Dive Brief:

• The federal government would be better off not selling utility Tennessee Valley Authority (TVA), according to a new strategic review by analysts Lazard Frères & Co.
• The report found a sale would not yield significant benefits for the federal government without significantly raising customer rates.
• Further, the report said that TVA's financial situation was strong enough to fund planned new programs on its own. By contrast, a sale would be difficult to achieve in a way that does not disrupt operations and also benefits stakeholders.

Dive Insight:

TVA currently owns and operates 35,500 MW of generation, a portfolio that includes coal, hydro, nuclear, and gas, and provides power to distribution utilities that serve over 9 million customers. Any sale would likely result in supply disruptions, the report found.

Rather than being sold, the utility can grow its value, according to the report. Reducing operational expenses will save money, while efforts to increase energy efficiency should result in environmental benefits and cost savings over time. 

"Based on the information received, current financial market conditions and their analysis of various business models, Lazard concluded that the business model with TVA's financial and operational plan is the best current option for the citizens of the Valley and others," the report concluded.