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TVA to retire eight coal-fired units at three of its power plants


From the November 18, 2013 issue of Public Power Daily

Originally published November 18, 2013

By Jeannine Anderson
Editor

The Tennessee Valley Authority's board of directors on Nov. 14 approved a plan to retire eight coal-fired units at three of its major power plants in Alabama and Kentucky.

TVA said it was taking the action "to further diversify TVA’s power generating 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."

The utility will retire more than 3,000 MW of coal-fired 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, TVA noted.

The retirements affect all five coal units at the Colbert Fossil Plant in Tuscumbia, Ala.; one of two operating coal units at Widows Creek Fossil Plant in Stevenson, Ala.; and two of three coal units at the Paradise Fossil Plant near Central City, Ky.

Paradise Unit 3, one of TVA’s largest coal units, will continue to operate.

TVA must respond immediately to challenging trends in lower power demand, a slow economy, uncertainty in commodity pricing, and tougher environmental requirements, particularly on air emissions, said TVA President and CEO Bill Johnson.

"This will support our focus on cleaner energy and bring additional, necessary balance into our portfolio for managing our current and projected load profile," Johnson told the board.

TVA said it conducted detailed analyses, including an environmental assessment, to review options for meeting stricter air quality regulations at the Paradise plant. Those options included 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 approved the construction of a $1 billion gas-fired plant at the Paradise site. The two coal units at the site will be retired when the gas plant is available, TVA said.

The utility said the new plan does not affect TVA's 2014 budget and it moves the federal utility toward a more balanced generation fleet of about 40 percent nuclear, 20 percent coal, 20 percent natural 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 the utility’s 2011 integrated resource plan, which is being updated now, TVA said.

"These were difficult recommendations to make, as they directly impact our employees and communities," Johnson said. "But the plan is what’s best in terms of its positive impact on TVA’s rates, debt and the environment," and will bring the greatest benefit to the people of the Tennessee Valley, he said.

The board delegated authority to Johnson to establish a schedule for the coal unit retirements.

Environmental groups, including the Sierra Club, Southern Environmental Law Center, Earthjustice and the Southern Allilance for Clean Energy, immediately applauded TVA's plan to retire the coal-fired units.

"Today's announcement by TVA made clear that, as one of the largest utilities in the country, it is ready to back away even further from the use of dirty, outdated coal for electricity," the Sierra Club said.

"There is a demonstrated link between pollution and asthma in children," said Tiffany Schauer, exeuctive director of Our Children's Earth Foundation. Families in Alabama, Kentucky, North Carolina and Tennessee "can breathe a little easier" as a result of the TVA board's decision, she said.

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