June 7, 2009

Taking advantage of a less costly alternative

Tennessee Valley Authority will construct an $820 million gas plant over the next two years. TVA has realized coal's high costs and prices, and rather than renovating its current coal plant, TVA has instead decided to invest in a gas powered plant. The hope is to reduce expenses and pollution. TVA's move is significant because investing in an alternative and not coal is precisely what Santee Cooper should do. Also linked below to this blog is another article by Flessner that further explains the details of TVA's appeal of the federal ruling to reduce coal emissions.

Times Free Press
TVA to build $820 million gas plant
Dave Flessner
June 5, 2009

While fighting a court order to expedite the cleanup of its coal plants, the Tennessee Valley Authority will build a cleaner, gas-powered plant to substitute for one of its threatened coal plants.

The federal utility plans to build an $820 million natural gas-powered plant by the end of 2011 at or near the John Sevier Fossil Plant near Rogersville, Tenn.

A federal judge ordered TVA in January to install more pollution controls on its John Sevier plant by the end of 2011. The court ruling, which came in response to a North Carolina lawsuit charging TVA’s air emissions were a public nuisance, could force the John Sevier plant to be idled for up to 20 months while both coal scrubbers and selective catalytic reduction devices are installed.

TVA appealed the court order last week. But in case the appeal is lost, the TVA board voted Thursday to build an 880-megawatt, combined-cycle gas plant.

“We do need additional capacity up there, especially while we’re in the throes of appealing this lawsuit,” TVA President Tom Kilgore said. “This is a good time to make this decision, and we were able to do it creatively so that we won’t have to spend any more money than we had already planned to spend on the new units on the western edge of our service territory.”

As a combined-cycle plant, the new gas-powered generator is expected to produce only about 40 percent as much of the emissions linked with global warming, Mr. Smith said.

TVA is adding the new generation despite the biggest yearly drop in electricity consumption ever for the 76-year-old utility this year. Power sales are down from 6 percent to 8 percent during the current fiscal year, primarily due to a recession-induced plunge in industrial power sales of more than 16 percent this year. The drop in power sales will leave TVA revenues about $500 million short of what was budgeted last year.

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