TVA sees less coal generation, cuts employee headcount

The Tennessee Valley Authority (TVA) only got roughly a third of its power from coal-fired generation during the three-month period that ended March 31, TVA officials said during a quarterly conference call on May 1.

Also during the call with business reporters and the financial community, TVA President and CEO Bill Johnson said TVA has cut its staff headcount by nearly 2,000 people in recent years.

TVA conducted the call as part of a briefing on results from its second quarter of Fiscal Year 2015. As a federal entity, TVA uses as its fiscal year the 12-month period ending on Sept. 30.

The payroll reduction is part of a TVA three-year goal of reducing annual O&M expenses by a sustainable $500m in fiscal 2015. Much of the belt tightening involves labor costs.

“When we started several years ago it was on the order of 12,800 … It’s now on the order of 10,900 [employees],” Johnson said. TVA is reducing its staffing by about 2,000 positions, the CEO said.

Johnson said the reductions have been made over time and in a “thoughtful” way. TVA has been “focusing on the work we have to do every day,” and molding the staffing levels around that work.

The cost reductions prompted one newspaper feature story in the Chattanooga Times-Free Press to compare Johnson to a former TVA chief, Marvin Runyon. “Runyon earned the moniker “Carvin’ Marvin” for cutting the size of TVA’s staff nearly in half through layoffs, outsourcing and plant cutbacks,” according to the article, which suggested that Johnson holds Runyon, who died a few years ago, in high regard.

Back in November of 2014, Johnson said that roughly 800 TVA employees had already taken early retirement packages from the federal utility.

Many staff reductions are resulting from coal plant retirements. Johnson noted that TVA is in the process of reducing its coal capacity by about 40%.

Coal generation down in first three months of 2015

TVA got 33% of its power generation from coal during the past quarter compared to 36% one year earlier. TVA ran its natural gas fleet more during the quarter in order to take advantage of cheap gas prices, TVA CFO John Thomas said during the call. (A chart provided by TVA after the call puts the official figure for the most recent quarter at 34%, slightly-higher than what Thomas said during the call).

The TVA chart indicated that nuclear accounted for 35% of TVA generation in the recent quarter; up 2% from 33% in the same period of 2014. Hydroelectric for the recent quarter was 10%, down from 11% one year ago.

Natural gas and oil units provided 9% of TVA energy in the last quarter, compared to 7% a year earlier. Purchased power accounted for the remainder.

Thomas also mentioned that rail congestions also affected TVA coal plants somewhat during the past quarter.

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.