TVA's newest nuclear power plant helped enable the federal utility to keep costs down this winter while a drought cut hydroelectric generation from TVA's power-generating dams.
But a ruptured condenser that broke apart when support beams failed at the Watts Bar Unit 2 reactor on March 23 has forced the $5 billion power plant to cease power production for the past six weeks and could keep the reactor out of service until later this summer, TVA officials said Tuesday.
"These are huge pieces of equipment - three stories tall or more - and we are still assessing the extent of the damages and the best way to make the necessary repairs," TVA President Bill Johnson said Tuesday. "It isn't technically complicated, but there is very little space, so how you do [the fix] is the tricky part. We don't have a fixed schedule yet."
The heat exchanger, or condenser, turns steam generated within the reactor back into water. But it has nothing to do with the nuclear side of the plant.
Tennessee Valley Authority CEO Bill Johnson answers questions during an interview with The Associated Press Tuesday, April 18, 2017, in Nashville, Tenn. The CEO of the biggest public utility in the country says the agency is not going to reopen coal-fired power plants under President Donald Trump. (AP Photo/Mark Humphrey)The condenser equipment could not be checked for reliability during the prolonged construction of Watts Bar Unit 2, which began in 1974 and was completed last year, Johnson said.
Dave Lochbaum, director of the Union of Concerned Scientists Nuclear Safety Project, said similar problems in the internal supports for the condenser developed at the Grand Gulf Nuclear Plant in Mississippi during that plant's initial fuel cycle.
The Nuclear Regulatory Commission also cited TVA last year for having a "chilled work environment" at Watts Bar that could stifle employees from voicing concerns. But regulators said in March that the work environment is improving and managers have implemented numerous processes and programs to address any employee concerns.
"It seems like the worst is behind us, although the all-clear is not quite ready," Lochbaum said.
Making tritium for nuclear bombs
Watts Bar Unit 2 also could be critical to supplying a key component for America's nuclear arsenal. TVA has been irradiating tritium for nuclear weapons at its Unit 1 reactor at Watts Bar since 2003 and is preparing to also make tritium at the newest reactor at Watts Bar for the Department of Energy's military operations.
"We're in a unique position to support the DOE on tritium, a key component in the nation's nuclear component capabilities.," Johnson said. "Supporting the national defense is a key part of our history and this is just the latest in a long series of activities we have supported dating back to before World War II."
As a government-owned utility, TVA is uniquely positioned to use its nuclear power generation to also support nuclear weapons within the terms of international nonproliferation agreements that otherwise could restrict mixing civilian and military nuclear functions.
TVA changes generation mix
The 1,210-megawatt Watts Bar Unit 2 entered commercial operation on Oct. 19, 2016, as the first new nuclear reactor in the country in two decades.
TVA said Tuesday it brought a new 1,025-megawatt combined cycle power plant online last month to replace two coal units at the Paradise Fossil Plant in Kentucky. The new gas-powered facility was completed on time and within its $900 million budget, Johnson said.
The TVA Watts Bar Nuclear Plant is photographed on Thursday, Oct. 22, 2015, near Spring City, Tenn., as Unit 2 begins producing electricity for the first time, 43 years after construction began at the site. TVA also added the River Bend Solar Energy Center in northern Alabama in November and another combined cycle gas-powered facility at the Allen Fossil Plant is expected to be completed in 2018, replacing TVA's 58-year-old coal plant in Memphis.
"TVA's generation fleet continues to become more diversified and this is helping us provide low-cost energy in a reliable and efficient manner," Johnson said. "With the drought conditions we experienced in the first half of the year, which limited power production from our dams, Watts Bar Nuclear Unit 2 played an important role in keeping costs low."
TVA rates lower than 5 years ago
Despite an increase in both TVA's base rates and fuel cost adjustments in the past year, Johnson said TVA rates are still below where they were in 2012, thanks to more than $800 million of cuts in annual operating expenses at TVA and the shift toward cheaper fuel sources, including natural gas and nuclear power.
"TVA's power rates have become more competitive year over year for several years now and we've managed to keep costs down this year despite drier than average conditions in the first half of the year," Johnson said.
Since he joined TVA as CEO in 2013, TVA has cut its staff by nearly 20 percent from 13,000 to about 10,500 today.
TVA said Tuesday its power sales in the winter quarter were down 7 percent, cutting net income by a third from last year. But for the first half of fiscal 2017, TVA still reported net income of $313 million, or $32 million more than the previous year, on sales of more than $5 billion in the 6-month period.
After completing Watts Bar and the new Paradise gas plant, TVA is focusing on finishing the Allen gas plant and spending another $1.1 billion in coal cleanup projects. But the agency's $26 billion of long-term debt should begin to decline this year and fall steadily over the coming decade, TVA Chief Financial Officer John Thomas said.
"Our expectation is that our debt will begin to drop this year," Johnson told financial analysts during an earnings call Tuesday.
TVA has $1 billion of notes up for maturity in July and another $700 million of bonds expiring in December "so I would expect we would be back in the market sometime this year."
Contact Dave Flessner at dflessner@timesfreepress.com or at 423-757-6340.