TVA agrees to pursue renewable energy purchases

Apr 2, 2009 - Duncan Mansfield - The Associated Press

JOHNSON CITY, Tenn.- In the face of looming legislative pressures for cleaner energy, the nation's largest public utility agreed Thursday to buy more than a nuclear reactor's worth of electricity from renewable energy sources.

The Tennessee Valley Authority board gave President and CEO Tom Kilgore authority to sign contracts totaling up to 2,000 megawatts of renewable and clean energy by 2011, with some of the power entering TVA's seven-state system as early as 2010.

TVA began the search in December and received more than 60 offers, some of which have been withdrawn because the providers have since committed to other utilities. TVA executives refused to say how much the federal utility is prepared to spend or to identify potential generators.

The quantity of renewable energy being sought is substantially more than TVA will get from the $2.5 billion completion of a second 1,200-megawatt reactor at the Watts Bar nuclear station by 2013.

"We applaud and welcome the fact that TVA is preparing for the 21st century by making this kind of commitment. Two-thousand megawatts is a major step in the right direction," said Steve Smith, director of the Southern Alliance for Clean Energy.

TVA executives said internal studies suggest the Tennessee Valley lacks the potential capacity to meet TVA's renewable energy needs, so they are looking outside the region. Smith conceded the region's renewable infrastructure is lacking, but urged TVA to help grow it through the agency's economic development activities.

Kilgore said TVA has little interest in building its own renewable energy generators, though TVA in the 1990s developed the first commercial wind farm in the Southeast near Knoxville.

The most likely near-term source of renewable generation are Western wind farms in the Dakotas and landfill gas recovery operations, said Van Wardlaw, TVA's power supply and fuels executive vice president.

While purchases outside the region will do little to improve air quality within TVA's 80,000-square-mile service territory, Kilgore said TVA's goal is to "reduce TVA's environmental footprint by increasing the renewable and clean energy resources in our generation mix."

The agency now generates a small amount of renewable energy at its own solar sites, wind turbines and a methane recovery project at a Memphis wastewater treatment plant. It also buys wind power from 15 privately owned turbines located on TVA's Buffalo Mountain wind farm.

TVA, which supplies some 8.7 million consumers, hopes to get more than half of its total electricity from zero or low carbon-emitting sources by 2020.

The utility currently gets about 60 percent of its power from coal-fired power plants increasingly under the gun to reduce emissions - most recently from a federal court ruling brought by North Carolina against four TVA plants closest to the North Carolina border.

Various energy bills before Congress would require a 20-25 percent clean energy mix by 2020. Kilgore said those proposals would not count nuclear power, which represents another third of TVA's power, or existing hydroelectric generation, which accounts for another 10 percent of TVA's power.

"Renewable energy and energy efficiency will be part of our clean energy portfolio," Kilgore vowed.

Meanwhile, TVA is in the early stages of an incentive-driven program to reduce energy consumption during high demand periods by up to 1,400 megawatts by 2012. Pilot tests with 13 commercial customers last summer produced a 70-megawatt reduction in peak power use by offering cheaper rates at night and more expensive prices during the daytime.