KNOXVILLE - TVA will shutter part of its aging fleet of coal power plants and turn to nuclear power and energy conservation to power the Tennessee Valley under a 10-year plan adopted Friday.
Tennessee Valley Authority President Tom Kilgore outlined a vision that calls for the nation's biggest government utility to idle at least 1,000 megawatts of coal generation - or more than 7 percent of its biggest source of power - by 2015.
TVA directors approved plans here Friday to move ahead with reviving work on its unfinished Bellefonte Nuclear Plant in Alabama and restructuring electric rates next spring to encourage distributors - and ultimately customers - to limit consumption during peak demand periods.
"We want to be a leader in cleaner energy and cleaner air, and that means we will have to be less reliant upon coal," Kilgore said. "That doesn't mean that coal is going away, but we are looking at idling some of our coal units pretty soon."
TVA got more than 60 percent of its electricity last year from the 59 coal-fired units at its 11 fossil plants across Tennessee, Alabama and Kentucky.
Before now, the only TVA-built plant to ever close was the Watts Bar Steam Plant in Rhea County, which was shuttered in 1983.
Kilgore said he wants to meet with employees who might be displaced and community leaders where coal plant closings could reduce TVA in-lieu-of-tax payments before announcing which coal plants will be closed. But some of the potential units on the chopping block could include the oldest units at the Widows Creek plant near Stevenson, Ala., the John Sevier plant near Rogersville, Tenn., and the Johnsville plant in West Tennessee.
Environmental groups gave mixed reviews to TVA's decision to phase out some coal units and build more nuclear plants and promote more conservation.
Stephen Smith, executive director for the Southern Alliance for Clean Energy, said shutting down the old coal plants "is absolutely the right path for TVA" and he applauded the agency for boosting its budget for energy conservation by nearly a third next year to $135 million.
"We believe there are a significant number of older, inefficient, dirty plants, even beyond the 1,000 megawatts that TVA is committing to retire today, that TVA should consider phasing out," he said.
TVA is facing state and private lawsuits, regulatory orders and potential congressional action to force costly limits on air emissions and carbon releases from its coal plants.
During Friday's public hearing, anti-nuclear activists blasted TVA for putting $248 million in next year's budget to move ahead with reviving the Bellefonte Nuclear Plant in Hollywood, Ala., where construction was halted in 1988.
TVA's new vision
* Less coal: Shut down at least 1,000 megawatts, or 7 percent, of TVA's coal-fired generation by 2015
* More nuclear: Revive construction of the Unit 1 reactor at the Bellefonte plant in Hollywood, Ala., finish building a second reactor at the Watts Bar plant near Spring City, Tenn., and make upgrades to existing plants to make TVA the national leader in new nuclear generation.
* More conservation: Reduce electricity consumption and peak demand by at least 3.5 percent from what it otherwise would be from new pricing schedules and conservation incentives to make TVA the leader in energy efficiency among Southeast utilities
Source: Tennessee Valley Authority
"Nuclear power is not safe, it's not reliable, and it's way too expensive," said Sandra Kurtz, a Chattanooga member of the Bellefonte Efficiency and Sustainability Team, a citizens group opposed to building more nuclear plants.
But TVA Chairman Dennis Bottorff said nuclear power is the lowest cost option for power generation and doesn't emit carbon dioxides linked with global warming.
"We think we have the best team in the country to plan, build and license these plants on time and on budget," Bottorff said, pointing to TVA's success in restarting its Browns Ferry units in the 1990s and the current effort to complete Watts Bar Unit 2 by 2012.
TVA estimates it will cost between $4.3 billion and $4.7 billion to finish Bellefonte Unit 1.
In TVA's $11.8 billion budget for fiscal 2011 adopted Friday, TVA projects flat power demand. The slowdown in the growth of power consumption should be aided next April when TVA plans to change the way it prices electricity for the first time since 1992.
TVA will charge distributors both for their monthly peak and their overall monthly consumption. Such demand and energy charges will be changed according to the season and ultimately according to the time of day to charge more during peak demand periods.
TVA Vice President John Trawick said the change next spring will allow consumers to cut their electric bills by changing when clothes or dishes are washed at home or when electric-powered machines operate in factories.