The TVA board will be asked at its next meeting on Aug. 21 in Knoxville to decide the fate of the Allen Steam Plant in Memphis. An environmental assessment recommends replacing the plant with natural gas, but the Sierra Club has mounted a campaign for TVA to get replacement power from a major new wind-energy source, Clean Line Energy.
The Tennessee Valley Authority will continue to move away from the coal-fired generation that once supplied most of its power when it likely shuts down the Allen Steam Plant in Memphis by 2018.
But in deciding this month the fate of the three-unit coal plant in Memphis, TVA directors also will be asked to pick what type of power will replace the aging coal plant on the western edge of TVA's seven-state region. The choice has sparked one of the most aggressive statewide campaigns in years by the Sierra Club of Tennessee and could generate a rare display of division among TVA's board when utility directors next meet in Knoxville on Aug. 21 to adopt the fiscal 2015 budget.
TVA's staff claims the lowest-cost option to replace the power generated by the Allen plant would come from a natural gas plant, which is projected to cost anywhere from $500 million to $1.3 billion, depending upon what type of plant is built.
TVA President Bill Johnson told analysts during an earnings report this week that the federal utility is obligated to pick the cheapest replacement power that complies with environmental and other rules. That, Johnson believes, would come from a combined-cycle natural gas plant.
"We have guidance in the federal statute that tells us we have to do lowest cost resources, lowest cost systems and planning all designed to deliver the lowest feasible cost electricity to our customers while meeting all environmental standards," Johnson said. "As we evaluate projects like Allen or others, that is the standard that we apply ... and I think the gas plant at Allen meets that standard."
Johnson declined to detail cost estimates for alternative power sources in advance of the TVA board meeting in a couple of weeks.
Twice in the past five years, TVA has made similar decisions by building combined-cycle natural gas power plants to replace the shuttered John Seviere Fossil Plant near Rogersville, Tenn., and the soon-to-shutdown oldest units at the Paradise coal plant in Kentucky.
But Scott Banbury, conservation program coordinator for the Tennessee chapter of the Sierra Club, questions whether natural gas will be less expensive than renewable sources over the long run.
"Natural gas is cheap right now, but it's not likely to remain at these prices forever as more utilities replace coal with gas and global demand for our natural gas supplies grows," Banbury said Wednesday.
The Sierra Club is urging TVA to buy into a 3,500-megawatt wind power connection coming to Memphis by a Houston company known as Clean Line Energy Partners. The $2 billion project would carry wind-generated power from windmills in Texas and Oklahoma over a 700-mile, direct-current line into the Tennessee Valley.
"We think we can provide green power at an attractive, fixed-rate price for TVA and other utilities in the region," Clean Line Energy Executive Jimmy Glotfelty told TVA last year. "Having a guaranteed price for 20 years is a great hedge against volatile natural gas prices."
TVA contends that wind is too variable for reliable, around-the-clock power and wind is still more expensive than natural gas, at least at current gas prices. But Banbury said the winds being tapped in the Great Plains are more steady and could be supplemented with more solar power and with some limited gas-fired generation in the Memphis area.
"We would hope there could be a mix of renewable and gas rather than making a decision now that obligates TVA for the long term to use another fossil fuel at a massive new power plant," Banbury said.
The Sierra Club is buying television, radio and online advertisements to promote its message to urge TVA to use wind turbines rather than gas turbines.
The newspaper ads show giant wind blades and say, "Let's turn, not burn." The radio ads suggest that "trading one costly fossil fuel for another is the wrong choice for our health and our energy future.
"Instead, TVA should replace Allen with clean energy technology," the Sierra radio ad says.
Banbury said the campaign is one of the biggest media campaigns for the Sierra Club in Tennessee in decades.
The Allen plant was built by Memphis Light, Gas and Water Division in the 1950s and was bought by TVA in 1984. The three units at the plant turn out 4.8 billion kilowatthours of electricity a year, or enough to supply 340,000 homes.
In a forum on the future of Allen last month, the author of the environmental assessment, Ashley Farless, said TVA looked at variety of alternatives for meeting its energy needs. She said that natural gas generation "seems the most reasonable."
Contact Dave Flessner at email@example.com or at 757-6340.