self-financing. During the 1950s, TVA's generating capacity nearly quadrupled. The following year, TVA began work on the construction of
Tellico Dam, which had been initially conceived in the 1930s and would later become its most controversial project.
Financial problems, Tellico Dam, and restructuring along the Tellico Reservoir was proposed to support 30,000 residents. The project was cancelled soon after the Tellico Project's controversy. During the 1970s significant changes occurred in the economy of the Tennessee Valley and the nation, prompted by energy crises in
1973 and
1979 and accelerating fuel costs throughout the decade. The average cost of electricity in the Tennessee Valley increased fivefold from the early 1970s to the early 1980s. TVA's first nuclear reactor,
Browns Ferry Unit 1, began commercial operation on August 1, 1974. Between 1970 and 1974, TVA set out to construct a total of 17 nuclear reactors, due to a projection of further rapid increase in power demand. However, in the 1980s, it became increasingly evident that the agency had vastly overestimated the Valley's future energy needs, and rapid increases in construction costs and new regulations following the
Three Mile Island accident posed additional obstacles to this undertaking. In 1981, the board voted to defer the
Phipps Bend plant, as well as to slow down construction on all other projects. The
Hartsville and
Yellow Creek plants were cancelled in 1984 and
Bellefonte in 1988. Construction of the
Tellico Dam raised political and environmental concerns, as laws had changed since early development in the valley. Scientists and other researchers had become more aware of the massive environmental effects of the dams and new lakes, and worried about preserving habitats and species. The Tellico Dam project was initially delayed because of
concern over the
snail darter, a small
ray-finned fish which had been discovered in the Little Tennessee River in 1973 and listed as an
endangered species two years later. A lawsuit was filed under the
Endangered Species Act and the U.S. Supreme Court ruled in favor of protecting the snail darter in
Tennessee Valley Authority v. Hill in 1978. The project's main motive was to support recreational and tourism development, unlike earlier dams constructed by TVA. Land acquired by eminent domain for the Tellico Dam and its reservoir that encountered minimal inundation was sold to private developers for the construction of present-day
Tellico Village, a
planned retirement community. The inflation crises of the 1970s and early 1980s, combined with the cancellation of several of the planned nuclear plants put the agency in deep financial trouble. In an effort to restructure and improve efficiency and financial stability, TVA began shifting towards a more corporate environment in the latter 1980s.
Marvin Travis Runyon, a former corporate executive in the
automotive industry, became chairman of the TVA in January 1988, and pledged to stabilize the agency financially. During his four-year term he worked to reduce management layers, and reduced overhead costs by more than 30%, which required thousands of workers to be laid off and many operations transferred to private contractors. These moves resulted in cumulative savings and efficiency improvements of $1.8 billion (equivalent to $ in ). and the institution of a rate freeze that continued for ten years.
Early 1990s to late 2010s As the electric-utility industry moved toward restructuring and
deregulation, TVA began preparing for competition. It cut operating costs by nearly $800 million a year, reduced its workforce by more than half, increased the generating capacity of its plants, and developed a plan to meet the energy needs of the Tennessee Valley through 2020. In 1992 work resumed on
Watts Bar Unit 1, and the reactor began operation in May 1996. This was the last commercial nuclear reactor in the United States to begin operation in the 20th century. In 2002, TVA began work to restart
Browns Ferry Unit 1, the last of TVA's reactors that had been mothballed in 1985. This unit returned to service in 2007. In 2004, TVA implemented recommendations from the Reservoir Operations Study (ROS) on how it operates the Tennessee River system. In 2005, the company announced its intention to construct an
Advanced Pressurized Water Reactor at its Bellefonte site in Alabama, filing the necessary applications in November 2007. This proposal was gradually trimmed over the following years, and essentially voided by 2016. In October 2007, construction resumed on
Watts Bar Unit 2. which began commercial operation in October 2016. Watts Bar Unit 2 was the first new nuclear reactor to enter service in the United States in the 21st century. , the largest environmental disaster in American history On December 22, 2008, an earthen dike impounding a
coal ash pond at TVA's
Kingston Fossil Plant failed,
releasing of coal ash slurry across of land and into two tributaries of the Tennessee River. The spill, of which cleanup was completed in 2015 at a cost of more than $1 billion, was the largest industrial spill in United States history, and considered one of the worst
environmental disasters of all time. A 2009 report by engineering firm
AECOM found a number of inadequate design factors of the ash pond were responsible for the spill, and in August 2012, TVA was found liable for the disaster by the
U.S. District Court for the Eastern District of Tennessee. The initial spill resulted in no injuries or deaths, but several of the employees of an engineering firm hired by TVA to clean up the spill developed illnesses, some of which were fatal, In 2009, to gain more access to sustainable, green energy, TVA signed 20-year
power purchase agreements with Maryland-based CVP Renewable Energy Co. and Chicago-based Invenergy Wind LLC for electricity generated by wind farms. In April 2011, TVA reached an agreement with the
Environmental Protection Agency (EPA), four state governments, and three environmental groups to drastically reduce pollution and carbon emissions. Under the terms of the agreement, TVA was required to retire at least 18 of its 59 coal-fired units by the end of 2018, and install scrubbers in several others or convert them to make them cleaner, at a cost of $25 billion, by 2021.
Recent history (SMR) facility at the
Clinch River Nuclear Site, the first of several to be constructed as part of TVA's New Nuclear Program approved in early 2022 In 2018, TVA opened a new cybersecurity center in its downtown Chattanooga Office Complex. More than 20 Information Technology specialists monitor emails, Twitter feeds and network activity for cybersecurity threats and threats to grid security. Across TVA's digital platform, two billion activities occur each day. The center is staffed 24 hours a day to spot any threats to TVA's 16,000 miles of transmission lines. Given continued economic pressure on the coal industry, the TVA board defied President
Donald Trump and voted in February 2019 to close two aging coal plants, Paradise Unit 3 and Bull Run. TVA chief executive
Bill Johnson said the decision was not about coal, per se, but rather "about keeping rates as low as feasible". They stated that decommissioning the two plants would reduce its carbon output by about 4.4% annually. TVA announced in April 2021 plans to completely phase out coal power by 2035. The following month, the board voted to consider replacing almost all of their operating coal facilities with combined-cycle gas plants. Such plants considered for gas plant redevelopment include the Cumberland, Gallatin, Shawnee, and Kingston facilities. In early February 2020, TVA awarded an outside company,
Framatome, several multi-million-dollar contracts for work across the company's nuclear reactor fleet. This includes fuel for the
Browns Ferry Nuclear Plant, fuel handling equipment upgrades across the fleet and
steam generator replacements at the
Watts Bar Nuclear Plant. Framatome will provide its state-of-the-art ATRIUM 11 fuel for the three
boiling water reactors at
Browns Ferry. This contract makes TVA the third U.S. utility to switch to the ATRIUM 11 fuel design. Citing its aspiration to reach net-zero carbon emissions in 2050, the TVA Board voted to approve an advanced approach of nuclear energy technology with an estimated $200 million investment, known as the New Nuclear Program (NNP) in February 2022. This would promote the construction of new nuclear power facilities, particularly
small modular reactors, with the first facility being constructed in partnership with
Oak Ridge National Laboratory at the
Clinch River Nuclear Site in
Oak Ridge. In December 2025, the
United States Department of Energy allocated TVA a grant of $400 million to assist in deployment of advanced light-water SMRs; TVA is planning to build a
BWRX-300 SMR. On December 23, 2022, TVA had several hours of
rolling blackouts due to the
late December 2022 North American winter storm. As many as 24,000
Nashville Electric Service customers were without power, with thousands more from smaller distributors affected as well. == Criticism and controversies ==