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TVA Board Implements Vision

August 18, 2011

KNOXVILLE, Tenn. — The Tennessee Valley Authority board of directors on Thursday began putting into action the Integrated Resource Plan that will meet the region's electricity needs today and into the future. The actions embrace TVA's vision for cleaner, reliable and competitively priced power.

"With today's actions, TVA will add more clean energy from nuclear and natural gas sources to its generating fleet and install air-quality controls at two additional coal- fired power plants," said Tom Kilgore, president and CEO.

The TVA board authorized completion of one nuclear unit at TVA's Bellefonte site near Scottsboro, Ala.; approved the purchase of a combined cycle gas plant in north Mississippi; and announced plans to add emissions controls at Gallatin and Allen fossil plants to reduce sulfur dioxide and particulate emissions.

"These strategic investments are key to providing reliable, low-cost electricity now and into the future while being responsible, good stewards of Tennessee Valley resources," Kilgore said. "To achieve our vision of being one of the nation's leading providers of low-cost and cleaner energy by 2020, TVA must continue to reduce air emissions, offer a balanced power mix and encourage energy efficiency."

To meet the power requirements in the Valley, make nuclear safety modifications as a result of Fukushima, bolster cyber-security and continue investing in clean-air initiatives and energy efficiency, the board approved a 2 percent rate increase in TVA's average wholesale rate, effective Oct. 1. The average increase amounts to about $1.60 a month on a 1,000 kilowatt-hour residential electric bill.

"As we build Bellefonte we will integrate safety modifications from the extensive review of the lessons learned from the Fukushima nuclear plants in Japan," Kilgore said. "Making Bellefonte a productive asset with state-of-the-art equipment will add an additional supply of clean, base-load power to TVA's generating mix."

Nuclear energy is the best option for clean, reliable and lower-cost electricity, compared to coal, gas and alternative fuels, Kilgore said. Once complete, Bellefonte will generate 1,260 megawatts, enough to power about 750,000 homes in the region.

The $4.9 billion project is expected to add about 2,800 construction jobs in the north Alabama area with about 650 permanent jobs once the plant is completed. The plant is about 55 percent complete and is expected to go into operation by 2020.

The air-quality controls, including flue gas desulfurization systems, or scrubbers, at Allen and Gallatin will take about six years to complete. Scrubbers can reduce sulfur dioxide emissions by more than 95 percent.

The Magnolia Combined Cycle Gas Plant that TVA will buy is a three-unit, natural gas-fired electric generating plant near Ashland, Miss. With 909 megawatts of summer dependable capacity, the plant is a modern, fully permitted generating facility with a proven operational history, located in the TVA service area and already connected to the TVA electrical grid.

"Those advantages make it a strong strategic, operational and financial fit for TVA and the purchase price is less than half the expected cost of future new construction," Kilgore said.

The plant is owned by Kelson Limited Partnership, a wholly owned subsidiary of Kelson Energy Inc. The closing of the transaction is expected to occur before the end of August.

In other actions, the board:

Approved a budget with $9.9 billion for operating expenses and $3.8 billion in capital expenditures for fiscal year 2012, which begins Oct. 1.
Reviewed and accepted the final Natural Resource Plan and Environmental Impact Statement that will help TVA prioritize efforts in managing recreation facilities, wildlife and plants, protecting water resources, and preserving historical and cultural sites on TVA-managed reservoir lands. To view the Natural Resource Plan and the programs it outlines, go to www.tva.com/nrp.

For high resolution photographs and broadcast quality video of various TVA plants discussed at the board meeting, go to http://www.tva.com/press.

The Tennessee Valley Authority, a corporation owned by the U.S. government, provides electricity for 9 million people in parts of seven southeastern states at prices below the national average. TVA, which receives no taxpayer money and makes no profits, also provides flood control, navigation and land management for the Tennessee River system and assists utilities and state and local governments with economic development.