TVA plants are underinsured, officials say

TVA plants are underinsured, officials say

By JESS NICHOLAS
Managing Editor

Tennessee Valley Authority nuclear plants in Alabama and Tennessee are underinsured, according to an Associated Press report.

According to the Associated Press, TVA's current property casualty insurance policies cover less than half the appraised value of the Brown's Ferry facility near Athens and approximately one-sixth the value of the Watts Bar facility near Spring City, Tenn.

TVA's current policy pays for up to $1.06 billion in coverage per site plus an extra $1 billion divided between its three plants. The third facility operated by TVA is the Sequoyah facility located near Chattanooga, Tenn.

TVA officials say they are aware of the discrepancy between insured values and real values of their plants, but little can be done about it.

"It's a new world that we're living in today," TVA Director Bill Baxter told the Knoxville News-Sentinel. "I think everybody is re-examining what are insurable risks. There is a lot of discussion within the industry. How do you measure that risk? What part is insurable? What part would the federal government need to step up on? What part do you self-insure on? Legitimately all of those things are being re-examined in light of Sept. 11."

TVA insurance officials say the agency is considering purchasing more insurance, but there is little chance of finding enough insurance to completely cover the cost of replacing a facility in the event of its destruction.

One consideration for officials seeking insurance is the design of the respective plants. The Watts Bar facility is a pressure-driven nuclear reactor, in which water from the cooling towers are separated from the water that comes in contact with radioactive material. Even though the cooling towers present a larger target for an attacker to hit, the water inside them is not radioactive.

But the Brown's Ferry plant in Alabama is constructed differently. Brown's Ferry uses a boiling water design, meaning the water used to turn the turbines and generate power comes into direct contact with the reactor core. Any water spilled from the Brown's Ferry facility during an attack would likely be contaminated.

Stephen Smith, executive director of the Southern Alliance for Clean Energy in Knoxville, said TVA should purchase enough insurance to replace nuclear plants with at least some form of power-generating equipment in the event of an attack.

"The likelihood of a nuclear plant attack has dramatically increased," he said. "They couldn't build another nuclear plant for $2.06 billion, but they could replace it with another form of power like natural gas."

The Associated Press contributed to this report.

The above graph shows the percentage of radiation present in the environment from different sources, according to TVA research. TVA says the amount of radiation present as a result of nuclear power generating activities makes up less than one percent of the total radiation present.