TVA denies News Sentinel appeal to release incentives for auto-parts maker

The Knoxville News Sentinel reports that TVA has rejected the newspaper’s appeal to reveal the incentives given to a South Korean company to expand its auto-parts manufacturing plant in Clinton.

The contract for the incentives is already signed, and the deal is done, but the government-owned utility said it would hurt its competitive advantage if it revealed how much money it gave SL Tennessee.

Here is an excerpt from the story, written by reporter Bob Fowler, which can be found online at knoxnews.com.

At issue is what types of lures TVA dangled before a South Korean company — SL Tennessee — in exchange for its announcement last summer that it was building an $81 million addition to its auto-parts manufacturing complex that officials said will create 1,000 new jobs.

State and local governments were forthright in revealing what they gave SL Tennessee in exchange for its decision to expand. The state provided $5 million, Clinton donated 53 acres valued at $637,300, and Anderson County is contributing $300,000 to repave the main roadway into the Clinton/Interstate 75 industrial park.

If state and local governments are willing to reveal those enticements, the newspaper asked what made TVA — the nation’s largest public utility — different.

But TVA kept mum. The utility at first said that SL Tennessee objected to the release of those incentives, which it claimed opened up the option of another Freedom of Information Act exemption.

TVA shifted its strategy after the company declined the News Sentinel’s request for more information. The authority then fell back on what’s called FOIA Exemption 5.

That’s what (Vice President of Communications Janet J.) Brewer based her denial on. That exemption protects TVA from releasing “confidential information … that would put the government at a competitive disadvantage,” she wrote.

“Release of information related to incentives offered to these businesses would provide a great advantage to other power providers and state/regional alliances in attracting businesses away from the Valley, which would not only harm TVA but would also harm the people of the Tennessee Valley whom TVA serves.”

Brewer’s denial doesn’t offer a rebuttal to the newspaper’s arguments that the incentives should be made public.

The News Sentinel in its appeal contended a Supreme Court ruling gives a starkly different interpretation of Exemption 5. Incentives can only be kept under wraps during negotiations, according to the highest court’s 1979 ruling. The cloak of secrecy ends “upon the awarding of a contract,” the court ruled.

“The incentives that have been awarded, therefore, under this cite they should be released to the public,” the newspaper contended.

TVA spokesman Scott Brooks disagreed. “Exemption 5 remains appropriate in this case even after a contract is signed,” he said in an email. “In economic development, the risk of competitive harm does NOT go away with a signed contract.”

“Any information on incentives could be used by competing power producers to lure business away from TVA, in effect to ‘sweeten the pot’ for future opportunities, including expansions, new business, or relocation. That creates competitive harm even after the contract is awarded.”

The News Sentinel also said revealing the incentives TVA gave doesn’t disclose any trade secrets. The utility’s economic development toolbox is available on the agency’s website.

At least one Republican congressman agreed with the newspaper. US. Rep. John J. Duncan Jr. said it was important that  “our government and all related agencies function with proper transparency and oversight.”

“I believe all of their (TVA’s) activities should be transparent and open to the public,” Duncan said.

Tennessee’s two senators, Bob Corker and Lamar Alexander, however, deferred to TVA’s judgment.

 

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