* 29,751 - Number of megawatts of power demanded in July 2016 when temperatures reached 96 degrees across the Tennessee Valley
* 32,000 - Number of megawatts of power demanded in July 2007 when temperatures reached 96 degrees across the Tennessee Valley, or 7 percent more even with fewer customers
Source: Tennessee Valley Authority
For most of its 83-year history, the Tennessee Valley Authority has been growing the economy of its seven-state region by harnessing the power of the Tennessee River, Appalachian coal and nuclear energy developed in Oak Ridge to generate and sell more electricity every year.
But the energy field for TVA and other power utilities is hitting a new kind of obstacle that is slowing — and could soon reverse — the growth in power consumption even as a growing number of households and businesses adopt more electric-powered devices and vehicles.
That power shift is benefiting consumers and the environment. But it's also likely to continue to shrink the budgets and staff for utilities such as TVA.
"The world is rapidly changing," TVA Chief Financial Officer John Thomas told a conference of TVA executives in Chattanooga on Wednesday. "It used to be we could rely upon 3 to 4 percent annual load growth, so we were continually adding major new power blocks (from nuclear, coal, gas and hydroelectric generators) because we knew we would need them sometime in the future. With the significant changes we are seeing now — and the potential of even negative load growth in a few years — it makes all of us very concerned about making any long bets."
Energy conservation, appliance efficiency and self-generation has combined to cut per capita consumption of electricity in most households as Department of Energy efficiency standards have improved the performance and reduced the power consumption for everything from electric washers and dryers to electric light bulbs and computers. The summertime power peak reached by TVA this year was 7 percent below that reached in 2007, even though temperatures were the same and TVA has added thousands more residential and commercial customers over the past nine years.
"In California, our economy continues to grow, but we haven't had any real growth in electricity demand in 20 years, and we're now seeing negative growth in power demand," said Geisha Williams, president of Pacific Gas & Electric, one of the nation's biggest electric utilities with more than 5 million customers.
Williams said the decoupling of economic growth and electricity usage has come from state policies, technology changes and consumer preferences. California already has 250,000 rooftop solar installations where homes and businesses generate their own electricity or heat their own water. More than 6,000 new rooftop solar units are being added every month.
"We have a new rooftop solar installation added about every seven minutes, on average, so that is a very real and present part of our business," Williams said. "We also fully embrace energy conservation and do what we can to be an advocate for our consumers in helping to reduce their energy use and their electric bills."
Even though electricity rates in California average nearly 75 percent more than in Tennessee, the average residential electricity bill in California is still about 30 percent less because of milder weather and more energy efficiency, conservation and alternative energy use on the West Coast, according to data by the U.S. Energy Information Administration.
"Our rates are some of the highest, but our bills to consumers are some of the lowest," Williams said.
Solar, wind and other renewable energy use in California is being spurred by state mandates for utilities to cut carbon emission by 40 percent and generate at least half of all electricity from clean, renewable and non-nuclear sources by 2030. Because of such mandates and technology-driven efficiency and purchasing changes, Williams said PG&E decided in June to shut down its only remaining nuclear power plant — the 2,240 megawatt Diablo Canyon Nuclear Power Plant — by 2025. The only other nuclear plant in California, the San Onofre nuclear plant, shut down in 2013.
"It was an excruciatingly difficult decision, but it was the right business decision at the end of the day," Williams said.
The demand for power has dropped so much that the twin reactors at Diablo Canyon are projected to be needed only half the time after 2025, "and it just doesn't make sense to operate a base-load plant like that only 50 percent of the time," Williams said.
PG&E now buys 65 percent of its power under contract with other power producers, rather than from fixed, base-load generation like what supplied most power in the past.
While California is cutting out nuclear power, across the country, South Carolina Electric & Gas Co. is adding two new Westinghouse AP-1000 reactors at its V.C. Summer nuclear plant near Jenkinsville, S.C.
SCANA Chairman and CEO Kevin Marsh said even with a record high $14 billion price tag for the new Summer units, the reactors "are a very good deal."
Although construction costs for the new V.C. Summer reactors are higher than originally forecast, interest rate costs — averaging only 4 percent instead of the projected 6 percent — have offset the higher building expenses, Marsh said.
"People ask me, 'What in the world are you doing building a new nuclear plant?' And I tell them, 'We're not. We're building two new nuclear units,'" Marsh quipped. "A lot of folks say that there has not been a nuclear renaissance, and there hasn't been one yet in the United States. But there has been around the world, and I just hate to see the United States miss out on this opportunity."
SCANA projects an annual growth pace of 1.5 percent for electricity and 2.5 to 3 percent for natural gas. Williams said nuclear generation offers a reliable, carbon-free source of base-load power and many of the 103 nuclear reactors that once or still generate power will be approaching the end of their useful life in the next two decades.
Marsh said wind and solar generation works only about 30 percent of the time.
While California often leads the country in technology and social trends, Williams said, "every market and every state is different," and power utilities are adapting to both changing markets and local customer and political demands.
SCANA is working toward one-third nuclear, one-third natural gas and one-third coal, with wind and solar supplementing those sources, Marsh said.
"With the growth portrait we see in South Carolina, we needed more base-load power, and nuclear made sense for us," he said.
At TVA, about one-third of its generation comes from nuclear power, one-third comes from coal and the rest comes from gas, hydro, wind and solar generation. Coal generation continues to decline as TVA complies with new Clean Power standards, while other generation sources are rising, Thomas said.
TVA finished construction of its Unit 2 reactor at the Watts Bar Nuclear Plant this summer to add 1,150 megawatts of base-load generation. But the utility is taking bids this month to sell its unfinished Bellefonte Nuclear Plant in Hollywood, Ala., because TVA doesn't project any demand for that power for at least the next two decades.
TVA, which once employed more than 50,000 workers across the Valley building nuclear and other power plants, has shrunk its staff to under 11,000 and is in the process this month of making further staff reductions in its nuclear power division.
Despite the drop in power plant construction and staffing, utility leaders said new talent is still needed — and is being recruited — for power utilities with about 20 percent of all utility workers — and 40 percent of managers — eligible for retirement in the next five years.
"Young people are energized about renewables and energy efficiency and we are attracting a lot of top talent as a result," Williams said.
Contact staff writer Dave Flessner at email@example.com or at 423-757-6340.