NASHVILLE, Tenn. (AP) -- The Tennessee Valley Authority board has approved increasing the utility chief executive's compensation by nearly a half million dollars, and Congressman Jimmy Duncan, Jr., has sent a letter to the TVA board chairman questioning the move.

The increase comes a month after the largest power rate increase in three decades took effect.

"Announcing this raise on the same day the Nation officially enters a recession, when many people are struggling to make ends meet, is just very unfortunate." In his letter to TVA Board Chairman William Sansom, Duncan says, "It becomes even worse when it follows a large rate increase that even Mr. Kilgore says may be able to be rescinded in a few months due to the decrease in fuel costs."

Meeting in Nashville, board members approved improving President and CEO Tom Kilgore's compensation from about $2.7 million to $3.27 million, effective with the next fiscal year.

Kilgore's base salary of $600,000 has remained the same since he became CEO in 2006. He said after the meeting he would not decline the board's decision to raise it to $850,000.

On Oct. 1, TVA put an effective 20 percent electricity rate increase into effect, raising the average residential monthly power bill by between $15.80 and $19.80.

Congressman Zach Wamp says, “Many families in East Tennessee have been struggling to pay their bills during these tough economic times."

"It defies common sense that following TVA’s biggest rate increase in three decades, the TVA Board of Directors would approve such a significant bonus package for the TVA chairman." Wamp says, "This isn’t fair to the many hard working TVA customers who will have to tighten their belts even further to pay ever-higher electric bills.”

Leave your thoughts in the comments section below.

Here's what Rep. Duncan's letter said:

October 31, 2008

Mr. William Sansom
Chairman of the Board
The Tennessee Valley Authority
400 W. Summit Hill Dr.
Knoxville, Tennessee 37902

Dear Chairman Sansom:

Each year an overwhelming majority of the people in this region become
extremely upset about the millions of dollars in bonuses TVA gives to its
top-level employees.

Now I am hearing an even stronger reaction to the salary and bonus package, totaling $3,270,000, given to Mr. Kilgore.

I have very great respect for you, Mr. Kilgore, and each member of the Board
whom I know. However, this pay raise is excessive and very unnecessary.

Further, the timing could not be worse. Announcing this raise on the same
day the Nation officially enters a recession, when many people are
struggling to make ends meet, is just very unfortunate.

It becomes even worse when it follows a large rate increase that even Mr.
Kilgore says may be able to be rescinded in a few months due to the decrease in fuel costs.

According to the Knoxville News-Sentinel, Mr. Kilgore says he did not
request or seek a pay raise, but he was "overruled" by the Board.

As much as I admire and respect Mr. Kilgore, no one is indispensable or
irreplaceable. I am convinced that many really outstanding people could be
hired for half of this $3.27 million pay package.

I know the argument that other top executives in the utility industry are
making more, and sometimes much more. However, just because someone else is making a ridiculous or unjustified salary does not mean that a public
service agency like TVA should follow suit.

East Tennessee is one of the most popular places to live in this entire
Country. TVA does not need to pay excessive salaries or bonuses to attract
well-qualified people to fill its top-level positions.

I assume that the Board will not rescind this latest pay raise and will
continue giving out huge bonuses, despite tremendous public opposition.

But I hope, at the very least, you will consider delaying this pay raise and
any bonuses until this Nation comes out of recession or until TVA rescinds
its recent rate increase.

With kindest regards, I am

Yours truly,

JOHN J. DUNCAN, JR.

Member of Congress

Amy H. Westmoreland

Communications Director/Legislative Assistant

Congressman John J. Duncan, Jr. (TN-2)

2207 Rayburn House Office Building

Washington, DC 20515

phone: 202-225-5435

fax: 202-225-6440

(The Associated Press contributed to this report.)

---

Latest Comments