August/September 2009

Across TVA

TVA Board approves 2010 budget

At its Aug. 20 meeting, the TVA Board approved a 2010 budget of $10.2 billion for operating expenses and $2.3 billion in capital investments.


The board also took several actions to reduce the impact on consumers of a projected $7.2-billion shortfall for the period 2010 through 2012, including $1.9 billion in budget cuts and $2.8 billion in additional borrowing primarily to fund capital projects. The board approved an 8-percent increase in the average wholesale rate that will be offset initially by an 11-percent decrease from the Fuel Cost Adjustment for the October billing period.

While amounts will vary across the Tennessee Valley, residential consumers can expect decreases in the wholesale portion of their bills that range from about 50 cents to about $4 in October.

The projected budget shortfall is primarily the result of the unprecedented decline in sales revenue, the need for increased contributions to TVA’s employee pension fund, investments to maintain power plants and other system assets, and projects related to the impacts of the Kingston recovery effort, the North Carolina Clean Air lawsuit and TVA’s storage and disposal of coal combustion byproducts.


TVA coal-combustion-products remediation plan proposed

The TVA Board was briefed Aug. 20 on a plan to end wet storage of ash and gypsum at TVA fossil plants with the goal of modernizing TVA’s facilities and having the safest and most thoroughly inspected impoundments in the industry.

“The proposed changes to dry storage would provide TVA with state-of-the-art storage systems that meet regulatory requirements and lead the industry in the management of coal-combustion byproducts,” says Tom Kilgore, TVA president and chief executive officer.

“The changes represent important investments in the TVA power system and the integrity of our facilities and will help protect the health and safety of the people we serve.”

Bob Deacy, TVA’s senior vice president for Clean Strategies & Project Development, told the TVA Board the capital program plans are to convert all TVA wet ash and gypsum storage to dry and eliminate the classification of any TVA impoundments as high-hazard for risk to people and property if the impoundment were to fail. The projected cost over eight to 10 years is $1.5 billion to $2 billion. Of that total, $181 million is budgeted for fiscal year 2010 with $625 million projected to be invested by the end of FY 2012.

All six of TVA’s 11 coal-burning plants that use wet fly-ash handling systems would be converted to dry. The plants are Allen, Gallatin, Johnsonville and Kingston in Tennessee; Widows Creek in Alabama; and Paradise in Kentucky. All 11 TVA coal-burning plants now use wet bottom-ash systems, and these would be converted to dry systems as well. The proposed program would also build four gypsum dewatering facilities and close 18 existing ash and gypsum ponds. All of the plans are subject to completion of required environmental reviews and obtaining needed regulatory approvals.