Nuclear driver for TVA

New generation
TVA's nuclear plants generated a record 47 million megawatts of electricity in calendar 2004, up nearly 13 percent from the previous year.

Nuclear

driver

for TVA

■ Record production fuels debate over safety concerns at plants.

BY DAVE FLESSNER
BUSINESS EDITOR

The Tennessee Valley Authority generated a record amount of nuclear power in 2004.

TVA's three nuclear plants produced more than 47 million megawatts of electricity during 2004 — more than enough power to supply every household in the agency's seven-state region.

Although repair and refueling outages in the next two years will keep nuclear generation below the 2004 peak, TVA officials are looking for even more production from their nuclear reactors in future years.

"Nuclear power is clean air energy and has to be an impor-

ant part of our future," TVA Chairman Glenn McCullough Jr. said.

Two decades after TVA idled all nuclear generation because of safety concerns, the federal utility revamped its nuclear program and now derives about 30 percent of its power from its Sequoyah, Watts Bar and Browns Ferry Nuclear Plant.

TVA also is in the midst of the biggest restart effort in the country, which involves reviving its oldest reactor at Browns Ferry.

At the same time, TVA has joined two groups of utilities and equipment manufacturers exploring the possibility of building new types of nuclear plants in another decade at its unfinished Bellefonte Nuclear Plant site.

TVA Director Bill Baxter calls nuclear power essential for generating power without the air pollution caused by burning coal.

"It is the most important option for low-cost power with zero emissions," Mr. Baxter said.

The New Deal agency ran out of rivers to dam for hydroelectric power a half century ago and since has derived most of its electricity from its 11 fossil plants around the valley. But new clean air rules could require TVA to spend an additional $5 billion to clean up its aging coal plants even without dealing with growing concerns about global warming caused by burning fossil fuels.

TVA once planned to replace its oldest coal units with nuclear power plants. But the transition proved too expensive.

Critics of nuclear power worry that TVA once again is too quick to embrace a costly change.

"Nuclear power is of the past, not the future," said Ed Passerini, a professor of economics at the University of Alabama who long has opposed TVA's nuclear power program. "It's time we let it go and move on the new sources of clean energy like wind, methane gas recovery and solar."

COSTLY HISTORY

Stephen Smith, executive director for the Southern Alliance for Clean Energy, said TVA's ongoing $1.8 billion investment in reviving the Unit 1 reactor at the Browns Ferry Plant in Alabama is depleting the agency's cash and could force a rate increase this fall.

TVA officials once planned to erect 17 nuclear reactors, but only six of those were finished. The federal utility invested more than $20 billion in building nuclear plants, which has saddled TVA with the largest debt of any electric utility in America.

Despite its hefty investment, TVA derived no power from any nuclear reactor from 1985 to 1988. The agency voluntarily shut down all of its nuclear reactors during the mid-1980s when it was unable to meet the stricter safety standards adopted by regulators after the 1979 accident at the Three Mile Island plant in Pennsylvania.

But TVA Nuclear Chief Karl Singer insists that long nuclear winter is in the past.

"We've done a lot of modifications in our equipment, training and processes to improve plant reliability over the years, and our plants are performing much better as a result," Mr. Singer said.

Nationwide, U.S. utilities also set a record for the most nuclear power generation during 2004, producing 788.5 billion kilowatthours of electricity, according to the U.S. Energy Information Administration.

"The industry's performance continues to improve, which should give a boost to the recent efforts to begin building new reactors again," said Mitchell Singer, a spokesman for the Nuclear Energy Institute, the principal trade group for the nuclear industry.

Dr. Passerini said such records are coming by straining equipment and staff at nuclear plants. But Mr. Singer dismissed claims.

"Safe, reliable operations are at the heart of everything we do," he said.

Last year, TVA had no lost-time accidents among its nuclear workers, Mr. Singer said.

TVA's nuclear plants also generated 30 percent of all power with only 22 percent of the operating and maintenance budget, officials said.

PRODUCTION OUTLOOK

Because of the outage schedule this year, TVA won't match 2004's record production in 2005 and 2006, Mr. Singer said.

But by 2007, TVA again could set a nuclear generation record with the return of an upgraded Unit 1 reactor at the Browns Ferry plant. TVA is in the midst of a $1.8 billion repair of its oldest reactor, which has been idle since 1985.

The restart of the Browns Ferry reactor will mark the first unit to join the nation's 103 operating reactors since TVA started its Watts Bar Nuclear Plant in 1997. No U.S. utility has ordered a new nuclear plant since the 1979 accident at Three Mile Island.

More than 2,400 TVA employees and contractors are working to rebuild and repair the unit in the biggest nuclear project in the country.

"A lot of people are watching Browns Ferry's progress," Mr. Singer said. "Our performance at Unit 1 will demonstrate not just TVA's success but the industry's ability to deliver a large nuclear project on time and on budget."

After returning Unit 1 to service by the spring of 2007, TVA plans to upgrade Unit 3 in 2008 and Unit 2 in 2009 with an additional 120 megawatts of power at each unit.

"It's a very cost-effective proposition," Mr. Singer said. "We don't have to add any more staff for the additional megawatts."

Beyond the repair and upgrade of Browns Ferry, however, TVA officials are cautious about investments in more nuclear power.

The agency has joined two of three groups of nuclear utilities and equipment manufacturers studying a new, streamlined licensing process to build another unit. But so far, early license applications have been filed for new plants by Entergy at its Grand Gulf plant in Mississippi; by Exelon at its Clinton, Ill., plant; and by Dominion Power for its North Anna site in Virginia.

TVA is offering its unfinished Bellefonte Nuclear Plant site in Hollywood, Ala., to test one of the new reactor designs. The Bellefonte site has cooling towers, an electrical switchyard and developed property on the Tennessee River to accommodate such a plant.

But TVA officials aren't rushing into any new expenditures for more nuclear power.

"Let's take it one step at a time," Mr. Singer said. "We need to successfully complete the task of completing the recovery of Unit 1 at Browns Ferry."

DEMAND PREDICTIONS

With the return of the oldest reactor at Browns Ferry, TVA projects it will have adequate capacity to meet its power demands through at least 2014.

At that point, TVA Director Skila Harris said, nuclear power will be considered along with other power-generating options, including clean coal technologies or renewable energy sources.

"One of the things that is going to be key to the next new generation of nuclear plants is the involvement of a consortium of companies," Ms. Harris said.

Mr. McCullough said the next board of directors for TVA likely will have to decide whether to pursue another nuclear unit, either by finishing one of the next generation units along with other utilities.

"I don't think there is any doubt we're going to see more nuclear plants (in the United States), but I don't know when or from whom," Mr. McCullough said.