On Dec. 30, during a special session of the Tennessee Valley Authority board, a decision was finalized to invest significant resources into retrofitting two units at its older, Shawnee coal plant in Paducah, KY. As explained in an earlier SACE blog, TVA had to make a decision concerning Shawnee Units 1 and 4 by December 31, 2014 under a 2011 Consent Decree with EPA and environmental groups. Despite TVA’s own assertion that it did not need to continue operation of these coal units to maintain reliability in the area, TVA decided to invest more than $200 million into propping up these two old coal units.
SACE and environmental allies submitted comments to TVA supporting retirement – not retrofit – of these units during the public comment period on TVA’s draft Environmental Assessment. Apparently, TVA concluded on December 23, that either decision – to retire the units or to retrofit them – would have “no significant impact” on the environment.
TVA rationalized spending hundreds of millions of dollars on the Shawnee plant by claiming it needed the generation to meet system demand growth needs. TVA’s demand, however, has been significantly lowered by the closure of the Department of Energy’s USEC Gaseous Diffusion plant, which was the primary user of the power generated by the Shawnee plant. Additionally, TVA is expected to bring its Watts Bar 2 nuclear plant online in the next year or two, which will increase TVA’s generation capacity by more than 3,000MW. Instead of investing in more energy savings measures that could reduce load growth and reduce the need for increased investment in expensive, dirty generation sources, TVA recently reduced its budget for energy efficiency programs.
Under the terms of the consent decree, TVA must retrofit these two units by December 31, 2017 if they want to continue operating. There is still hope, however, that TVA may ultimately decide to retire these units. TVA can decide to retire these units during the 3 year timeframe between this decision and the 2017 retrofit deadline. If TVA had decided to retire these units, however, they would not have been allowed to dial back that decision under the Consent Decree. We are hopeful that TVA was merely reserving the right to retrofit these units under the Consent Decree and will ultimately decide to retire these units and instead invest the hundreds of millions of dollars reserved for this project into growing its clean energy resources.