The Tennessee Valley Authority (TVA) board of directors decided November 14 to further diversify TVA’s power generation mix to keep pace with changing economic and regulatory conditions, and in keeping with TVA’s commitment to keep electric rates low and reliability high.
According to TVA, the federally owned utility corporation must respond to challenging trends in lower power demand, a slow economy, uncertainty in commodity pricing and tougher environmental requirements, particularly on air emissions.
The board approved a coal fleet plan that will retire eight coal units at three plant sites with more than 3,000 MW of combined generating capacity. A number of these units were already idled or scheduled for idling and/or retirement based on an agreement with the Environmental Protection Agency (EPA).
The retirements affect all five coal units at the Colbert Fossil Plant in Tuscumbia, Alabama; one of two operating coal units at Widows Creek Fossil Plant in Stevenson, Alabama, and two of three coal units at the Paradise Fossil Plant near Central City, Kentucky. Paradise Unit 3, one of TVA’s largest coal units, will continue to operate.
TVA conducted detailed analyses including an Environmental Assessment to review options for meeting stricter air quality regulations at the Paradise plant, including installing additional emission controls on Units 1 and 2, building a new gas-fired generating plant at the site or taking no action.
Based on that review, the board November 14 approved the construction of a gas-fired plant at Paradise. This will result in an investment of about $1 billion at the site. The two coal units will be retired when the gas plant is available.
The new plan, which does not affect the FY 2014 budget approved by the board in August, moves TVA toward a more balanced generation fleet of about 40 percent nuclear, 20 percent coal, 20 percent gas and 20 percent hydro, renewables and energy efficiency. This more diversified portfolio will help TVA manage load growth and provide maximum flexibility, and is consistent with the range of options analyzed in TVA’s 2011 Integrated Resource Plan, which is now being updated.
The closures come on top of ones announced in 2011.