Tennessee Valley Authority Privatization Act

[Democratic Hawk]

While I probably would have favoured partial privatization since questions have been raised regarding it's profitability and the amount of revenue raised from its sale, would some profit sharing agreement as part of the contract of sale not be feasible?

For example, by stipulating a profit sharing agreement over perhaps the first 50 years could raise a little revenue

I thought perhaps 10 years @ 25%, reducing by 5% every 10 years thereafter.

Assuming annual profits of $800m, this would work out as follows:

10 years @ 25% would raise $200m pa (a total of $2bn)
10 years @ 20% would raise $160m pa (a total of $1.6bn)
10 years @ 15% would raise $120m pa (a total of $1.2bn)
10 years @ 10% would raise $80m pa (a total of $800m)
10 years @ 5% would raise $40m pa (a total of $400m)

Total revenues raised over 50 years would therefore be $6bn. Of course, remaining profits will remain subject to any applicable federal taxes

Also, I think some stipulation should be made protecting employees' exsiting contracts

Perhaps, should the Bill pass, the Secretary of the Treasury could incorporate this into any necessary rules and regulations regarding the terms of the privatization. After all, given the inevitable rise in share prices once privatised, shareholders will be getting a bargain

Dave 'Hawk'

[Democratic Hawk]

No energy company would agree to that sort of thing; running the TVA really wouldn't be worth their while if that had to agree to profit sharing.

It was just a thought considering that I expect them to do very well out of it

Dave

[Democratic Hawk]

It was just a thought considering that I expect them to do very well out of it

Ah, but they wouldn't do very well out of it if they had to agree to profit sharing

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O.K... a question to Senators only (let's not have anyone else do your job for you...)

I guess in effect my suggestion (since that's all I can do for now ), is effectively the same as selling off 75% and retaining 25%

Dave