TVA's power forecasting methods questioned

TVA's power forecasting
methods questioned

By Andy Shor
The Chattanooga Times

NASHVILLE — TVA ran up an estimated $20 billion debt to build a nuclear power program that since the mid-1970s was based on faulty predictions about future power needs in the Tennessee Valley, a regional coalition of environmental groups charged Friday.

The Tennessee Valley Energy Reform Coalition said the federal utility's Chattanooga-based power office is still using flawed methods of electricity-demand forecasting.

Group spokespersons said if TVA doesn't change, the public will ultimately have to shoulder another $8 billion in debt as other nuclear plants are brought on line.

The group also says power demand is so far below projections that TVA could scrap the Sequoyah Nuclear Plant near Soddy-Daisy and all other nuclear plants and do quite well with one, possibly two reactors at Brown's Ferry Nuclear Plant.

John Sherman, president of the coalition, called upon TVA to revise its planning methods and focus more on increasing efficiency and less on building more generating capacity. Sherman, who is also executive director of the Tennessee Environmental Council, predicted consumers will see a 30 percent rate increase once current plants are brought on-line and TVA is allowed to factor the cost of construction of the plants into its rates.

Sherman warned TVA rates are already only marginally competitive and future rate increases will cause power distributors in areas like Memphis to bolt to other power generators.

TVA spokesman John Moulton said the federal utility was not alone in the 1970s in overestimating the growth in electricity consumption.

"In the 1970s, power demand was doubling every seven years and all utilities were forecasting huge increases in electricity demand," he said. "After the oil embargo, that changed and TVA responded."

Moulton said a recent review of TVA's power forecasting program by Barakat and Chamberlain in Oakland, Calif., concluded that TVA's accuracy was better than most utilities and "could serve as a role model" for the industry.

"We recognize there is uncertainty in forecasting and we would be glad to look at anybody's study," Moulton said. "We are currently evaluating our long-term strategy and we will involve groups such as TVERC."

Ed Passerini, professor of environmental studies at the University of Alabama and a member of the Alabama Conservancy, said he has been trying to convince TVA of its forecasting errors since 1977. TVA made "outrageous projections and then built in accordance with those projections," he said, adding, "the problem is that TVA continues to make the same kind of forecasting they have all along."

Passerini said TVA based part of its future power needs on an assumption that 80 percent of homes would have full-size freezers.

Passerini said that in 1977, TVA predicted power demand in the region would rise from 20 gigawatt hours that year to 40 gigawatt hours in 1989. He said 1989 power demand reached only 21 gigawatt hours. Passerini said he used a more sophisticated Major-Time-Line analysis, which in 1977 showed TVA would need less than 25 gigawatt hours by 1989.

He said TVA now says demand will hit the 40 gigawatt-hour peak by 2010. Don't believe it, Passerini said.

Passerini and Sherman say TVA has managed to keep rates stable only by cutting staff in what they maintain are crucial areas such as operating staff.