Construction of Watts Bar 2 won’t get credit under EPA plan

Tennessee Valley Authority (TVA) President and CEO Bill Johnson remains confident that the 1,100-MW Watts Bar 2 nuclear unit will be online by the end of 2015 at a cost of $4.2bn, he said Aug. 5.

When it comes online, the new unit will have some safety features inspired by the Fukushima disaster in Japan, such as additional backup emergency equipment stored on-site, Johnson said.

At the same time, however, it appears bringing online this new carbon-free nuclear generation won’t score the state of Tennessee many brownie points under the U.S. Environmental Protection Agency (EPA) Clean Power Plan to reduce CO2.

“Nuclear plants that are in flight, do not count,” toward the reduction. “That’s our understanding,” Johnson said in response to a reporter’s question during the quarterly financial call.

Because Watts Bar 2 construction was already well underway when EPA released its proposal for existing plants on June 2, it appears that EPA would not allow the state to count that toward a 30% reduction in carbon by 2030, Johnson said.

The TVA generating system itself has already cut its emissions more than 30% below 2005 levels, Johnson said.

 “That’s a concern and that will get a lot of discussion,” as the EPA CO2 rule undergoes public review, Johnson said. But TVA is now “further down the path toward commercial development,” of Watts Bar 2 the CEO said.

Johnson was also asked if TVA might consider entering into a regional greenhouse gas (GHG) reduction program with other Southeast states. Johnson replied that TVA is talking with Southeastern states and its neighboring utilities, but putting together a regional program would be complex.

“We are, at the moment, talking with all our states and their environmental departments,” said the TVA chief. But the different states “have options about how they will meet the rule.” For example, various states are doing better on CO2 tonnage as opposed to CO2 emission rates, Johnson said.

On another nuclear issue, TVA is maintaining its relationship with the Babcock & Wilcox (B&W) mPower small modular reactor (SMR) program although B&W has slowed its SMR program for market reasons. TVA continues to do work on the Clinch River site in Tennessee where the SMR units would be located.

“We continue to be interested in the concept,” Johnson said.

As a federal entity, TVA has now concluded the first three quarters of its fiscal year. During that nine-month period, TVA has done refueling and maintenance outages at three of its nuclear plants.

TVA’s Browns Ferry nuclear station in Alabama remains under increased Nuclear Regulatory Commission (NRC) oversight due to some past problems, Johnson said. However, the NRC has lifted the “red” designation at the plant, Johnson said.

Raccoon Mountain back in service

On other topics, TVA officials said that the Raccoon Mountain pumped storage facility in Tennessee is back online.

TVA’s hydroelectric output has been down some in FY 2014 due to drier weather, TVA officials said. TVA saw a record hydroelectric year in 2013.

Johnson was also asked about a Sierra Club proposal that TVA consider wind energy, rather than natural gas to replace the Allen fossil plant in Memphis.

Johnson replied that TVA needs to find a least-cost option to replace generation from Allen. The TVA CEO said he could lay out more information on the Allen situation in the near future.

About Wayne Barber 4201 Articles
Wayne Barber, Chief Analyst for the GenerationHub, has been covering power generation, energy and natural resources issues at national publications for more than 20 years. Prior to joining PennWell he was editor of Generation Markets Week at SNL Financial for nine years. He has also worked as a business journalist at both McGraw-Hill and Financial Times Energy. Wayne also worked as a newspaper reporter for several years. During his career has visited nuclear reactors and coal mines as well as coal and natural gas power plants. Wayne can be reached at wayneb@pennwell.com.