TVA'S FIRST-CLASS FLEET
Consumer groups question utility’s nearly $29 million purchase of luxury planes, helicopter
When TVA Chairman Richard Howorth and TVA Director Ron Walter travel to Chattanooga today for a TVA board meeting, the pair will board an $11 million jet the utility is dispatching to Memphis to bring the directors to the Scenic City.
Without a direct commercial flight between Memphis and Chattanooga, traveling aboard the Cessna Citation Excel jet will save the TVA board members more than five hours of driving each way from their respective homes in Memphis and Oxford, Miss.
“It’s a timesaver and enables us to meet longer and hold to a tighter schedule,” Howorth said. “It’s not a perk, but it is something of great value.”
Such executive aircraft travel is so valuable TVA has spent nearly $29 million in the past two and a half years to buy nearly identical corporate jets and a specialized Mercedes-Benz Style helicopter formerly used by Dallas Cowboys owner Jerry Jones.
The executive jets and helicopter are part of TVA’s overall aircraft fleet of nine active helicopters, airplanes and jets (plus a King Air 350 plane that TVA bought for $6.5 million and is now for sale). TVA employs five full-time pilots and aircraft supervisors and spends millions of dollars a year to operate its own aircraft.
But consumer and environmental groups on Tuesday blasted TVA for the executive aircraft purchases, claiming they benefit primarily wealthy executives, directors and business prospects at the expense of ordinary electric ratepayers in the Tennessee Valley.
“Buying extravagant jets and helicopters is a hijacking of the TVA act, whose
stated purpose is to protect the residential customers, not buy flashy toys for millionaire executives or cut backroom deals with private industry,” said Stephen Smith, executive director for the Southern Alliance for Clean Energy in Knoxville. “This is the very definition of corruption of the TVA mission and is ‘tone deaf’ to the needs of our region.”
Debbie Dooley, a tea party co-founder and president of Conservatives for Energy Freedom, said TVA directors and managers should be able to drive across TVA’s seven-state territory or fly on airplanes or commercial flights “like the rest of us do,” rather than using more expensive private jets or helicopters.
“The use of these jets and this luxury helicopter should not be acceptable to anyone and this is just further evidence that the self-regulated TVA monopoly is out of control, and CEO Bill Johnson needs to be replaced.”
Dooley suggested that just as the Trump White House forced former Health and Human Services Secretary Tom Price out of office last year over questions about his private jet travel, TVA should fire TVA CEO Bill Johnson for buying jets when TVA is cutting jobs and raising base electric rates.
“It is time we drained the swamp at the top of TVA, pure and simple,” she said.
But TVA officials insist its aircraft help the utility maintain its reliability and efficiency, and its executive aircraft is often used to help show off properties in the Tennessee Valley to recruit more business and jobs to the region.
Since 2013, when Johnson became CEO, TVA has cut its annual operating and maintenance costs by more than $800 million while recruiting more than $40 billion for new or expanded business in the Tennessee Valley.
JET ENVY?
Mike Skaggs, executive vice president for TVA, said TVA’s jets are safer and faster than the planes they replaced and are part of the utility’s effort to be more efficient. Skaggs also said TVA has fewer and smaller jets than the eight other comparable power utilities in the Southeast.
“The ownership of corporate aircraft is a standard industry practice,” Skaggs said. “When we look at our peer utilities in the Southeast and we compare ourselves to our closest peers, they all have more aircraft than we do and their aircraft is more often larger and more expensive than the ones we have. I certainly don’t think the number of our aircraft is out of line and I don’t think the type of aircraft we use is out of line compared with other utilities.”
Most of TVA’s aircraft involves helicopters that survey transmission lines or work on construction or maintenance work in remote areas of the Tennessee Valley.
TVA has long used its own King Air airplanes for air travel, but in 2015, TVA upgraded to a corporate jet when it acquired a Cessna Citation Excel jet for $11.2 million. Last year, TVA decided to replace another plane with a similar Cessna jet, which it bought for $10.6 million.
Skaggs said the jets cost only 7 percent more to operate than the airplanes they replaced, not counting the initial purchase price. TVA said the jets have a better safety record and are quicker, saving about 45 minutes of air travel time between Knoxville and Memphis, for instance.
HELICOPTER RECRUITING
TVA bought the executive helicopter to help its economic development staff recruit industry into the Tennessee Valley. The Mercedes-Benz Style helicopter, which TVA acquired for $6.95 million, has hardwood paneling and was once featured on “The Billionaire Shop” alongside speedboats, Ducati motorcycles and high-end New York properties.
Skaggs said the aircraft is effective in showing business prospects aerial views of potential development sites for new businesses in TVA’s 80,000-square-mile service territory.
“The majority of these locations do not have commercial air service, leaving private aircraft as the only option for safe, timely travel,” TVA spokesman Jim Hopson said.
Skaggs said recruiting new businesses to the Tennessee Valley helps create jobs and pay for TVA service throughout the region, lowering electric rates.
“The mission of economic development is an integral part of TVA’s mission and an integrated part of saving money, because when we are able to bring customers and businesses to the Tennessee Valley, that helps everyone,” Skaggs said.
But Smith and Dooley questioned why electric ratepayers should subsidize the corporate travel and entertainment for industrial prospects.
“I know lots of people who do economic development in Atlanta and other places and they don’t fly around in Mercedes-Benz helicopters,” Dooley said. “I think this really shows the attitude of TVA’s czar, Bill Johnson, and the fact that he wants to live high on the hog at the expense of the customers in the area that TVA serves.
“I don’t understand why ordinary ratepayers should pay the bill for economic development on lavish helicopters,” he said.
Jimmie Garland, a vice president for the Tennessee chapter of the NAACP, called upon Congress “to reverse the current path TVA has chartered,” which he said is contrary to the agency’s founding principles of harnessing the power of the Tennessee River to help ordinary citizens in the Tennessee Valley.
“The recent findings, revealing the reckless expenditures made by TVA and its staff, is evidence of the need for independent oversight of TVA to assure that Tennessee families are not being unfairly tasked by having them shoulder the burden of poor decision making by TVA and the local power companies,” Garland said.
The criticism over TVA’s use of aircraft comes as four new TVA directors prepare for their first public board meeting Friday in Chattanooga. The new directors, who were appointed last year by President Donald Trump, and Memphis attorney John L. Ryder, who was nominated by the president this year and is awaiting Senate confirmation, bring a new Republican majority to the nine-member TVA board.
“We are calling for a full investigation into these excessive purchases, which have clearly taken place under Bill Johnson’s watch,” Smith said.
Skaggs said TVA’s inspector general is reviewing TVA’s aircraft policies. Although the audit identified instances in which there was not sufficient written justification for using some jets and planes on occasion, the IG auditors did not recommend TVA sell any of its aircraft, Skaggs said.