TVA Board Approves Completion of Second Unit at Watts Bar Nuclear Plant

August 1, 2007

Based on results of four detailed studies that examined future power needs, cost and schedule, environmental impact, and financing and risks, the TVA Board today approved a recommendation to complete the second unit at Watts Bar Nuclear Plant in Spring City, Tenn.

At a meeting at TVA headquarters in Knoxville, Tenn., the Board unanimously approved completing Watts Bar Unit 2 at an estimated cost of $2.49 billion for the five-year construction project. When completed by 2013, the nuclear unit will provide 1,180 megawatts of electricity, or enough power to serve about 650,000 Tennessee Valley homes.

“Completing Watts Bar Unit 2 puts an existing asset to work for TVA customers and provides a clean, safe and reliable source of affordable power to the people of the Tennessee Valley,” said TVA Chairman Bill Sansom. “The studies clearly show that completing this unit is without a doubt TVA’s best option to help meet the region’s growing power needs.”

The TVA Board’s Operations, Environment and Safety Committee recommended approval of the project after review of a detailed scoping, estimating and planning study; an environmental review; a power supply assessment; and a financial and risk analysis.

The environmental review showed no significant environmental impacts from the completion and operation of the second unit at Watts Bar. The financial analysis shows that the operation of the unit will reduce TVA’s average cost of power production. Operating Unit 2 will also reduce TVA’s overall carbon footprint – the total amount of carbon dioxide released per kilowatt-hour of electricity generated by all TVA plants.

“Adding Watts Bar Unit 2 to TVA’s generation portfolio will go a long way toward meeting the growing demand for power in the region,” said TVA President and CEO Tom Kilgore. “TVA has a good track record of operating Watts Bar Unit 1 and Sequoyah Nuclear Plant, so we know the unit design is sound. We used the same process that we used in our successful restart of Browns Ferry Unit 1, and we will incorporate all lessons learned from that project.”

In addition to adding new generation, TVA is striving to reduce about 1,200 megawatts of power demand through energy efficiency and demand-reduction initiatives in five years – the equivalent of one large generation unit such as Watts Bar Unit 2.

“The Valley’s demand for electricity is growing by nearly 2 percent a year, so we are stepping up our energy conservation and demand-reduction efforts to help reduce the growth, as well as completing the nuclear unit,” Kilgore told the Board.

He also said TVA is committed to providing renewable energy through its Green Power Switch program, but renewable energy alone cannot provide enough energy to meet the Valley’s growth in power use.

The Watts Bar Unit 2 construction project will boost the regional economy through material purchases from area suppliers and vendors, contracts with service providers, and numerous temporary and permanent employment opportunities. Approximately 2,300 contract workers are expected during the height of construction, and the project will result in about 250 additional permanent jobs at the plant.

Permanent jobs to support plant operation and maintenance include operators, engineers, technicians, crafts, chemists, instructors and other support functions. Crafts needed to complete construction of Unit 2 include boilermakers, carpenters, electricians, insulators, iron workers, laborers, millwrights, pipe fitters, sheet-metal workers, teamsters, cement workers, machinists, painters and instrumentation mechanics.

TVA operates six nuclear units at three generating sites – three boiling water reactors at Browns Ferry Nuclear Plant in Athens, Ala., and three pressurized water reactors at Watts Bar and Sequoyah nuclear plants in Tennessee. The operating reactors at Sequoyah near Chattanooga and Watts Bar have the same design as Watts Bar Unit 2 and are recognized in the industry for reliable and efficient performance and strong safety records.

Unit 1 at Watts Bar began operating in 1996 and is the last commercial nuclear unit in the United States to begin operation.

TVA is the nation’s largest public power provider and is completely self-financing. TVA provides power to large industries and 158 power distributors that serve approximately 8.7 million consumers in seven southeastern states. TVA also manages the Tennessee River and its tributaries to provide multiple benefits, including flood damage reduction, navigation, water quality and recreation.

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