TVA Board Approves Investments To Support Modernizing Power System

Thursday, August 21, 2014

The Tennessee Valley Authority board of directors approved today a $10.7 billion budget for fiscal 2015 that achieves a sustainable $500 million savings in operations spending and a record $3.5 billion in capital investment in generating plants and system improvements.

“This budget reflects our continuing efforts to reduce our O&M spending while modernizing and diversifying our generating fleet with cleaner and more efficient technology, continuing our stewardship activities, and growing jobs and capital investment in the region,” TVA President and CEO Bill Johnson said.

Even with the $500 million reduction in O&M spending, a small rate increase is necessary for new power capacity and environmental enhancements. This will ensure TVA’s power system meets the current and future needs of the 9 million residents of the Tennessee Valley.

The budget contains a 1.5-percent rate increase, slightly below the rate of inflation in the Consumer Price Index, amounting to about $1.70 more a month for the average Valley resident using 1,000 kilowatt-hours a month. The increase will take effect with the FY2015 budget year that begins Oct. 1, 2014.

“We have carefully considered the impact this might have on our customers and the businesses, industries and people of the region,” said Mr. Johnson. “This small rate adjustment – in addition to our internal cost reductions – is necessary to meet revenue requirements for 2015.”

TVA reduced its debt by $1.2 billion in FY2014 while continuing to invest in its power system to deliver reliable, lower-cost and cleaner electricity. The 2015 capital budget includes about $1 billion in base capital to fund continued operation of current assets, with the rest funding the completion of Watts Bar Nuclear Unit 2, a new gas plant at Paradise,  environmental controls at Gallatin Fossil Plant, new generation at Allen Fossil Plant, significant transmission work, and other items.

As part of TVA’s efforts to move to a more diverse, flexible and cleaner generation fleet, the board approved replacing the Allen coal-fired plant with a new combined-cycle gas plant. Under TVA’s 2011 Clean Air Agreements with the Environmental Protection Agency and others, TVA must either retire the Memphis-area coal plant or put on environmental controls by December 2018.

“Replacing the existing plant with a gas unit is more economical than retrofitting it with environmental controls,” said Mr. Johnson. He cited the age of the existing plant, the cost of complying with existing or foreseeable environmental regulations, and the uncertainty of the cost of future regulation as reasons for choosing an alternative technology at Allen.

TVA considered a range of generation sources for the site, including wind, solar, biomass, and various natural gas configurations. “The gas combined-cycle option was the best match to TVA’s statutory standards that call for us to achieve the lowest system cost, and deliver power reliably at the lowest feasible cost to consumers, while also meeting system-wide needs,” Mr. Johnson explained.

During Mr. Johnson’s report to the board, he touched on several topics including TVA’s continued emphasis on cleaner energy sources, stewardship and economic development. As of 2013, nearly half of TVA’s electricity was from clean energy sources and carbon emissions are more than 30 percent below 2005 levels. Last fiscal year, 16 percent of TVA’s power supply came from renewable energy sources including solar, wind and hydro.

“As we achieve top quartile in industrial rates in the Valley, we’re seeing record capital investment of nearly $8 billion dollars,” Mr. Johnson said. This has helped create and retain 52,000 jobs so far this year and helped foster economic opportunity across the region.”


Crime Stoppers: Burglary On Gunbarrel Road

Crime Stoppers and the Chattanooga Police Department are seeking information on a burglary that occurred at 1906 Gunbarrel Road on Sept. 5.  Chattanooga Police received an alarm call at Cell Phone Repair at 1906 Gunbarrel Road. Officers arrived and found the front glass of the business shattered. Surveillance video captured the suspects as they entered the store. ... (click for more)

Jury To Decide 2 Charges Against Sweeney After 1 Count Dismissed In Facebook Child Exploitation Case

After a motion made by defense attorney Amanda Dunn, one of the three charges against Randy Sweeney was dropped during his federal trial on Wednesday. A jury will still determine on Thursday if Sweeney is guilty of sexual exploitation of children and illegal possession of a firearm.  However, Judge Sandy Mattice dropped a second charge that involved a defendant using ... (click for more)

Why So Much For A Rail Study?

From the things that make you go hmm department. Ok, so the feds are giving us $400k and the city is kicking in another $300k for a total of $700k to do a study on having in town rail service. Why so much for a study? Don't get me wrong, I'm totally down with Chattanooga having some passenger trains running around. I get that. It's awesome. We've needed it for a long time. I ... (click for more)

Roy Exum: I’m Certainly No Expert

Sometime on Monday night, after I had written a piece on getting swatted with a switch as a kid, I got an email from ESPN Canada asking if I would be a televised guest on “Off the Record,” the most watched daily sports show in Canada. The subject: corporal punishment in America. Are you kidding me? I am hardly an expert. All weekend my world of sports and its excitement was warped ... (click for more)

Lookouts and Minnesota Twins Sign 4-Year Agreement

In a fast-paced, high stakes game of musical chairs with the three players from Major League Baseball - Minnesota, Arizona and Colorado - vying for one chair (Chattanooga Lookouts), the Twins from Minneapolis came up the winner Wednesday. Officials from the Minnesota ball club flew to Chattanooga Tuesday and signed contract papers for a four year player development ... (click for more)

Lady Mocs Volleyball Team Set To Host Scenic City Showdown

The Chattanooga Mocs returns to action Friday and Saturday at Maclallan Gym is they host the Scenic City Showdown – Presented by Hampton Inn & Suites.  Its second three-team tournament of the season, Chattanooga welcomes UT Martin, Stetson and South Carolina State to Downtown. “This is another great opportunity for us to display our city, campus and facilities ... (click for more)