Lamar Alexander

WASHINGTON — The Tennessee Valley Authority is riding the wave of the nuclear industry’s renaissance, investing billions of dollars in a revived program to keep up with the region’s growing demand for electricity.

TVA, a pioneer in nuclear energy 40 years ago, is spending $2.5 billion on completing the unfinished Unit 2 reactor at Watts Bar Nuclear Power Plant in Spring City, Tenn.

Last November, it submitted an application for a license to build two next-generation reactors at its Bellefonte site in Hollywood, Ala., after construction stopped there two decades ago because of delays and cost overruns.

“Nuclear is very important,” said Jack Bailey, TVA’s vice president of nuclear generation development. “It provides stable, competitively priced power for customers in the Tennessee Valley. Going forward, nuclear looks good, in terms of expanding its use.”

Critics of nuclear power say the utility’s investment in nuclear is misguided.

Arjun Makhijani, a former energy consultant to TVA in the late 1970s and now head of a nuclear watchdog organization, said TVA has not learned the lessons from its first go-around with nuclear power.

TVA launched the most ambitious nuclear power construction program in the nation in the 1970s and spent more than $8 billion building 10 reactors that were canceled before they were finished.

“They were overbuilding at that time, and they got the area into deep economic trouble,” said Mr. Makhijani, president of the Washington, D.C.-based Institute for Energy and Environmental Research. “I’m afraid they’re forgetting their history. Nuclear is risky and unnecessary.”

He said utilities have given short shrift to renewable energy sources, such as wind and solar, and that by the time the first new nuclear reactor comes online in about a decade, they will be rendered economically obsolete by solar cells.

Mr. Makhijani pointed out that a utility owned by billionaire investor Warren Buffet’s Berkshire Hathaway Inc. recently pulled out of a nuclear reactor project after finding it economically impractical.

“Rather than wearing the government mantle and saying, ‘Government knows best,’ TVA should look to the most successful investor in the country,” he said. “Their own track record is not great. They’re taking nuclear as the lazy answer.”

“What is the right mix?”

TVA officials say nuclear power remains a vital component of the utility’s energy portfolio, along with coal, hydroelectricity and growing natural gas capabilities. As the Southeast continues to grow in population, TVA needs new capacity to keep up with electricity demand.

The 75-year-old utility, which covers seven states in the Southeast, already derives 30 percent of its energy from nuclear power, and each new reactor that comes online adds 3 percent to 5 percent to that total.

“We do want to maintain a balanced portfolio” of fuels, Mr. Bailey said. “We’re not looking at moving to all nuclear. The question is, what is the right mix? Forty to 50 percent is as far as you might go.”

Mr. Bailey said the nuclear reactors that were completed in the 1970s and 1980s are profitable and have proven to be sound investments.

New, more efficient technology and a streamlined permitting process recently approved by the Department of Energy make the economics of nuclear-power generation more palatable and competitive against coal-fired plants today, he said.

“We’ve done a lot of work, based on a lot of the lessons learned from the ’80s to make sure we don’t repeat some of the problems that happened,” he said. “Nuclear is second to hydro in terms of fuel cost. It’s stable, competitively priced power for customers in the Tennessee Valley.”

support at home

Tennessee and Georgia lawmakers have been supportive of the nuclear industry and TVA’s efforts.

Nationwide, the nuclear industry hit record outputs, with the country’s 104 reactors generating 807 billion kilowatt-hours of electricity last year, exceeding the previous high of 788.5 billion kWh set in 2004. Coal generates about half of the country’s electricity, with nuclear and natural gas each generating about 20 percent.

U.S. Sen. Lamar Alexander, R-Tenn., co-chairman of the Congressional TVA Caucus, said TVA, as a quasi-governmental utility with a federal charter, should be a leader in exploring new technology.

TVA, created in 1933 as one of President Franklin Roosevelt’s New Deal programs, is governed by a board appointed by the president but does not accept any taxpayer funding.

“TVA is a unique utility,” Sen. Alexander said. “It ought to take on special assignments for the good of the country. Taking the leadership role in the renaissance of nuclear power is a good role for TVA, and if it succeeds, it’ll be a huge boost to the national efforts.”

Derrick Freeman, a lobbyist with the Nuclear Energy Institute, said nuclear power is key to meeting the surging electricity demand in the Southeast, the fastest population growing region in the country. The lack of greenhouse gas emissions from nuclear plants also can help many areas in the Southeast that are not in compliance with Environmental Protection Agency clean air rules, he said.

“The South sees the value of building these reactors,” Mr. Freeman said. “Utilties are looking to balance increased generation and not going further out on a limb environmentally, and they see nuclear as one of the safest means of doing that.”

Skeptics contend TVA has an institutional bias toward nuclear power because many of its top executives have long worked in the industry.

“The bottom line is that TVA remains an unregulated federal corporation that seems happiest when it is building mega-projects for megawatts,” Crossville, Tenn., environmental activist Louise Gorenflo recently told the TVA board.

The industry also has yet to figure out what to do with spent radioactive fuel, which for now is stored on reactor sites, making them inviting targets for terrorists, said Jim Riccio, nuclear policy analyst with Greenpeace, which advocates for greater investment in efficiency and renewable energies.

“You’re building more reactors, with more radioactive waste, placing more targets for our enemies, and what for?” Mr. Riccio said.

The Nuclear Regulatory Commission recently announced it is increasing monitoring of TVA’s Browns Ferry Unit 1 reactor in North Alabama because of five unplanned shutdowns since May.

The outages of the plant’s Unit 1 reactor, which was restarted last May after a 22-year hiatus, were the most of any plant in the country.

TVA officials insist their operations are safe and reliable. The Browns Ferry site has not put the public or its workers at any increased risk, they said.

As for the other concerns cited by nuclear opponents, spent fuel can continue to be stored on reactor sites indefinitely for decades, Mr. Bailey said, and technology to reprocess and recycle spent fuel is being developed. TVA reactors are also fortified against any potential terrorist attacks or other security threats, he said.

In Jackson County, Ala., where the Bellefonte plant is located, all of the municipal and county governmental bodies passed resolutions last year in support of building the new reactors, which would create more than 2,500 construction jobs and add more than 800 full-time plant employees.

“We’re looking at 30,000 to 40,000 new people moving to North Alabama in the next four years so we ask that you continue to support the development at Bellefonte,” Jackson County, Ala., Chamber of Commerce President Rick Roden told the TVA board.