[Senate Hearing 115-123]
[From the U.S. Government Publishing Office]


                                                        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
  
  
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               COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS

                     ONE HUNDRED FIFTEENTH CONGRESS
                             FIRST SESSION

                    JOHN BARRASSO, Wyoming, Chairman
JAMES M. INHOFE, Oklahoma            THOMAS R. CARPER, Delaware
SHELLEY MOORE CAPITO, West Virginia  BENJAMIN L. CARDIN, Maryland
JOHN BOOZMAN, Arkansas               BERNARD SANDERS, Vermont
ROGER WICKER, Mississippi            SHELDON WHITEHOUSE, Rhode Island
DEB FISCHER, Nebraska                JEFF MERKLEY, Oregon
JERRY MORAN, Kansas                  KIRSTEN GILLIBRAND, New York
MIKE ROUNDS, South Dakota            CORY A. BOOKER, New Jersey
JONI ERNST, Iowa                     EDWARD J. MARKEY, Massachusetts
DAN SULLIVAN, Alaska                 TAMMY DUCKWORTH, Illinois
RICHARD SHELBY, Alabama              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            SHELDON WHITEHOUSE, Rhode Island
JOHN BOOZMAN, Arkansas               BENJAMIN L. CARDIN, Maryland
ROGER WICKER, Mississippi            BERNARD SANDERS, Vermont
DEB FISCHER, Nebraska                JEFF MERKLEY, Oregon
JERRY MORAN, Kansas                  KIRSTEN GILLIBRAND, New York
JONI ERNST, Iowa                     EDWARD J. MARKEY, Massachusetts
RICHARD SHELBY, Alabama              TAMMY DUCKWORTH, Illinois
JOHN BARRASSO, Wyoming (ex officio)  THOMAS R. CARPER, Delaware (ex 
                                         officio)
                           
                           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

 
 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 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.

          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 opportunity 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.
    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.
    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.
    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.
    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:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    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 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:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    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.
    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:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    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 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:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    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, 
sequestration, 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.
    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 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.
    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, carbon-free 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.
    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.
    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 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.

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