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TVA Board Updated on Operations at its Quarterly Meeting

May 7, 2015

HUNTSVILLE, Ala. – The Tennessee Valley Authority board of directors was updated Thursday by TVA management on progress in diversifying TVA’s power portfolio, providing cleaner energy sources, and reducing operating and maintenance costs.

The quarterly meeting was held in Huntsville, where one of TVA’s largest customers, Huntsville Utilities, is celebrating 75 years of service.

“We are proud to partner with Huntsville Utilities to bring reliable, cleaner, lower cost power to the region,” said Bill Johnson, TVA president and CEO. “We share their commitment to delivering excellent service to the people of Northern Alabama.”

Northern Alabama is home to the nation’s second largest energy producer, TVA’s Browns Ferry Nuclear Plant, near Decatur. “Browns Ferry is a model for our commitment to continuous improvement at every TVA facility,” Johnson said.

Through continuous improvement efforts, TVA is on track to achieve a three-year goal of $500 million in sustainable reductions in operating and maintenance costs by year-end. John Thomas, chief financial officer, reported that annual O&M spending has been reduced by more than $400 million to date, contributing to strong financial and operational performance for the fiscal year. “The reduced O&M costs and the increased revenues so far this year are helping us make necessary investments in the power system,” Thomas said.

TVA is undertaking a number of large projects as part of a $3.5 billion capital budget, the largest in TVA’s history. One of these projects is the completion of Watts Bar Nuclear Plant Unit 2 reactor. Mike Skaggs, senior vice president of Watts Bar Nuclear Operations and Construction, told the board that Watts Bar Unit 2 remains on schedule and budget to be the first new U.S. nuclear generation of the 21st century. He emphasized that employees are focused on working safely; protecting the safe, reliable operations of Unit 1; and completing Unit 2 the right way for top performance.

“Having a good mix of generating assets gives us flexibility in running the power system, especially as customer needs and behaviors change over time,” Johnson told the board. “In recent years, we have diversified our mix so we are not overly dependent on any one fuel source and we have more clean generation, including nuclear, hydro, natural gas, renewables and energy efficiency.”

According to Johnson, the diversified generation mix is helping TVA meet environmental regulations that continually raise the bar for air quality and emissions control. A recent Environmental Protection Agency rule on the storage of coal ash goes into effect soon and has implications for TVA, particularly the Widows Creek Fossil Plant.

Widows Creek in Northern Alabama is currently operating with one unit; seven other units are no longer operating. “The ash pond for the remaining operating unit will reach capacity as early as next spring,” Johnson said. “As a result, we will need to set a retirement date for the final unit earlier than we had planned.”

The board approved a resolution to retire the final unit at Widow’s Creek and to delegate authority to Johnson to determine the date. Johnson said it would be no later than October 2015.

In other business, the board approved the sale of properties on Emory River Road in Kingston, Tenn., consisting of 76.8 acres.

The Tennessee Valley Authority is a corporate agency of the United States that provides electricity for business customers and local power distributors serving 9 million people in parts of seven southeastern states. TVA receives no taxpayer funding, deriving virtually all of its revenues from sales of electricity. In addition to operating and investing its revenues in its electric system, TVA provides flood control, navigation and land management for the Tennessee River system and assists local power companies and state and local governments with economic development and job creation.


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