TVA Today:
Daily news for employees

Wednesday, October 1, 2003 - U P D A T E

TVA Unveils Draft Strategic Plan – Asks Employees, Others for Comment
After more than a year of intense analysis by a core group of TVA employees, with input from industry experts, TVA has developed a draft Strategic Plan to guide decision-making as it prepares for a more competitive market and customer choice. The draft plan is based on the most thorough analysis of possible future market conditions that TVA has ever done.

“We are living in a world of change, and our Strategic Plan identifies steps TVA needs to take so we can be successful in a more competitive market,” says Chairman Glenn McCullough. “The changes that we make in the future will strengthen TVA’s ability to fulfill our fundamental mission of providing affordable, reliable power, being good stewards of the environment, and helping attract and retain jobs.”

The draft plan is being made available to members of Congress and the Administration, distributors of TVA power, employees and other stakeholders. With input from the various stakeholder groups, the plan will be completed by the end of the year. Because the plan is a “living” document, it will continue to evolve, providing a framework for TVA to respond to future market challenges.

“During fiscal year 2004, we will do detailed operational planning to identify the actions necessary to accomplish the steps spelled out in the strategic plan,” says Director Skila Harris. “TVA’s success is built on a record of employee accomplishments, and this strategic plan gives employees today an opportunity to define TVA’s future, rather than seeing that future defined for us.”

The plan envisions four fundamental changes to TVA’s business environment:

• An evolving wholesale electricity market.
• The option for distributors of TVA power to buy power from competing suppliers.
• Exposure to market fluctuations and the uncertainty in revenues resulting from open-market competition for TVA customers.
• The need for increased financial flexibility, to be achieved in part by further reductions in TVA’s debt.

“The Strategic Plan provides a framework that we will use to set annual budgets and develop annual performance plans, allowing us to make the business decisions today that will help us be successful in the future,” says Director Bill Baxter. “In a competitive environment, our success comes down to our performance.”

According to the plan, preparing for a more competitive market requires TVA to begin working with distributors to develop new, more highly differentiated prices for power, unbundled services and new contract terms. TVA also will assess the way it provides and prices transmission service to its customers and decide whether to integrate its transmission system into a larger regional market.

The plan recommends a debt-reduction target of $3 billion to $5 billion over the next 10 to 12 years but says debt-reduction targets will be updated annually depending on TVA priorities and changing market conditions. Accelerated debt reduction can be achieved through continued emphasis on cost reduction, increased productivity, asset improvements to increase performance, further limiting capital projects where appropriate, and rate adjustments and rate changes consistent with market and power-supply conditions.

Plan presented in Knoxville Town Hall meeting
Director Harris and Theresa Flaim, Senior Vice President of Strategic Planning & Analysis, conducted an employee briefing about the Strategic Plan draft in a Town Hall meeting held in Knoxville earlier today.

Chris Mitchell, Vice President of Corporate Finance, and John Long, Executive Vice President of Human Resources, were on hand to help address employee questions.

Flaim’s presentation included a discussion of increased competition in the electric-utility industry, how the analysis supporting the plan was conducted, and how TVA can best prepare for competition.

A question-and-answer period followed today’s employee briefing. Flaim and Mitchell also are holding a media briefing this afternoon.

Questions from today’s briefing
Here are a few of the questions asked at today’s meeting in Knoxville:

Question: What can employees expect over the next few months?

Answer: TVA will carefully look at all programs and resources as we make plans to meet the challenges outlined in the Strategic Plan. The TVA Board and management is committed to communicating decisions as soon as they are made.

Q: What can employees do to help TVA meet the challenges of the future?

A: TVA's employees can help identify opportunities to operate more efficiently. One of TVA's employees’ most important roles is to understand the Strategic Plan, understand TVA's business, and help neighbors and family members understand the value of TVA.

Q: How does TVA plan to work with distributors as actions resulting from this plan are implemented?

A: TVA will work in collaboration with the distributors. We have already established a working group that will work proactively to develop and implement changes.

All questions and answers from today’s meeting will be posted on InsideNet as soon as possible.

More information about the draft Strategic Plan
Click here http://www.tva.gov/abouttva/stratplan/index.htm for additional information about the draft Strategic Plan, including an overview fact sheet of the plan, Frequently Asked Questions and the complete text of the plan. The site also includes a link for e-mailing questions about the plan. Questions will be answered and posted via regular updates to the Frequently Asked Questions page on the site.

The October Inside TVA, scheduled to be distributed Oct. 7, will include coverage of the plan.

Videotape of today’s briefing, printed copies of plan available
In addition, employee groups or organizations can request a videotape of today’s employee briefing in Knoxville. Employees also can request printed copies of the draft Strategic Plan. To request these materials, e-mail DeWilda Harless.

Have You Cast a Vote in U.S. News ‘100 Documents That Shaped America’ Poll?
Employees are reminded that U.S. News is offering people a chance to vote on which of “100 Documents That Shaped America” they believe are the most significant.

People can vote on what they believe are the “10 documents that best define who we are as a people and what our nation stands for.”

The Tennessee Valley Authority Act is included as one of the 100 documents identified by the magazine as the most influential in American history. The TVA Act is listed in the 1901-1950 section, along with the Social Security Act, the United Nations Charter and the 16th Amendment to the U.S. Constitution: Federal Income Tax.

Voting deadline and options
Votes can be cast through Dec. 1, according to the U.S. News voting site.

Those interested in voting should click here http://www.usnews.com/usnews/documents/document_main.htm to access the site, then click on the “How to Vote” link near the upper left of the page for voting instructions and related information.

People can vote online, or they can print out a ballot and mail it in. The address is included on the printed ballot.

Chattanooga Facilities Management Employee Dies
Leslie (Al) Grimes, a Custodian and Job Steward in Facilities Management in Chattanooga, died Monday evening of a suspected heart attack.

Grimes, 56, had been with TVA for about 19 years and lived in Ooltewah. Survivors include his parents, Opal and Edwin Grimes; sons, Rodney Grimes and Steve Painter; daughters, Larissa Grimes and Melody Oppie and Stacy Parkerson; three brothers and a sister; and eight grandchildren.

Arrangements are incomplete at this time but are being handled by Heritage Funeral Home (423-894-2010) at 7454 E. Brainerd Rd. in Chattanooga.

Fall Issue of Green Power Switch News Now Available Online
The fall 2003 issue of Green Power Switch News is now available online.

This issue of the quarterly newsletter includes a feature article on the first consumer-owned Green Power Switch Generation Partners solar home. The home, in Lenoir City, Tenn., supplies power to the TVA system and is a model for energy efficiency.

The latest issue also includes the following:

• An article highlighting the members of the GPS steering committee.
• A feature on Maryville College joining the GPS program and agreeing to purchase 45 blocks of green power.
• Information about the GPS electricity label, which is designed to increase public awareness about selected environmental impacts of generating and using electricity.
• Information on a GPS Generation Partners orientation, set for Oct. 3 in Knoxville, on the technical installation of grid-connected solar and wind systems.
• The latest GPS generation and participation figures.

Green Power Switch offers consumers the opportunity to choose electricity generated by the sun, wind and methane gas.

The newsletter is produced in partnership with the Green Power Switch steering committee, which includes representatives from TVA, participating distributors of TVA power and the environmental community.

Click here http://www.tva.com/greenpowerswitch/newsletter/vol3_4/index.htm to access the fall Green Power Switch News.

Chefs Needed for Knoxville CFC Cookoff
Knoxville employees will have an opportunity to show off their culinary skills at this year’s CFC Chili/Dessert Cookoff.

The event, to benefit the Smoky Mountain Combined Federal Campaign, will be held Wednesday, Oct. 8, from 11:30 a.m.-1 p.m. It will be in the West Tower Auditorium and WT Plaza conference rooms 402, 404 and 407.

All Knoxville-based TVA organizations are helping with the cookoff. Employees can sample from several different pots of chili, as well as desserts. Soft drinks will be available.

This year, event organizers hope to have 60 chili contestants, 50 dessert contestants and three contestants from area restaurants including Calhoun’s, Charlie Pepper’s and J. Scotts. Employees interested in entering the cookoff should see their organization’s CFC coordinator.

Tickets for $5 are now on sale from CFC coordinators until the day of the event. Employees are encouraged to purchase tickets in advance, but a limited number also will be available at the door. Proceeds will benefit the Smoky Mountain Region CFC’s general fund. More than 450 people attended last year’s cookoff. This year’s goal is to sell 500 tickets.

Director Skila Harris will announce winners at noon in the West Tower Auditorium. Prizes will be awarded for Best Chili and Best Dessert in each organization, as well as for overall categories including Hot, Medium and Mild Chili. Overall winners also will be selected in the Vegetarian and Restaurant Chili categories. First-, second- and third-place overall winners will be selected in the dessert competition as well. This year’s judges will include local media and community representatives, principals from several Partners In Education schools and TVA executives.