TVA Board addresses Watts Bar 2, Widows Creek, IRP

The Tennessee Valley Authority (TVA) Board of Directors on Aug. 21 adopted its new 2015 integrated resource plan, which does not call for any near-term baseload power beyond the completion of the Watts Bar 2 nuclear plant and upgrades to certain other nuclear units.

The IRP, which would be updated in 2020, was written in consultation with a stakeholders group that met monthly. The resource plan continues to lessen TVA reliance on coal. The plan also increases TVA’s embrace of renewable power and energy efficiency.

This greener approach includes measures such as TVA’s recently-announced contract agreement with the 80-MW River Bend solar project in Alabama.

The stakeholder group members included environmental organizations like the Southern Alliance of Clean Energy (SACE), and there were plenty of disagreements along the way, officials TVA said.

The process was akin to “making sausage,” said TVA Vice President Stakeholder Relations Joe Hoagland, who said TVA essentially treated energy efficiency “as a power plant.”

TVA board member Pete Mahurin said that flexibility is vital to the plan because no one can confidently predict future electricity prices.

The TVA board also approved its FY 2016 budget that calls for $3bn in capital spending including completion of the Allen combined-cycle and Paradise combined-cycle gas plants.

The TVA budget also calls for a 1.5% rate increase. The financial plan also includes a revised rate structure including a “time of use” option for ratepayers.  TVA is also working on a long-term financial plan that spans 10 years

“We are continuing to move toward a more diverse portfolio of generation assets,” TVA President and CEO Bill Johnson said during his comments to the board. Johnson also said that construction of the Watts Bar 2 plant is “substantially complete” and TVA has asked the Nuclear Regulatory Commission (NRC) to issue the operating license.

Johnson has said that TVA hopes to load fuel in September at the 1,150-MW pressurized water reactor (PWR) unit. Watts Bar 2 will be able power 650,000 homes. “That’s a lot of homes,” Johnson said.

During his remarks, Johnson praised the decision by Google to build a data center at the Widows Creek coal plant. Johnson also praised the employees of coal units that are being retired.

As a federal utility, TVA’s fiscal year ends Sept. 30 so this is the last board meeting of FY 2015, Johnson said. TVA has reached its goal in a $500m annual reduction in operation and maintenance cost.

Regarding the EPA Clean Power Plan, TVA has reduced its CO2 emissions 30% from 2005 levels already and have plans to increase that to 40% by 2020.

The final version of the Clean Power Plan was reduced Aug. 3 and it is substantially different than the proposed version issued in June 2014. “If you studied hard on that plan, and thought you understood it, forget it,” Johnson said.

The final version of the CO2 plan does make one important change in counting the Watts Bar 2 nuclear unit toward Tennessee emission reductions, the CEO added.

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.