110 Iowa L. Rev. 2233 (2025)

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Abstract

Support for public ownership of utilities as a means of decarbonizing energy systems is rising. Yet good models for how to institutionally structure publicly owned utilities to accomplish this mission are scarce. In fact, many point to the disappointing track record of the United States’ largest publicly owned utility, the Tennessee Valley Authority (“TVA”), as evidence that publicly owned power is a poor institutional model for the energy transition. This Essay interrogates this argument, tracing how TVA’s institutional design relates to its sectoral performance. As we show, TVA’s record is decidedly mixed: In some ways, it is overperforming its private-sector peers, delivering cheaper and cleaner electricity than investor-owned utilities (“IOUs”) in the region. Yet the agency remains intransigent and nontransparent in the face of clean energy developments, causing it to lag on solar and wind development and to over-rely on planned gas additions in comparison to private sector peers. 

Our core argument is that TVA’s modern struggles should be understood as consequences of accretive choices in its institutional design. Mechanisms for politically controlling TVA from above and below have eroded over time, as it has faced mounting pressure to run and perform like a private sector company. The modern TVA is operating under a muddled theory of accountability that mixes theories of corporate governance with theories of presidential control of agency action. The resultant hodgepodge is incoherent, ineffective, and deficient in realizing the democratic ethos of the TVA Act. For TVA to be rendered more effective, these muddled theories of accountability must be parsed. We trace two paths forward, one focused on instilling more competition and the other on transforming TVA into a laboratory of clean energy innovation. We close by contending that a more careful understanding of TVA’s institutional dynamics does not disprove the potential potency of public power as a tool of the energy transition—but it does suggest design guardrails necessary for its success. Public power is a creature of democratic will rather than profit-making potential. It can succeed only when its democratic mandate is clear, channeled wisely, and maintained over time through concrete results and sustained practices of democratic engagement.