TVA Mulls Coal Plant Closures, Trump Urges Board to Consider All Factors

The Tennessee Valley Authority (TVA) is holding a board meeting today, during which the fate of the corporate agency’s Bull Run and Paradise Unit 3 coal power plants could be decided. Permanent closure of the facilities is strongly being considered.

The stakes are high, according to Kentucky Gov. Matt Bevin (R). In a Jan. 4 letter to TVA CEO Bill Johnson, Bevin wrote that it “would be a huge mistake” to permanently shut down Paradise Unit 3, which is located in Muhlenberg County, Kentucky. “The impact on our economy and our region’s (and nation’s) long-term energy grid reliability, would be devastating,” he added.

President Trump seems to agree. On Feb. 11, he posted on Twitter, “Coal is an important part of our electricity generation mix and @TVAnews should give serious consideration to all factors before voting to close viable power plants, like Paradise #3 in Kentucky!” The TVA responded on Twitter that it would “give serious consideration to all factors.”

The Paradise Fossil Plant was originally constructed with two coal-fired cyclone generating units—Units 1 and 2. The facility began operation in 1963. The 1,150-MW Unit 3 came online in 1970. In recent years, the TVA invested about $1 billion to build a three-unit, 1,100-MW gas-fired plant on the Paradise site. It opened in April 2017, replacing Units 1 and 2, which were retired that year. The Paradise Combined Cycle Plant was recognized as a POWER Top Plant award winner in 2017 (see “Model of Gas-Fired Efficiency Rises in Heart of Coal Country” in the September 2017 issue).

The Bull Run Fossil Plant (BRF) in Anderson County, Tennessee, is the only single-generator coal-fired power plant in the TVA system. The 881-MW unit was built between 1962 and 1966, and commercial operation began in June 1967. At the time BRF was completed, it was the largest unit in the world, based on volume of steam produced.

Like all power companies, the TVA must continuously evaluate all generating assets to ensure portfolio flexibility and fiscal responsibility. As part of that process, the TVA has conducted four studies each on Paradise Unit 3 and BRF since August. It says, “Given the projected need for energy over the next several years, where flat to declining demand combines with more renewable energy resources and higher load swings … assets that have relatively high projected future maintenance cost and environmental compliance expenditures, high forced outage rates and poor generation portfolio fit are now the focus of more detailed study for potential retirement.” Both Paradise Unit 3 and BRF fall into that category of assets.

On Feb. 11, the TVA released “Final Environmental Assessment” and “Finding of No Significant Impact” documents, concerning the retirement of each unit. The documents say that the TVA has found neither unit provides “the level of flexibility needed to balance hourly, daily and seasonal changes in energy consumption. In addition, cycling the unit[s] off and on results in more wear and tear and higher operation and maintenance costs. TVA has considered load outlook, economic benefits and costs, performance, and environmental and social impacts and determined that there is no immediate need to replace the generating capacity currently provided” by either unit. Therefore, the assessors recommended retiring Paradise Unit 3 in 2020 and BRF in 2023.

The TVA board is scheduled to meet on Feb. 14 at 9:30 a.m. EST in Chattanooga, Tennessee. Part of the agenda is to discuss and possibly vote on the fate of both plants.

[Ed. update on Feb. 14, 2019, at 12:15 p.m. EST]: The TVA board approved the retirement of Paradise Unit 3 and the Bull Run facility. “Making decisions that impact employees and communities is difficult as we fulfill our commitment to keep power rates as low as possible,” Johnson said. “We value the contributions of the employees of Paradise and Bull Run, and we will be working directly with them and local communities to ease the transition as much as possible.”

Aaron Larson is POWER’s executive editor (@AaronL_Power, @POWERmagazine).

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