TVA is ready for Red Hills power

TVA is ready for Red Hills power
Plant will help appease agency's record needs
By Tom Charlier
charlier@gomemphis.com

CHESTER, Miss. — Far from the rolling blackouts and spiking prices worrying much of the nation, the Tennessee Valley Authority is watching its energy future take shape among the backroads and red hills of Choctaw County.

In less than two months, a privately built and run power plant here will begin delivering 440 megawatts of electricity — enough to light 440,000 homes — exclusively to the TVA system. It's the biggest infusion of new base load power for the agency's system in five years.

For kilowatt-hungry TVA, the $490 million Red Hills Power Station can't start producing soon enough.

"If they were to call today and say they won't be ready until September, we'd have to take steps to replace that," said Greg Vincent, senior vice president of power resources and operation planning for TVA. "We're counting on it."

The coal-burning plant, 150 miles southeast of Memphis, is coming on line amid efforts by TVA to stay ahead of a steeply rising demand curve for electricity. In addition to buying power from Red Hills, the nation's largest public power system is embarking on a $1 billion-plus program to add generating capacity during the next two years.

At a cost of $300 million, TVA will build a 510-megawatt natural gas-burning power plant in Middle Tennessee. At the same time, TVA is sinking major dollars into building "peaking" generators — turbines that are activated during times of extreme demand.

Eight 80-megawatt turbines, costing about $250 million, will go on linethisthis year in Haywood County, Tenn. Eight were added at different sites last year, and eight more will be ready in 2002.

The agency also is seeking proposals from its distributors and independent power producers to build plants that would generate electricity for sale to TVA.

The Memphis Light, Gas & Water Division, the largest TVA distributor, has expressed interest in building its own generating facility.

And TVA continues to study options promoted by Alabama representatives to restart at least one more idled nuclear reactor.

The TVA program to secure generating resources began before the recent turmoil in California, where a flawed deregulation scheme combined with a variety of economic and weather-related factors to force rolling blackouts and other problems.

But, to agency officials, the West Coast troubles were not the only reason for the wisdom of adding generating capacity.

Until about four years ago, TVA planned to get much of the additional power it needed through purchases of surplus electricity on the open market, figuring the prices would be cheap.

Events since then convinced the agency otherwise. In a letter sent this month to members of Congress from the region, TVA said, "Our nation's power supply failed to keep pace with demand," and the transmission network needed to move electricity from one utility to another "came under increasing stress."

Stephen A. Smith, executive director of the Southern Alliance for Clean Energy, said the TVA region has some of the highest electrical consumption rates in the nation. "We're not squeezing enough out of each kilowatt-hour before we need to rush out there and build new plants."

TVA repeatedly has set new records for demand in recent years. Last August, the agency on five occasions met demands that exceeded the previous year's record.

The Red Hills proposal was "reasonably attractive" when it was presented to TVA several years ago, Vincent said. "Over time, it's gotten more attractive because the market price of electricity has gone up," he added.

Environmental groups and TVA critics, however, say that instead of simply rushing to generate more power, the agency should work harder to foster energy conservation and efficiency.

As a result, officials decided that relying on the open market was "not a workable strategy," Vincent said. "We're going to have to invest in our own resources, or we can't keep the lights on, and we can't protect our customers from price spikes," Vincent said.

The Red Hills plant should help meet the high consumption levels expected this year. Although the facility isn't a TVA plant, it's the next best thing.

Owned by Choctaw Generation, a subsidiary of Tractebel, the plant is under a 30-year contract to sell all the power it produces to TVA. With its nearly half-billion-dollar price tag, the facility represents one of the largest single industrial investments in Mississippi history.

The plant will burn lignite, a low-grade coal found across much of central and Northeast Mississippi.

It's a very poor-quality coal," said B. H. 'Randy' Ransdell, plant manager. "Pound-per-pound, lignite contains less than half the energy of the high-quality bituminous coal found in Appalachia and the Midwest.

The plant will have to burn about 10,000 tons of it each day.

To minimize air pollution, the plant will employ "clean coal" technology in which limestone will be injected to convert acid rain-causing sulfur dioxide gas into calcium sulfate, a dry powder. Low combustion temperatures will minimize emissions of smog-causing nitrogen oxides.

TVA has added more than 3,500 megawatts of capacity to its system since 1994, with the building continuing. But Vincent said the agency will be careful not to repeat the mistakes it made a few decades ago, when inflated demand projections led to the overbuilding and idling of costly nuclear plants.

"We're very mindful of where this industry was in the 70s," he said.