published Tuesday, February 4th, 2014

TVA sticks with stable power outlook despite record power use last month

TVA headquarters in downtown Chattanooga.
TVA headquarters in downtown Chattanooga.
Photo by Staff File Photo.

The increase in residential consumption of electricity this winter reflects the unusual cold this year, not a fundamental change in power use, TVA President Bill Johnson said.

TVA is sticking with its forecasts for slower growth in electricity in the coming decade even though power demand jumped last month during the coldest January in nearly three decades. Johnson also said the utility will continue to turn more to natural gas generation to replace aging coal-fired production despite the recent increase in gas prices.

“We have confidence in pretty good stability longer term for gas and I think the equation still moves you to new gas generation rather than retrofits (of older coal plant),” Johnson told analysts today during a conference call about the utility’s quarterly results.

Johnson said long-term forecasts for natural gas prices still make gas generation less costly than upgrading coal plants TVA has operated for the past half century, especially ” because of the uncertainty about what happens next in the regulatory space” for coal.

Last month, TVA had to limit power to some customers with interruptible contracts when temperatures across the Tennessee Valley fell into single digits and those relying upon electric furnaces and heaters boosted power demand to a new all-time daily peak. But Johnson said today that the utility performed well and was able to handle the unusual weather without any delivery problems for most customers.

“When you have a once in a 30-year event, which is what this was, I don’t think you need to get too excited about the future,” Johnson said. “I think the forecast will largely remain the same.”

Adjusted for weather, TVA doesn’t expect to get back to the power peaks reached in 2007 before the recession for another decade. While residential power use will creep up, industrial use has been declining for the past four years.

TVA is in the process of shutting down 18 of the 59 coal-fired units it once operated to meet stricter environmental rules. That generation is being made up with another nuclear reactor at the Watts Bar plant and with the building of new natural gas-fired power plants in Tennessee and Kentucky.

about Dave Flessner...

Dave Flessner is the business editor for the Times Free Press. A journalist for 35 years, Dave has been business editor and projects editor for the Chattanooga Times Free Press, city editor for The Chattanooga Times, business and county reporter for the Chattanooga Times, correspondent for the Lansing State Journal and Ingham County News in Michigan, staff writer for the Hastings Daily Tribune in Nebraska, and news director for WCBN-FM in Michigan. Dave, a native ...

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