TVA Board Approves Natural Gas Plant In Memphis

Thursday, August 21, 2014

The Tennessee Valley Authority board of directors on Thursday approved replacing the Allen Fossil Plant in Memphis with a cleaner, natural gas plant that will help ensure continued low-cost and reliable electricity for the greater Memphis area and TVA’s western service territory.

Following an environmental review that received comments from more than 1,500 people, the board agreed to retire the 55-year-old coal plant and replace it with a high-efficiency, 2-on-1, combined-cycle gas plant. The board authorized up to $975 million to build a gas plant with a capacity of approximately 1,000 megawatts, enough to supply about 580,000 homes.

The Allen gas plant will be the seventh combined-cycle gas plant TVA has added to its power portfolio since 2007.

TVA is working under a deadline to either retire or install emission controls at the Allen coal plant by December 2018 under a 2011 clean-air agreement with the U.S. Environmental Protection Agency, three states and four environmental groups.

“We evaluated our options from financial, business and environmental perspectives and decided this is the best way to help us meet our cleaner air goals and optimize the generation portfolio,” TVA President and CEO Bill Johnson said. “Memphis is our largest customer and we must have a proven source of generation in the city to ensure system-wide reliability while giving us flexibility that allows for future growth.”

Compared with the coal plant, the natural gas plant will reduce carbon emissions by more than 60 percent, nitrogen oxides by 90 percent and sulfur dioxide by nearly 100 percent while taking advantage of environmentally friendly options, such as the use of methane gas and the recycling of gray water from the Memphis Waste Water Treatment Plant rather than using water from McKellar Lake.

“This natural gas plant will improve air quality in Memphis and that is important to the city’s vitality and future economic development,” Mr. Johnson said.

The gas plant will be built across Plant Road from the existing coal plant. Memphis Light, Gas and Water will build the pipeline that will supply natural gas to the plant’s two combustion turbines. The exhaust from the combustion turbines will generate steam to drive a steam turbine, making it one of the most efficient power generation plants.

The recommendation to retire the plant came after the utility completed an environmental assessment and a related “finding of no significant impact” for the preferred alternative of a natural gas plant. TVA hosted a 38-day comment period and an open house so interested citizens could voice their opinions. The comments were included in the final assessment delivered to the board.

Numerous options were considered, including the use of wind, solar, biomass, energy efficiency, a transmission-only solution, various configurations of gas generation and other configurations. The recommended 2-on-1 combined-cycle design provided the highest level of reliable, consistent generation potential at the lowest generation cost. Other options were considerably more expensive.

The gas plant will have greater energy capacity than the coal plant it replaces. This will preserve the opportunity to use the gas plant in combination with other kinds of energy sources, such as solar or wind, to meet future demand, assuming they meet TVA’s lowest feasible cost and reliability standards.

“Adopting utility scale renewable resources requires utility scale support behind it, and the new gas plant would assist with that,” Mr. Johnson said.

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