published Sunday, January 29th, 2012

TVA fix will cost users of electricity

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    Tennessee Valley Authority's Browns Ferry Nuclear Plant is near Athens, Ala.

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TVA rate rule of thumb: For the average residential customer who uses 1,000 kilowatt-hours per month, every $1.5 million in operating expense equates to 1 cent per month on the residential customer's bill.

Electric ratepayers will shoulder TVA's cost to prepare for a final round of the Nuclear Regulatory Commission's stepped-up inspections triggered by last year's "red" safety finding.

"We're reserving $8 million in our budget for 2012, just for the regulatory work associated with the [red finding] inspection work," said Preston Swafford, TVA's chief nuclear officer and vice president.

TVA is funded completely by ratepayers, so $8 million in TVA's roughly $11 billion budget would amount to just less than 1 percent of every electric bill.

But Swafford and TVA spokesman Ray Golden say the cost is not for naught.

Some of the $8 million will pay for upgrading equipment, Swafford said, because one of the NRC's concerns has been that TVA has not maintained some of its plant assets adequately.

Better maintenance increases efficiency, according to the NRC and Swafford.

"Replacing aging equipment -- those investments will more than pay out [with] a higher reliability," Golden said.

But nearly half of the $8 million will pay just for NRC inspectors, according to figures from the officials with both TVA and NRC.

And that's on top of the $1.5 million-a-year fee TVA pays NRC for routine onsite inspectors at each of the utility's six reactors.

For the red finding that triggered the new tab for stepped-up inspections at Browns Ferry, NRC will bill TVA for the time of each additional inspector.

In 2011, the NRC inspector rate was $273 an hour, said NRC spokesman Joey Ledford.

Ledford and Len Wert, NRC deputy regional administrator for operations, said NRC can't say yet what TVA's bill will be, but a similar series of inspections at the Palo Verde Nuclear Plant in Arizona in 2008 involved about 10,000 inspection hours.

In a public meeting Thursday at the Browns Ferry plant in Athens, Ala., NRC special inspection team leader John Jandovitz addressed the issue of efficiency, or the lack of it, because of planning weaknesses.

He gave an example of an 18-week planning process for the job that workers found already had been done when they got to the worksite.

"Normally, the NRC doesn't worry about efficiency [at the plants]. But in this case it does impact safety ... it prolongs safety work," he said.

The Browns Ferry plant was flagged with the red finding after it was discovered that a valve on a cooling system was inoperable and likely had been so for 18 months. Fortunately it had not been needed.

Under NRC's color-coded inspection findings, white is least serious, then yellow, then red. A plant operating with no safety problems is coded as green, and each increasing level concern calls for more NRC oversight.

So why did TVA not take the proactive road before, rather than wait for the NRC push?

Golden said Friday that TVA, like any corporation, has competing interests.

"There are two ways to drive down rates," he said. "One is higher efficiency of the units. The other is cutting costs out of the budget. In some periods [the utility] focused on cutting costs out, and capital investment-type initiatives may have been postponed."

Golden said that has changed.

"We now recognize that cannot be done any longer," he said. "The investments have to be made. But, long term, the belief is that it will enhance efficiency."

about Pam Sohn...

Pam Sohn has been reporting or editing Chattanooga news for 25 years. A Walden’s Ridge native, she began her journalism career with a 10-year stint at the Anniston (Ala.) Star. She came to the Chattanooga Times Free Press in 1999 after working at the Chattanooga Times for 14 years. She has been a city editor, Sunday editor, wire editor, projects team leader and assistant lifestyle editor. As a reporter, she also has covered the police, ...

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