TVA Indefinitely Delays Bellefonte Nuclear Project

The Tennessee Valley Authority (TVA) last week indefinitely delayed new construction on its Bellefonte Nuclear Plant in Alabama, saying it had slashed the project’s budget by 64% and would reduce staff by 75%.

The federally owned corporate agency said it would focus instead on completing its Watts Bar Unit 2, also under construction, in a "quality manner, on time and within budget." But according to senior vice president for Nuclear Construction, Mike Skaggs, "Protecting the Bellefonte asset is also at the top of our ‘must and will do’ list.”

Skaggs told Bellefonte employees and contractors that the TVA had determined that it could reduce the plant’s operations and management budget from about $182 million in FY2013 to $66 million in FY2014. That will mean the onsite TVA and contractor staff will be reduced from about 540 to approximately 140. Currently, about 60 TVA employees and 480 contractors work at the plant, while another 130 contractors are based in satellite offices. The reductions, which will take place over the next several months and be completed by October, will leave just 25 TVA employees and 115 onsite contractors associated with the Bellefonte effort, he said.

Skaggs also said the TVA has been "looking across the company, including at our nuclear construction projects, to determine the work that is most important to perform. We have also been determining how we can do that work safer, better, faster and leaner."

About 38% of the TVA’s total generation was produced by nuclear power in 2012, almost equal to coal’s share. “Hard decisions are necessary, though, especially during challenging times like we face today as TVA works to lower rates by improving performance and controlling costs in an environment where mild weather and a mild economy have negatively affected sales,” Skaggs said.

Work on the 1,260-MW Bellefonte plant began in 1974 but was halted in 1988 in response to declining demand—even though Unit 1 was the furthest along, considered about 90% complete when the project was stopped. Work on the $4.9 billion plant restarted in late 2011, but stalled again early in 2012, when the TVA said that it would not start working on completion of the Bellefonte unit until after the initial fuel loading at Watts Bar 2. The TVA even considered a lease-purchase transaction for its newly completed 880-MW John Sevier Combined Cycle Plant to raise $1 billion in financing to support construction of Bellefonte.

But the TVA’s second Watts Bar reactor under construction near Spring City, Tenn., has seen its own share of delays. Last year, the TVA admitted the project would cost nearly double the $2.49 billion price estimated in October 2007 (when it decided to complete the project) and take much longer than the projected 60-month completion timeframe. Work on Watts Bar 2, like Bellefonte, was stopped in 1985 for declining demand, though it was considered about 80% complete with a total investment of about $1.7 billion. The TVA now anticipates the reactor will be online between September and December 2015. Watts Bar 2 is a 1,150-MWe, Westinghouse-designed pressurized water reactor of the same type as Unit 1.

Last week, the Nuclear Regulatory Commission (NRC) issued a Final Environmental Impact Statement to the Watts Bar 2 reactor, as POWERnews reported.

On Wednesday, the NRC proposed a $70,000 penalty against the TVA for component violations during the construction of Unit 2. An inspection conducted late last year and early this year had identified three violations related to Unit 2’s commercial grade dedication process, which should provide "reasonable assurance that components purchased from a commercial supplier are equivalent to nuclear grade items," the NRC said.

NRC inspectors found "a breakdown in the program resulting in construction of unknown quality, a failure to report that breakdown and a failure to identify that issue as a significant condition affecting quality." In a statement, TVA said it "accepts and respects the enforcement decision issued today by the NRC with regard to issues associated with the commercial grade dedication process," but added that no issues have been identified through reviews and testing to date that would challenge a Watts Bar 2 component’s ability to perform its safety function.

Sources: POWERnews, TVA

Sonal Patel, Senior Writer (@POWERmagazine, @sonalcpatel)

Update from original June 20 story: Adds that NRC proposed a $70,000 penalty against the TVA for component violations at Watts Bar 2

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