TensValyAuthoriy

TVA Board Sets Path for 

Environmental Future 

April 14, 2011 

Utility advances clean air strategy by retiring coalfired generating units 

CHATTANOOGA, Tenn. — The Tennessee Valley 

Authority announced plans Thursday to retire 18 older 

coal-fired generation units at three power plants as part of 

the federal utility’s vision of being one of the nation’s 

leading providers of low-cost and cleaner energy by 2020. 

The retirements will help TVA reduce emissions of sulfur 

dioxide, a component of acid rain, by 97 percent from 

1977 levels and help reduce emissions of nitrogen oxides, 

which contribute to smog, by 95 percent from 1995 levels. 

Previous TVA pollution-control programs already have 

reduced sulfur dioxide emissions by more than 90 percent 

and nitrogen oxide emissions by 86 percent. 

The retirements, which include about 1,000 megawatts of 

coal-fired capacity previously slated for idling, mean TVA 

will have idled or retired about 2,700 megawatts of its 

17,000 megawatts of coal-fired capacity by the end of 

2017. The capacity will be replaced with low-emission or 

zero-emission electricity sources, including renewable 

energy, natural gas, nuclear power and energy efficiency. 

President and CEO Tom Kilgore told the TVA board of 

directors, meeting in Chattanooga, that replacing older 

and less-economical generation with cleaner sources also 

is in alignment with recommendations in the utility’s 

Integrated Resource Plan as well as the utility’s vision for 

cleaner air. 

The Integrated Resource Plan, which was formally 

presented to the board of directors at Thursday’s meeting, 

was developed over two years, with extensive business, 

technical and economic analysis and public input. Kilgore 

credited a Stakeholder Review Group, consisting of 

representatives of the political, business, consumer and 

environmental communities, for providing expertise and 

viewpoints “that added important perspectives as we 

formulated our Integrated Resource Plan.” 

The plan recommends a strategic direction focusing on a 

diverse mix of electricity generation sources, including 

nuclear power, renewable energy, natural gas and energy 

efficiency, as well as traditional coal and hydroelectric 

power. 

“Diversity proved to be the most prudent course in 

meeting future energy needs in all the various future 

scenarios we studied,” Kilgore said. “A variety of 

electricity sources, rather than heavy reliance on any 

single source, reduces long-term risks and helps keep 

costs steady and predictable.” 

Fact Sheets

Clean Air Act agreements

Plans for coal-fired 

generation

Nuclear program updates

Presentation

Board meeting presentation 

slides

High-resolution 

photographs

John Sevier Fossil Plant

Johnsonville Fossil Plant

Widows Creek Fossil Plant

 

EPA Information

Settlement informaiton

 

 

 

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Because coal constitutes more than half of TVA’s current 

generation mix, Kilgore said replacing older and lessefficient coal units with cleaner sources of power follows 

the Integrated Resource Plan’s advice to further diversify 

the utility’s future power portfolio. 

“In the longer term, these actions reinforce our vision to 

keep bills low, keep our service reliability high and further 

improve air quality as we modernize the TVA power 

system,” Kilgore said. 

The coal-unit retirements announced Thursday include 

two at John Sevier Fossil Plant in East Tennessee, six at 

Widows Creek Fossil Plant in northern Alabama and all 

10 units at Johnsonville Fossil Plant in Middle Tennessee. 

TVA announced in 2010 that it would idle units at John 

Sevier and Widows Creek, as well as one of 10 units at 

Shawnee Fossil Plant near Paducah, Ky. Idling units shuts 

them down in stand-by status, while retirement 

permanently removes them from service under their 

current operating permits. 

“These units are among the first built by TVA and have 

served us well over the years. But as times change, TVA 

must adapt to meet future challenges,” Kilgore said, 

adding that installing the expensive emission-control 

equipment that new regulations would require at the 

smaller, older plants would not be economical. He 

explained that other coal-fired units without advanced 

emission controls also are under consideration for idling 

and possible retirement or for additional emission-control 

equipment. 

Consistent with the coal-unit retirements, and in alignment 

with the Integrated Resource Plan and vision for cleaner 

air, the TVA board also authorized Kilgore to enter 

agreements with the U.S. Environmental Protection 

Agency; the states of Alabama, Kentucky, Tennessee and 

North Carolina; and three environmental advocacy groups 

to settle ongoing legal and regulatory issues related to 

Clean Air Act compliance. 

TVA has invested more than $5.3 billion since 1977 to 

reduce coal-fired power plant emissions. With the EPA 

agreements and its own long-range plans, TVA estimates 

that it will invest an additional $3 billion to $5 billion in 

the next 10 years on new emission-control equipment and 

upgrades of existing equipment at its coal plants. 

The agreements with EPA also call for TVA to provide 

$350 million to fund a number of environmental 

improvement projects over the next five years. Those 

include efficiency upgrades to the electric grid; support 

for energy efficiency enhancements in homes and 

businesses; assistance to the National Park Service and 

U.S. Forest Service in restoring and improving lands, 

watersheds and forests; and aiding reduction of 

greenhouse gas emissions through efforts such as wasteheat recovery, solar and landfill-gas energy installations. 

Also under the EPA agreements, TVA has agreed to pay a 

$10 million civil penalty to end costly legal proceedings 

and reduce the risks of much higher costs in the future 

related to past and potential disputes over regulatory 

compliance. 

TVA’s chief operating officer, Bill McCollum, briefed the 

board on the utility’s nuclear operations and on potential 

implications of last month’s nuclear-plant problems in 

Japan. McCollum told directors that safety is TVA’s top 

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priority in designing and operating its plants and that its 

nuclear program will incorporate lessons learned from 

Japan into the operations, designs and features of its 

nuclear plants, including those under construction and 

projects that are under consideration. 

The previously approved construction at Watts Bar 

Nuclear Plant Unit 2 in East Tennessee and engineering 

work at the Bellefonte site in northern Alabama are 

proceeding on schedule. McCollum said TVA staff will 

ask the board to make a decision on whether to move 

ahead with construction of a nuclear unit at the Bellefonte 

site “after TVA has a clear understanding of the Japanese 

nuclear situation and any potential impact on the project.” 

Chief Financial Officer John Thomas told the board that 

colder weather has increased demand for TVA electricity 

and fuel expenses since the fiscal year began in October, 

but uncertainty resulting from the slow U.S. economic 

recovery and from the Japanese nuclear situation could 

increase the volatility of TVA’s revenue for the remainder 

of the year. Thomas added that TVA has managed cash 

flows well and is on track to achieve its fiscal 2011 

financial objectives, which include avoiding increases in 

the base wholesale rate for electricity during the fiscal 

year. 

The board also voted to re-elect director Dennis Bottorff 

of Nashville as chairman. Bottorff became chairman last 

year, succeeding director Mike Duncan of Inez, Ky., who 

stepped down as chairman but remains on the board. The 

board also named Director William Sansom to serve as 

vice chairman. 

In other business, the board of directors: 

 Authorized the CEO to approve certain major 

contracts for electrical transformers; 

 Approved a pilot program for additional customer 

participation in the Valley Investment Initiative 

economic development program; and 

 Approved de-watering facilities for bottom ash at 

the Kingston Fossil Plant and for bottom ash and 

gypsum at the Bull Run Fossil Plant, part of 

ongoing efforts to convert coal byproducts to dry 

storage. 

The Tennessee Valley Authority, a corporation owned by 

the U.S. government, provides electricity for utility and 

business customers in most of Tennessee and parts of 

Alabama, Mississippi, Kentucky, Georgia, North Carolina 

and Virginia – an area of 80,000 square miles with a 

population of 9 million. TVA operates 29 hydroelectric 

dams, 11 coal-fired power plants, three nuclear plants and 

11 natural gas-fired power facilities that can produce 

about 34,000 megawatts of electricity, delivered over 

16,000 miles of high-voltage power lines. TVA also 

provides flood control, navigation, land management and 

recreation for the Tennessee River system and works with 

local utilities and state and local governments to promote 

economic development across the region. TVA, which 

makes no profits and receives no taxpayer money, is 

funded by sales of electricity to its customers. Electricity 

prices in TVA’s service territory are below the national 

average. 

Media Contact: 

Barbara Martocci, Knoxville, (865) 632-8632 

TVA Media Relations, Knoxville, (865) 632-6000 

TVA Newsroom

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