Knotts addresses TVA board

Knoxville, TN – Today the Tennessee Valley Authority Board of Directors held a public listening session at the TVA Knoxville office complex. Mike Knotts, CEO of the Tennessee Electric Cooperative Association, addressed the board during the listening session, and a readout of his comments is below.

TVA | Knoxville, TN | 2:00 p.m. EST

 

Good afternoon. My name is Mike Knotts, and I serve as the CEO of the Tennessee Electric Cooperative Association.

I appear today on behalf of 25 distribution utilities who rely upon TVA to supply wholesale energy, manage the transmission grid, and ensure the power flows on the coldest of winter mornings and the hottest summer afternoons.

The power bills paid by TECA members make up nearly 25 percent of TVA revenues – almost $3 billion per year. For each cooperative, the wholesale power bill they pay constitutes between 70-80 percent of their total revenue.

I don’t know of another business in which a single input cost from a single vendor affects a company’s financial health more significantly. Because of this, co-ops have more than just an incentive to see TVA operate efficiently and effectively. It is essential to our purpose.

I believe it is a good reminder to share with you that while electric co-ops share in TVA’s mission of the “three E’s” – energy, economic development, and environmental stewardship – we are different from municipal utilities and TVA itself, in that we are not units of government. Cooperatives are private sector, not-for-profit companies that are owned by their consumer-members.

Therefore, our policies are set by independent Boards of Directors who are elected by the company’s members – not by City Councils or political figures.

And that is where we are most alike. Because of this governance structure and the fiduciary duty you both share to make decisions that are in the public interest, co-op board members understand the monumental importance of undertaking a Board’s most important singular decision – hiring a new Chief Executive Officer.

As you undertake the process to make that decision for TVA, your choice for appointing this very important position will have lasting impacts on the entire Tennessee Valley region. Strong leadership skills and relevant professional knowledge and experience are paramount for TVA’s next leader.

But cooperatives believe that experience in and commitment to TVA’s one-of-a-kind mission is more important. More than any consultant you may hire, co-ops understand this unique mission of providing power at the lowest feasible cost for the benefit of the communities they serve. That mission is who we are, not just what we do each day.

Investor-owned utilities exist for very different purposes, and their incentives for performance do not always align with the unique mission of TVA. We believe that dedication to a mission of service will best equip the next CEO to understand and successfully lead TVA’s unique structure and shape its culture.

And we can help you identify that background and dedication, because we see it every day.

So, it is our request that the Board would carefully consider input from TVA’s private sector, not-for-profit electric cooperatives. Our non-government status and focus on people and service give us a unique perspective among TVA’s stakeholders, and we stand ready to assist you.