TennesseeValleyAuthorityStatement EPA Public Hearings: Clean Power Plan Proposed Rule Atlanta, Georgia

July30, 2014 

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Good Morning, my name s John MyersJirector of Environmental Policy with the Tennessee Valley Authorit 'vve B!l!lFec· e the opportunity to be among the many voices at this public hearing. Congress tasked TVA with promoting the social and economicwell-being ofthe residents ofthe Tennessee Valley. Reliable and affordable energy, economic development, and environmental stewardship are tools TVA uses to achieve this mission. TVA operates the nation's largest public power system serving parts of Tennessee, Alabama, Mississippi, Kentucky, Georgia, North Carolina, and Virginia with a population of over nine million people. Although the region has progressed far in attaining a better quality of life, many of our residents and their communities still are struggling economicallyand have yetto recoverfrom the economic recession. It is importantto TVAthatthe proposed rule not underminethe progressthat has been made.

We are continuing to review and analyze this complex rulemaking and will be providing EPA detailed comments. Today I want to talk about Building Block 3, "Using an ExpandedAmountofLess Carbon-Intensive Generating Capacity." It is appropriate that

we deliverthese comments here in Atlanta becausethe Southeast is uniquely impacted by this building block and the treatment ofnuclear units underconstruction. Generation fleets across the Southeast have been transitioning to supplying electricity with lower carbon emissions. For TVA, this means relying more on renewable energy resources, natural-gasfired generation and, importantly, nuclearenergy.

TVA is completing construction of a second unit at its Watts Bar Nuclear Plant in Tennessee. We have invested billions ofdollars in this carbon-free resource and when Watts Bar Unit 2 comes on line in late 2015, it will be the first new nuclear unit in the 21st century and provide nearly 10,000 GWh of emission-free generation per year. Watts Bar Unit 2 is an integral component of TVA's goal to achieve a more balanced, cleaner portfolio of energy resources. We expected this investment to give TVA agood starttoward complying with any carbon emission regulations. Under EPA's rule as proposed, that does not happen. Rather, TVA and other utilities with nuclear units under construction are handicapped because generation from these units is used to set more stringent limits on affected fossil fleets in our States. Rather than gaining compliance margin under the proposed rule, TVA's and Tennessee's compliance risks

are increased. That is not right. That is poorenvironmental policy.

EPA asserts that there is flexibly for a state to use some, none, or all of the building blocks in crafting State Plans, but States with nuclear under construction have no valid optionsto assuagethe impactofthis blockdueto its size. Anysingle source makingthis much contribution to a state's reduction provides a compliance risk to the region. The proposed rule effectively punishesthis early action and investment by our ratepayers by creating abig compliance risk.

Wewanted to bring thisto EPA'sattention and appreciatethe opportunityto makethese briefcomments.

ThankYou.