The KNS had a report yesterday regarding a TVA proposal to share ownership of some of their power plants with distributors.

According to the article, the deal would let TVA finance expansion of their capacity "off the books", using tax exempt financing their distributors such as KUB are eligible for. This would help contain TVA's debt, which is currently around $25 billion. Distributors would get credit for the power produced at the plants they invest in.

One thing not mentioned in the article is the possible liability power distributors such as KUB might assume under the deal.

TVA's coal-fired power plants are becoming a huge liability. Even though they have successfully fought off New Source Review challenges, there always seems to be another lawsuit. Eventually, one of them might prevail and TVA will be held accountable for all the pollution. Or, a more environmentally friendly administration might come in to office and force TVA to accelerate installation of expensive pollution controls. Then there are the growing concerns about other toxic releases such as mercury.

Another looming problem is carbon sequestration. If (or when) Congress decides to tackle global climate change, developing and implementing carbon sequestration systems could cost TVA a fortune. In 2005, TVA coal-fired power plants emitted 105,000,000 tons of CO2. With carbon credits currently selling for $5 to $10 per ton on the retail market, this represents $500 million to $1 billion in offsets per year.

Widows Creek was mentioned in the article as one of TVA's existing coal-fired power plants being considered for the joint ownership deal. In criticizing TVA's progress on pollution controls, Sen. Lamar Alexander singled out Widows Creek in 2005: "These plants also produce nitrogen pollutants and mercury, which are hazardous to our health. TVA has the latest pollution control equipment on only two of the eight units at Widows Creek today. If we're really serious about clean air, TVA needs to put the latest pollution control equipment on all of its coal-fired units and/or build more nuclear power plants."

So we wonder if the power distributor trade group working on the joint ownership proposal with TVA has considered all this. Would Knox County residents want to be on the hook for all that liability by way of KUB? In one sense I guess it doesn't really matter, though. Ratepayers throughout the TVA system are going to have to pay the piper sooner or later.