In March, the Tennessee Valley Authority removed the coal-fired Colbert Units 1-4 in Alabama, with a summer net capability of 712 MW, from service.
The decision to idle or retire coal-fired units from TVA’s generation fleet is being influenced by several factors, the utility said in its May 3 quarterly Form 10-Q report, including the two agreements into which TVA entered in April 2011 to resolve a dispute under the Clean Air Act, environmental legislation, the cost of adding emission control equipment and other environmental improvements, fuel prices, conditions of its aging plants, and demand for energy. Under the two Environmental Agreements, TVA committed, among other things, to retire, on a phased schedule, 18 coal-fired units.
During the first fiscal quarter of 2016 (fourth calendar quarter of 2015), TVA provided notice to the U.S. Environmental Protection Agency of its election to retire Colbert Unit 5 and Allen Units 1-3 on or before Dec. 31, 2018, and Colbert Units 1-4 on or before June 30, 2019. TVA removed Colbert Units 1-4 from service in March 2016. Colbert Unit 5 was previously removed from service in 2013.
As of March 31, 2016, TVA had retired 19 coal-fired units with a summer net capability of 3,210 MW. The retirements of sixteen of these units, with a summer net capability of 2,148 MW, were carried out to comply with the Environmental Agreements. TVA said it continues to evaluate the appropriate mix of generation and assess the status of individual power generating facilities.
On April 16, 2016, the EPA issued an Administrative Order (AO) allowing the coal-fired Paradise Units 1 and 2 in western Kentucky to operate for an additional year beyond the April 2016 compliance date allowed by the federal Mercury and Air Toxics Standards (MATS). The AO allows TVA to continue to operate these units, which, in their current configuration, are not capable of meeting certain requirements of the MATS rule. The AO allows TVA to continue to operate Paradise Units 1 and 2 to maintain electric reliability pending the availability of commercial power from the natural gas-fired units currently under construction at the Paradise site without incurring penalties under the Clean Air Act (CAA).
During 2014, the TVA Board approved the construction of two natural gas-fired power plants. One facility, with an expected generation capacity of approximately 1,000 MW, will be constructed at the Allen coal plant site at a cost not to exceed $975 million. The second facility, with an expected capacity of approximately 1,000 MW, will be constructed at TVA’s Paradise site at a cost not to exceed $1.1 billion. Upon completion of each facility, existing coal-fired units at each site will be retired with the exception of Paradise Unit 3, which would continue to be operated on the Paradise site.