TVA to Look Aggressively for Cost Savings During 2004
Oct. 30, 2003
TVA will look for aggressive cost savings and review all of its programs to find areas for cost savings and efficiency during the 2004 fiscal year to continue providing affordable, reliable power to meet the region’s need for electricity, TVA Chairman Glenn McCullough Jr. told employees today.
In the TVA Board’s annual employee meeting, which was simulcast from Knoxville to other TVA sites throughout the Tennessee Valley, McCullough highlighted major accomplishments during 2003, which included meeting a new all-time high peak demand for electricity, and he outlined the challenges ahead.
“Our strategic plan is a broad analysis of what we must achieve to be successful in a competitive marketplace,” McCullough said. “It’s a call to action. We must reduce our debt and lower our cost of delivered power, and to do that we must achieve aggressive cost savings.”
He said TVA’s mission will remain unchanged. “TVA’s mission is to enable the people we serve to realize their dreams. We enable them to do that by delivering affordable, reliable power, making the air and water cleaner, and supporting partnerships that attract new and better jobs,” McCullough said.
TVA Directors Skila Harris and Bill Baxter, Chief Operating Officer Ike Zeringue and Chief Financial Officer Mike Rescoe also made presentations at the annual employee meeting.
As TVA begins implementing its strategic plan, which was made public on Oct. 1 at the beginning of fiscal year 2004 and is expected to be approved by the Board during the fiscal year, TVA leaders will have to make tough decisions, according to McCullough.
The $7.5-billion 2004 budget allocates $418 million for clean air, $386 million for the recovery of Browns Ferry Nuclear Plant Unit 1, and $225 million for the reduction of outstanding debt from bonds and notes.
As part of the cost-reduction effort, McCullough said TVA will take four important steps: taking a close look at its capital expenditures to see if it can do without some projects, scrubbing budgets for savings in operations and maintenance, reviewing the corporation’s use of contractors, and looking at all programs to see if they are essential to the strategic goals.
Reductions in staff would be considered only after all those steps have been taken and after a further review of staffing levels.
Harris urged employees to look for new ways to control
costs. “We must
objectively evaluate everything we do to ensure that every function supports
the core responsibilities of our mission,” Harris said.
Citing TVA’s unique role in helping Valley communities improve their quality
of life through economic progress, Baxter said that TVA must “invest in
what makes us different, which is helping communities achieve their goals.”
The Board thanked employees for accomplishments during the 2003 fiscal year, which was described as a year of operational challenges. McCullough announced that employees overall achieved six of eight measures on the Winning Performance Balanced Scorecard, which determines the amount of year-end incentives for employees.
As a result most employees will receive an award of approximately 3.6 percent of their pay for achieving performance goals set at the beginning of 2003. “On behalf of the Board and our senior leadership, we recognize that you responded well to unexpected challenges, and the winning performance numbers reflect that performance,” McCullough said.
TVA is the nation’s largest public power producer and is completely self-financed. TVA provides power to large industries and 158 power distributors that serve 8.3 million consumers in seven southeastern states.
Media Contact:
John Moulton, Knoxville (865-632-8048) or TVA News Bureau, Knoxville (865-632-6000)
