TVA Board Approves Construction of Gas Plant in Northeast Tennessee

June 4, 2009

YOUNG HARRIS, Ga. – The TVA Board today approved construction of an 880-megawatt gas-fired power plant in northeast Tennessee and deferred two planned construction projects to upgrade gas plants in West Tennessee and Northeast Mississippi.

The Board approved a resolution to re-order TVA’s gas-fired generation projects, using funds and equipment allocated for planned upgrades at the Gleason combustion turbine plant in Gleason, Tenn., and the planned Caledonia combustion turbine plant in Caledonia, Miss., to develop a proposed new combined cycle plant in northeast Tennessee.

The new plant is expected to cost approximately $820 million, which is the same range of total estimated expenditures for the Gleason and Caledonia projects. The plant’s exact location and a construction date have not been determined.

“The Board’s action ensures that we have the flexibility to meet future power needs in the Tennessee Valley while maintaining transmission reliability in the eastern part of our service area,” said TVA President & CEO Tom Kilgore. “This will permit us to minimize future financial risk and continue to meet the goals of TVA’s aggressive emissions reduction program that is improving the region’s air quality.”

To meet a court-ordered accelerated schedule to install emission control equipment at the John Sevier Fossil Plant in East Tennessee, TVA would have to shut down units at the plant for about 20 months during the construction. Because John Sevier is TVA’s easternmost power plant and anchors the eastern end of TVA’s transmission system, reduced generation would increase the risk of disruptions to the reliability of the power system.

In a report to the Board at a meeting at Young Harris College in Young Harris, Ga., Kilgore said tributary reservoirs are at summer levels for the first time in three years, and the construction to complete Watts Bar Unit 2 is on schedule. He also gave the Board an update of the Kingston ash spill recovery and an update of TVA operational and financial results so far this fiscal year.

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 9 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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