TVA to close 8 coal-powered units in Ala. and Ky.
Thursday, November 14, 2013
The Tennessee Valley Authority's board has voted to close six coal-powered units in Alabama and replace two others in Kentucky with a natural gas plant.
"This is a personal nightmare for me," said Peter Mahurin, a board member from Bowling Green, Ky. "But I must support what I believe to be in the best interest of TVA's customers."
Increasingly stringent environmental regulations and flat power demand have made it necessary to rethink how the nation's largest public utility generates power, CEO Bill Johnson said at the Thursday board meeting in Oxford, Miss.
In fiscal year 2013, coal accounted for 38 percent of TVA's portfolio while natural gas made up 8 percent. Johnson said he would like to see those numbers closer to 20 percent each over the next decade.
Senate Republican Leader Mitch McConnell met with Johnson last month to seek continued operation of all three coal-burning units at Paradise Fossil Plant in Drakesboro, Ky. The board had previously approved upgrading the two oldest units with environmental controls. But on Thursday, Chief Operating Officer Chip Pardee recommended building a natural gas plant instead.
He said the third unit at Paradise is newer and has sufficient environmental controls to continue operating on coal.
In a news release after the vote, McConnell blamed the Obama administration for the unit closures.
"I fought hard to prevent these changes and fortunately one of the units will continue to burn coal, saving hundreds of jobs," he said.
Johnson said about 200 of the 400 jobs at Paradise will be affected, and the units will continue to run until new environmental regulations come into effect. That could be in 2015 or even later, if an extension is granted.
Rick Newman is the top elected official in Muhlenberg County, where the Paradise plant is located. His father was a coal miner for 32 years, and he was upset by the decision to shut down two units there.
"I am sort of sick to my stomach," he said. "Coal really is our legacy, for generations here. It seems to be disappearing and disappearing as days go by."
Newman said that about half the coal burned at Paradise is mined there in the county, so the closure could affect mining jobs as well.
"This is going to be a blow, and I feel sorry for all those connected to coal," he said. "But they could've closed the whole plant down. We're thankful for that."
The TVA board also voted Thursday to close all five units at the Colbert plant in Tuscumbia, Ala., where about 150 people are employed, and one of two remaining units at the Widows Creek plant in Stevenson, Ala. There are about 175 employees there.
Johnson said he does not yet know how many jobs at those two plants will be affected.
TVA board member Joe Ritch, of Huntsville, Ala., echoed Mahurin's comments on the closures, saying, "As painful as it is, it's the right thing to do."
He said that saving a few jobs now would reduce TVA's competitiveness for years to come.
Daryl Dewberry, the United Mine Workers' international vice president for the Southeast, said the decision was not a surprise because federal regulations are making it harder to burn coal. He also predicted that the move would increase the cost of energy.
"President Obama's war on coal is going to put us in worse economic shape," he said.
Johnson said that two other coal-fired plants are still under evaluation — the Allen plant in Memphis, Tenn., and the Shawnee plant near Paducah, Ky. — as is the final unit at Widows Creek.
But TVA is not abandoning coal entirely. The utility is spending about $1 billion to upgrade a coal-fired plant in Gallatin, Tenn., and other units remain open.
Many environmentalists were pleased with TVA's decision to begin using less coal as a fuel source.
Stephen Smith, executive director of the Southern Alliance for Clean Energy and a member of TVA's Regional Energy Resource Council, said he believes even more unit closures are on the horizon because there are other coal-burning plants that TVA has not taken steps to upgrade.
"TVA is on course to go from being one of the largest coal consumers in the U.S. to dropping that to only 20 percent of its portfolio. That's historic," Smith said. "TVA is in coal country, yet it's moving away from coal as a fuel source because it's the right thing to do economically and environmentally."
In addition to reducing energy from coal, Johnson said he hopes to increase the percentage of nuclear power in the utility's portfolio from about 32 percent to 40 percent.
He told the board that the utility is on track to complete a second reactor at the Watts Bar Nuclear Plant in Spring City, Tenn., by the end of 2015. But there are no immediate plans to complete a reactor at the mothballed Bellefonte Nuclear Power Station northeast of Scottsboro, Ala. Johnson said the estimated cost of completion has risen from $4.9 billion to between $7.4 and $8.7 billion.
Johnson said there is no short-term need for the plant, but the utility intends to maintain it as a viable option for the future.
Associated Press writers Dylan Lovan, in Louisville, Ky., and Phillip Rawls, in Montgomery, Ala., contributed to this report.
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