CHATTANOOGA, Tenn. (AP) — The Tennessee Valley Authority is rewarding employees for helping boost the utility’s income above $1 billion last year.
TVA directors voted Friday to allow the agency’s 10,900 employees to share in some of those record earnings, the Chattanooga Times Free Press (http://bit.ly/1HewbVr) reported. The directors approved payments of $113 million, or an average year-end bonus of $10,367 per employee.
The total amount of those payments to employees was down by 14 percent from a year ago, but most of that reflected a drop in TVA employment. TVA has offered early retirements and not filled vacant positions to cut most of the more than 2,000 jobs eliminated over the past couple of years.
Meanwhile, the board was even more generous to its top five executives.
TVA CEO Bill Johnson was paid a compensation package in fiscal 2015 worth more than $6.4 million.
Four other top TVA executives were each paid more than $2 million in the fiscal year ended Sept. 30.
TVA Chairman Joe Ritch acknowledged that TVA’s executive staff is well paid by government standards. But he insisted that TVA is not a typical government agency and the federally owned utility must compete with higher-paying, investor-owned utilities to keep and retain top talent.
“We are dealing with the fact that because of the high performance we are getting, many other utilities would like to hire our people away,” Ritch said. “We still pay below industry levels.”
Ritch and other TVA directors praised Johnson and other top executives for helping to turn around TVA’s financial standing, raising the utility’s net income in each of the past four years from $60 million in fiscal 2012 to a record high $1.1 billion in fiscal 2015.
“A few years ago, everyone was talking about how TVA was going to have to raise its $30 billion debt ceiling, but we don’t here that talk anymore,” said Peter Mahurin, a TVA director who is chairman of the board’s rates and finance committee. “We’ve improved our finances and we’re paying down our debt, and I hope we don’t hear any more talk about raising our debt ceiling for many more years.”
Under Johnson, TVA cuts its annual operating expenses by $600 million and kept power rate increases below the rate of inflation while preparing the utility for new clean air standards by finishing a nuclear plant, cleaning up its coal plants and building more renewables and natural gas plants. Despite a record $3.6 billion in capital spending last year, TVA managed to keep its debt $1.2 billion below what it had budgeted for the year.
“Our rates are very competitive and getting more competitive,” Johnson said Friday.
During the past year, TVA invested more than $3 billion in the power system and environmental improvements, including clean air equipment at the Gallatin Fossil Plant, natural gas plants at Allen in Memphis and Paradise in Kentucky, completing construction at Watts Bar Nuclear Plant Unit 2, and acquiring the Ackerman Gas Plant. About $340 million was invested in the transmission system.