TVA Board Takes Action To Improve TVA’s Operations And Financial Health

Thursday, November 14, 2013

The Tennessee Valley Authority board of directors took action Thursday to further diversify TVA’s power generating mix to keep pace with changing economic and regulatory conditions, and in keeping with TVA’s commitment to keep electric rates low and reliability high.

TVA must respond immediately to challenging trends in lower power demand, a slow economy, uncertainty in commodity pricing, and tougher environmental requirements, particularly on air emissions, TVA President and CEO Bill Johnson said.

“This will support our focus on cleaner energy and bring additional, necessary balance into our portfolio for managing our current and projected load profile,” Mr. Johnson told the board.

“Over the past months, we considered a number of capacity studies, including TVA’s 2011 Integrated Resource Plan and associated financial and environmental analyses. We also looked hard at the effect on rates, our employees and any potential economic impact to local communities.”       

The board approved a coal fleet plan that will retire eight coal units at three plant sites with more than 3,000 megawatts of combined generating capacity.  A number of these units were already idled or scheduled for idling and/or retirement based on an agreement with the Environmental Protection Agency.

The retirements affect all five coal units at the Colbert Fossil Plant in Tuscumbia, Al.; one of two operating coal units at Widows Creek Fossil Plant in Stevenson, Al., and two of three coal units at the Paradise Fossil Plant near Central City, Ky. Paradise Unit 3, one of TVA’s largest coal units, will continue to operate.    .

TVA conducted detailed analyses including an Environmental Assessment to review options for meeting stricter air quality regulations at the Paradise plant, including installing additional emission controls on Units 1 and 2, building a new gas-fired generating plant at the site or taking no action.

Based on that review, the board on Thursday approved the construction of a gas-fired plant at Paradise. This will result in an investment of approximately $1 billion at the site. The two coal units will be retired when the gas plant is available.

The new plan, which does not affect the FY 2014 budget approved by the board in August, moves TVA toward a more balanced generation fleet of about 40 percent nuclear, 20 percent coal, 20 percent gas and 20 percent hydro, renewables and energy efficiency. This more diversified portfolio will help TVA manage load growth and provide maximum flexibility, and is consistent with the range of options analyzed in TVA’s 2011 Integrated Resource Plan, which is now being updated.

“These were difficult recommendations to make as they directly impact our employees and communities,” Mr. Johnson said. “But the plan is what’s best in terms of its positive impact on TVA’s rates, debt and the environment; and it will bring the greatest benefit to the people of the Valley.” The board delegated authority to Johnson to establish a schedule for the coal unit retirements.

FY13 Performance

In reviewing TVA’s performance for the 2013 fiscal year, Mr. Johnson said TVA had a good year with solid financial and operational performance. He said employees had worked safely and found ways to reduce operating and maintenance costs significantly.

“I appreciate the effort made by employees,” Mr. Johnson said. “They have made a difference and helped us stay focused on our goal of reducing our O&M expenses by $500 million by 2015, and sustaining that reduction in order to live within our means.

“I want to give a big ‘thank you’ to all of my fellow employees for their effort and commitment.”

Mr. Johnson highlighted key performance achievements for the year including TVA employees delivering electricity with 99.999 percent reliability for the 14th year in a row, generating more than 57 percent of TVA’s power from cleaner energy sources, and producing the most hydro power ever generated in a single year resulting in lowered fuel costs for all TVA customers.

In addition to the operational performance, TVA, through its economic development efforts and partnerships helped attract or retain 52,000 jobs across the region along with a capital investment of about $5 billion.

TVA will hold a call on Monday, with investors and news media to review its FY 2013 financial performance. The 10-K annual report will be available the same day.

In other board action, the nine-member board:

  • Extended Director Bill Sansom’s term as chairman until his board term ends in May 2014, and established a practice to aid the board in selecting future board chairs.
  • Recognized the service of Director Neil McBride, whose term ends this year.
  • Approved tax equivalent payments of $522 million to be paid to state and local governments during fiscal year 2014, based on TVA’s fiscal year 2013 sales revenues.



Obedience Club Of Chattanooga Has New Session Starting Jan. 5

The Obedience Club of Chattanooga will begin its next six-week session of obedience, rally, and agility classes for puppies and dogs on Monday, Jan. 5,  at its training facility four miles south of Chattanooga on Highway 193 in Flintstone. Registration will be held on Sunday, Jan. 4, from 1-3 p.m. at the training facility.  During registration, various OCC dog/handler ... (click for more)

Attorneys Batts And Taylor Elected To Lead State Drug Court Association

The Tennessee Association of Drug Court Professionals has elected attorneys Kevin Batts and Richard Taylor to leadership positions in the statewide group. Mr. Batts will serve as president and Mr. Taylor will serve as vice president of the association in 2015. Mr. Batts is director of the Drug Court in the 23rd Judicial District, serving five counties of Middle Tennessee. He ... (click for more)

TVA Sues Cleveland's Allan Jones Over Dock, Retaining Wall, Boat Ramp, Boathouse On Hiwassee River

TVA has sued Cleveland, Tn., Check Into Cash millionaire W. Allan Jones Jr. over the construction of a dock, retaining wall, boat ramp and boathouse on the Hiwassee River. In the lawsuit in Federal Court, TVA said it told Mr. Jones before the construction was finished that he was on TVA property. The complaint says he has refused to move the construction from the river. ... (click for more)

Bobby Dodd Lawsuit Against City Moved To Federal Court

A lawsuit brought by former Chattanooga Police Chief Bobby Dodd against the city of Chattanooga and the Chattanooga Fire and Police Pension Fund over his pension has been moved to Federal Court. The lawsuit was earlier filed in Chancery Court by attorneys Jerry Tidwell and Adam Izell. The suit says former Chief Dodd opted for a plan that would have half of his pension go to ... (click for more)

Please Don't Close The Piccadilly Cafeteria At Hamilton Place - And Response

Oh, no. The Piccadilly Cafeteria at Hamilton Place is closing.  Its last day is Christmas Eve.  I will miss the great food they have there but most of all I will miss their servers, cashiers and waitresses.  They are all so friendly and accommodating.  They make it like it’s a home-style restaurant. I sure wish there was some way that Hamilton Place and ... (click for more)

Roy Exum: The Manger Scene Stays!

When the Freedom From Religion Foundation struck the tiny town of Jay, Fla., earlier this month, the town mayor had a life-sized Nativity scene that had been displayed every Christmas for the past 40 years taken down and sold as “city surplus.” But in Alabama, things are different. When the foundation tried the same thing in Rainbow City, Ala., more people than all those who live ... (click for more)