Monday, February 19, 2018

Tennessee Valley Authority CEO defends purchase of corporate jets, helicopter

Tennessee Valley Authority President Bill Johnson recalls being grounded because of fog at a small Alabama airport three years ago when another single-engine, single-pilot TVA helicopter arrived with five executives from a foreign company on board looking at a potential industrial site in the area.

"It occurred to me that if we crashed that helicopter, we would wipe out the entire management team of that industrial company we are trying to attract," Johnson said. "I thought a much safer way of doing this is to get a helicopter with two engines and two pilots, which is sort of the norm for these kind of tours."

So in September 2015, TVA paid $6.95 million to buy an EC145 helicopter, an eight-passenger, twin-engine aircraft equipped with the $1.5 million Mercedes- Benz-style interior that includes fine hardwood paneling.

Despite criticism of the aircraft purchase last week from consumer, environmental and conservative groups, Johnson said the helicopter "has more than paid for itself" from new industrial prospects that have used the helicopter and decided to locate in the Tennessee Valley.

The TVA president said he also decided in 2015 to upgrade TVA's King Air plane with an $11.2 million Cessna Citation Excel jet to improve the safety of the trips he and other TVA executives make across TVA's seven-state region.

Johnson said the King Air previously used "was in such bad repair that I personally landed twice when the flaps didn't work." On another occasion, the plane lost its gyroscope, which helps tell the elevation and location of the aircraft.

TVA decided it should replace the aging plane and estimated it would cost only 7 percent more to operate a jet, instead of a propeller-driven airplane. Last year, TVA bought another nearly identical Cessna jet for $10.6 million so pilots wouldn't have to operate a different type of aircraft.

TVA didn't use jets before Johnson became CEO, even though TVA once had more than five times as many employees and was involved in the past with more complicated and ambitious building programs than it is today.

But Johnson said the jets have allowed him and other TVA executives to more frequently visit TVA plants and employees and meet leaders of the municipalities and power co-ops that buy TVA power.

Tennessee Valley Authority President/CEO Bill Johnson

"We have improved results with much better customer relations and major projects being done now on time and on budget," Johnson said. "The only way that happens is if you go visit and see. I am a strong believer in management presence and oversight."

Johnson said he has personally visited 100 of the 154 local power companies that distribute TVA power and frequently goes to TVA's facilities, which he said the agency's two jets help him to do on a regular basis.

"I think there is a direct link between those (aircraft) assets and the improved performance of TVA," he said. "I can drive to Memphis is seven hours, have a one-hour meeting, stay overnight and drive back the next day or I can fly to Memphis in an hour, have a meeting, come back and do three other things in three other cities in a day. That is a much more efficient use of time."

But consumer groups last week continued to challenge the need for the aircraft upgrade, which cost TVA nearly $29 million to acquire and additional costs to operate and maintain.

Debbie Dooley, president of Conservatives for Energy Freedom, said she was "appalled" at the purchase of executive jets and a helicopter while the agency was cutting its staff and raising its base rates.

"Surely you understand the appearance of that," she told the TVA board last week.

Dooley, one of the original founders of the Tea Party movement, has joined with the NAACP and a variety of environmental groups to question TVA's use of jets and an executive helicopter.

"This is not about left or right, it is about right and wrong," Dooley said.

Jason Carney, founder of Energy Electives LLC in White Creek, Tenn., said the typical Tennessee Valley resident "is so far removed from these corporate jets and Mercedes Benz helicopters" that they question their worth and cost.

The helicopter TVA bought was previously used by Dallas Cowboys owner Jerry Jones and was once listed on the "billionaires shop" website.

Johnson said the used helicopter came with its luxury features, including a Mercedes logo on the seats, and that it was cheaper to keep the logos than replace them.

Other federal agencies covered by the General Services Administration don't even allow federal employees, in most instances, to fly first class on commercial airlines or to charter private jets without a waiver from GSA rules. Former Health and Humans Services Secretary Tom Price resigned last year over amid sharp criticism of his use of taxpayer-funded charter flights and EPA Administrator Scott Pruitt last week came under fire for flying first class without a waiver.

As an independent, self-funded federal agency, TVA is not covered by the GSA rules and Johnson said TVA actually has fewer and smaller aircraft than other comparable investor-owned utilities in the Southeast.

TVA bought a Cessna Citation Excel jet in 2015 for $11.2 million and a similar jet in 2017 for $10.7 million. A Mercedes Benz-style EC145 helicopter previously used by Dallas Cowboys owner Jerry Jones was bought for $6.95 million.

TVA's inspector general reviewed documentation for the use of the TVA planes and found some shortcomings. But interim Inspector General Jill Matthews said there has been no report issued yet and no review of TVA' latest purchase of the Cessna jets or the Mercedes Benz helicopter.

Johnson said the helicopter played "a key role" in allowing Toyota and Mazda officials to make aerial inspections of an industrial site in Huntsville, Ala., where the auto companies announced last month a $1.6 billion joint venture to build an automotive plant with 4,000 employees.

Tennessee economic recruiters also said the TVA helicopter helped to show off industrial sites to prospects, including the 330-acre Dayton industrial park where Finnish tire maker Nokian plans to build a $360 million factory. Dayton was picked last year for Nokian's first American plant from among 80 U.S. sites that were considered, including two dozen like Dayton where company executives visited.

"TVA is a tremendous partner to the state and is involved in many of our recruitment projects," said Jennifer McEachern, communications director for the Tennessee Department of Economic and Community Development. "ECD has used the TVA helicopter for business recruitment, which has aided the state in landing several significant projects in Tennessee, specifically in the rural areas of our state."

Enticing Nokian to locate in Dayton is especially beneficial since Rhea County has the highest jobless rate among Tennessee's 95 counties, McEachern said.

"When prospects want to look at a big site, you've got to get them up in a helicopter and when you can get more people in this helicopter and look at the site all at once that is definitely an advantage," Johnson said. "Part of our mission is economic development and that's why we commit resources to it. A lot of the states that we deal with don't have helicopters."

Over the past five years, TVA has attracted or retained more than 400,000 jobs and brought more than $41 billion in direct investment to the Valley.

Original article can be found here ➤

1 comment:

  1. F/W-R/W retired corporate pilot. I see the need for a utility/corporate type Helicopter but not necessarily in the EC 130 class. High main and costs. As for fixed wing a twin turbo prop would fit the bill better. In a state the size of Tennessee the safety factor is better. I'm typed and flew the XL its a good airplane but if all access and short fields are the goal its not your airplane a KA_350 is the better airplane especially considering the stage lengths. A lot of
    Tennessee Resident's money spent so the exec's could look good.