Pollution controls don't prove as costly as critics forecast

America's biggest public utility has completed the closing and cleanup of its aging fleet of coal plants to comply with clean air requirements and has done so while keeping power rate increases below the rate of inflation.

When the Tennessee Valley Authority reached a settlement with the U.S. Environmental Protection Agency and environmental groups in 2011 to clean up its power generation, coal industry advocates warned closing fossil plants would push up power rates and cut jobs in TVA's seven-state region.

But over the past seven years, TVA managed instead to phase out more than half of the 59 coal-fired units it once operated - and install scrubbers and other pollution controls on some of its biggest remaining coal plants - without any major rate increase.

In fact, TVA has cut rates in the past five years while attracting a record volume of investment in its seven-state region.

TVA shuttered 33 coal-fired units in Tennessee, Alabama and Kentucky and spent $2 billion to install scrubbers or selective catalytic control devices at the Gallatin and Shawnee coal plants in the past decade.

In their place, the agency has built combined-cycle, natural- gas-powered plants, added another nuclear reactor and purchased more renewable power.

Last month, TVA also completed its first extended power uprate at Browns Ferry Nuclear Plant Unit 3, which will result in an additional 155 megawatts of carbon-free energy. Similar power uprates at Browns Ferry Units 1 and 2 are scheduled to be finished by next spring.

"These actions have enabled our diversified generating fleet to produce more than half of our power from carbon-free sources and reduce our carbon emissions almost 50 percent below 2005 levels," TVA President Bill Johnson said.

Allen gas plant finishes EPA settlement

Last week, TVA began power generation at its new $900 million combined-cycle natural gas plant in Memphis. The 1,000-megawatt gas plant was built to replace the Allen Fossil Plant, which supplied coal-fired power in the western edge of TVA's territory for more than 58 years before it shut down this spring. It was the last of five major multi-unit coal plants to be idled since the 2011 environmental settlement was reached by TVA with EPA and three environmental activist groups.

Before its closing in April, the Allen Fossil Plant burned 7,200 tons of coal daily, spewing more than 11,000 tons of sulfur dioxide, 2,600 tons of nitrogen oxides and the equivalent of 5.4 million tons of carbon dioxide annually. Similar pollution was generated by the Widows Creek and Colbert plants in Alabama and the John Sevier and Johnsonville plants in Tennessee, which TVA also shut down in the past seven years.

Scientists say carbon dioxide emissions contribute to climate change, while sulfur dioxide is blamed for acid rain. Nitrogen oxides react with volatile organic compounds to create ozone, a major component of smog.

Jonathan Levenshus, representative for the Sierra Club's Beyond Coal campaign in Tennessee, said the Sierra Club was among those who sued TVA and helped negotiate the settlement to require the agency to reduce its carbon footprint and shift to cleaner sources of power generation.

"We entered into an agreement in 2011 because at the time, we recognized that TVA's coal plants were increasingly becoming a health and economic burden for the people and businesses of the Tennessee Valley," he said.

Cheaper gas, efficiencies avoid feared rate shock

At the time of TVA's settlement with the EPA, the Partnership for Affordable Clean Energy and other pro-coal advocacy groups warned that TVA's plans to shutter 7,000 megawatts of coal-fired electricity generation would boost electric rates in the Tennessee Valley by more than 20 percent and cut 65,000 jobs and $900 million of manufacturing output in Tennessee.

TVA has had to spend billions of dollars to build replacement power and to demolish and clean up its old coal plants. But cheaper natural gas prices have helped to keep TVA rates relatively constant for most of the past decade. In the past five years, the average price of TVA power has dropped by 2 percent and, adjusted for inflation, is down by more than 9 percent.

TVA's current long-range financial plan calls for annual base rate increases in the wholesale price of electricity around 2 percent to continue to keep power rate increases below the overall rate of inflation.

"The doom-and-gloom forecasts about the costs of moving away from dirty coal were clearly exaggerated, and we now have cleaner air to breathe and a more energy efficient system," said Stephen Smith, executive director of the Southern Alliance for Clean Energy.

Environmental groups want more cleanup

But Smith and other environmentalists want TVA to do more, and they have complained that a rate realignment the agency's board will consider this week may reduce some of the incentives for self-generated renewable power from solar or wind. TVA is falling behind its neighboring utilities in the share of solar and wind produced in the Valley.

"Now, as cheaper wind and solar power are pushing coal out of the market, it's vital that TVA retire more of its coal plants, and rely less on its gas plants, to protect our air and water quality, but also to shield consumers from price shocks," Levenshus said. "Both coal and gas continue to cause serious harm to the environment and human health, and they're no bargain either. New wind or solar power plants can be cheaper to build than a new fossil fuel plant, particularly when measured by cost per megawatt-hour."

TVA is preparing a new long-range energy plan, known as an Integrated Resource Plan, that the board is scheduled to decide upon next spring.

"Moving forward, we will remain focused on making the right decisions that allow us to build on these results and provide cleaner, reliable energy at the lowest costs feasible to those we serve," Johnson said.

Contact Dave Flessner at dflessner@timesfreepress.com or at 423-757-6340.