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27–748 PDF 2018

S. HRG. 115–123 

HEARING ON THE NOMINATIONS OF KENNETH 

E. ALLEN, A.D. FRAZIER, JEFFREY SMITH, AND 

JAMES R. THOMPSON III TO BE MEMBERS 

OF THE BOARD OF DIRECTORS OF THE TENNESSEE VALLEY AUTHORITY 

HEARING 

BEFORE THE

SUBCOMMITTEE ON CLEAN AIR 

AND NUCLEAR SAFETY 

OF THE

COMMITTEE ON 

ENVIRONMENT AND PUBLIC WORKS 

UNITED STATES SENATE 

ONE HUNDRED FIFTEENTH CONGRESS 

FIRST SESSION 

NOVEMBER 28, 2017 

Printed for the use of the Committee on Environment and Public Works 

( 

Available via the World Wide Web: http://www.fdsys.gov 

(II) 

COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS 

ONE HUNDRED FIFTEENTH CONGRESS 

FIRST SESSION 

JOHN BARRASSO, Wyoming, Chairman 

JAMES M. INHOFE, Oklahoma 

SHELLEY MOORE CAPITO, West Virginia 

JOHN BOOZMAN, Arkansas 

ROGER WICKER, Mississippi 

DEB FISCHER, Nebraska 

JERRY MORAN, Kansas 

MIKE ROUNDS, South Dakota 

JONI ERNST, Iowa 

DAN SULLIVAN, Alaska 

RICHARD SHELBY, Alabama 

THOMAS R. CARPER, Delaware 

BENJAMIN L. CARDIN, Maryland 

BERNARD SANDERS, Vermont 

SHELDON WHITEHOUSE, Rhode Island 

JEFF MERKLEY, Oregon 

KIRSTEN GILLIBRAND, New York 

CORY A. BOOKER, New Jersey 

EDWARD J. MARKEY, Massachusetts 

TAMMY DUCKWORTH, Illinois 

KAMALA HARRIS, California 

RICHARD M. RUSSELL, Majority Staff Director 

GABRIELLE BATKIN, Minority Staff Director 

SUBCOMMITTEE ON CLEAN AIR AND NUCLEAR SAFETY

SHELLEY MOORE CAPITO, West Virginia, Chairman 

JAMES M. INHOFE, Oklahoma 

JOHN BOOZMAN, Arkansas 

ROGER WICKER, Mississippi 

DEB FISCHER, Nebraska 

JERRY MORAN, Kansas 

JONI ERNST, Iowa 

RICHARD SHELBY, Alabama 

JOHN BARRASSO, Wyoming (ex officio) 

SHELDON WHITEHOUSE, Rhode Island 

BENJAMIN L. CARDIN, Maryland 

BERNARD SANDERS, Vermont 

JEFF MERKLEY, Oregon 

KIRSTEN GILLIBRAND, New York 

EDWARD J. MARKEY, Massachusetts 

TAMMY DUCKWORTH, Illinois 

THOMAS R. CARPER, Delaware (ex officio) 

(III) 

C O N T E N T S 

Page 

NOVEMBER 28, 2017 

OPENING STATEMENTS 

Capito, Hon. Shelley Moore, U.S. Senator from the State of West Virginia ...... 1 

McConnell, Hon. Mitch, U.S. Senator from the State of Kentucky ..................... 3 

Corker, Hon. Bob, U.S. Senator from the State of Tennessee ............................. 4 

Whitehouse, Hon. Sheldon, U.S. Senator from the State of Rhode Island ......... 5 

Barrasso, Hon. John, U.S. Senator from the State of Wyoming .......................... 6 

Alexander, Hon. Lamar, U.S. Senator from the State of Tennessee ................... 54 

Paul, Hon. Rand, U.S. Senator from the State of Kentucky, prepared statement ...................................................................................................................... 58 

WITNESSES 

Allen, Kenneth E., nominated to be a Member of the Board of Directors 

of the Tennessee Valley Authority ...................................................................... 6 

Prepared statement .......................................................................................... 9 

Responses to additional questions from: 

Senator Carper .......................................................................................... 13 

Senator Whitehouse .................................................................................. 15 

Frazier, A.D., nominated to be a Member of the Board of Directors of the 

Tennessee Valley Authority ................................................................................ 19 

Prepared statement .......................................................................................... 21 

Responses to additional questions from: 

Senator Carper .......................................................................................... 25 

Senator Whitehouse .................................................................................. 27 

Smith, Jeffrey, nominated to be a Member of the Board of Directors of 

the Tennessee Valley Authority .......................................................................... 30 

Prepared statement .......................................................................................... 32 

Responses to additional questions from: 

Senator Carper .......................................................................................... 36 

Senator Whitehouse .................................................................................. 38 

Thompson, James R., III, nominated to be a Member of the Board of Directors 

of the Tennessee Valley Authority ...................................................................... 42 

Prepared statement .......................................................................................... 44 

Responses to additional questions from: 

Senator Carper .......................................................................................... 47 

Senator Whitehouse .................................................................................. 49 

(1) 

HEARING ON THE NOMINATIONS OF KENNETH E. ALLEN, A.D. FRAZIER, JEFFREY 

SMITH, AND JAMES R. THOMPSON III TO BE 

MEMBERS OF THE BOARD OF DIRECTORS 

OF THE TENNESSEE VALLEY AUTHORITY 

TUESDAY, NOVEMBER 28, 2017 

U.S. SENATE, COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS, SUBCOMMITTEE ON CLEAN AIR AND NUCLEAR SAFETY, Washington, DC. 

The Subcommittee met, pursuant to notice, at 10:06 a.m. in room 

406, Dirksen Senate Building, Hon. Shelley Moore Capito (Chairman of the Subcommittee) presiding. 

Present: Senators Capito, Inhofe, Boozman, Fischer, Ernst, Barrasso, Whitehouse, and Gillibrand. 

OPENING STATEMENT OF HON. SHELLEY MOORE CAPITO, 

U.S. SENATOR FROM THE STATE OF WEST VIRGINIA 

Senator CAPITO. I want to thank everybody for being here today. 

This hearing of the Clean Air and Nuclear Safety Subcommittee 

is called to order. 

I will begin by recognizing myself for a brief opening statement 

before turning over the floor to the Ranking Member. 

We will then hear from our first panel, which will include Senate 

Majority Leader McConnell, to introduce the nominee from the 

Commonwealth of Kentucky and Senators Corker and Alexander to 

introduce the nominee from the great State of Tennessee. 

Following their introductions, I will ask the nominees to introduce themselves and their friends and family in the audience 

today. 

I recognize myself for 5 minutes. 

The Tennessee Valley Authority has diverse mandates to provide 

portions of Tennessee, Alabama, Georgia, Kentucky, Mississippi, 

North Carolina, and Virginia with affordable electricity, flood prevention, navigation access, and economic development opportunities. 

As a Government corporation, the TVA faces a unique combination of challenges that also confront private utilities and State and 

local governments around the country, as well as the Federal Government itself. 

Like many utilities reliant upon coal and nuclear as baseload 

generation sources, the TVA has been impacted by environmental 

regulations and the new economics of cheap natural gas. Aging coal 

2 

and nuclear units will need to have their licenses extended, be upgraded or be replaced in the coming years, all subject to the full 

gamut of State and Federal environmental regulatory review. 

The Authority also sources renewable energy from its significant 

hydroelectric assets. However, this variable source of energy can 

contribute uncertainty to the TVA’s price modeling. Like entities 

across the country, the TVA faces significant maintenance and replacement costs for infrastructure, in some cases dating back to the 

1930s. 

The TVA reliance upon ratepayers for its funding and congressional mandates to provide electricity at the lowest feasible price 

for residential and industrial customers in one of the most economically disadvantaged parts of the country is particularly susceptible 

to fuel and regulatory costs. So far it has been successful in its mission, having retail rates more affordable than nearly 70 percent of 

electric utilities. 

From an environmental perspective, 55 percent of TVA’s generation is carbon free across its nuclear and hydropower generation, 

and the Authority intends to reduce carbon dioxide emissions by 40 

percent from its 2005 baseline by the year 2020. Continuing to 

build upon TVA’s environmental stewardship will be of significant 

interest to this Committee. 

TVA is also facing a serious issue confounding government entities at every level all around the country. That is, meeting its pension obligations. The GAO sounded the alarm last year that the 

TVA retirement system is under-funded by about $6 billion. The $7.1 billion currently available to the TVA retirement system is sufficient to cover only 54 percent of existing and expected 

obligations. Though the TVA’s debt has remained stable over the 

past decade, unfunded pension obligations have increased over the 

same timeframe. Even as it transitions to a 401(k) style defined 

contribution system, these pension obligations will further pressure 

TVA’s finances given the other significant investments it will need 

to make in the coming years to fulfill its mission. 

Each of our nominees will serve a term of 5 years on the TVA’s 

board of directors determining the Authority’s goals and objectives 

to address these challenges. I look forward to hearing the testimony today on how they intend to bring their varied backgrounds 

in private and public service from coal to finance to the National 

Lab system to bear to keep the TVA a viable engine for economic 

development in the Tennessee Valley for another 80∂ years. 

Thank you for your willingness to serve on the board of the TVA. 

I will now recognize Ranking Member Whitehouse for his opening statement. 

Senator WHITEHOUSE. Madam Chair, we have both the Majority 

Leader and the Chairman of the Foreign Relations Committee 

here. I would be more than happy to defer my opening statement 

to allow them to make their introductions so they can proceed with 

what must be fairly busy schedules. 

Senator CAPITO. With unanimous consent, I think that is a great 

idea. Thank you for very much, Senator Whitehouse. 

With that, I will introduce Senate Majority Leader, Senator 

McConnell, for his introduction. 

Thank you. 

3 

OPENING STATEMENT OF HON. MITCH MCCONNELL, 

U.S. SENATOR FROM THE STATE OF KENTUCKY 

Senator MCCONNELL. Chairman Barrasso, Senator Capito, Senator Whitehouse, and colleagues, I appreciate the opportunity to be 

here today to support the nomination of Kenneth Allen of Hopkins 

County, Kentucky, to serve on the board of directors of TVA. 

President Trump made a strong choice in nominating Kenny to 

help lead the TVA to fulfill its important mission of delivering affordable and reliable energy and promoting economic development 

in the region it serves. 

Kenny is the right choice to fill this role, and he brings decades 

of relevant work experience to the position. Further, he has 

interacted firsthand with the agency for many years through his 

work in the coal industry. 

As members of this Subcommittee know, TVA is a critical resource for approximately 9 million Americans in the southeast, 

many of them in my State. About 205,000 households in Kentucky 

rely on TVA for the delivery of electricity. In addition, the TVA is 

charged with serving as a responsible steward of land and water 

around the Kentucky Dam and Reservoir which are important to 

our State economy and culture. 

As a native of western Kentucky, Kenny will help govern the 

TVA well and serve as a prudent caretaker of TVA managed land 

in Kentucky and throughout the southeast. He understands the 

particular challenges facing the coal industry in States like mine. 

During his career in the private sector, much of his work focused 

on marketing coal to electric utility companies. I am confident that 

his wealth of experience and knowledge will benefit the agency as 

it works to better serve Kentucky and the entire region. 

In addition to his nearly 40 years of work experience in the coal 

industry, he has served on the boards of a number of associations 

and commissions dedicated to environmental stewardship, energy 

production, and economic development. 

For example, he has shown his commitment to conservation and 

land preservation by serving as the Commissioner and Vice Chair 

of the Kentucky Reclamation and Guarantee Fund. For many communities, especially in coal States like mine, land reclamation and 

redevelopment are critical to economic growth. Kenny understands 

that priority. 

He has also served on the Western Kentucky Consortium of Energy and Environment and the Kentucky Workforce Investment 

Board of Directors demonstrating his commitment to affordable energy, a clean environment, promoting job creation, and economic 

development. 

Through each of these positions, he has built relationships with 

TVA communities. I want to congratulate Kenny, his wife Teresa, 

and their two sons on this important nomination. 

I thank the Subcommittee for allowing me to be here today to 

support him during this process. I was proud to recommend him 

to President Trump to serve in this position, and I hope the Subcommittee will move forward quickly to process his nomination. 

Through this morning’s hearing, I am confident that you will find 

a qualified and talented individual prepared to serve the TVA service region as a member of its board. Once again, thanks for the opVerDate Aug 31 2005 06:46 Jan 03, 2018 Jkt 000000 PO 00000 Frm 00007 Fmt 6633 Sfmt 6633 S:\_EPW\DOCS\27748.TXT SONYA
4 

portunity to be here this morning and to introduce my friend. 

Thank you so much. 

Senator CAPITO. I would like to thank the Leader. Thank you for 

taking the time. I appreciate you coming before the Committee. 

Senator Corker. 

OPENING STATEMENT OF HON. BOB CORKER, 

U.S. SENATOR FROM THE STATE OF TENNESSEE 

Senator CORKER. Thank you, Chairman Capito, Chairman Barrasso, and Ranking Member Whitehouse. 

As you know, I have about 13 months left here, and my bucket 

list is getting filled as I am able to present before EPW today for 

the first time. I thank you for that. 

I am pleased to be with you today to introduce Jeff Smith, nominated to serve on the board of the Tennessee Valley Authority. I 

would like to extend a warm welcome to Jeff and his family. 

I also want to welcome the other three board members today, 

Kenny Allen, A.D. Frazier, and Skip Thompson, as well as their 

families. 

I would also like to thank the Committee for holding this hearing. 

With over 9 million customers, TVA is the largest public power 

utility in the nation. It is critical for the region that it remains a 

low cost, reliable producer of electricity, not only for ratepayers, but 

also for our State business recruitment efforts. 

It is important that TVA has a full and well qualified board. 

Without confirmation of these nominees, the board will lose a 

quorum at the end of the year. 

As Deputy Director of Operations for one of the most prestigious 

research labs in the country, Oak Ridge National Laboratory, Jeff 

Smith understands the importance of continuing TVA’s mission. 

In this position, he gained extensive experience working with 

TVA as he coordinated with the utility to construct three new substations as part of efforts to modernize the grid at Oak Ridge. 

Jeff also has overseen cutting edge research in the energy sector. 

That knowledge and background will be of great value as our electrical power sector undergoes important changes to support the demands of the growing Tennessee Valley. 

In addition to a distinguished career, Jeff has demonstrated a 

true commitment to east Tennessee through his involvement with 

multiple community organizations that work to improve the standard of living in the region. 

I am confident that Jeff understands the needs of the Tennessee 

Valley, and I believe he will bring valuable experience to the TVA 

board. I wholeheartedly support Jeff’s nomination and the other 

nominees here today and believe their diverse backgrounds give 

them the necessary qualifications to support TVA’s important mission. 

I appreciate you letting me be here today. Thanks for holding 

this committee hearing. I hope we will swiftly confirm these nominees. 

Thank you. 

Senator CAPITO. Thank you, Senator Corker. 

5 

Senator Alexander will be here at some point, and we will recognize him. 

I will go to the Ranking Member for his statement. 

OPENING STATEMENT OF HON. SHELDON WHITEHOUSE, 

U.S. SENATOR FROM THE STATE OF RHODE ISLAND 

Senator WHITEHOUSE. That will give me time to fit in my opening statement while we wait for Senator Alexander. 

First, let me particularly welcome Jeff Smith and thank him for 

his service to our country at the Oak Ridge National Laboratory. 

I have had the opportunity to visit Oak Ridge. It is an astonishingly impressive place where astonishingly impressive work is done 

for the American people. 

Thank you, Chairman Capito and members of the Subcommittee, 

who are all here today. Welcome to all of the nominees. 

As Chairman Corker said, TVA is the nation’s largest public utility. It is positioned to lead the development of policies to provide 

affordable and clean energy. Currently, TVA provides electricity to 

about 9 million people in Tennessee, Alabama, Mississippi, Kentucky, Georgia, North Carolina, and Virginia. 

In 2015 TVA completed a long term planning process to identify 

future energy needs. In its plan, TVA stated that it would add between 150 mw to 800 mw of large scale solar by 2023 and between 

3150 mw and 3800 mw of large scale solar by 2033. These renewable goals are worth pursuing, but the heavy lifting to achieve 

them has yet to be done. 

According to the World Economic Forum, there are more than 30 

countries whose renewable energy prices are on par with fossil 

fuels, in most cases without subsidies. New auctions are sometimes 

lower than fossil fuels can match. 

Here in the U.S., the renewable energy industry currently employs nearly 700,000 Americans and provides 15 percent of our energy supply. Renewable energy capacity in the U.S. has more than 

tripled since 2008. In 2016 renewables led the way for new additions onto our energy grid. 

We are seeing an explosion of renewable energy deployment and 

generation across the U.S. The five States that get the largest percentage of their electricity from wind are Iowa, Kansas, South Dakota, Oklahoma, and North Dakota. 

Texas wind generation hit a record 15 gw in December 2016, 

meeting 45 percent of the State’s power needs, with 18,000 mw installed and another 5,000 mw under construction. In Iowa, 

MidAmerican is planning to add 2,000 mw of new wind by 2019. 

Once installed, 85 percent of the energy MidAmerican generates 

will be renewable. 

The nationwide success of renewables shows that outside of 

Washington and the thrall of the powerful fossil fuel lobby, renewable energy is both a bipartisan issue and a powerful economic engine. 

The growth in renewables is driven by innovation and rapidly declining costs, assisted sometimes by State and Federal tax incentives, strong State level renewable portfolio standards, Federal policy, and guidance from Federal agencies like the Federal Energy 

Regulatory Commission. 

6 

FERC, the regional grid operators, and utilities like TVA will 

continue to play a major role in the modernization of our grid. 

I look forward to hearing from today’s nominees about how they 

plan to carry out TVA’s long term plan and whether they support 

the ambitious renewable energy goals the agency set in 2015. 

Independent regulators are being pressed by this Administration 

to reject market forces to prop up the fossil fuel industry. Right 

now, FERC is considering a rule proposed by the Department of 

Energy to subsidize the coal industry. That rule has drawn nearly 

universal opprobrium except from the likes of coal industry magnates such as Bob Murray. 

The energy market is infested with subsidies for fossil fuels already. Any new rules at FERC should respect first the Federal 

Power Act, and not the wishes of well connected political donors 

like Murray working behind the scenes to direct Administration energy policy. 

Thank you, Madam Chair. 

Senator CAPITO. I would like to recognize the Chairman of the 

full Committee for a brief statement. 

OPENING STATEMENT OF HON. JOHN BARRASSO, 

U.S. SENATOR FROM THE STATE OF WYOMING 

Senator BARRASSO. Thank you, Senator Capito, for holding this 

Subcommittee hearing today. 

You are presiding over a very important matter on behalf of the 

full Committee, a hearing to consider the nominations of four individuals to serve as members of the Board of Directors of the Tennessee Valley Authority. The significance of these nominations to 

the TVA region and the American people as a whole is underscored 

by the interest being demonstrated by our fellow Senate colleagues. 

I would like to thank Senator McConnell as well as Senator 

Corker and Senator Alexander, who will be joining the proceedings 

shortly, for being with us today to introduce the nominees. 

I look forward to the hearing. Thank you, Madam Chairman. 

Senator CAPITO. I would ask the nominees to take your seats. 

Two gentlemen have been introduced by their home State Senators. Briefly, I would say Mr. A.D. Frazier is from Georgia. He is 

the President Emeritus of Georgia Oak Partners, LLC. Welcome. 

Additionally, we have Mr. James R. Thompson, III of Alabama. 

He is the Chief Executive Officer of Corporate Billing, LLC. Welcome to you four gentlemen. 

As you know, you are the nominees to be members of the Board 

of Directors of the Tennessee Valley Authority. I want to remind 

each of you that your full statement has been submitted for the 

record. I would like to ask that you give a 5 minute synopsis of 

your statement, and then we will begin questioning. 

Mr. Allen, we will begin with you. 

STATEMENT OF KENNETH E. ALLEN, NOMINATED TO BE A 

MEMBER OF THE BOARD OF DIRECTORS OF THE TENNESSEE VALLEY AUTHORITY 

Mr. ALLEN. Thank you, Madam Chairman. 

Good morning, Ranking Member Whitehouse and members of the 

Committee. 

7 

My name is Kenny Allen. I am extremely honored to be nominated by President Trump to serve on the Board of Directors of the 

Tennessee Valley Authority. 

I would like to thank Senator McConnell, from my home State 

of Kentucky, who brought my name to the attention of the President, and gave me a very flattering recommendation earlier, which 

I appreciate greatly. 

I have spent my entire life working in the energy sector and believe that reliable, affordable and environmentally sound energy is 

the very foundation of our standard of living in our great country. 

I believe the Tennessee Valley Authority, by the very nature of 

its structure and long history, had and will continue to play a 

major role in the innovation and implementation of energy policy 

and the production of energy for the future success of our society. 

I have led an extremely blessed life. I grew up on a small farm 

in western Kentucky. I was raised in a strong Christian family and 

taught a strong work ethic at an early age. I began my career in 

the coal mining industry in the mid-1960s and spent 50 years 

working in various capacities with two mining companies, 40 years 

with the first and 10 years with the second, before my retirement 

in June of this year. 

I began my mining career as an electrician in a mine in Ohio 

County, Kentucky. Power for the mine was provided from a new 

power plant at the time, Paradise Generating facility in neighboring Muhlenberg County. 

As I stated, it was a relatively new power plant at the time and 

was then run by TVA and continues to be operated by TVA. 

This was my first experience of many with TVA that my career 

would bring. My fascination and interest in electricity was fueled 

by the opportunities afforded me working at the mine on large electric machines. 

As I worked and self-schooled myself, I was able to advance in 

my profession. In 1973 I became the chief electrician at one of the 

largest mines in Western Kentucky. In 1984, I was promoted to the 

position of chief electrical engineer for the eastern division of the 

company I worked for and later assumed that responsibility for the 

entire Midwest for the company. 

From there I moved into senior management in the early nineties. Through the years I have served on various State and community boards, commissions, and committees both in civic and governmental entities such as the Chamber of Commerce Board of Directors, Economic Development Board of Directors, Kentucky Workforce Development Board of Directors, and the Governor’s Council 

of Economic Advisors. 

I have been the chairman of the Upper Pond River Conservancy 

District for the past 10 or 12 years, a local conservancy district in 

my community which I serve. I am Vice Chairman and Commissioner of the Kentucky Reclamation Guaranty Fund. 

The early experiences in my career not only gave me insight into 

the mechanics of our country’s vast electrical system; it gave me a 

great appreciation for all of the many lives and businesses that are 

touched and involved in the production of the electricity that each 

American enjoys every day. 

8 

My time spent in management gave me a better knowledge of 

our economy as it relates to business, and the important role our 

infrastructure plays in our day to day lives and jobs, power supply, 

roads, waterways, communication, and so forth. 

TVA plays an important role, not only in power supply, but also 

the management of our waterways, transportation and powerline 

corridors, as well as many acres of beautiful forest lands and lakes 

that enhance our region. 

The time that I have spent serving on both civic and governmental boards, commissions, and committees has strengthened my 

ability to deal with the public, and has helped to broaden my 

thought process beyond conventional thinking regarding some of 

the things that impact our daily way of life. 

I believe that the Tennessee Valley Authority has a responsibility 

to the region it serves to continue to provide reliable and affordable 

electricity, to maintain the highest standards with regard to the 

environment, and to continue to manage all of the resources under 

their care in a professional and responsible manner. 

I look forward to the opportunity to serve on this board, if approved by you, and respectfully ask for your consideration in this 

nomination process. 

Thank you very much. 

[The prepared statement of Mr. Allen follows:] 

9 


27748.001

Kenneth E. Allen 

Former Chief Operating Officer 

Armstrong Energy, Inc. 

Mr. Kenneth "Kenny" E. Allen was Executive Vice President of 

Operations and Chief Operating Officer at Armstrong Coal Company, Inc. 

from 2014-2017. From 2007 to 2011 he was Vice President of Operations 

and in 2011 was promoted to Executive Vice President of Operations. 

Allen has over 40 years of experience in the coal industry. He began his career with Peabody 

Coal Company in 1967 as an electrician. In 1971, he moved into a supervisory position and 

continued to hold various supervisory and management positions, including General Foreman, 

ChiefElectrician, Chief Electrical Engineer, Mine Superintendent, General Manager, Operations 

Manager, Vice President of Resource Development and Conservancy. Mr. Allen joined 

Armstrong in 2007. Prior to Armstrong, he served as the President and Operations Manager of 

Bluegrass Coal Company. 

Allen has served as the Chairman of the Executive Boards of the Kentucky Coal Association and 

the Western Kentucky Coal Association and currently serves as its Member. He has been and 

continues to be involved in numerous civic and community organizations. Allen currently serves 

as Commissioner and Vice Chairman of Kentucky Reclamation Guaranty Fund. He serves as the 

Chairman of the Upper Pond River Conservancy District, and sits on the Board of Directors of 

the First United Bank and Trust Company. He was a Member of the Kentucky Coal Counsel, the 

Kentucky Governors Finance Committee and Kentucky Consortium for Energy and the 

Environment. He served as a Director at Armstrong Energy, Inc. from May 2015 until February 

7, 2017. 

Mr. Allen attended classes at Madisonville Community College, the University of Evansville, the 

University of North Carolina and Darden. He and his wife, Teresa have two sons. 
10 


27748.002

Statement of Kenneth "Kenny" E. Allen 

Nominee to the Tennessee Valley Authority Board of Directors 

before the 

U.S. Senate Environment and Public Works Committee 

Subcommittee on Clean Air and Nuclear Safety 

Tuesday, November 28,2018 

Good morning, Madam Chair, Ranking member Whitehouse and members of the 

Committee. I am extremely honored to be nominated by President Trump to serve on the 

Board of Directors of the Tennessee Valley Authority. I would like to thank Senator 

Mitchell McConnell from my home state of Kentucky who brought my name to the 

attention of the President, and all of you for taking time to consider my nomination. 

I have spent my entire life working in the energy sector and believe that reliable, 

affordable, and environmentally sound energy is the very foundation of the standard of 

living in our great country. I believe that the Tennessee Valley Authority, by the very 

nature of its structure and long history, has,and will continue to play a major role in the 

ilmovation and implementation of energy policy and the production of energy for the 

future success of our society. 

I have led an extremely blessed life. Having grown up on a small farm in rural Western 

Kentucky, I was raised in a strong Christian family and taught a strong work ethic at a very 

early age. I began my career in coal mining in the mid-sixties and spent fifty years working 

in various capacities with two mining companies: forty years with Peabody Energy, and 

the last ten years before my retirement in June of this year with Armstrong Energy. 

I began my mining career as an electrician at a mine in Ohio County, Kentucky. Power for 
11 


27748.003

the mine was provided from the Paradise Generating facility in neighboring Muhlenberg 

County, a relatively new power plant that was then, and continues to be operated by TV A. 

This was the first of many experiences with TVA that my career would bring. My 

fascination and interest in electricity was fueled by the opportunities afforded me at the 

mine working on the large electric machines. As I worked and self-schooled myself, I was 

able to advance in my profession. In 1973 I became the Chief Electrician at one of the 

largest mines in Western Kentucky, and in 1984 I was promoted to the position of Chief 

Electrical Engineer for the Eastern Division of Peabody and later assumed that 

responsibility for the Mid-West region of the company. From there I moved into senior 

management in the early nineties. Through the years I have served on various state and 

community boards, commissions, and committees both in civic and governmental entities 

such as the Chamber of Commerce Board of Directors, Economic Development Board of 

Directors, Kentucky Workforce Development Board of Directors, and the Governor's 

Council of Economic Advisors. I have been the Chairman of the Upper Pond River 

Conservancy District for the past ten or twelve years and I currently serve as Vice 

Chainnan and Commissioner of the Kentucky Reclamation Guaranty Fund. 

The early experiences in my career not only gave me insight into the mechanics of our 

country's vast electrical system, it gave me a great appreciation for all of the many lives 

and businesses that are touched and involved in the production of the electricity that each 

American enjoys every day. My time spent in management gave me a better knowledge of 

our economy as it relates to business, and the important role our infrastructure plays in our 

day to day lives and jobs, power supply, roads, waterways, communication, etc. TV A plays 

an important role, not only in power supply, but also the management of our waterways, 

2 
12 


27748.004

transportation and powerline corridors, as well as many acres of beautiful forest lands and 

lakes that enhance our region. The time that I have spent serving on both civic and 

governmental boards, commissions, and committees has strengthened my ability to deal 

with the public, and has helped to broaden my thought process beyond conventional 

thinking regarding some of the things that impact our daily way of life. 

I believe that the Tennessee Valley Authority has a responsibility to the region it serves, to 

continue to provide reliable and affordable electricity, to maintain the highest standards 

with regard to the environment, and to continue to manage all of the resources under their 

care in a professional and responsible marmer. 

I look forward to the opportunity to serve on this board if approved by you and respectfully 

ask for your consideration in this nomination process. I welcome the opportunity to serve 

on this board, and commit to do my very best to help lead this organization in a direction 

that will promote and preserve our way of life and the principles of our great country. 

Again, thank you for your time today. 

3 
13 


27748.005

Senate Committee on Environment and Public Works 

Clean Air and Nuclear Safety Subcommittee 

Hearing entitled, "Nominations of Kenneth E. Allen, A.D. Frazier, Jeffrey Smith, 

and James R. Thompson III to be 

Members of the Board of Directors ofthe Tennessee Valley Authority" 

November 28, 2017 

Questions for the Record for Mr. Kenneth E. Allen 

Full Committee Ranking Member Carper: 

Please provide a response to each question, including each sub-part. 

1. I strongly believe TV A should be an industry leader, not a laggard, especially when it 

comes to clean energy and energy efficiency. I've been pleased with TV A's 

commitments to retiring old, dirty coal power plants and investing in clean energy. 

TVA's CEO, Bill Johnson, has reported that TVA is expected to easily meet the Clean 

Power Plan deadlines, even without the EPA rule. The Tennessee Valley is benefiting 

from these clean ups with cleaner air and with economic growth. For example, Google 

has announced a $600 million investment to build a database center at one ofTVA's 

retired coal plants in northern Alabama. Google wants to run the database on renewable 

energy and knows TV A can provide the clean power. This one project is expected to 

create at least I 00 jobs. My question, if confirmed, do you commit to continuing the 

clean energy investments and commit to ensuring that TV A is a leader in the clean 

energy economy? 

Answer: If confirmed I commit to researching every decision regarding the 

production of electricity and the methods and drivers used, and base my decisions 

on the latest and best economic and technical data available at the time the decision 

is made. 

2. Do you agree to provide complete, accurate and timely responses to requests for 

information submitted to you by any Member of the Environment and Public Works 

Committee? If not, why not? 

Answer: Yes 

3. In December 2007, President Bush's EPA proposed to declare greenhouse gases as a 

danger to public welfare through a draft Endangerment Finding, stating, "The 

Administrator proposes to find that the air pollution of elevated levels of greenhouse gas 

(GHG) concentrations may reasonably be anticipated to endanger public 

welfare ... Carbon dioxide is the most important GHG (greenhouse gas) directly emitted 

by human activities, and is the most significant driver of climate change." 1 Do you agree 

with these statements, if not, why not? 

Page 1 of 6 
14 


27748.006

Answer: There has been much debate regarding this subject and many opinions 

formed, while I do agree that carbon dioxide is a greenhouse gas and that we as 

humans do contribute to the generation ofthis gas, I do not have adequate 

information to confirm that it is the most significant driver of climate change. 

4. Do you agree that it is essential that in making decisions, TV A must be shielded from 

political influence and spared even the appearance of being subject to political influence 

or considerations? If not, why not? 

Answer: Yes 

5. The Department of Energy Secretary Perry has sent a proposal to the Federal Energy 

Regulatory Commission (PERC)- the independent agency that regulates electricity 

markets - asking the Commission to adopt a rule that would require consumers to pay 

more to support certain coal and nuclear plants. Some of these payments would go 

toward coal-fired power plants that are long overdue to be retired. Since TVA can set its 

own rates and may be restructuring its rate system soon, if confirmed, will you support a 

rate system that requires customers to pay more to keep coal-fired power plants running 

or will you support a rate system that continues to grow renewable energy in the Valley 

and encourages energy efficiency? 

Answer: If confirmed, I will support a rate system that employs the most economical 

and environmentally acceptable means of generating electricity. 

6. Why did you forget to mention your coal royalty payments in your original ethics 

agreement and what steps will you take to recuse yourselffrom decisions that may impact 

TVA's usage of coal? 

Answer: My coal royalties were fully disclosed on my initial financial disclosure 

forms. If confirmed, I have agreed to fully divest myself of all coal royalties within 

ninety days of confirmation. I would recuse myself from any decisions regarding 

coal until the royalties have been divested. 

7. Do you agree with President Trump's decision to withdraw the United States from the 

International Paris Climate Accord? If so, please explain. 

Answer: That decision was made at a very high level. I do not have access to the 

information on which that decision was made. To voice an opinion without adequate 

information would be without merit. 

8. If confirmed, how will you boost employee morale and ensure TV A retains and recruits 

the best employees? 

Answer: I believe that people are the most important asset that any business 

organization has. Maintaining a high employee morale and positive attitude is a 

Page 2 of 6 
15 


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critical component to the fntnre success of TV A. If confirmed, I will work diligently 

to promote transparency in all decision making and to assure that the integrity of 

management/employee relations are maintained at the highest standards. 

9. If confinned, what steps will you take to ensure TV A employees will not be working in 

an intimidating work-place environment and will feel comfortable reporting problems at 

any TV A facility? 

Answer: If confirmed, we will take the steps necessary to assure all employees that 

workplace intimidation is totally unacceptable and that we welcome any feedback 

that anyone feels the need to share, whether positive or negative, with regard to 

their workplace or working conditions. 

10. There are reports that over !50 employees from the firm hired by TVA to manage the 

clean-up the coal ash spill at the TVA Kingston Fossil Fuel Power Plant have died or are 

gravely ill. There are also reports that supervisors may have put the employees cleaning 

up the coal ash in harm's way by destroying or altering air monitor data. 

a. If confirmed, will you commit to ensuring TVA is a good actor and is transparent 

to the employees and families that may be impacted by this issue? 

Answer: Yes 

b. If confinned, will you commit to ensuring TV A employees and those contracted 

by TV A work in a safe environment at all times? 

Answer: If confirmed, I will commit to doing everything in my power to 

ensuring that the safety of our employees and contractors is always #1 at 

TVA. 

c. If confirmed, what steps will you take to ensure TV A does not have another 

environmental disaster like the Kingston Fossil Fuel Power Plant coal ash spill? 

Answer: If confirmed, I will work diligently to assure that sound engineering 

practices and that acceptable safety factors are included in any and all 

designs of facilities used in the storage of any waste product generated by 

TVA in the production of electricity. 

Subcommittee Ranking Member Whitehouse: 

According to the filings of Armstrong Coal with the U.S. Securities and Exchange Commission, 

you currently have an "overriding royalty agreement" with the company. In this arrangement, 

Annstrong Coal pays you $0.05 per ton of coal mined, extracted and sold from specific reserves 

the company holds. 

II. My understanding is that you have agreed to divest of that royalty interest and your 

Armstrong stock within 90 days of your confinnation, pursuant to the attached agreement 

dated November 25, 2017. Is that correct? 

Answer: Yes 

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12. Once you have completed that divestment, will you have any other source of income 

from, or financial interest in, an entity that derives income from fossil fuels or any other 

source of energy? If so, please specify the sources of income and the steps you will take 

to comply with federal ethics laws. 

Answer: All of my financial holdings have been fully disclosed to the OGE, and I 

have agreed to comply with all ethics laws. 

13. I also understand that as part of your ethics agreement with TV A that you will not 

participate personally and substantially in any particular matter that has a direct and 

predictable effect on the financial interests of Armstrong Energy Inc. or its subsidiaries 

unless I first obtain a written waiver or qualify for a regulatory exemption. At this time, 

do you anticipate needing or seeking a waiver from this commitment? If so, please 

specify each issue for which a waiver may be sought and the reasons you have for 

seeking it. 

Answer: I do not anticipate any reason to seek a waiver. 

The vast majority of scientists agree that climate change is real, and caused by humans. 

14. Do you agree that climate change is real? 

Answer: Yes 

15. Do you agree that humans are the dominant driver of climate change over the past several 

hundred years? 

Answer: While I do believe that humans have a direct effect on our environment, I do not 

have the knowledge, with regard to climate change, to know the answer to this question. 

16. Do you agree that the burning offossil fuels by humans is the dominant driver of climate 

change over the past several hundred years? 

Answer: I do not have enough knowledge regarding this subject, to answer this question. 

17. Do you accept the scientific consensus that the average global temperatures should not 

reach or exceed +2 degrees Celsius. If temperatures do reach these levels, do you agree 

that many regions of the world will very likely experience catastrophic changes in the 

environment that may very likely impact the safety and prosperity of many people? 

Answer: I do not know the answer. 

The Department of Energy has asked FERC to issue a rule that would have consumers subsidize 

coal plants in the name of ensuring reliability. 

Page 4of 6 
17 


27748.009

18. Do you think the federal government should subsidize or otherwise give priority to 

certain sources of energy under the Federal Power Act? 

Answer: No 

19. This year the Department of Energy finalized a report on grid reliability that found that 

cheap natural gas is the primary reason for coal plant closures. Do you agree that cheaper 

natural gas prices have led coal plant closures in the U.S.? 

Answer: The generation of electricity is a competitive business, yes I believe that the 

low cost of natural gas has certainly displaced coal as a fuel of choice in electrical 

generation and has influenced the decisions with regard to coal plant closures. 

20. Will it be your priority to approach regulatory decisions with a goal of putting the 

consumer first when it comes to providing clean, reliable, and affordable energy? If not, 

what other priorities do you believe are more important? 

Answer: If confirmed, my first priority will be to work diligently to ensure that 

TV A provides the cleanest, most reliable, and most affordable energy possible. 

21. In 2015, TV A completed a long-term planning process to identify future energy needs. In 

its plan, TV A stated that it would add between 150 and 800 MW of large-scale solar by 

2023, and between 3,150 and 3,800 MW oflarge-scale solar by 2033. 

a. Do you agree with these goals? If not, why not? 

Answer: At this point I have not been made fully aware of future goals 

and the processes outlined for achieving those goals. 

b. If confirmed as a TVA board member, what will you do to ensure these goals 

are met? 

Answer: If confirmed I will work closely with my fellow board members 

and the TV A management to plan and achieve the goals that we all 

believe to be in the best interest of all the people we serve. 

22. Since 2013, reactors have been shut down in Vermont, Nebraska, California, Wisconsin, 

and Florida and six more plants have announced they will close between 2017 and 2025. 

In 2016, TV As Watts Bar became the first U.S. nuclear plant to finish construction in the 

21" century. 

a. Do you think that nuclear energy can play a role in helping the U.S. meet its 

climate commitments? 

Answer: Yes 

Page 5 of 6 
18 


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b. Is there a role for additional nuclear energy capacity beyond Watts Bar in the 

TVA region? If so what are those plans and what types of reactors could 

TV A explore? 

Answer: My knowledge of nuclear generation is limited. If confirmed I 

will educate myself to the extent possible, and do my best to make the 

correct decisions with regard to future reactors. 

23. There have been several steps taken by states, businesses, and public utilities to put a 

value on the costs of carbon emissions. The New York Public Service Commission and 

Illinois state legislature are working to incorporate a carbon prices into their states' 

energy markets. Two PUCs in Minnesota and Colorado also ordered utilities to 

incorporate social costs of carbon into their decision planning. 

a. Does carbon pollution impose an economic cost to the American public? 

Answer: I believe that all pollution has an economic cost to the American 

public. 

b. How would placing a value on this cost help to encourage the development of 

carbon-free technologies? 

Answer: I am not sure I have enough information on the subject to 

answer that question. 

Page 6 of6 
19 

Senator CAPITO. Thank you, Mr. Allen. 

Mr. Frazier. 

STATEMENT OF A.D. FRAZIER, NOMINATED TO BE A MEMBER 

OF THE BOARD OF DIRECTORS OF THE TENNESSEE VALLEY 

AUTHORITY 

Mr. FRAZIER. Thank you, Madam Chairman Capito, Ranking 

Member Whitehouse, and distinguished members of the Committee. 

I would like to thank you for your consideration of my nomination. 

My name is A.D. Frazier. I appreciate having been nominated by 

President Trump and supported by Senators Isakson and Perdue to 

serve on the Board of Directors of the Tennessee Valley Authority. 

It is also an honor because my home is in Mineral Bluff, Georgia, 

in the North Georgia Mountains. Mineral Bluff is 6 miles from 

Lake Blue Ridge, Georgia, at the head waters of the Ocoee River. 

You may have heard of the Ocoee River because of the 1996 Olympic whitewater competition. 

When I was chief operating officer of the Atlanta Committee for 

the Olympic Games, I signed the contract to put whitewater shalom canoeing on the Ocoee. I have never been more grateful for 

support in my life. We worked closely with TVA to ensure the 

Ocoee River had the appropriate flow for the whitewater events. 

I am proud to say, every river event that was watched by people 

around the world was made possible because of the dedicated employees of the Tennessee Valley Authority. The course remains the 

finest one in the United States and is still visited by athletes from 

around the world. 

Aside from the Olympics, I am honored to be associated with the 

Tennessee Valley Authority because of its mission of service to improve the lives of the 9 million people of the Tennessee Valley. I 

live and work among these people every day. I cannot imagine the 

Appalachian Region without TVA. 

As a bit about my professional background; I am President 

Emeritus of Georgia Oak Partners, a private equity business. My 

associates and I provide financing tools and resources to help small 

Georgia companies grow faster. 

As president and CEO of INVESCO, Inc., we helped people and 

companies from around the world to make smart business investment decisions in the United States. When I served as chairman 

and CEO of Danka Business Systems, we provided technology solutions to businesses in the United States and Europe. 

Earlier in my career, I served as chairman of the board of Gold 

Kist, Inc.; as president and COO of Caremark Rx, Inc.; and as 

chairman of the board and CEO of the Chicago Stock Exchange. 

I served on the compensation committee of Apache Corporation, 

an upstream independent oil and gas company, for 19 years. I also 

served on the boards of Gevity, Inc.; Rock Tenn Corp.; and R.J. 

Reynolds Tobacco Co. In 2010 I chaired a task force for the Georgia 

Legislature to examine how tax policy impacts economic development. 

My career has required knowledge of topics like strategic planning, executive compensation, asset liability management, risk 

20 

management, public policy, environmental stewardship, and economic development, all of which are important aspects of TVA leadership. 

Speaking of economic development, TVA’s efforts in just the last 

5 years have helped to increase the number of companies that have 

decided to invest in the region, 418,000 jobs since 2011 and $48 billion in commitment of capital. 

I am confident my business experience has prepared me for an 

opportunity to serve as a member of this board. I firmly believe in 

TVA’s commitment to do the right things for the region, to provide 

reliable electric power, to be responsible managers of public lands 

and water, and to fulfill its mission to make life better for all those 

who live in the region, as I do, through its economic development 

efforts. 

Madam Chairman and members of the Committee, I welcome 

this opportunity to be considered and respectfully request your support of my nomination. 

Thank you. 

[The prepared statement of Mr. Frazier follows:] 

21 


27748.011

A. D. Frazier 

President Emeritus 

Georgia Oak Partners 

A.D. Frazier has spent his entire 35-year career as an executive manager in 

the for-profit, not-for-profit and government sectors. His career has 

included extensive involvement with corporate and consumer lending, 

mergers, acquisitions and divestitures, strategic planning, corporate 

governance, human resource management and marketing. 

A.D.'s executive leadership roles have included serving as the Chief Operating Officer and 

second in command of the Atlanta Committee for the Olympic Games, President and Chief 

Executive Officer of INVESCO, Inc., Chairman and Chief Executive Officer of Danka Business 

Systems, Chairman of the Board of Gold Kist, Inc., President and Chief Operating Officer of 

Caremark Rx, Inc, and Chairman of the Board and Chief Executive Otiicer of the Chicago Stock 

Exchange. His board membership experience includes Apache Corporation, Gevity, Inc., Rock 

Tenn Corp., and R.J. Reynolds Tobacco Co., among others. 

He has served on a number of not-for-profit boards including The National Council on the 

Humanities (Presidential Appointee), The Atlanta Symphony Orchestra Board (Chairman), 

Georgia Public Television Commission (First Chairman), the Alliance Theater (Atlanta, GA), 

Georgia Board of Corrections, Evanston Hospital Corporation (Chairman of Finance Committee) 

(Evanston, IL), Neighborhood Housing Services of Atlanta (First Chairman) and NHS of 

Chicago. He also served in the Carter Administration (Office of Management and Budget). 

A.D. has received numerous professional and civic awards, some of which include The Olympic 

Order in Gold (only COO to receive the IOC's highest service award), Georgia Trend 

Magazine's Most Influential Georgians, (1995-1996) and Honorary Doctor of Business 

Administration (Piedmont College). In 2008, he was recognized with the Georgia Distinguished 

Humanitarian Award by The Australian/New Zealand American Chamber of Commerce 

(ANZACC) and UNICEF. 

A.D. received an AB and JD from The University of North Carolina at Chapel Hill and he 

completed his Harvard Business School's Advanced Management Program. He is a member of 

the North Carolina Bar, the American Bar Association, the North Carolina Bar Association, the 

Georgia Bar Association, the Atlanta Bar Association, and the Association for Conflict 

Resolution. He served for six years as an officer in the US Army Reserve. 

He and his wife, Clair Wofiord Frazier are residents of Atlanta and Mineral Bluff, GA. Mrs. 

Frazier is a Trustee of Young Harris College. 
22 


27748.012

Statement of A.D. Frazier 

Nominee to the board of directors of the Tennessee Valley Authority before the 

U.S. Senate Committee on Environment and Public Works 

Subcommittee on Clean Air and Nuclear Safety 

Tuesday, November 28,2017 

Chairman Capito, Ranking Member Whitehouse and distinguished members of the committee, I 

would like to thank you for your consideration of my nomination and for this opportunity to 

appear before you today. 

My name is A.D. Frazier. 

I am honored to have been nominated by President Trump to serve on the board of directors of 

the Tennessee Valley Authority. 

Being asked to serve on the TV A board is an honor because my home is in Mineral Bluff, 

Georgia- in the North Georgia Mountains, about 100 miles from Atlanta. 

I mention this because Mineral Bluff is just six miles from Blue Ridge, Georgia. In my opinion, 

it is one of the most beautiful places that TV A serves. 

TVA's Blue Ridge Dam, on the Toccoa River, is just a few miles from my home. The Toccoa is 

actually the headwaters of the Ocoee River. The name simply changes when it crosses the state 

line into the Peach State. 

You may have heard of the Ocoee River because of the 1996 Olympics whitewater competitions. 

When I was Chief Operating Officer and second-in-command of the Atlanta Committee for the 

Olympic Games, we worked closely with TV A to ensure the Ocoee River had the appropriate 

flow for the whitewater events. And, I am proud to say, every river event that was watched by 

people around the world was made possible because of the dedicated employees of the 

Tennessee Valley Authority. 
23 


27748.013

But, aside from the Olympics, I am honored to be associated with the Tennessee Valley 

Authority because ofTVA's mission of service to improve the lives of the 9 million people of 

the Tennessee Valley. I am excited to be considered for a seat on the board of directors because 

it would provide me the opportunity to help ensure TV A continues its good works. 

My work with corporate and consumer lending, mergers, acquisitions and divestitures, strategic 

planning, corporate governance, human resource management and marketing has shown me the 

importance of quality public education and a trained or trainable work force. 

Actually, my entire 35-year career in executive business management has taught me the 

importance of TV A's work. 

As president of Georgia Oak Partners, LLC, my associates and I provide the right tools and 

resources to help companies grow faster. As president and Chief Executive Officer of 

INVESCO, Inc., we helped people and companies from around the world to make smart business 

investments to achieve their financial objectives. And, when I served as chairman and Chief 

Executive Officer of Danka Business Systems, we provided technology solutions to businesses 

from around the world. 

Earlier in my career, as chairman of the board of Gold Kist, Inc.; as president and Chief 

Operating Officer of Caremark Rx, Inc.; and, as chairman of the board and Chief Executive 

Officer of the Chicago Stock Exchange and even as a board member for Fortune 500 Company 

Apache Corporation; Gevity, Inc.; Rock Tenn Corp.; and, R.J. Reynolds Tobacco Co.- each of 

my experiences has reinforced the importance the need for having a trained or trainable labor 

force, and quality K-through-12 public education. 

TV A supports our public schools through programs such as its robotics programs that teach 

students in our public schools the practical aspects of math and science. 

TV A also has successful programs that help bring much-needed jobs to the region. They are 

doing this by working with state and local governments and non-governmental agencies, and by 

helping our young people to be better prepared for the jobs of tomorrow. 
24 


27748.014

By helping to bring in a variety of employers to the Valley, TV A is helping to diversify 

employment opportunities by providing opportunities for a trained and trainable labor force. This 

is particularly important because a broad industrial base allows for greater opportunities for 

career growth and economic diversity. And, that helps everyone. 

In my opinion, TVA's efforts in just the last five years have helped to increase the number of 

companies that have decided to locate to the region. And these companies are bringing muchneeded jobs. 

I am confident my business experiences have prepared me for the opportunity to serve as a 

member of the board of directors of the Tennessee Valley Authority. I firmly believe in TVA's 

commitment to doing the right things for the region: to provide reliable electric power to the 

citizens and businesses of the Valley, responsibly manage its public lands and water, and fulfill 

its mission to make life better through its economic development efforts. 

Mr. Chairman and members of this committee, I welcome this opportunity to be considered to 

serve on the TV A board of directors and respectfully request your support of my nomination. 

Thank you for your consideration and for providing me this opportunity to be here with you 

today. 
25 


27748.015

Senate Committee on Environment and Public Works 

Clean Air and Nuclear Safety Subcommittee 

Hearing entitled, "Nominations of Kenneth E. Allen, A.D. Frazier, Jeffrey Smith, and 

James R. Thompson III to be Members of the Board of Directors of the Tennesse Valley 

Authority" 

November 28,2017 

Questions for the Record for Mr. A.D. Frazier 

Full Committee Ranking Member Carper: 

Please provide a response to each question, including each sub-part. 

!. I strongly believe TV A should be an industry leader, not a laggard, especially when it 

comes to clean energy and energy efficiency. I've been pleased with TVA's 

commitments to retiring old, dirty coal power plants and investing in clean energy. 

TVA's CEO, Bill Johnson, has reported that TVA is expected to easily meet the Clean 

Power Plan deadlines, even without the EPA rule. The Tennessee Valley is benefiting 

from these clean ups with cleaner air and with economic growth. For example, Google 

has announced a $600 million investment to build a database center at one ofTVA's 

retired coal plants in northern Alabama. Google wants to run the database on renewable 

energy and knows TV A can provide the clean power. This one project is expected to 

create at least 100 jobs. My question, if confirmed, do you commit to continuing the 

clean energy investments and commit to ensuring that TV A is a leader in the clean 

energy economy? 

Response: Yes. 

2. Do you agree to provide complete, accurate and timely responses to requests for 

information submitted to you by any Member of the Environment and Public Works 

Committee? If not, why not? 

Response: Yes. 

3. In December 2007, President Bush's EPA proposed to declare greenhouse gases as a 

danger to public welfare through a draft Endangerment Finding, stating, "The 

Administrator proposes to find that the air pollution of elevated levels of greenhouse gas 

(GHG) concentrations may reasonably be anticipated to endanger public 

welfare ... Carbon dioxide is the most important GHG (greenhouse gas) directly emitted 

by human activities, and is the most significant driver of climate change." 1 Do you agree 

with these statements, if not, why not? 

Page 1 of 5 
26 


27748.016

Response: I do not have enough information, nor am I qualified scientifically to 

determine whether carbon dioxide is the most significant driver of climate change. 

However, I do agree that carbon dioxide contributes to climate change. 

4. Do you agree that it is essential that in making decisions, TV A must be shielded from 

political influence and spared even the appearance of being subject to political influence 

or considerations? If not, why not? 

Response: Yes. 

5. The Department of Energy Secretary Perry has sent a proposal to the Federal Energy 

Regulatory Commission (FER C)-the independent agency that regulates electricity 

markets- asking the Commission to adopt a rule that would require consumers to pay 

more to support certain coal and nuclear plants. Some of these payments would go 

toward coal-fired power plants that are long overdue to be retired. Since TV A can set its 

own rates and may be restructuring its rate system soon, if confirmed, wi 11 you support a 

rate system that requires customers to pay more to keep coal-fired power plants running 

or will you support a rate system that continues to grow renewable energy in the Valley 

and encourages energy efficiency? 

Response: I do not know the details of the proposal from DOE to FERC, but if 

confirmed, I will examine this proposal as it relates to TV A and its missions of providing 

low cost power, economic development and environmental stewardship. 

6. Do you agree with President Trump's decision to withdraw the United States from the 

International Paris Climate Accord? If so, please explain. 

Response: I do not know the factors or details of President Trump's decision with regard 

to the International Paris Climate Accord, but if confirmed, I will examine this issue as it 

relates to TV A and its three fold mission including providing low cost, reliable 

electricity, economic development and environmental stewardship. 

7. If confirmed, how will you boost employee morale and ensure TVA retains and recruits 

the best employees? 

Response: If confirmed, as a member of the Board of Directors of TV A, it will be the 

Board's responsibility to ensure that the CEO manages the corporation in ways that 

ensure TV A retains and recruits the best employees. 

8. If confirmed, what steps will you take to ensure TV A employees will not be working in 

an intimidating work-place environment and will feel comfortable reporting problems at 

any TV A facility? 

Response: If confirmed, it will be the mine and the Board's responsibility to oversee 

senior management to ensure that the environment is a positive one for TV A employees. 

Page 2of5 
27 


27748.017

At such time, if there is an issue that needs attention, I will seek to understand any 

existing concerns an support the steps needed to correct them. 

9. There are reports that over 150 employees from the firm hired by TVA to manage the 

clean-up the coal ash spill at the TVA Kingston Fossil Fuel Power Plant have died or are 

gravely ill. There are also reports that supervisors may have put the employees cleaning 

up the coal ash in harm's way by destroying or altering air monitor data. 

a. If confirmed, will you commit to ensuring TV A is a good actor and is transparent 

to the employees and families that may be impacted by this issue? 

Response: Yes. 

b. If confirmed, will you commit to ensuring TV A employees and those contracted 

by TV A work in a safe environment at all times? 

Response: Yes. 

c. If confirmed, what steps will you take to ensure TV A does not have another 

environmental disaster like the Kingston Fossil Fuel Power Plant coal ash spill? 

Response: If confirmed, I will support the TV A mission of environmental 

stewardship, better understand what measures are taken to minimize operational 

risks and make decisions on those suggested measures. 

Subcommittee Ranking Member Whitehouse: 

The vast majority of scientists agree that climate change is real, and caused by humans. 

10. Do you agree that climate change is real? 

Response: Yes. 

11. Do you agree that humans are the dominant driver of climate change over the past several 

hundred years? 

Response: I agree that human activity contributes to climate change. 

12. Do you agree that the burning of fossil fuels by humans is the dominant driver of climate 

change over the past several hundred years? 

Response: I agree that burning fossil fuels increases greenhouse gas emissions which 

contribute to climate change. 

13. Do you accept the scientific consensus that the average global temperatures should not 

reach or exceed +2 degrees Celsius. If temperatures do reach these levels, do you agree 

that many regions of the world will very likely experience catastrophic changes in the 

environment that may very likely impact the safety and prosperity of many people? 

Response: Yes, I agree that catastrophic changes in the environment would likely impact 

the safety and prosperity of many people. 

Page 3 of 5 
28 


27748.018

The Department of Energy has asked FERC to issue a rule that would have consumers subsidize 

coal plants in the name of ensuring reliability. 

14. Do you think the federal government should subsidize or otherwise give priority to 

certain sources of energy under the Federal Power Act? 

Response: I am not familiar with the details of the Department of Energy's request to 

FERC. If confirmed, I will examine this information and make an educated decision 

based on how the request would affect TVA's mission of providing low cost, reliable 

power to the people of the Tennessee Valley region. 

15. This year the Department of Energy finalized a report on grid reliability that found that 

cheap natural gas is the primary reason for coal plant closures. Do you agree that cheaper 

natural gas prices have led coal plant closures in the U.S.? 

Response: Yes. 

16. Will it be your priority to approach regulatory decisions with a goal of putting the 

consumer first when it comes to providing clean, reliable, and affordable energy? If not, 

what other priorities do you believe are more important? 

Response: If confirmed, it will be my priority to make decisions that support the mission 

of the TVA, providing the lowest cost, affordable energy. 

17. In 2015, TVA completed a long-term planning process to identify future energy needs. In 

its plan, TVA stated that it would add between 150 and 800 MW oflarge-scale solar by 

2023, and between 3,150 and 3,800 MW of large-scale solar by 2033. 

a. Do you agree with these goals? If not, why not? 

Response: At this time I do not have enough information to comment on this. 

If confirmed, I will examine TVA's long-term plan to identify future energy 

needs and support future energy portfolios that meet TVA's long term 

generating portfolio goals. 

b. If confirmed as a TV A board member, what will you do to ensure these goals 

are met? 

Response: I will need to understand how these goals fit into TVA's long term 

generating portfolio goals and ensure that they meet the mission to provide the 

lowest cost power for the people ofthe Tennessee Valley region. 

18. Since 2013, reactors have been shut down in Vermont, Nebraska, California, Wisconsin, 

and Florida and six more plants have announced they will close between 2017 and 2025. 

In 2016, TV As Watts Bar became the first U.S. nuclear plant to finish construction in the 

21" century. 

Page 4 of 5 
29 


27748.019

a. Do you think that nuclear energy can play a role in helping the U.S. meet its 

climate commitments? 

Response: Yes. 

b. Is there a role for additional nuclear energy capacity beyond Watts Bar in the 

TVA region? If so what are those plans and what types of reactors could 

TV A explore? 

Response: If confirmed, I will examine this issue and be better able to 

determine TV A's future energy capacity needs. 

19. There have been several steps taken by states, businesses, and public utilities to put a 

value on the costs of carbon emissions. The New York Public Service Commission and 

Illinois state legislature are working to incorporate a carbon prices into their states' 

energy markets. Two PUCs in Minnesota and Colorado also ordered utilities to 

incorporate social costs of carbon into their decision planning. 

a. Does carbon pollution impose an economic cost to the American public? 

Response: I do not have enough information to determine the extent to which 

carbon pollution imposes an economic cost to the American public. If 

confirmed, and this issue relates directly to my position on the Board and 

meeting TV A's mission, I will examine this issue more thoroughly. 

b. How would placing a value on this cost help to encourage the development of 

carbon-free technologies? 

Response: Any external cost impacts the advancement of technology, the 

extent to which such would do so in this case is outside my speci fie area of 

expertise. However, if confirmed, I will examine this issue further as it relates 

to TVA and TVA's mission. 

PageS ofS 
30 

Senator CAPITO. Thank you, Mr. Frazier. 

Mr. Smith. 

STATEMENT OF JEFFREY SMITH, NOMINATED TO BE A MEMBER OF THE BOARD OF DIRECTORS OF THE TENNESSEE 

VALLEY AUTHORITY 

Mr. SMITH. Chairman Capito, Ranking Member Whitehouse, and 

other members of the Committee, thank you for the opportunity to 

appear before you today. 

I am honored to have my wife and two of my three daughters 

here to support me. 

My name is Jeffrey W. Smith, and I am the Deputy for Operations at Oak Ridge National Laboratory. I am honored to have 

been nominated for this opportunity. 

In 1999 I moved my family to east Tennessee to take on the role 

of Deputy for Operations at Oak Ridge National Laboratory. The 

laboratory consumes significant amounts of power, and as the Chief 

Operating Officer, I know large amounts of reliable, low cost electricity is important to the missions assigned by the Department of 

Energy to Oak Ridge. 

The laboratory often works with TVA to help recruit new business to the region, and in my role as a senior executive, I have participated in these recruitments and seen firsthand the strength of 

TVA as driver of economic development. 

More personally, our family owns a home on Norris Lake, one of 

TVA’s reservoirs. As a result, I understand the complex dynamic 

between production, flood management, and recreational use of the 

water resources under TVA control. 

Based on my professional and personal experiences with TVA 

over the last 18 years while I have been in Tennessee, it is my belief that to successfully fulfill its mission to improve the quality of 

life for all who live and work in the Valley, TVA must provide 

clean, reliable, resilient, low cost power to our homes and businesses while protecting the waterways we enjoy and the air we 

breathe. 

Oak Ridge National Laboratory has a longstanding relationship 

with the Tennessee Valley Authority, going all the way back to the 

1940s and the Manhattan Project. The Manhattan Project needed 

a site with ample fresh water and access to tremendous amounts 

of power. 

Sixteen miles downstream from TVA’s Norris Dam, a site was selected to be the home of what is known as the secret city. That city 

would produce the nuclear materials that would accelerate the end 

of World War II and help win the cold war. Simply put, if it had 

not been for TVA, there would be no Oak Ridge National Laboratory. I am grateful for that. 

During my 18 years at the laboratory, I have had the privilege 

to lead a $400 million modernization effort that has been instrumental in transforming the laboratory with the help of TVA. 

I oversee the day to day operations of an organization with a $1.4 

billion annual operating budget; we entertain over 5,000 researchers and guests every day at the laboratory and maintain the infrastructure of a small city. 

31 

Oak Ridge National Laboratory operates one of two Department 

of Energy nuclear reactors. Granted the High Flux Isotope Reactor 

at Oak Ridge is only 1/10th the scale of today’s commercial power 

reactors such as those in the TVA fleet, but responsibility for this 

reactor has taught me something about the importance of a strong 

nuclear safety culture. 

I have also had the opportunity to be involved with TVA in several economic development recruitments in which the laboratory 

has partnered with the State of Tennessee and local municipalities 

to attract new companies. 

I can tell you that low cost, clean—and clean comes up more and 

more often these days—and reliable power is always a consideration in site selection. My personal experience tells me TVA is 

dedicated to working with local and State governments to encourage economic development and create jobs in the region. This is 

something that I will continue to support. 

I have had a longstanding relationship with Battelle, a not for 

profit company that specializes in managing several national laboratories. I have served on the governing boards for the Pacific 

Northwest National Laboratory, the Brookhaven National Laboratory, the Idaho National Laboratory, and the National Renewable 

Energy Laboratory. 

As a result, I have been involved in the recruitment and selection 

of several laboratory directors, the CEO of these organizations. If 

there should be a change in leadership at TVA during my appointment, I believe I can add something to that process through those 

experiences. 

I have interacted with TVA as an industrial user, as a partner 

in infrastructure expansion, and to promote economic development. 

These engagements have given me useful insight into the breadth 

and depth of TVA’s operations, and its importance to the region. 

I believe my background and experience has prepared me for the 

challenge and responsibility of joining the TVA board. If confirmed, 

I am committed to working with my fellow board members and 

TVA staff to ensure that TVA continues to fulfill its mission to 

serve the people of the Tennessee Valley. 

I appreciate your consideration of my nomination, and thank you 

for the opportunity to be here today. 

[The prepared statement of Mr. Smith follows:] 

32 


27748.020

JeffW. Smith 

Executive Vice President 

UT -Battelle LLC 

Jeff Smith is the Executive Vice President for Operations for UT-Battelle, 

LLC, and serves as the Deputy for Operations at Oak Ridge National 

Laboratory, the U.S. Department of Energy's largest multi-program science 

and energy laboratory with annual budget of $1.5 billion. 

Smith has overseen ORNL operations since UT-Battelle began managing 

the laboratory in April 2000. His responsibilities include facilities operations; environment, 

safety and health; business services; security; human resources for the Laboratory's 4,700 

employees; internal and external communications; and information technology, and technology 

transfer. 

Smith led a $400 million modernization of ORNL's main campus that transformed the dated 

facilities of the Manhattan Project-era site into one of the world's most modem laboratories. 

Through unique partnerships developed with the state of Tennessee, the private sector, and 

federal agencies, he oversaw construction of new lab space, office buildings, and technical 

facilities that include the world's foremost center for high-performance computing. Smith also 

serves as President ofUT-Battelle Development Corporation, a non-profit special purpose entity 

created to support the private sector development offacilities at ORNL. 

Soon after arriving at ORNL, Smith coordinated efforts to improve the safety and reliability of 

the High Flux Isotope Reactor, the nation's premier research reactor. He supported the 

construction on time and on budget of the $1.4B Spallation Neutron Source, the world's most 

powerful neutron science facility. More recently he led the effort to construct a Carbon Fiber 

Technology Facility to advauce the development of low cost carbon fiber for the automotive and 

other industries. 

ORNL's research capabilities such as the Spallation Neutron Source and the Center for HighPerformance Computing consume large amounts of power. Smith worked with the Tennessee 

Valley Authority to construct three new substations on the ORNL campus and remake the 

Laboratory's electrical distribution system. Combined with a new steam plant and expanded 

chilled water capacity, the scope and quality of the Laboratory's power infrastructure exceeds 

that of any laboratory in the DOE complex. 

During a period of unprecedented expansion and modernization, the Laboratory's safety 

performance improved to record levels while operating costs were sharply reduced. 

Smith's success at ORNL Jed to an expansion of his responsibilities with Battelle Memorial 

Institute, the University of Tennessee, and with the Department of Energy. Smith serves as 

Battelle's senior leader on operational matters, providing oversight and coordination across the 

nationwide system of laboratories managed by Battelle. He has participated in the development 

of all of Battelle's laboratory bids in the last 10 years and has served on the Board of Directors at 

Pacific Northwest National Laboratory, Brookhaven National Laboratory, the National 

Renewable Energy Laboratory, and the Idaho National Laboratory. In addition, Smith currently 
33 


27748.021

serves on the governing boards of the University of Tennessee's Cherokee Farm Development 

Corporation and Oak Ridge Associated Universities. 

Smith is past chairman of the Department of Energy's National Laboratory Chief Operations 

Officers working group and has served on numerous DOE special working groups. He served a 

six-month special assignment in 2002 in support of the White House's Transition Planning 

Office, participating in the creation of the U.S. Department of Homeland Security. 

Smith is active in Oak Ridge and Knoxville community groups and initiatives. He has served on 

the governing boards of the East Tennessee Economic Council, Aid to Distressed Families of 

Appalachian Counties, and the Anderson Country Red Cross. In 2003-2006 he played a key role 

in assisting with a $56 million renovation and expansion of Oak Ridge High School. 

Smith has a personal passion for technology transfer. He served as an advisor to Battelle 

Ventures, an investment and startup capital arm of Battelle responsible for $200M of startup 

capital. He was the motivation behind creation of the ORNL Science & Technology Park in 

cooperation with the Community Reuse Organization of East Tennessee. He was appointed by 

former Knoxville Mayor Bill Haslam as a member of the Metropolitan Knoxville Airport 

Authority, where he played a major role in the recruitment of Cirrus Aircraft to Knoxville and is 

a strong advocate of the proposed Oak Ridge Airport. 

Graduating from the Ohio State University in 1981 with a B.S. degree in Ceramic Engineering, 

Smith worked briefly for the Anchor Hocking Glass corporation before joining Battelle in 1984 

and continues his Battelle association today. 

An instrument-rated private pilot, Smith built and flew a 2-person sport aerobatic airplane. His 

personal interests also led him through a frame-off restoration of a 1953 Chevrolet pickup truck. 

He has built two homes and extensively remodeled others, performing most tasks himself. He 

volunteers with his wife Debbie to assist Homes of Love, an organization that provides for a 

family living environment for at risk children in Southeast Asia and Africa. 

Jeff and Debbie reside in Knoxville and have three daughters and two granddaughters. 
34 


27748.022

Statement of Jeffery W. Smith 

Deputy for Operations, Oak Ridge National laboratory 

Nominated by President Trump for Board Member for the Tennessee Valley Authority 

Before the 

Committee on Environment and Public Works 

United States Senate 

DATE 

Chairman Barrasso, Ranking Member Carper, and Members of the Committee, thank you for the 

opportunity to appear before you today. My name is Jeffrey W. Smith and I am the Deputy for 

Operations at Oak Ridge National laboratory (ORNL) in Oak Ridge, Tennessee. I am honored to have 

been nominated by President Trump to serve on the Tennessee Valley Authority Board of Directors. 

In 1999, I moved my family to East Tennessee to take on the role of Deputy for Operations at Oak Ridge 

National laboratory. The laboratory consumes significant amounts of power, and as the Chief Operating 

Officer, I know large amounts of reliable, low cost electricity is important to executing the important 

missions assigned by the Department of Energy to Oak Ridge. The laboratory often works with TVA to 

help recruit new business to the TVA region, and in my role as a senior executive 1 have participated in 

these recruitments and seen first-hand the strength of TVA as driver of economic development. More 

personally, I own a home on Norris Lake, one of TVA's reservoirs. As a result, I understand the complex 

dynamic between hydropower production, flood management, and recreational use of the water 

resources under TVA control. Based on my professional and personal experiences with TVA over the last 

18 years, it is my belief that to successfully fulfill its mission to improve the quality of life for all who live 

and work in the Valley, TV A must provide clean, reliable, resilient, low-cost power to our homes and 

businesses, while protecting the waterways we enjoy, and the air we breathe. 

ORNL has longstanding relationship with the Tennessee Valley Authority, going all the way back to the 

1940s and the Manhattan Project. The Manhattan Project needed a site with ample fresh water, ridges 

and valleys, and, most importantly, access to tremendous amounts of power. Sixteen miles downstream 

from TVP.:s Norris Damn a site was selected as the home of the secret city that would produce the 

nuclear materials that accelerated the end of World War II and helped win the Cold War. As the 

manufacturing hub of the Manhattan Project, Oak Ridge was home to the Y-12 centrifuges, the K-25 

gaseous diffusion plant, and the X-10 graphite reactor. Millions of kilowatts of reliable TVA energy made 

possible the essential war time work in Oak Ridge. When the war ended the graphite reactor served as 

the foundation for an open science laboratory that became Oak Ridge National laboratory. Simply put, 

without TV A there would be no Oak Ridge National laboratory. 

During my 18 years at ORNL, I have had the privilege to lead a $400 million modernization effort that 

has been instrumental in transforming ORNL into the Department of Energy's largest open science 

laboratory. I oversee the day to day and strategic operations challenges faced by an organization with a 

$1.4 billion annual operating budget, 4,700 employees, and close to 200 buildings spanning 4,400 acres. 

I am responsible for the safe and efficient operations of the facilities and support organizations that 

allow ORNl's researchers to deliver scientific discoveries and technical breakthroughs that accelerate 
35 


27748.023

the development and deployment of solutions to the most difficult scientific problems in energy and 

national security. 

Oak Ridge National Laboratory operates one of two Department of Energy research reactors. Granted, 

the High Flux Isotope Reactor is roughly 1/10'" the scale oftoday's commercial power reactors such as 

those in the TVA fleet, but the responsibility for this reactor has taught me something about the 

important of a strong nuclear safety culture. 

I have also had the opportunity to be involved with TVA in several economic development recruitments 

in which the laboratory has partnered with the State of Tennessee, local municipalities, and TVA to 

attract new companies to the region. I can tell you that low cost, clean and reliable power is always a 

consideration in site selection. My personal experience tells me TVA is dedicated to working with local 

and state governments to encourage economic development and create jobs in the region and this is 

something that I will continue to support. 

I have had a long standing relationship with Battelle Memorial Institute, a not-for-profit company that 

specializes in managing several R&D laboratories. I have served on the governing Boards for the Pacific 

Northwest National laboratory, the Brookhaven National Laboratory, the Idaho National laboratory, the 

National Renewable Energy Laboratory. As a result, I've been involved in the recruitment and selection 

of several laboratory directors and in the event there is a change in leadership at TVA during my 

appointment, I believe I can add something to this process. 

I have interacted with TVA as an industrial user, as a partner in infrastructure expansion, and to promote 

economic development. These engagements have given me useful insight into the breadth and depth of 

TVA's operations, and to its importance for our region. I believe my background and experience has 

prepared me for the challenge and responsibility of joining the TV A board. 

If confirmed, I am committed to working with my fellow board members and TVA staff to ensure that 

TVA continues to fulfill its mission to serve the people ofthe Tennessee Valley by focusing on energy, 

environment, and economic development. I appreciate your consideration of my nomination and thank 

you for the opportunity to be here today. 
36 


27748.024

Senate Committee on Environment and Public Works 

Clean Air and Nuclear Safety Subcommittee 

Hearing entitled, "Nominations of Kenneth E. Allen, A.D. Frazier, Jeffrey Smith, 

and James R. Thompson III to be 

Members of the Board of Directors of the Tennessee Valley Authority" 

November 28, 2017 

Questions for the Record for Mr. Jeffrey Smith 

Full Committee Ranking Member Carper: 

Please provide a response to each question, including each sub-part. 

I. I strongly believe TV A should be an industry leader, not a laggard, especially when it 

comes to clean energy and energy efficiency. I've been pleased with TVA's 

commitments to retiring old, dirty coal power plants and investing in clean energy. 

TVA's CEO, Bill Johnson, has reported that TVA is expected to easily meet the Clean 

Power Plan deadlines, even without the EPA rule. The Tennessee Valley is benefiting 

from these clean ups with cleaner air and with economic growth. For example, Google 

has announced a $600 million investment to build a database center at one of TVA's 

retired coal plants in northern Alabama. Google wants to run the database on renewable 

energy and knows TV A can provide the clean power. This one project is expected to 

create at least 100 jobs. My question, if confirmed, do you commit to continuing the 

clean energy investments and commit to ensuring that TV A is a leader in the clean 

energy economy? 

Response: Yes, while mindful ofTVA's charter that seeks attainment of three goals to 

include economic development, environmental stewardship, and low cost power. 

2. Do you agree to provide complete, accurate and timely responses to requests for 

information submitted to you by any Member of the Environment and Public Works 

Committee? If not, why not? 

Response: Yes 

3. In December 2007, President Bush's EPA proposed to declare greenhouse gases as a 

danger to public welfare through a draft Endangerment Finding, stating, "The 

Administrator proposes to find that the air pollution of elevated levels of greenhouse gas 

(GHG) concentrations may reasonably be anticipated to endanger public 

welfare ... Carbon dioxide is the most important GHG (greenhouse gas) directly emitted 

by human activities, and is the most significant driver of climate change." 1 Do you agree 

with these statements, if not, why not? 

Page 1 of6 
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27748.025

Response: I believe GHG emissions are contributing to climate change and that in the 

extreme, climate change can endanger the public welfare. I am not qualified 

scientifically regarding which GHG is the most important. 

4. Do you agree that it is essential that in making decisions, TV A must be shielded from 

political influence and spared even the appearance of being subject to political influence 

or considerations? If not, why not? 

Response: Yes 

5. The Department of Energy Secretary Perry has sent a proposal to the Federal Energy 

Regulatory Commission (FER C)-the independent agency that regulates electricity 

markets- asking the Commission to adopt a rule that would require consumers to pay 

more to support certain coal and nuclear plants. Some ofthese payments would go 

toward coal-fired power plants that are long overdue to be retired. Since TV A can set its 

own rates and may be restructuring its rate system soon, if confirmed, will you support a 

rate system that requires customers to pay more to keep coal-fired power plants running 

or will you support a rate system that continues to grow renewable energy in the Valley 

and encourages energy efficiency? 

Response: I currently do not have an understanding of how TV A sets their rates. If 

confirmed, I am committed to understanding how this is done and to support a rate 

structure that is as consistent with TVA's founding charter, i.e. environmental 

stewardship, low cost power, and technology innovation. 

6. Do you agree with President Trump's decision to withdraw the United States from the 

International Paris Climate Accord? If so, please explain. 

Response: If confirmed, I must set aside my personal perspective on the decision but I 

would be obligated to consider the implications of that decision on TV A's mission. At 

this time I do not understand what implications, if any, withdrawal has on TVA's power 

generation plans. 

7. If confirmed, how will you boost employee morale and ensure TVA retains and recruits 

the best employees? 

Response: As a board member I will not have a direct relationship with any of the 

employees except the CEO. It will be my intent to ensure the CEO is managing the 

business in such a way that the employees are proud to be associated with TV A and 

potential new recruits see TV A as an employer where they can have productive and 

fulfilling careers. 

8. If confirmed, what steps will you take to ensure TV A employees will not be working in 

an intimidating work-place environment and will feel comfortable reporting problems at 

any TV A facility? 

Page 2 of6 
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27748.026

Response: Creating the right culture is the responsibility of senior leadership. I would 

like to understand senior leadership's view of the current state of the culture, and what 

actions they are taking to address any issues that may exist. Once obtained, I would work 

to support needed actions that will address those concerns. 

9. There are reports that over 150 employees from the firm hired by TVA to manage the 

clean-up the coal ash spill at the TVA Kingston Fossil Fuel Power Plant have died or are 

gravely ill. There are also reports that supervisors may have put the employees cleaning 

up the coal ash in harm's way by destroying or altering air monitor data. 

a. If confirmed, will you commit to ensuring TV A is a good actor and is transparent 

to the employees and families that may be impacted by this issue? 

Response: Yes 

b. If confirmed, will you commit to ensuring TV A employees and those contracted 

by TV A work in a safe environment at all times? 

Response: Yes 

c. If confirmed, what steps will you take to ensure TV A does not have another 

environmental disaster like the Kingston Fossil Fuel Power Plant coal ash spill? 

Response: I will work to understand how TV A evaluates operational risks and 

subsequently responds to those assessments. 

Subcommittee Ranking Member Whitehouse: 

The vast majority of scientists agree that climate change is real, and caused by humans. 

10. Do you agree that climate change is real? Response: Yes 

11. Do you agree that humans are the dominant driver of climate change over the past several 

hundred years? 

Response: The latest scientific consensus that I am aware of is reflected in the Climate 

Science Special Report (CSSR), released in late October 2017 and involving the work of 

13 federal agencies. The report cites evidence for demonstrating that it is "extremely 

likely" that human influence has been the dominant cause of global surface warming 

since the mid-20th century. I have no scientific basis to challenge that assessment. 

12. Do you agree that the burning of fossil fuels by humans is the dominant driver of climate 

change over the past several hundred years? 

Response: According to the U.S. Energy Information Administration, about 4.08 trillion 

kilowatt-hours (kWh) of electricity were generated at utility-scale facilities in the United 

States in 2016. About 65% of this electricity generation was from fossil fuels (coal, 

natural gas, petroleum, and other gases), about 20% was from nuclear energy, and about 

Page 3of6 
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27748.027

15% was from renewable energy sources. The CSSR report (referenced above) states 

with very high confidence that during the industrial era (1901-2016), "human activities 

have been, and are increasingly, the dominant cause of climate warming." I have no 

scientific basis to challenge that assessment. 

13. Do you accept the scientific consensus that the average global temperatures should not 

reach or exceed +2 degrees Celsius. If temperatures do reach these levels, do you agree 

that many regions of the world will very likely experience catastrophic changes in the 

environment that may very likely impact the safety and prosperity of many people? 

Response: I cannot offer an independent scientific opinion on environmental impact at a 

global scale if average temperatures should reach or exceed + 2 degrees Celsius. 

However, I do recognize that catastrophic climate change will cause significant impact to 

the safety and welfare of many people. 

14. The Department of Energy has asked FERC to issue a rule that would have consumers 

subsidize coal plants in the name of ensuring reliability. Do you think the federal 

government should subsidize or otherwise give priority to certain sources of energy under 

the Federal Power Act? 

Response: There are numerous regulatory, pricing, and tax policies that impact decisions 

made by businesses and consumers that in effect, establish energy policy. Within a 

coordinated national energy policy framework, I believe the federal government should 

ensure long term U.S. interests are met by utilizing various tools which may impact the 

attractiveness of specific energy uses. 

15. This year the Department of Energy finalized a report on grid reliability that found that 

cheap natural gas is the primary reason for coal plant closures. Do you agree that cheaper 

natural gas prices have led coal plant closures in the U.S.? 

Response: I'm not in a position to understand all of the factors that have gone into these 

decisions by the various utilities in the U.S., but based on what has been reported by 

DOE and other entities such as the Nuclear Energy Institute, it seems reasonable that the 

price of natural gas has been a significant factor in decisions impacting changes in the 

generating mix. This would apply to decisions impacting not just coal but also nuclear. 

16. Will it be your priority to approach regulatory decisions with a goal of putting the 

consumer first when it comes to providing clean, reliable, and affordable energy? If not, 

what other priorities do you believe are more important? 

Response: As articulated in the founding Act for TV A, low cost power to benefit the 

residents of the Tennessee Valley is important. However, those decisions need to be 

balanced against other factors specified by the Act such as technology innovation and 

environmental stewardship. 

Page 4 of 6 
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27748.028

17.ln 2015, TVA completed a long-term planning process to identify future energy needs. In 

its plan, TV A stated that it would add between 150 and 800 MW of large-scale solar by 

2023, and between 3, !50 and 3,800 MW oflarge-scale solar by 2033. 

a. Do you agree with these goals? If not, why not? 

Response: These goals seem appropriate, but I lack sufficient understanding 

of how these goals fit within TV As overall longer term generating mix plan. 

b. If confinned as a TV A board member, what will you do to ensure these goals 

are met? 

Response: Based on my knowledge today, these goals seem notionally 

attainable. However, I would like to understand TVA's assessment of the 

economics around these goals and how this added generating capacity fits 

within their overall generation mix plan. 

18. Since 2013, reactors have been shut down in Vermont, Nebraska, California, Wisconsin, 

and Florida and six more plants have announced they will close between 2017 and 2025. 

In 2016, TV As Watts Bar became the first U.S. nuclear plant to finish construction in the 

21" century. 

a. Do you think that nuclear energy can play a role in helping the U.S. meet its 

climate commitments? 

Response: I believe nuclear electricity generation is an important element of 

the U.S. electric power system and should be a component for the foreseeable 

future. 

b. Is there a role for additional nuclear energy capacity beyond Watts Bar in the 

TVA region? If so what are those plans and what types of reactors could 

TV A explore? 

Response: Without understanding TV A's longer term power generation plans 

it is difficult to answer specifically, but I believe nuclear power should be 

considered. I also believe the U.S. struggles with building new nuclear 

generating assets and I would be supportive of TV A playing a role in 

demonstrating new approaches and/or new reactor designs/sizes in an attempt 

to bring the cost of nuclear down. 

19. There have been several steps taken by states, businesses, and public utilities to put a 

value on the costs of carbon emissions. The New York Public Service Commission and 

Illinois state legislature are working to incorporate a carbon prices into their states' 

energy markets. Two PUCs in Minnesota and Colorado also ordered utilities to 

incorporate social costs of carbon into their decision planning. 

Page 5 of6 
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27748.029

a. Does carbon pollution impose an economic cost to the American public? 

Response: Yes; I believe the exploitation of any energy source at scale has an 

economic cost. 

b. How would placing a value on this cost help to encourage the development of 

carbon-free technologies? 

Response: Adding a "value" price would be a factor in the development of 

carbon-free technologies, or any technology where a value price is introduced. 

Page 6 of6 
42 

Senator CAPITO. Thank you. 

Mr. Thompson. 

STATEMENT OF JAMES R. THOMPSON III, NOMINATED TO BE 

A MEMBER OF THE BOARD OF DIRECTORS OF THE TENNESSEE VALLEY AUTHORITY 

Mr. THOMPSON. Good morning, Chairman Capito, Ranking Member Whitehouse, and distinguished members of the Committee. 

I am honored to have been nominated to serve on the Tennessee 

Valley Authority Board of Directors. I also very much appreciate 

the support of Senator Shelby and Senator Strange of my home 

State of Alabama. 

I am also glad to have my wife, Margie, here with me this morning. 

My relationship to the Tennessee River is probably fairly unique 

among potential board members. As a young person growing up in 

north Alabama, I spent countless hours on the Tennessee River 

waterskiing with friends. 

As a father, some of my most cherished memories are of time 

spent on the river with my family, particularly time spent fishing 

with my two sons as they grew up. Today, as a grandfather, I’m 

now blessed to be able to introduce my grandchildren to the unique 

beauty of the Tennessee River and the recreational opportunities 

that it affords. 

For this, TVA’s focus on environmental stewardship and flood 

control deserves much of the credit. 

My parents moved our family to the Tennessee Valley in 1963, 

when I was 4 years old. My father was fresh out of the Navy and 

had taken a job with NASA at Marshall Space Flight Center in 

Huntsville. 

As a result, I have lived and worked almost my entire life within 

a couple of miles of the Tennessee River. It defines our region of 

the country, and TVA’s influence on the economy and quality of life 

in its service area cannot be overstated. 

For the past 6 years, I have had the privilege of serving on the 

Board of Directors of Decatur Utilities, which is TVA’s second largest distributor partner in Alabama, which is TVA’s second largest 

State. Decatur Utilities serves the power needs of roughly 30,000 

customers. 

In this role as a board member, I have developed a new appreciation for TVA and its unique relationship with its distributors. I 

have also developed a new appreciation for the importance of reliable, competitively priced power to the residents and businesses of 

our region. 

As our electricity provider, TVA has been an exemplary partner 

in the economic development efforts of our region of Alabama. The 

business that I currently run is a nice example. 

Our company provides credit and financial services for small 

trucking companies, body shops, truck and auto dealers throughout 

the country. Any disruption in our electricity has the potential to 

cut off funding for our customers and significantly disrupt their operations. 

Thanks in part to having TVA as our generator of power, our 

company has a predictable and reliable source of electricity and an 

43 

attractive region of the country to which we can attract employees. 

As a result, today we have grown to employ 68 people versus 38 

when we purchased the company in 2009. TVA is a friend to small 

business just as much as it is to large industrial customers. 

My primary role on the Decatur Utilities Board has revolved 

around my financial training and background. I envision using this 

skill set on the TVA Board, if confirmed. I have extensive experience with and appreciation for budgets, proper debt structure, and 

financial discipline and soundness. Given its unique ownership and 

structure, I believe these considerations are paramount in the proper management of TVA as it carries out its mission. 

One final point I would like to make is my firm belief in the importance of competent board members playing their role in setting 

the mission of an organization, then empowering competent management to execute on that mission. In my career, I have been on 

both sides of that relationship, board member and management. 

I have seen very talented boards that work well together and 

have an excellent working relationship with management. I have 

also seen boards that either do not have members with the appropriate skill set or do not know the proper role of a board member. 

Proper board interaction among the members and with management is essential for any organization to be successful. If confirmed, I intend to bring this same mindset to the TVA Board. 

Thank you for your time and consideration. 

[The prepared statement of Mr. Thompson follows:] 

44 


27748.030

Mr. James R. "Skip" Thompson, IU 

President and CEO 

Corporate Billing LLC 

Skip Thompson is currently president and CEO of Corporate Billing LLC 

in Decatur, a subsidiary of National Bank of Commerce, The 

Decatur $1 billion per yem· in operating 

businesses was president and CEO 

American Bank in Decatur from 1995-2008, and prior to that, he was 

and CEO of First Commercial Bank in Huntsville, Alabama. 

A graduate of the University of Alabama, Huntsville with a Bachelor of Science degree in 

iinance, is a Decatur native. He is very active in the Decatur community. serving as board 

chairman of Coaches. a faith-based character organization that serves 

basketball coaches and athletes at 150 colleges and universities. He is board chairman 

of Grace, a jail ministry and residential serving women and children. Thompson is 

a Board member of Decatur Utilities, a million asset public in the TV A service area 

serving 30,000 customers. He and his wife of 35 years. Margie, have children and four 

grandchildren. 
45 


27748.031

Statement of J.R. "Skip" Thompson, Ill 

Nominee to the Tennessee Valley Authority Board of Directors 

U.S. Senate Committee on Environment & Public Works 

November 28, 2017 

Good afternoon, Chairman Capito, Ranking Member Whitehouse, and distinguished 

members of the Committee. I am honored to have been nominated to serve on the 

Tennessee Valley Authority Board of Directors. I also very much appreciate the support of 

Senator Shelby and Senator Strange of my home state of Alabama. 

My relationship to the Tennessee River is probably fairly unique among potential board 

members. As a young person growing up in north Alabama, I spent countless hours on the 

Tennessee River, waterskiing with friends. As a father, some of my most cherished 

memories are of time spent on the river with my family, particularly time spent fishing with 

my two sons as they grew up. Today, as a grandfather, I'm now blessed to be able to 

introduce my grandchildren to the unique beauty of the Tennessee River and the 

recreational opportunities that it affords. For this, TVA's focus on environmental 

stewardship and flood control deserves much of the credit. 

My parents moved our family to the Tennessee Valley in 1963, when I was four(4) years old; 

my father was fresh out of the Navy and had taken a job with NASA at Marshall Space Flight 

Center in Huntsville. As a result, I've lived and worked almost my entire life within a couple 

of miles of the Tennessee River. It defines our region of the country, and TVA's influence on 

the economy and quality of life in its service area cannot be overstated. 

For the past six(6) years, I've had the privilege of serving on the Board of Directors of 

Decatur Utilities, which is TVA's second largest distributor partner in Alabama, which is 

TVA's second largest state. Decatur Utilities serves the power needs of roughly 30,000 

customers. In this role as a board member, I have developed a new appreciation for TVA 

and its unique relationship with its distributors. I've also developed a new appreciation for 

the importance of reliable, competitively priced power to the residents and businesses of 

our region. As our electricity provider, TVA has been an exemplary partner in the economic 

development efforts of our region of Alabama. 

The business that I currently run is a nice example. Our company provides credit and 

financial services for small trucking companies, body shops, and truck and auto dealers. 

Our customers are spread out across the country. Any disruption in our electricity has the 

potential to cut off funding for our customers and significantly disrupt their operations. 

Thanks in part to having TVA as our generator of power, our company has a predictable and 

reliable source of electricity and an attractive region of the country to which we can attract 

employees. As a result, today we have grown to employ 68 people vs 38 when we 
46 


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purchased the company in 2009. TVA is a friend to small business just as much as it is to 

large industrial customers. 

My primary role on the Decatur Utilities board has revolved around my financial training 

and background. I envision using this skill set on the TVA board, if confirmed. I have 

extensive experience with and appreciation for budgets, proper debt structure, and 

financial discipline and soundness. Given its unique ownership and structure, I believe 

these considerations are paramount in the proper management of TVA as it carries out its 

mission. 

One final point I'd like to make is my firm belief in the importance of competent board 

members playing their role in setting the mission of an organization, then empowering 

competent management to execute on that mission. In my career, I have been on both 

sides of that relationship- board member and management. I've seen very talented 

boards that work well together and have an excellent working relationship with 

management, and I've also seen boards that either do not have members with the 

appropriate skill set or do not know the proper role of a board member. Proper board 

interaction among the members and with the management team is essential for any 

organization to be successful. If confirmed, I intend to bring this same mindset to the TVA 

board. 

Thank you for your time and consideration, and I will be happy to answer any questions. 
47 


27748.033

Senate Committee on Environment and Public Works 

Clean Air and Nuclear Safety Subcommittee 

Hearing entitled, "Nominations of Kenneth E. Allen, A.D. Frazier, 

Jeffrey Smith, and James R. Thompson III 

to be Members of the Board of Directors of the Tennessee Valley Authority" 

November 28, 2017 

Questions for the Record for Mr. James R. Thompson III 

Full Committee Ranking Member Carper: 

Please provide a response to each question, including each sub-part. 

1. I strongly believe TV A should be an industry leader, not a laggard, especially when it 

comes to clean energy and energy efficiency. I've been pleased with TVA's 

commitments to retiring old, dirty coal power plants and investing in clean energy. 

TVA's CEO, Bill Johnson, has reported that TVA is expected to easily meet the Clean 

Power Plan deadlines, even without the EPA rule. The Tennessee Valley is benefiting 

from these clean ups with cleaner air and with economic growth. For example, Google 

has announced a $600 million investment to build a database center at one ofTVA's 

retired coal plants in northern Alabama. Google wants to run the database on renewable 

energy and knows TV A can provide the clean power. This one project is expected to 

create at least I 00 jobs. My question, if confirmed, do you commit to continuing the 

clean energy investments and commit to ensuring that TV A is a leader in the clean 

energy economy? 

I commit to the mission of TVA to provide affordable and reliable power, an asset 

portfolio that is balanced, and energy that complies with EPA regulations. 

2. Do you agree to provide complete, accurate and timely responses to requests for 

information submitted to you by any Member of the Environment and Public Works 

Committee? If not, why not? 

Yes. 

3. In December 2007, President Bush's EPA proposed to declare greenhouse gases as a 

danger to public welfare through a draft Endangerment Finding, stating, "The 

Administrator proposes to find that the air pollution of elevated levels of greenhouse gas 

(GHG) concentrations may reasonably be anticipated to endanger public 

welfare ... Carbon dioxide is the most important GHG (greenhouse gas) directly emitted 

by human activities, and is the most significant driver of climate change." 1 Do you agree 

with these statements, if not, why not? 

I'm unaware of studies declaring the most important GHG emitted by human activities, 

but will look into these issues if confirmed. 

Page 1 of 4 
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4. Do you agree that it is essential that in making decisions, TV A must be shielded from 

political influence and spared even the appearance of being subject to political influence 

or considerations? If not, why not? 

Yes. 

5. The Department of Energy Secretary Perry has sent a proposal to the Federal Energy 

Regulatory Commission (FERC)- the independent agency that regulates electricity 

markets- asking the Commission to adopt a rule that would require consumers to pay 

more to support certain coal and nuclear plants. Some of these payments would go 

toward coal-fired power plants that are long overdue to be retired. Since TV A can set its 

own rates and may be restructuring its rate system soon, if confirmed, will you support a 

rate system that requires customers to pay more to keep coal-fired power plants running 

or will you support a rate system that continues to grow renewable energy in the Valley 

and encourages energy efficiency? 

I commit to the mission of TVA to provide affordable and reliable power, an asset 

portfolio that is balanced, and energy that complies with EPA regulations. 

6. Do you agree with President Trump's decision to withdraw the United States from the 

International Paris Climate Accord? If so, please explain. 

I have not read and do not know the details of the International Paris Climate Accord, 

7. If confirmed, how will you boost employee morale and ensure TVA retains and recruits 

the best employees? 

Employee morale and quality employees are essential to the success of any 

organization; I will support and encourage senior management in these priorities. 

8. If confirmed, what steps will you take to ensure TV A employees will not be working in 

an intimidating work-place environment and will feel comfortable reporting problems at 

any TV A facility? 

I understand there are avenues today within TVA that encourage employees to report 

problems without fear of retribution. I will support and encourage senior management 

in keeping these lines of communication open. 

9. There are reports that over 150 employees from the firm hired by TVA to manage the 

clean-up the coal ash spill at the TVA Kingston Fossil Fuel Power Plant have died or are 

gravely ill. There are also reports that supervisors may have put the employees cleaning 

up the coal ash in harm's way by destroying or altering air monitor data. 

a. If confirmed, will you commit to ensuring TV A is a good actor and is transparent 

to the employees and families that may be impacted by this issue? 

Yes. 

b. If confirmed, will you commit to ensuring TV A employees and those contracted 

by TV A work in a safe environment at all times? 

Yes. 

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27748.035

c. If confinncd, what steps will you take to ensure TV A does not have another 

environmental disaster like the Kingston Fossil Fuel Power Plant coal ash spill? 

I will support and encourage senior management to comply with all 

environmental safety regulations, and work with/for TVA to he the safest 

energy utility in the country. 

Subcommittee Ranking Member Whitehouse: 

The vast majority of scientists agree that climate change is real, and caused by humans. 

I 0. Do you agree that climate change is real? 

Yes. 

11. Do you agree that humans are the dominant driver of climate change over the past several 

hundred years? 

I believe the climate is changing, and humans should do Lt:/{~!~we can to protect the 

environment for the long-term benefit of the planet. 

12. Do you agree that the burning of fossil fuels by humans is the dominant driver of climate 

change over the past several hundred years? 

I am unaware of the dominate driver of climate change over the past several hundred 

years, hut will look into this issue if confirmed. 

13. Do you accept the scientific consensus that the average global temperatures should not 

reach or exceed + 2 degrees Celsius. If temperatures do reach these levels, do you agree 

that many regions of the world will very likely experience catastrophic changes in the 

environment that may very likely impact the safety and prosperity of many people? 

I am unaware of this benchmark to trigger catastrophic changes, hut will look into this 

issue if confirmed. 

The Department of Energy has asked FERC to issue a rule that would have consumers subsidize 

coal plants in the name of ensuring reliability. 

14. Do you think the federal government should subsidize or otherwise give priority to 

certain sources of energy under the Federal Power Act? 

I am unaware of the details of this request by the Department of Energy, hut will look 

into this issue if confirmed. 

15. This year the Department of Energy finalized a report on grid reliability that found that 

cheap natural gas is the primary reason for coal plant closures. Do you agree that cheaper 

natural gas prices have led coal plant closures in the U.S.? 

Yes. 

16. Will it be your priority to approach regulatory decisions with a goal of putting the 

consumer first when it comes to providing clean, reliable, and affordable energy? If not, 

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27748.036

what other priorities do you believe are more important? Yes. I would add a balanced 

asset portfolio to the priority. 

17. In 2015, TVA completed a long-term planning process to identify future energy needs. In 

its plan, TV A stated that it would add between 150 and 800 MW of large-scale solar by 

2023, and between 3,150 and 3,800 MW oflarge-scale solar by 2033. 

a. Do you agree with these goals? If not, why not? 

Yes. 

b. If confirmed as a TV A board member, what will you do to ensure these goals 

are met? 

As long as these goals are not modified by pressures such as market prices 

or technology disruptions/advances, I will support senior management with 

the resources to implement. 

18. Since 2013, reactors have been shut down in Vermont, Nebraska, California, Wisconsin, 

and Florida and six more plants have announced they will close between 2017 and 2025. 

In 2016, TV As Watts Bar became the first U.S. nuclear plant to finish construction in the 

21st century. 

a. Do you think that nuclear energy can play a role in helping the U.S. meet its 

climate commitments? 

Yes. 

b. Is there a role for additional nuclear energy capacity beyond Watts Bar in the 

TV A region? If so what are those plans and what types of reactors could 

TV A explore? 

I am not fully versed on this issue, but will look into the issue if confirmed. 

19. There have been several steps taken by states, businesses, and public utilities to put a 

value on the costs of carbon emissions. The New York Public Service Commission and 

Illinois state legislature are working to incorporate a carbon prices into their states' 

energy markets. Two PUCs in Minnesota and Colorado also ordered utilities to 

incorporate social costs of carbon into their decision planning. 

a. Does carbon pollution impose an economic cost to the American public? 

Yes. 

b. How would placing a value on this cost help to encourage the development of 

carbon-free technologies? 

I am not fully versed on this issue, but will look into the issue if confirmed. 

Page 4 of4 
51 

Senator CAPITO. Thank you all very much. I appreciate your 

opening statements. 

I will recognize myself for 5 minutes of questioning. 

I want to start with you, Mr. Smith, on the nuclear issue. You 

mentioned in your statement that you have quite a bit of experience in the field of nuclear energy. The TVA Watts Bar Unit 2 is 

the first new nuclear plant to start up in over 30 years. As you 

know, across the country a lot of these are closing. As a matter of 

fact, in South Carolina, they just ceased construction of a new nuclear facility. 

How do you envision TVA’s nuclear power generation in the future looking out say 10 or 20 years? 

Mr. SMITH. Thank you, Madam Chairman. 

I think nuclear is an important part of the generation mix that 

TVA needs to continue to supply to the region. TVA should be commended, in my opinion, for successfully starting up Watts Bar Unit 

2. As you indicated, that has not happened very often in the U.S. 

recently. 

We tend to be struggling right now as a country in terms of delivering new nuclear generation plants. I am not sure I understand 

all the reasons behind that, but I can see TVA being an important 

provider of power generated for nuclear assets for a long time into 

the future. 

Senator CAPITO. I would comment that, on a bipartisan basis, the 

full Committee has moved forward on some reforms in the nuclear 

power area to make the next generation of nuclear facilities more 

agile from the regulatory perspective and also from the environmental and safety perspectives as well. I think that is something 

TVA could probably look forward to as part of their portfolio. 

Mr. Allen, obviously I know a lot about coal being from the State 

of West Virginia, and obviously you do, too. TVA has retired many 

coal plants. I think by the beginning of 2018, 59 coal-fired plants 

will have been retired. 

I have the same kind of question I asked Mr. Smith. How do you 

envision the baseload capacity that coal brings as being part of 

TVA’s energy mix, to bring that affordable energy to all the millions of customers? 

Mr. ALLEN. Madam Chairman, I appreciate the question. 

Yes, I have been involved in the coal industry for five decades, 

and I am very proud of that fact, but I also recognize the changes 

in our environment, and I recognize the changes in our culture 

across the country. TVA has done a great job with diversity in their 

supply. 

As you know, coal has declined as part of the generation mix. I 

think moving forward we have to be very cognizant of our environment, of our surroundings, and how we address all those issues. 

I believe in good old American ingenuity to solve problems. I 

think we are problem solvers. We have proven that by the great 

electrical system that we have had in this country for most of my 

life. I think we will continue to do that by using economic and technological data to make sound, responsible decisions. 

Senator CAPITO. Thank you. 

I would also mention that the Ranking Member and I are on a 

bill together to spur more investment in carbon capture, sequestraVerDate Aug 31 2005 06:46 Jan 03, 2018 Jkt 000000 PO 00000 Frm 00055 Fmt 6633 Sfmt 6633 S:\_EPW\DOCS\27748.TXT SONYA
52 

tion, and utilization. We come from very different backgrounds, and 

I would say slightly different belief systems in some instances, but 

we are able to bridge the gap here. Again, I think that could hold 

some promise for future coal utilization in TVA. 

The last question is for Mr. Frazier. You obviously have a great 

background in finance and have worked in this area your entire 

life. In my opening statement, I mentioned the challenge of pensions. I would say the TVA pension issue is not unique to just TVA. 

We have this problem in a lot of other areas. 

That is a formidable challenge, I think. How are you seeing that? 

I am not asking you to give a definitive plan forward, but just what 

type of comments you might make about that. 

Mr. FRAZIER. Thank you, Madam Chairman. The difference in assets and liabilities is now $8 billion in assets 

and about $12.6 billion in liabilities. That is a formidable amount 

to pay. There are a couple of ways TVA is doing this. One is a return on assets in their pension fund, obviously. I have looked at the 

asset allocations there. 

The second one is contribute contributions out of earnings. In 2017, as you know, they supplemented their $300 million per year 

contribution effort with another $500 million and expect to do the 

same thing again this year. 

Those were about the only two options we have to fix this problem. The good news is this company is generating enough cash flow 

to make those additions to support assets. I am optimistic about 

the TVA’s ability to fund this thing. It will take years, maybe a 

decade, but on the present course and speed, they will do it. 

Senator CAPITO. Thank you. 

Senator Whitehouse. 

Senator WHITEHOUSE. Thank you, Chairman. 

If I am not misstating Mr. Allen’s response, I think he recognized 

there are environmental and other costs associated with carbon 

emissions from coal power plants. I believe, based on the background of the other witnesses, they also already understand that. 

My concern has to do with the economics of that problem. I see 

it playing out in a couple of areas. One is with respect to carbon 

capture, utilization, and sequestration. We have done some good bipartisan work and have the proposed bipartisan bill with wide support both from the energy industry and the environmental community to try to figure out a way, in the absence of a proper price on 

carbon, to put a payment of some kind or a benefit of some kind 

to successful carbon capture, utilization, and sequestration. 

I think when the President talks about clean coal, that is probably what he has in mind since there is no other rational or logical 

definition of the term. 

The problem that I see is that if you have no revenues available 

for having successfully captured, utilized, or sequestered carbon, it 

is hard to create a business model that supports carbon capture, 

utilization, or sequestration. 

The same problem occurs with respect to the nuclear fleet where 

you have nuclear power plants that are operating safely, that are 

providing carbon free energy to the grid, but that get no compensation whatsoever for the carbon free nature of their energy which 

then are obliged to compete with very often natural gas plants. 

53 

We have over and over again seen safely operating nuclear 

plants have to close because they cannot make an economic test 

that is unfair in the sense that it gives them no credit for the carbon free nature of their power. 

Until we solve those pricing problems, we are going to continue 

to hurt nuclear and continue to see carbon capture, utilization, and 

sequestration die in the crib for want of any economic sustenance. 

Let me start with Mr. Smith because I know the extraordinary 

work that your organization has done on mapping, predicting, and 

quantifying carbon emissions, climate change, and weather responses to all of that. 

Instead of focusing on the sort of scientific, geological, atmospheric, oceanic merits of climate change, focus on this economic 

problem of how you keep nuclear plants on a level playing field 

with natural gas and that competition, and how you allow for capture, utilization, and sequestration, or other methods of dealing 

with carbon when there is no price reward for doing those things. 

Mr. SMITH. Thank you for that question, I think. 

The challenge, as you have laid it out from a value pricing perspective, I am not an economics expert but I agree with you completely that the economics today, at some level, do not support 

what you would think would be a rational approach to some of 

these problems. 

We all enjoy the benefits of nuclear, but it is not value priced, 

some would say, appropriately. We all think coal is a reliable resource, but we cannot figure out how to do the carbon capture 

piece. 

In that piece, I think there are also some technological advancements that can be made in terms of how we would capture carbon 

and deal with that in a more economical way. 

Senator WHITEHOUSE. To Mr. Allen’s point earlier about how 

good old American ingenuity has been a successful way of solving 

problems, usually that good old American ingenuity is provoked by 

a value proposition at the end of the day. 

If there is no way to pay somebody for having captured, utilized 

or sequestered carbon pollution, it is pretty hard to channel that 

good old American ingenuity into solving that problem, except 

maybe at a few national labs. 

Mr. SMITH. Maybe, for example, there could be a pilot demonstration project or something like that. As you know, TVA’s charter encourages TVA—in fact mandates—that they be a technological innovator as part of their culture. 

You could see TVA trying some different things to see if we cannot move this whole front forward. You could say the same thing 

in the nuclear space with different reactor technology, small, modular reactors and things like that. 

Again, I think TVA has the opportunity to participate in that by 

charter. It may not be something they deploy widely here in this 

region after it gets proven. Those are decisions that would be made 

as part of the long range energy planning. 

I do think TVA can be, if you will, a sandbox for understanding 

how some of these issues can be played out on a larger scale. 

Senator WHITEHOUSE. I very much hoped you would say that and 

use the TVA that way, and I think your ability to model for the 

54 

rest of the country. I want you and all of the nominees to know 

that on these issues of supporting the nuclear fleet and not having 

these plants have to prematurely shut down, and in terms of investing in carbon utilization, sequestration, and capture, there has 

been really good bipartisan work done here. 

We may have fights about other issues, but those two things 

have been a place where if you come to us with a sensible proposal, 

I think you can find bipartisan support. I just wanted to close with 

that point. 

Thank you, Chairman. 

Senator CAPITO. Senator Inhofe. 

Senator INHOFE. Thank you, Madam Chair. 

Mr. Frazier, in your opening statement, you were very specific in 

answering a question I was going to ask all four of you. You do not 

need to answer this one. 

The question would have been what do you see as the fundamental duty of the Tennessee Valley Authority to the individuals, 

talking about the 9 million individuals and businesses who live in 

that area of service? You were very specific in your answer. 

What would you say, Mr. Allen? 

Mr. ALLEN. Thank you, sir. I think I understand your question. 

Senator INHOFE. What benefits are you going to see or do you believe TVA is going to have to the 9 million people in that service 

area? 

Mr. ALLEN. I think we have to continue to work hard to provide 

economical and affordable energy for those 9 million people. As I 

stated in my opening statement, I believe energy is the very foundation of our standard of living. I think it is of utmost importance 

that we continue to work diligently to provide economical and affordable energy to everyone. There are 3.5 billion people in this 

world who do not enjoy electricity. We are fortunate. 

Senator INHOFE. Do you agree with that generally? 

Mr. THOMPSON. Yes, sir. I would say jobs is a primary importance in TVA’s mission, affordable electricity that is reliable, and 

also managing the environment along the rivers, basins, and all 

that is very important. 

Senator INHOFE. I appreciated that in your opening statement, 

you were the only one who really spent a lot of time talking about 

the recreational activity that is generated from the TVA. I think 

all of you agree that should be in the mix in terms of the benefits 

that are out there. 

Let me pause in my statement here at this point so that Senator 

Alexander can make his introduction. 

OPENING STATEMENT OF HON. LAMAR ALEXANDER, 

U.S. SENATOR FROM THE STATE OF TENNESSEE 

Senator ALEXANDER. That is characteristically courteous of you, 

Senator Inhofe. 

I thank you very much, Madam Chairman, Senator Whitehouse, 

and Senator Inhofe, thank you for letting me do this. 

I am chairing a hearing down the hall, but I wanted to come by 

and congratulate all of the nominees, and especially to say a word 

about Jeff Smith. I will put my statement in the record. 

55 

The three areas I wanted to mention about Jeff are first, one reason Senator Corker and I recommended him was because of his 

background in nuclear energy. He is the Deputy Director of the 

Oak Ridge National Laboratory. He has been that for some time. 

Going back to the Manhattan Project, they have a lot of expertise 

in nuclear energy and the Tennessee Valley Authority built the last 

new reactor of the last century and the first one of this century, 

and is headed toward 40 percent of our power in our large, seven 

State region, to be coming from nuclear power, which, of course, is 

clean from sulfur, nitrogen, mercury, and carbon. Having someone 

with that background is very important. 

Second, he knows how to manage a large organization. He is deputy director of an organization with a $1.5 billion budget and 5,000 

employees. He has done that well for a long time. 

Third, he knows how to bring a large construction project in on 

time and on budget which has been a problem with some Government projects, but not at Oak Ridge National Laboratory. Their 

Spallation Neutron Source was on time and on budget, actually a 

little under budget, a $1.4 billion project, while he was deputy director. 

For all these reasons, his expertise in nuclear energy, his background in management of a large facility, and his understanding 

of large construction projects, he will make an excellent board 

member for the nation’s largest public utility. 

I am grateful to the Senators for giving me an opportunity to 

come by and express my strong support for him. 

Thank you very much. 

[The prepared statement of Senator Alexander follows:] 

STATEMENT OF HON. LAMAR ALEXANDER, 

U.S. SENATOR FROM THE STATE OF TENNESSEE

Thank you, Chairman Capito and Ranking Member Whitehouse. 

I am here today to introduce Jeff Smith, one of the nominees to serve on the Tennessee Valley Authority (TVA) Board of Directors. 

I also would like to congratulate Kenny Allen, Skip Thompson, and A.D. Frazier 

on their nominations to serve on the TVA Board. 

Jeff Smith’s experience as Deputy Laboratory Director for Operations at Oak 

Ridge National Laboratory makes him an outstanding choice to help keep TVA on 

a good path. 

The first way Jeff Smith can be an asset to TVA is his knowledge and experience 

with nuclear power and clean energy. 

Oak Ridge National Laboratory is known around the world for its expertise in nuclear energy, beginning with the Manhattan Project and continuing today with its 

research in using nuclear technologies and systems to improve human health; explore safer, more environmentally friendly power; and support scientific discoveries 

that address national challenges. 

TVA has been the utility that has led all other utilities in opening new nuclear 

reactors. TVA opened both the last nuclear power reactor in the 20th century and 

the first nuclear power reactor in the 21st century. 

Today nearly 40 percent of TVA’s generation comes from pollution-free, carbonfree nuclear power. 

Having a TVA director with a broad background in nuclear energy is especially 

important. 

Oak Ridge National Laboratory is also one of the nation’s leaders in research for 

new forms of clean energy. 

And TVA is on its way to becoming one of the cleanest electricity generators in 

the country. In addition to nuclear power, it is placing pollution control equipment 

on all its coal plants, completing new natural gas plants, and nearly 10 percent of 

its electricity comes from hydropower. 

56 

These are sound decisions that will benefit ratepayers and our region for years 

to come, and will help TVA continue to fulfill its mission to provide ‘‘safe, clean, reliable, and affordable power for the region’s homes and businesses.’’ 

TVA has done this while reducing its debt and reducing electric rates, which is 

good news for jobs and economic development in the region. 

The second way Jeff Smith can be an asset to TVA is good management. 

As the chief operating officer of Oak Ridge National Laboratory, Jeff has extensive 

experience leading large organizations. Oak Ridge National Laboratory employs 

nearly 5,000 people and has a budget of $1.4 billion. 

He brings this experience to the nation’s largest public utility which has an annual budget of over $10 billion and employs more than 10,000 people. 

His management background and expertise will be very helpful. 

Finally, Jeff Smith understands how to do large construction projects on time and 

on budget. 

Jeff has been very involved in the lab’s $400 million modernization effort, which 

has resulted in more new construction at the lab than at any time since the Manhattan Project. 

And during his tenure as Deputy Laboratory Director, Oak Ridge National Laboratory completed the $1.4 billion Spallation Neutron Source project on time and on 

budget. 

As a resident of the Tennessee Valley and East Tennessee, Jeff is very familiar 

with the needs of the region’s residents and businesses. He understands that TVA 

must continue to provide low cost, clean, and reliable power for homes and businesses throughout the TVA region. 

Jeff will make an excellent TVA Board member. I strongly support his nomination, and I encourage the members of the Committee to support his nomination so 

he can quickly be considered by the full Senate. 

Senator CAPITO. Thank you, Senator Alexander. I appreciate it. 

Senator Inhofe, would you like to resume your questioning? 

Senator INHOFE. Yes, I would. I am halfway through my questions, but I wanted to pause to be sure Senator Alexander had a 

chance to make his introduction. 

Mr. Allen, as someone who has worked his entire career in one 

industry, specifically the coal industry, I think you might appreciate a dilemma I found myself in during the last Administration, 

the Obama administration. 

During that Administration, when I would travel around Oklahoma, constituents would be amazed at the fact that we had a 

President who was opposed to fossil fuels, coal, oil, and gas, and 

I might add, nuclear. 

If you stop and think about the fact that 80 percent of the energy 

that runs this country falls into those categories, coal, oil, gas, and 

nuclear. If you extract that, how do you run this machine called 

America? That is the question I would have. 

I think an answer is yes, we do have an all of the above but you 

have to put the economics in there also. When they talk about the 

efforts with wind, Oklahoma is one of the five States that generates the most, I suppose you could argue, energy from wind. The 

Congressional Research Service study shows the wind production 

tax is the largest energy related tax expense. Between the years of 

2016 and 2020 it is projected that it would cost the Treasury some 

$25.7 billion. That is a consideration. 

I would like a response from you as to what are the risks associated with solely relying on renewable energy because there are 

some who believe that renewable energy is adequate to take care 

of all our needs. 

Let us start with whoever wants to be first. 

Yes, Mr. Allen. 

57 

Mr. ALLEN. I totally agree with your statement. It is a tremendous problem that we have. There is a divide in this country on 

how it should be addressed. I think that is one of the major issues 

the TVA board needs to confront. 

As I stated earlier, TVA has done a good job in diversifying their 

generation portfolio. They are very fortunate to have a lot of hydro 

generation which is proven and well established. Some of the others, as you mentioned, wind and solar, we are still learning. I think 

we have to apply that good old American ingenuity, as I mentioned 

earlier, to all the above. I think we have to continue to investigate 

how we clean up fossil fuel. 

Senator INHOFE. As a final question to all of you, is there anyone 

on this panel who believes you can do away entirely with fossil 

fuels and nuclear and still run the machine called America? 

What do you think, Mr. Frazier? 

Mr. FRAZIER. No. I don’t believe that. 

Senator INHOFE. Thank you, Madam Chair. 

Senator CAPITO. Thank you all very much. 

If there are no more questions for today, I do have to ask you 

all the following questions that we ask of all nominees on behalf 

of the Committee. I am going to ask each of you to give me a verbal 

OK on this. I sound like the flight attendant on the exit row. 

No. 1, do you agree, if confirmed, to appear before this Committee or designated members of the Committee and other appropriate committees of the Congress, and provide information subject 

to appropriate and necessary security protection with respect to 

your responsibilities? 

Mr. ALLEN. Yes. 

Mr. FRAZIER. Yes. 

Mr. SMITH. Yes. 

Mr. THOMPSON. Yes. 

Senator CAPITO. Do you agree to ensure that testimony, briefings, documents, and electronic and other forms of information are 

provided to this Committee, its staff, and other appropriate committees in a timely manner? 

Mr. ALLEN. Yes. 

Mr. FRAZIER. Yes. 

Mr. SMITH. Yes. 

Mr. THOMPSON. Yes. 

Senator CAPITO. Do you know of any matters, which you may or 

may not have disclosed, that might place you in any conflict of interest if you are confirmed? 

Mr. ALLEN. No. 

Mr. FRAZIER. No. 

Mr. SMITH. No. 

Mr. THOMPSON. No. 

Senator CAPITO. I think that ends that exercise. 

If there are no more questions, you may expect members to submit follow up, written questions for the record, called QFRs, by the 

close of business on Thursday, November 30. The nominees shall 

respond to those questions by close of business Wednesday, December 6. 

I would like to thank the nominees for their time and testimony. 

I would like to state for the record that I intend to support all of 

58 

you when your nominations come before the Committee and on to 

the floor of the U.S. Senate. 

Thank you for your willingness to serve, and thank you for coming today. 

The meeting is adjourned. 

[Whereupon, at 11:03 a.m., the Subcommittee was adjourned.] 

[An additional statement submitted for the record follows:] 

STATEMENT OF HON. RAND PAUL, 

U.S. SENATOR FROM THE STATE OF KENTUCKY

I congratulate Mr. Kenny Allen from Hopkins County, Kentucky, on being nominated to serve on the Tennessee Valley Authority Board of Directors. I regret that 

my injuries kept me from being able to attend his hearing in person. I am confident 

that Mr. Allen, if confirmed, will serve Kentucky and the nation well, and I applaud 

President Trump for nominating him. 

Mr. Allen spent his 50-year career in coal mining, beginning as a mine electrician 

in Ohio County, Kentucky, and advancing over the years into senior management. 

His first 40 years were spent with Peabody Energy, and the last 10 at Armstrong 

Energy. Throughout his career, he was also involved in his community in Western 

Kentucky, including by serving on the Kentucky Reclamation Guaranty Fund, the 

Upper Pond River Conservancy District, and the Governor’s Council of Economic 

Advisors. 

TVA is responsible for serving its region with reliable and affordable electricity. 

In Kentucky alone, TVA is responsible for providing electricity to over 200,000 

households in nearly 30 Kentucky counties. I am confident that Mr. Allen will work 

to serve Kentucky and the nation by finding innovative ways to make energy more 

affordable and reliable, including through coal-fired power generation. Thank you 

for giving your consideration to his nomination. 

Æ