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TVA sets new agenda for future power generation

NORTH MISSISSIPPI — The Tennessee Valley Authority (TVA) board of directors has adopted a renewed vision for TVA’s future, focusing on cleaner air and greater energy efficiency and eventually replacing some of its older coal-fired generation units with low-carbon or carbon-free sources such as nuclear power.

CEO Tom Kilgore told board members, “TVA’s vision to lead our nation toward a cleaner energy future means relying more on nuclear power, continuing to improve air quality, relying less on coal and sharpening our focus on energy efficiency. Much of our stakeholder input and other assessments point toward a greater reliance on nuclear power and energy efficiency and less reliance on coal. Replacing some coal with other, cleaner fuel sources allows a reduction in air emissions, including carbon. One of TVA’s key goals is to reduce our carbon intensity.”

TVA’s vision of providing cleaner energy will be guided by its Integrated Resource Plan, a broad assessment of the utility’s options for fulfilling its mission over the next 20 years. A draft of the Integrated Resource Plan is expected to be released for public comment in September, and the plan should be finalized in the spring, Kilgore said.

As part of the move toward greater demand response and energy efficiency, the TVA board also approved a change in the wholesale rate structure. The new structure, to be implemented in April 2011, will include options for time-of-use rates that more closely reflect the cost of electricity production, which can be significantly higher on hot summer afternoons and cold winter mornings than at other times.

Board members also approved TVA’s budget for fiscal year 2011, which includes $248 million for work at the Bellefonte nuclear site in North Alabama to maintain the option for future power generation. Next year, the TVA board will consider whether to complete construction of the nuclear power generating unit there. Construction was halted several years ago, but studies show new generation capacity will be needed by 2020, and nuclear energy provides power generation with no carbon emissions.

The fiscal year 2011 budget, which includes no base rate increase for the fiscal year, also includes: $635 million for construction of the Watts Bar 2 nuclear facility in East Tennessee, scheduled for completion in 2013; $314 million for construction of natural gas-fired power generation at the John Sevier plant site near Rogersville, Tenn.; and, $351 million for environmental improvements at coal-fired plants, including converting wet ash storage facilities to dry. In addition, the budget contains $135 million for energy efficiency and demand-response programs and $70 million for economic development.


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