TVA to lose largest industrial customer

The Tennessee Valley Authority is losing its largest industrial customer, a government-owned uranium enrichment plant.  When the plant near Paducah, Kentucky closes next year, TVA will lose about 5 percent of its electricity sales, resulting in a loss of about $600 million in annual revenue. What does this mean for TVA and for its fleet of coal-fired electric generating facilities?

The Tennessee Valley Authority is the nation's largest public power provider and a corporation of the U.S. government.  TVA provides electricity for about 9 million people in seven southeastern states: Alabama, Georgia, Kentucky, Mississippi, North Carolina, Tennessee, and Virginia.  TVA is independently financed, meaning it neither receives no taxpayer money nor retains any earnings as profits.  It owns the most operating electric capacity of any utility in the U.S. (33,804 MW as of 2011), and leads the nation in both volume of annual energy sales (167,730 million kilowatt-hours) and annual revenue ($11.841 billion).

TVA's largest customer has been the Paducah Gaseous Diffusion Plant.  Originally built by the U.S. Department of Energy to enrich uranium into fuel for U.S. nuclear power plants, the plant has been leased to and managed by USEC, Inc. since 1993.  Paducah has been the nation's only facility for processing low-enriched uranium since 2001.

Last month, USEC announced that it plans to close the Paducah plant in 2014.  When that happens, TVA will face a new, smaller landscape of demand for its power.  As a result, some observers expect TVA to close the nearby Shawnee Fossil Plant.  The Shawnee facility is a 1,200-megawatt coal-fired power plant built at the same time as the Paducah enrichment plant at a site about 2 miles away.

TVA has not yet indicated whether it will close Shawnee, but in recent months it has announced plans to close 3 other older coal-fired power plants: the Widows Creek Fossil Plant in northeast Alabama, and the John Sevier and Johnsonville fossil plants in Tennessee.  On the other hand, TVA continues to modernize and invest in refurbishing other older coal-fired plants, including the Gallatin Fossil Plant near Nashville, Tennessee.  TVA is investing about $1.1 billion in Gallatin to install pollution controls including sulfur dioxide capture technology.

How TVA responds to the loss of the Paducah uranium plant remains to be seen.  TVA's relatively low rates for power may attract another large industrial customer to the region.  If that happens, it may continue to operate the Shawnee facility and other plants that can be made economical.  Otherwise, TVA may find itself faced with choices to mothball Shawnee or to do something else with its newfound surplus power.

April 28, 2011 - storms knock TVA nuclear plant offline

The rash of tornadoes and powerful storms across the American midwest and south have knocked three nuclear reactors in Alabama offline.

This small dam maintains water levels in Haley Pond in the village of Rangeley, Maine.

I've previously noted the Tennessee Valley Authority's nuclear power program, and how stormy weather can impact generation and the electric grid.  Yesterday, a series of severe storms and tornadoes damaged eleven major transmission lines in the Southeast, cutting the power supply to TVA's Browns Ferry nuclear plant in Alabama.  Browns Ferry is home to three reactors with a combined capacity of 3,274 megawatts.


The TVA is a congressionally-chartered federal corporation operating a variety of generation resources.  Most famous among these may be the TVA's 29 hydroelectric dams, although TVA also operates three nuclear power plants (totaling six reactors), as well as coal plants, natural gas combined-cycle plants, and some non-hydro renewable power.




The storms may have some electric upside: TVA is running 8 of its 9 dams on the Tennessee River at full production -- primarily to control flooding, but producing hydroelectricity at the same time.

February 8, 2011 - nuclear power in Utah?

Nuclear power is one element in the mix of U.S. electric power generation sources.  In 2010, nuclear power from 104 plants accounted for 19% of net electric generation in the country, or about 670 terawatt-hours.  (That's 670,630,000 megawatt-hours.)  On a net electric generation basis for 2010, nuclear ranked below coal and gas, but above all other resource types.  Since 1977, no new nuclear plants have started construction, due to reasons including cost, safety concerns, and local siting opposition.

The tide against new nuclear power plants may be shifting.  In 2007, the Tennessee Valley Authority approved plans to restart construction on the Watts Bar Unit 2 plant near Spring City, TN; its sister plant was the last domestic civilian reactor to reach commercial operation, while Unit 2 has sat in a state of 80% completion since 1988.

A number of new nuclear plants are now in the planning stages around the country.  In Utah, a plant proposed by Blue Castle Holdings is proposing to build a two-unit plant near Green River. Nuclear plants need a large amount of water for cooling and steam production; Blue Castle has obtained leases for the annual use of 50,600 acre-feet of water from the San Juan and Kane County water conservancy districts.  Those leases stem from 1960s-era unused water appropriations for coal-fired generation plants that were never constructed; Blue Castle has filed to change the leases to allow for nuclear generation.  Blue Castle's project remains on the drawing board, with other key permits not yet sought (like approval from the Nuclear Regulatory Commission, which Blue Castle hopes will be obtained by 2016).  What role will Utah play in a nuclear renaissance?