First Gallatin scrubber should be deployed in early 2015

The Tennessee Valley Authority (TVA) is about 40% through environmental retrofit work at its Gallatin coal-fired facility and expects to bring online the first of the plant’s four scrubbers early in 2015.

The scrubber will be “tied-in” during an outage at the plant early in 2015, said TVA President and CEO Bill Johnson.

TVA is spending more than $1bn on sulfur dioxide scrubbers and selective catalytic reduction (SCR) technology in order to reduce SO2 and NOx emissions, Johnson said.

To date, more than 1,000 workers involved in the clean air project have achieved more than two million work hours without a lost time incident, Johnson said. A federal judge recently held that TVA has conducted adequate environmental review before moving forward with the coal plant environmental controls.

The four coal-fired units at the Gallatin plant in Sumner County, Tenn., burn subbituminous coal and together can generate about 1,000 MW.

TVA officials said that FY 2015 will be a heavy capital expenditure year because of the construction of Watts Bar 2; environmental controls at Gallatin; and a new combined-cycle gas project being developed at the Paradise plant.

TVA, a federal utility, goes by a federal fiscal year calendar. Johnson made his comments during an Aug. 5 quarterly financial call.

TVA is also making much progress on reducing operation and maintenance (O&M) expenses by $500m by 2015, officials said. Johnson said much of the savings have come through reducing TVA’s employee headcount.

For starters, TVA decided not to fill about 1,000 open positions, Johnson said. There have been other headcount reductions as well, Johnson said.

Although the April-June period is a transitional quarter with generally milder weather and lower demand for electricity, Johnson said, “We have seen an underlying layer of growth in power sales, and that is very encouraging economic news.”

Despite still dealing the impact of the closure of the USEC gaseous diffusion plant in Kentucky, which was a major power customer, TVA has seen many economic development projects being announced during the past year in its service territory, Johnson said.

“Remaining focused on the right strategic priorities has improved TVA’s overall financial health,” CFO John Thomas said. “We have invested nearly $2 billion in our asset base so far this year, while reducing debt by over $1 billion.”

Total sales were down 3% through the first nine months of FY 2014 when compared with the same period a year ago, due largely to the closing of the USEC plant.

TVA’s net income of $147m for the nine months ended June 30, 2014, on almost $8bn in revenue, and a nearly 7% reduction in operating and maintenance expenses year-over-year resulting from cost-saving initiatives.

In addition, $5m previously reported as Environmental cleanup costs —Kingston ash spill, net was reclassified to $5 million of Insurance recoveries, TVA said in its 10-Q.

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.