TVA directors today will consider plans for a record capital budget of nearly $3 billion for fiscal 2015 to boost generation from new nuclear and gas plants and to clean up some of its existing coal-fired units.
But TVA won't spend much of its own money on plans for a pair of new small modular reactors proposed to be built in Oak Ridge.
Nuclear power proponents had hoped smaller nuclear designs would limit risks and costs and lead to a nuclear renaissance in America. But the leading developer of the next generation of smaller reactors has slowed its development efforts after failing to attract investors for the project.
Babcock and Wilcox, which is developing its mPower small modular nuclear design for TVA and other utilities, dismissed its mPower leader this spring and limited work on the project after failing to attract investors for the new plant design.
"While we have made notable progress in developing a world-class technology, there is still significant work involved in bringing this climate-friendly technology to reality," B&W CEO James Ferland said in a statement earlier this year after the company announced that mPower President Christopher Mowry was leaving.
B&W devoted its largest research budget to mPower when it was launched in 2009. The engineering firm signed a 5-year agreement with TVA in April 2013 to jointly spend up to $226 million in federal funds to develop and license the mPower plant design and tentatively agreed to locate a couple of the first units in Oak Ridge.
TVA President Bill Johnson said last week the federal utility is now taking a "wait and see" approach to mPower reactors, which TVA doesn't anticipate needing for at least another decade.
"Our partner, B&W, has had some retrenching of their work in that effort, and I think their basic view is that the market isn't significantly robust for them to continue to invest at the rate they were," Johnson said. "We continue to be interested in the concept, so we continue to work on our site development and some of the licensing activities, and we'll wait and see what the market brings in terms of a product that we could deploy in that space."
TVA spokesman Jim Hopson said TVA is moving through an early site permit process while it waits on B&W to get approval from nuclear regulators for its new plant design. That process will allow TVA to verify that the former Clinch River Breeder Reactor site in Oak Ridge could accommodate most any of the new small modular reactor designs.
"Under the original time line before the slowdown by B&W, we were proceeding forward so that once we had the design certification application and B&W had gained approval for its design, we would proceed with a construction permit," Hopson said. "Because of the slowdown in design, we're going to move to an intermediate step and try to get an early site permit."
Despite the slowdown on work toward small modular reactors, TVA still plans big spending next year to finish its Unit 2 reactor at the Watts Bar Nuclear Plant, to build combined cycle gas plants to replace shuttered coal facilities at Paradise in Kentucky and Allen in Tennessee, and to install scrubbers on its Gallatin coal plant near Nashville.
"Looking forward next year, 2015 is a high capital expense year for us, just from the stacking of projects," TVA Chief Financial Officer John Thomas told financial analysts last week. "We've got a heavy capital year next year as well as a billion dollar maturity (of existing bonds) so I think we will be in the market (borrowing more money)."
Thomas said the proposed capital budget is "in the $3 billion range."
Contact Dave Flessner at dflessner@timesfree press.com or at 757-6340.