Monday, November 1, 2010

TVA in the News

TVA considers switching from coal to gas in Memphis
By Wayne Risher

Originally published 11:49 a.m., October 28, 2010
Updated 10:00 p.m., October 28, 2010

TVA is looking at whether to idle the 51-year-old coal-fired Allen Fossil Plant and replace it with a facility that uses clean-burning natural gas.

TVA officials have gotten permission from the Memphis and Shelby County Port Commission to do soil testing on 73 acres near the Allen plant in southwest Memphis.

They also told port officials that the utility would need an option to buy or lease the site and arrange for temporary use of adjoining acreage for construction staging, if necessary.

TVA's new unit services staff is weighing construction of a natural gas plant versus installing scrubbers to clean up emissions from the coal-fired plant, spokeswoman Jennifer Stone said.

The decision, which would require approval by the TVA board, will be based on economic and environmental considerations, as well as generation needs and reliability.

Stone emphasized the study is in an early stage and that no decision is expected before next spring. TVA's target for completing a new plant or retrofitting the old one is 2015, to meet anticipated clean air requirements, she said.

Although a gas-fired plant would have fewer permanent employees, 30-40 people compared to Allen's 160 or so, either alternative would involve hundreds of millions in construction spending, creating numerous jobs.

TVA spent $474 million on the recently opened Lagoon Creek gas-fired plant near Brownsville and has projected an $820 million tab for a natural gas plant in East Tennessee.

One design under study for Memphis carries a price estimate of $700 million.

Jerry Collins, president of Memphis Light, Gas and Water Division, TVA's largest customer, said, "We have been working hand in hand with TVA on this project.

"The important thing is the power will be generated in Shelby County. Certainly TVA has some challenges with its older coal-fired plants, and there's currently an abundance of natural gas in the U.S."

"It's an economic issue, and TVA has to look at the economics and make a decision that best benefits its customers, and I believe TVA will do that," Collins said.

Allen, built by MLGW in the 1950s, then sold to TVA in the 1980s, has peak output of 753 megawatts, which can supply more than half of Memphis' electricity.

A switch from coal to natural gas would be a boon for the environment, but it would take a bite out of the port's commodity totals. Natural gas would be delivered by pipeline.

Barges brought 2.9 million tons of coal to the port to supply the Allen plant in 2008, making it the No. 2 commodity behind petroleum, port interim executive director Randy Richardson said.

"The benefit of the new (gas-fired) plant would be more so to the whole community, particularly, in my opinion, in terms of air quality," Richardson said.

TVA has installed scrubbers to remove sulfur dioxide from emissions at several coal-fired plants, Stone said.

Another environmental issue is disposal of fly ash, the waste left after coal is burned. Ash from Allen Fossil Plant is stored in containment basins adjoining the plant, and some of it has been used to build up low-lying land in Frank C. Pidgeon Industrial Park.

The EPA is considering new regulations on disposal of fly ash in response to concerns of environmental groups.

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