TVA projects $15 billion surplus, eyes restart of oldest nuclear unit

TVA projects $15 billion surplus,
eyes restart of oldest nuclear unit
Extra generation, clean air requirements may limit debt reduction efforts

BY DAVE FLESSNER
STAFF WRITER

The Tennessee Valley Authority projects it will have at least $15 billion of extra revenues over the next decade to cut its debt in half.

However, TVA Chairman Craven Crowell said Monday the federal utility may have to use most of that extra money instead to clean up its aging coal plants and add more power generation to keep the lights on. TVA directors are planning to boost the $2 billion already spent on pollution controls, and the board is considering a plan to restart TVA's oldest nuclear reactor, idle for 16 years because of safety concerns.

"It's tempting to follow the 'California Plan' and simply hope that others build capacity for us," Mr. Crowell said Monday during one of his last board meetings before he retires from TVA next month. "But then the valley might experience similar problems of not enough generating capacity or transmission."

Anti-nuclear activists pledge to fight TVA's attempt to extend the life of its Browns Ferry Nuclear Power Plant and to restart the plant's oldest reactor. Critics claim the $1 billion expense required to bring the Unit 1 reactor at Browns Ferry into compliance with today's safety standards is too risky and expensive and could be avoided with better conservation.

The Unit 1 reactor at Browns Ferry, the site of a 1975 fire that was one of America's most serious nuclear plant accidents, has been idle since 1985.

"To support the restart of Browns Ferry Unit 1 demonstrates an ignorance of past failures such as Three Mile Island and a disregard for the future," said Dr. Ed Passerini, president of Southern Alliance for Clean Energy, an anti-nuclear group.

TVA directors have yet to officially decide whether to pursue the restart of the Unit 1 reactor at Browns Ferry. But TVA will conduct a public hearing today near Decatur, Ala., on the potential environmental impacts of extending the 40-year license for Browns Ferry for another 20 years.

"We're closely looking at the feasibility of bringing Unit 1 online at Browns Ferry," TVA Director Glenn McCullough said Monday.

TVA's electricity demand is growing.

ing 50 percent faster than the national average. TVA Executive Vice President Terry Boston said having adequate power supplies is critical for today's digital economy and to avoid rolling brownouts like those experienced this winter in California. "Electricity is a lifeline, not just a bottom line," he said.

Adding extra power generation to meet the growing demand for electricity could hurt TVA's bottom line. The utility developed a 10-year plan in 1997 to cut the agency's $27 billion debt in half by 2007. The debt will have dropped by $2.2 billion by the end of this year, but TVA's decision to add more power capacity will leave the utility short of its original debt reduction target, Mr. Crowell said.

"By following a different strategy (than California) — making prudent investments to increase our generation — TVA remains on target to achieve our original goal of having a competitive cost of power by 2007," Mr. Crowell said.

Dr. Stephen Smith, executive director of the Southern Alliance for Clean Energy, insists that TVA could reduce its debt and cut consumer power bills by encouraging conservation. Tennessee and Alabama now rank first and third, respectively, among the states in the share of electricity used by the average resident.

"We are awash in energy in the Southeast," Dr. Smith said.

TVA may try to boost its generation by trying to finish its dormant Bellefonte nuclear plant. But Mr. McCullough said the unfinished plant will probably be powered with a fuel other than nuclear.

"Bellefonte's future most likely will not be nuclear. We are looking at a number of options that could make the Bellefonte site productive," he said.

Mr. Crowell said his successors on the TVA board will have to decide how to use extra revenues to pare TVA's debt, build more capacity or install more pollution controls. But he said there should be enough money to do at least some of all three goals without a rate increase.

TVA directors are considering restarting the Unit 1 reactor at Browns Ferry, but the twin-reactor Bellefonte plant and the Unit 2 reactor at Watts Bar are still deferred and TVA has no plans to finish the units as nuclear reactors at this point.

Browns Ferry

• Unit 1 — Began operation in 1974, idled since 1985
• Unit 2 — Began operation in 1975
• Unit 3 — Began operation in 1977

Sequoyah

• Unit 1 — Began operation in 1981
• Unit 2 — Began operation in 1982

Watts Bar

• Unit 1 — Began operation in 1996
• Unit 2 — Deferred

Bellefonte

• Units 1 and 2 — Deferred

"We at TVA are proud of our record of just one rate increase in 13 years, and we're also proud that we won't need another rate increase for the foreseeable future," Mr. Crowell said.