TVA cancels construction of next-generation nuclear reactors in Alabama

TVA cancels construction of next-generation nuclear reactors in Alabama

February 13th, 2016 by Dave Flessner in Business Around the Region

TVA's Bellefonte nuclear plant can be seen from Highway 72.

Photo by Angela Lewis Foster /Times Free Press.

Bellefonte at a glance

› Location: On the Tennessee River in Hollywood, Ala.

› Size: 1,600 acres

› Original reactors: Two unfinished Babcock & Wilcox pressurized water reactors, started in 1974 but never completed (units 1-2)

› New reactors: In 2007, TVA applied for a combined operating license for two Westinghouse AP 1000 design reactors (units 3 and 4)

› Investment: More than $6 billion of capital, maintenance and interest costs spent so far, but most of the investment has already been written off

Source: TVA

Construction starts and stops

› 1974: Construction permit issued and building begins

› 1985: Construction halted on Unit 2, then 55 percent complete

› 1988: Construction halted on Unit 1, then 88 percent complete

› 1996: TVA studies options of converting plant to combined-cycle natural gas but drops plans two years later

› 2001: Texaco proposes using Bellefonte as site for coal gasification plant and Chattanooga financier Franklin Haney offers to finance completion as nuclear plant

› 2002: Texaco drops proposal and TVA turns down Haney offer

› 2005: Nustart Energy coalition picks Bellefonte as site for Westinghouse AP 1000 nuclear plant; TVA withdraws permit for original plant

› 2006: TVA sells steel tubing, pipes for scrap metal from original units; other equipment transferred to other plants

› 2008: TVA reverses itself and decides to revive original Bellefonte units

› 2013: Private investment group assembled by Haney proposes financing deal to complete Bellefonte by 2021

› 2015: TVA’s long-term plan projects no need for major plants like Bellefonte for more than 20 years

Document: TVA's motion to withdraw its application for new reactor design

Read TVA's motion to withdraw its application for new reactor design at Bellefonte

The Tennessee Valley Authority, which planned a decade ago to begin an American renaissance in nuclear power by building the first next-generation nuclear reactors in Alabama, is abandoning those plans because of shrinking power demand and rising nuclear construction costs.

TVA told regulators Friday it will not pursue construction of two Westinghouse AP1000 reactors at its Bellefonte Nuclear Power plant in Hollywood, Ala. The utility filed a motion Friday with the Atomic Safety and Licensing Board of the Nuclear Regulatory Commission indicating it will withdraw its application for a combined operating license for the reactors.

Dr. Marilyn Brown, chair of TVA's nuclear oversight committee, said TVA's long-range power plan "does not demonstrate the need for additional large baseload generating capacity over the next two decades.

"Thus, withdrawing the license applications for Units 3 and 4 is the fiscally responsible action," she said in an email Friday.

TVA is not giving up on the two reactors it began building at Bellefonte in 1974. But utility President Bill Johnson said there are no plans to resume building n the half-finished units that have already cost more than $6 billion in construction, maintenance and interest expenses.

"We have no plans to restart construction," Johnson told reporters after a quarterly board meeting in Chattanooga on Thursday.

Johnson said within TVA "there is a vigorous debate" about what to do with the Bellefonte site.The agency is studying whether it could use the site for another source of power or another alternative project.

"We're still encouraging TVA to either generate some electricity there or do something at that site," said Dus Rogers, president of the Jackson County Economic Development Authority and chairman of the Regional Energy Resource Council that reviewed TVA's long-range power plans.

"It's a great site for a power plant or some other large business, but I am a realist and I think it would break TVA ratepayers to finish it right now," Rogers said.

The utility applied in 2007 to build the first Westinghouse AP 1000 reactors, which are designed to be simpler and safer than plants begun in the 1960s and 1970s. A consortium of utilities and engineering firms known as NuStart Energy picked Bellefonte as the site when TVA thought it could convert the original reactors to the new design for less money than building from scratch.

But growth in power demand stalled during the recession and has yet to reach its pre-recession peaks thanks to more energy-efficient homes, appliances and factories and a shift to cheaper natural gas over electric furnaces.

The first AP1000 reactors now are being built at Plant Vogtle near Waynesboro, Ga., at a projected cost of up to $22 billion by Georgia Power, the Municipal Electric Authority of Georgia and the city of Dalton.

Environmental groups opposed to any nuclear construction at Bellefonte praised TVA's decision Friday.

"We welcome TVA's decision to slow the financial hemorrhage at Bellefonte 3 and 4," said Stephen A. Smith, executive director of the Southern Alliance for Clean Energy. "We strongly encourage TVA to go ahead and close the books on the 42-year-old Bellefonte 1 and 2 reactor units, which will never be completed, saving more money and allowing Northern Alabama to move into the 21st century with new economic opportunities like Google, energy efficiency and clean solar power."

Activists at the board meeting suggested TVA abandon any nuclear construction at Bellefonte, which they said would push the utility's debt far above its $30 billion cap.

"It's time to quit wasting money pursuing this project that TVA can't afford," said Garry Morgan, a Scottsboro resident and critic of the Bellefonte project.

Morgan said the utility operates "under a veil of fractured accounting making it very difficult to figure out their total financial status."

TVA's debt, interest and other financial obligations total more than $49.7 billion, Morgan said, and two new reactors at Bellefonte would likely add $10 billion to $20 billion more.

"The Tennessee Valley Authority is wasting tens of millions of dollars annually propping up its twice-abandoned Bellefonte plant," said Lou Zeller, executive director for thed Blue Ridge Environmental Defense League which challenged TVA's license application at Bellefonte. "Truly, it is a zombie reactor. It's time to face the facts."

TVA is still working to finish the Unit 2 reactor at the Watts Bar Nuclear Plant this spring and Johnson said a site is being sought in Oak Ridge to possibly build small modular reactors. Those reactors, Johnson said, are more scalable and can be built for less money.

But among dozens of new nuclear reactors proposed a decade ago by U.S. utilities after regulators adopted a more streamlined licensing process for new plants, only five are now being built — the Unit 2 reactor at TVA's Watts Bar plant, two AP1000 reactors at Plant Vogtle and two AP1000 reactors at the V.C. Summer plant in South Carolina.

U.S. Sen. Lamar Alexander, R-Tenn., one of the strongest supporters of nuclear power in the U.S. Senate, urged American utilities seven years ago to build at least 100 new reactors to generate more carbon-free power.

On Friday, Alexander acknowledged TVA's mission "is to provide low-cost, clean, reliable energy" and declined to criticize the decision and praised the utility's other steps.

"TVA has already invested in Watts Bar 2, which will be the first new U.S. nuclear reactor of the 21st Century, and continues to focus on the development of new small modular reactors that will revolutionize the safety and effectiveness of our nuclear technology," Alexander said in a statement.

But Sara Barczak, high-risk energy choices program director with the Southern Alliance for Clean Energy, said nuclear power is proving too expensive to justify building more reactors.

"TVA and its customers have been burned time and time again by the high costs and risks associated with nuclear power and it's taken a long while for those lessons to be learned," she said. "But today's decision shows there are utilities that have the wherewithal to change course and prevent future, costly mistakes."

In Hollywood, Ala., where Bellefonte has remained nothing more than a construction site for nearly 43 years, Mayor Frank "Buster" Duke lamented the potential end of the nuclear future.

"I think this was one of the best nuclear plants TVA ever built, but it's not looking good for any nuclear use of Bellefonte," said Duke, who worked as a pipefitter helping build Bellefonte from 1974 to 1984.

"I'm afraid everything is outdated there now like an old computer. I just hope TVA can do something with all those assets there."

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