The collapse of an ash impoundment that destroyed a handful of houses near TVA's Kingston Fossil Plant last month likely will hit the pocketbooks of nearly 8 million electricity users across the Tennessee Valley this year.
And if two Tennessee lawmakers have their way, the cleanup and compensation costs from America's worst coal plant spill could spread to all U.S. taxpayers.
The cleanup operations by TVA and the U.S. Army Corps of Engineers at Kingston are expected to take months to complete and, officials say they still don't have any estimate of the total cleanup costs.
Every $100 million of extra expenses for TVA will cost electric ratepayers an extra 1 percent in higher power bills. In the past year, TVA electric rates already have jumped by more than 25 percent - even after a 6 percent fuel cost reduction last week - primarily because of higher coal and natural gas prices.
But U.S. Rep. Zach Wamp and U.S. Sen. Lamar Alexander, both Tennessee Republicans, want to hold down rate increases that may come from the Kingston spill by turning to Uncle Sam for relief.
"If it's possible to get federal funds to help the ratepayers pay the bills, I'll work on it," said Sen. Alexander, who pledged to try to get federal assistance for TVA either through the upcoming stimulus package or other federal appropriations.
Rep. Wamp said the heavy rains that contributed to the Dec. 22 Kingston ash pond spill could be considered like Hurricane Katrina, which yielded more than $100 billion of relief for Louisiana and Mississippi. Furthermore, he said TVA power users are having to shoulder the expense of land and water stewardship borne in other parts of the country by the U.S. Army Corps of Engineers.
"We have the only system in the country with TVA that has three missions together: land and water management, economic development and power production," Rep. Wamp said. "In the past, we got appropriated dollars for TVA stewardship programs, but TVA ratepayers now must bear all of that responsibility. To me, it's simply a matter of equity and fairness."
Sen. Alexander, who previously served as co-chairman of the TVA Congressional Caucus, which met with TVA officials last week, insisted that the federal utility must clean up the Kingston spill, "make whole all the people who were hurt, and do everything possible to make sure this doesn't happen again."
Tennessee's other U.S. senator, Republican Bob Corker, of Chattanooga, agrees that TVA "has to fully clean up this mess."
But TVA will have to pay for the cleanup and any changes to how plants handle coal ash, he said.
"It would be totally inappropriate" to try to include help for TVA in the upcoming fiscal stimulus plan, he said.
"If something happens at Duke Power or Florida Power, I would expect those utilities to deal with that," Sen. Corker said. "I talked with Tom Kilgore and TVA has no plans to ask for any federal involvement, and I certainly have no plans to ask for any federal involvement. I hate it for the ratepayers of TVA, but this is their responsibility."
TVA Chairman Bill Sansom acknowledged that costs of the ash pond cleanup will show up in rates "sooner or later" in an interview with Associated Press.
For now, TVA President Tom Kilgore said he isn't paying much attention to the price tag for utility employees and contractors working around the clock to clear ash-covered roads, rail lines and farms and preparing to dredge the Emory River of mounds of ash left from the spill.
"Our focus right now is on cleaning up the spill," Mr. Kilgore told a Senate panel last week. "TVA will do a first-rate job of remediation."
But after a second leak from a TVA coal plant ash pond last week in Alabama, TVA could be forced to do far more than just clean up what was spilled from wet ash ponds in Kingston and Widows Creek. Congressional leaders and environmental activists are pushing TVA and other utilities to phase out their wet ash disposal systems in favor of more costly dry ash recovery and recycling.
U.S. Rep. Nick Rahall, D-W.Va., chairman of the House Natural Resources Committee, said last week he may draft legislation for stricter federal controls over ash disposal at TVA and other utilities.
U.S. Sen. Barbara Boxer, D-Calif., chairwoman of the Senate Environment and Public Works, also pledged to push the Environmental Protection Agency to adopt new controls over coal ash disposal.
"The current situation is unacceptable," Sen. Boxer said Friday after TVA revealed its second ash spill in 18 days.
TVA balked a few years ago at replacing its wet ash storage system at the Kingston plant with a dry ash disposal process estimated to cost at least $25 million. But Sen. Boxer said TVA's decision to stick with what turned out to be faulty ash ponds at Kingston will cost far more in cleanup expenses.
If TVA is required to change its ash pond systems at six coal plants, the conversions easily could cost more than $100 million.
"There is no way TVA is going to get through this for less than a $100,000, and it will probably cost ($200,000) to $300,000," said Stephen Smith, executive director for the Southern Alliance for Clean Energy, a Knoxville environmental leader who has been a watchdog of TVA for years. "Coal is dirty and, increasingly, it is going to be more expensive."
Despite the disaster in Kingston, coal industry leaders contend that coal ash ponds, in general, have had an excellent record and some coal industry critics are exaggerating the risks of fly ash.
"This is a very unfortunate incident in Kingston, but it is a very isolated event among the hundreds of plants that dispose of coal ash every day," said David Goss, executive director of the American Coal Ash Association.
Mr. Goss said he believes over time coal power plants can convert from wet ash ponds to dry ash recovery and recycling into products such as Portland cement and agricultural soil mixtures.