A new TVA energy strategy

Having incurred black eyes for the massive Kingston ash spill and its recent decision to appeal a federal court order to slash air pollution at four of its dirtiest coal-fired plants, TVA's image has taken another hit. The venerable New Deal agency still seems anchored in a past heavily dependent on old coal plants that yet remain heavy air polluters and hazardous waste sites. And it's still burdened by enormous debt from its failed, but once grandiose vision, to build a slew of nuclear plants all around the Tennessee Valley.

Still, TVA remains this region's most crucial energy resource, and it must respond to the rising national and global movement to ratchet down toxic emissions that harm human health, and carbon emissions that drive global warming.

With a thoughtful updating of its future energy supply strategy, the agency can turn an important corner by adopting an energy policy that stops subsidizing dirty coal by externalizing its environmental costs, and that curtails carbon emissions by focusing on conservation and alternative energy.

The moment for change

TVA's management is clearly aware of the moment. TVA is now preparing to invite public participation in an 18-month study on a new long-term energy supply strategy. If done with respect to environmental considerations, the study should provide a thorough examination of alternative energy sources, load management and energy conservation as a supply strategy. A good final plan could burnish TVA's sagging image, as well.

Fossil-fuel plants -- mainly coal, but including 6,000 megawatts of natural gas turbines -- presently provide around 60 percent of TVA's 30,000 megawatt capacity. The agency's three nuclear plants, with a total of six reactors, provide roughly 30 percent of current power resources. Hydro-electric power provides most of the 10 percent balance.

An alternative energy strategy

Renewable energy -- including solar, wind, bioenergy, geothermal -- generates just a fraction of the agency's energy supplies. Environmentalists reasonably want TVA to stretch its renewable energy base to 15 percent of its generating capacity in coming years.

To reach such a goal, TVA would have to make alternative energy a real priority. Yet its traditional power supply orientation remains focused on nuclear and natural gas options. Natural gas is far cleaner than coal, and produces barely half the carbon -- but that's still a huge carbon load. Nuclear power is cleaner, but it presents enormous and unsolved mining and waste disposal issues, and it uses vast quantities of water, which it discharges without adequate cooling to protect aquatic integrity.

Despite these immense environmental issues, TVA's management hasn't appeared in favor of changing its goals or power-mix formula significantly.

The agency has announced plans to build more natural gas turbine plants to take advantage of dramatically lower natural gas prices, and to mitigate coal-plant pollution drift into North Carolina -- the subject of the lawsuit it recently lost in federal court.

It may, in fact, be cheaper to build a natural-gas-fired turbine plant (at a cost of around $850 million) than to add possibly $1 billion in pollution scrubbers ordered by a North Carolina federal district court ruling to clean up just one of the four dirty coal plants cited by the court.

Still, it appears that it will take vigorous public support to encourage TVA to move more quickly toward renewable energy and conservation.

Gas, coal prices will rise

There is a case to be made for such a shift. Natural gas, analysts say, is probably just five years away from soaring on another price surge. The commodity price is barely a quarter of what it was just a year ago. It's down from $13 to $4 dollars (per million Btu) given the global drop-off in demand due to the recession and new domestic and foreign reservoir discoveries. But those low prices won't last forever.

Coal reserves, moreover, look far less ample than the nation has been led to believe, a recent reassessment of profitably recoverable reserves has shown. Less than 6 percent of the nation's largest and most productive coal field, Wyoming's Gillette field, for example, can be profitably mined even at prices higher than today's prices, a recent U.S. Geological Survey found.

With prices for natural gas and coal expected to mount significantly within a few years, conservation and renewable energy strategies look much more cost efficient.

Alternatives cleaner, cheaper

Conservation could yield a 20 percent savings on electricity demand if vigorously pursued, experts reasonably believe. A robust alternative energy program could add substantially to that savings.

If those estimates hold, it would be far cheaper to offset the need for a couple of nuclear plants, at $5 billion to $7 billion apiece, through conservation and renewable energy than to build such plants to meet the currently expected (post-recession) electric demand growth of roughly 2 percent a year.

To take advantage of such potential savings, however, electric utility managers must be persuaded to reverse their traditional model of adding new plants and expanding the sale of kilowatt hours to produce more revenue. They need, instead, to begin investing in reducing demand for electricity through conservation and load management, and alternative energy.

Turning that corner will be hard. It will require bold action. Public support is necessary to achieve it.