A shake-up on the Tennessee Valley Authority board by President Trump appears to have nothing to do with the coming decision by Memphis Light, Gas and Water Division on whether to stay with or leave the federal agency.

It does, however, add an element of uncertainty to an already lively debate about who should be the future provider of the utility’s electric power.

Trump announced at a Monday, Aug. 3, cabinet meeting that he was removing TVA board Chairman James Thompson and board member Richard Howorth. And he called for the TVA board to replace President and CEO Jeff Lyash with someone who would be paid a smaller salary than the $8 million annual salary the job pays.

Trump cannot remove Lyash. Only the board can do so.

TVA private meeting with consultants to MLGW stirs pot in electric power debate

But Trump said he wants Lyash out because of a “disastrous and heartless decision” that Trump said was to replace 200 American workers with foreign workers.

Trump acknowledged that he could not fire Lyash.

“We’re getting rid of him, in one form or another,” he said, according to Associated Press. “Either the board’s gong to do it, we’re going to do it. But he’s gone.”

Lyash has mounted an aggressive response to calls for MLGW to cut ties with TVA and make MISO – Midcontinent Independent System Operator, a nonprofit power consortium – the supplier of electric power to what is currently TVA’s largest customer.

Lyash’s response began almost as soon as he became the new CEO of TVA in April 2019.

A leader of the group “$450 Million for Memphis,” which is pushing for an exit from TVA, called Trump’s reaction “a direct result of the TVA’s wasteful corporate culture.”

“TVA would rather fire local Tennessee workers than cut their own executive compensation costs, cut executive corporate jets and helicopters, or, heaven forbid, actually lower electricity rates for their own customers,” said Jim Gilliland Jr. in an emailed statement to The Daily Memphian.

TVA counteroffer to keep MLGW includes buying transmission system

“As we know, TVA has some of the highest wholesale power rates in the South, if not in the country,” he said. “Stunningly, MLGW executives are standing in the way of holding TVA accountable via a fair comparison of Memphis-market electricity rates.”

U.S. Rep. Steve Cohen of Memphis raised the issue of outsourcing the tech jobs in May, calling for a ban on outsourcing federal jobs during the pandemic. 

Trump’s firing of Thompson as board chairman drew rare praise from Cohen who has called for Trump’s impeachment on other issues but has also been a vocal critic of TVA.

“I have rarely agreed with any of Trump’s decisions, and he’s rather late with this one,” Cohen said in a statement. “But it is incomprehensible that the TVA would outsource jobs in the middle of a global pandemic.”

The International Federation of Professional and Technical Engineers began calling attention to the outsourcing of tech labor by TVA with an ad campaign that Trump initially called “fake” earlier this month. As he denounced the ads, he also complained that Lyash’s salary was too high.

The union represents 2,500 TVA workers.

IFPTE international President Paul Shearon said Monday he was pleased Trump had acted.

“We’re pleased the White House weighed in on this issue, but it should never have gone this far,” he said in an emailed statement.

U.S. Senator Lamar Alexander of Tennessee called the job outsourcing by TVA “poor judgment hiring foreign companies during a pandemic.”

“But on most counts, it does a very good job of producing large amounts of low-cost reliable electricity,” he said in a statement that also noted the pay of the agency’s CEO is in the bottom fourth of what utility CEOs earn in the industry.

“And (it) is set strictly according to requirements of federal law,” Alexander added. “TVA receives no federal tax dollars.”

In March, Trump proposed selling off TVA’s transmission assets – a second attempt that followed one in 2019 rejected by Congress.

The shake-up of the TVA board and the spotlight on its choice of Lyash as CEO comes at a critical time in MLGW’s decision process.

Later this month, at its Aug. 19 meeting, the utility board is expected to review in detail the final version of an Integrated Resource Plan that examines all that would be involved in splitting with TVA. MLGW President and CEO J.T. Young is to follow with a recommendation to the board.