Facing the future

A dozen people threw nets and reeled fishing lines around the peaceful Cane Creek inlet of the Tennessee River on a recent Saturday afternoon in Colbert County.

Fishing enthusiasts in groups of two and three trapped small bait that was then used to catch the real prize - catfish.

"It's a good place to fish," said Albert Armstead, of Cherokee, who had already caught one catfish that afternoon.

At the backdrop of this peaceful fishing hole are the smokestacks of Colbert Fossil Plant, one of 11 coal-fired plants operated by the Tennessee Valley Authority. A crew could be seen working in the crosshatch of electrical lines on this sunny day to repair pipes that transmit electricity from the plant to businesses and homes in the Shoals.

The plant is a large part of present-day TVA.

The public utility, which celebrates its 75th anniversary this week, now must look toward the future, though. And the challenges awaiting are huge.

TVA officials must determine how to best use, or possibly eliminate, coal-fired plants like Colbert Fossil Plant. They must further examine how nuclear power plants and renewable energy fit into the future as well as how the Muscle Shoals reservation will fit into future plans. There's also a $24 billion debt, shoreline management and economic development issues to be handled.

At the same time, they must continue what they do best. TVA is the nation's largest public utility and is best known for its relatively inexpensive electricity. The inexpensive electricity is a boon for attracting industries that many say is essential for economic growth in the Shoals.

Getting a handle on future electricity demands will atop the priority list. Delivering cheaper power and also answering criticism from environmentalists.

Generating electricity through coal-fired and nuclear plants is a bane for environmentalists who criticize TVA's track record of coal pollution and wasteful spending on risk-prone nuclear technologies.

TVA faces significant challenges and is at a crossroads that it last encountered in the 1970s, when energy costs skyrocketed and debt weighed down the agency as it pushed for increases in conservation, efficiency and nuclear power.

Energy demand in the Tennessee Valley grows 1 percent each year. That might not seem like much, but if the growth remains constant, in the next 10 to 15 years TVA officials estimate it will need 6 gigawatts to 12 gigawatts more electricity to accommodate up to 170,000 households. Already, TVA purchases an eighth of its power at higher rates.

TVA's energy production from nuclear sources recently increased with the restart of the Unit 1 reactor at Browns Ferry Nuclear Plant near Athens.

Howard Sullivan has lived nine years in the shadow of the Colbert Fossil Plant, which is on a certified wildlife habitat reserve. Sullivan has lived nearby for 35 to 40 years.

When asked what he knew about the plant, Sullivan said, "I know they make power; they make electricity. I know a lot of people work over there.

"It used to give off a scent years ago, but they changed that. It's real clean now compared to the way it used to be."

Sullivan wasn't aware that the coal plant released nearly 4.6 million pounds of toxic chemicals in 2005, a swill that included 22,370 pounds of ammonia, 22,155 pounds of lead and 283 pounds of mercury, all potentially dangerous to human health. The data comes from an annual report mandated by the Environmental Protection Agency required by utilities, chemical plants and other industries.

"I'm 58 years old; they haven't made me sick; my problem is diabetes," Sullivan said.

Environmentalists say burning coal is one of the dirtiest methods to generate electricity and should be phased out.

With its aging fleet of coal plants, TVA has said it has no plans to build new plants until newer technology permits cleaner coal burning.

In 2007, a judge ruled that TVA violated clean-air regulations more than 3,000 times over a three-year span at the Colbert Fossil Plant.

Last year's decision stemmed from a 2002 lawsuit filed by environmental groups Sierra Club and the Alabama Environmental Council that claimed the plant exceeded federal standards of visible smokestack emissions.

TVA is preparing to answer those allegations in court.

Environmentalists also worry about invisible pollution such as carbon dioxide, a greenhouse gas linked to global warming.

"From a climate risk perspective, the TVA coal plants are contributing to this planet's most serious problem," said Ulla-Britt Reeves, regional program director for the Southern Alliance for Clean Energy, which follows coal-derived energy.

TVA has several technologies in use to clean up coal-fired green house gases and pollution, including scrubbing down sulfur and catalyzing nitric oxide, one reason why Sullivan smells the coal plant less. However, technology doesn't exist to reduce or sequester carbon dioxide out of the atmosphere.

At Colbert Fossil Plant, carbon dioxide production has increased from an average of 7.1 million tons per year in the 1990s to 8 million tons per year in the early 2000s. TVA's carbon dioxide levels have increased across the board.

Reeves argued that the best way for TVA to combat pollution is to phase out its aging coal facilities instead of putting them on life support.

"There is no such thing as clean coal," Reeves said.

TVA has a different take on carbon from coal-fired plants.

"Our plan on carbon is not to construct more coal (plants) until the technology is there to remove the carbon and sequester it," said TVA President and Chief Executive Officer Tom Kilgore. "In the meantime, adding more nuclear, adding gas (fired plants), which is less carbon intensive, is our way of reducing our carbon emissions."

TVA will be tested on its pollution track record again in July at the state level when a trial is expected to begin in North Carolina. The state sued TVA, accusing it of polluting the Smoky Mountains.

TVA plans to install $597 million in pollution controls to the coal-fired power plant that is under scrutiny in North Carolina.

TVA and the entire energy industry is undergoing a nuclear renaissance that includes TVA's restart last year of one of its reactors at Browns Ferry, another planned restart at Watts Bar near Spring City, Tenn., and applications to complete two reactors at Bellefonte in Hollywood, near Scottsboro.

TVA's renaissance has had a rocky start with Browns Ferry, including $90 million in unexpected construction costs, five unplanned safety shutdowns in less than a year and voiced concerns from the Nuclear Regulatory Commission.

The nuclear resurgence also has environmentalists worried, especially in light of TVA's history with nuclear power.

"We feel like it's a broken record," said Sara Barczak, safe energy director for Southern Alliance for Clean Energy, a non-profit advocacy group. "The problem is we are going down a path that has happened with TVA before, a big financial debacle."

During the last nuclear boom in the 1970s, TVA overestimated its energy needs and accumulated billions of dollars in debt investing in nuclear reactors that suffered from increased construction costs. At one point, TVA had orders for 17 nuclear plants.

"I'm not worried about history repeating itself," Kilgore said. "We are really bullish on nuclear power. We operate six units now. We think adding a unit about every five years is the right way to add to our base load capability."

The latest nuclear addition was the restart of Browns Ferry's Unit 1 reactor, which began operation in 1974. The reactor has a storied past.

There was a fire at Browns Ferry on March 22, 1975, caused when an electrician who was using a candle to check for air leaks in a room of cables accidently ignited combustible foam rubber. The fire burned for hours and disabled the emergency core cooling system for Unit 1. The fire caused $100 million in damages and nearly caused a nuclear meltdown comparable to Three Mile Island.

Unit 1 reopened the same year of the fire, but TVA shut down all three reactors at Browns Ferry in 1985, citing safety concerns. Unit 2 reopened in May 1991 and Unit 3 in November 1995.

The plant underwent a $1.8 billion renovation that lasted five years and, after 22 years of inactivity, the Unit 1 reactor began operating in May 2007.

The restart was a boon to the Shoals as it provided jobs, in most cases temporary. Because of five unplanned safety-related shutdowns, the Nuclear Regulatory Commission will further inspect the reactor in October.

TVA also spent $6.3 billion on reactors at Watts Barr and Bellefonte that never produced a kilowatt of power.

TVA recently agreed to restart one reactor at Watts Bar plant near Spring City, Tenn., after its construction stopped in 1988. Along with energy consortium NuStart Energy Development LLC, it chose to complete two new nuclear reactors at Bellefonte.

The moves also come at a time when construction costs nationally have increased and the economy has become sluggish.

"I am very concerned about the time it takes to build a nuclear unit and what can happen to commodity prices like steel and concrete as we are designing and licensing a nuclear plant," Kilgore said. "Because of that, you always have to keep some flexibility in your plan.

"Even with all the commodity price runups that we've had, they're still cheaper than solar, cheaper than wind and they're more consistent than renewables out there that aren't available 24 hours a day. Most of us like to use electricity whenever we flip the switch."

That cost concern is shared by others.

"We don't even have a sense of how much they are going to cost," said Allison Fisher of Public Citizen, a national public interest non-profit.

Many experts say that nuclear reactors will likely cost $5 billion to $12 billion per plant. Even nuclear plants built between the 1960s and 1980s cost three times the expected price, according to the Congressional Budget Office.

For years, critics of TVA and nuclear power have pointed out federal subsidies that help influence the true costs of nuclear reactors.

"They cannot fund this technology, they need every bone that gets thrown their way; at this time they have everything but the pinky finger," Fisher said.

The Energy Policy Act of 2005 stipulates incentives for the first six nuclear reactors that come on board, which has caused a race of about 30 reactors that are chasing billions of dollars in loan guarantees and access to federal funds.

Kilgore said that money doesn't benefit TVA, however. Kilgore expects Watts Bar and Bellefont will be built without exceeding TVA's $30 billion debt limit.

Another concern with nuclear power is the pollution it generates, namely plutonium that remains radioactive for thousands of years and can become a weapons ingredient.

TVA stores its used fuel in the spent fuel pool on site for 10 years and then moves it into dry casks in secure areas on the plant site.

"Eventually the country, not just TVA, has to face up to what we're going to do with this," Kilgore said.

Currently, the United States does not recycle nuclear fuel, although several agencies are experimenting with pilot programs, in contrast to France, which has recycled the fuel for decades.

TVA and the U.S. Department of Energy recently announced a conceptual study of how a fuel reprocessing and recycling plant might work. Proponents of the plan have advocated that such a plant be built in north Alabama.

Flashback to 1977 when President Jimmy Carter addressed the nation's energy crisis wearing a cardigan sweater. Energy conservation and alternative energy sources like solar and wind also came into fashion as oil prices hit record highs, drivers suffered at the gas pumps and a recession hit the nation.

If it sounds familiar, that's because it is, although the current president favors cowboy boots instead of a sweater.

TVA is undergoing a public relations blitz to raise awareness about efficiency as a way to deter increased energy demands. In the next four years, TVA aims to reduce electrical demand the equivalent to the generating capacity of one nuclear reactor.

"It seems like a conflict with themselves to sell more power and yet say that they want people to conserve energy and efficiency," said Michael Churchman, executive director for the Alabama Environmental Alliance in Birmingham.

The Southwest region, however, lags behind the nation in efficiency and consumes the most electricity per capita in the nation.

TVA's area also lags behind renewable energy, which includes solar, wind, hydroelectric, biomass, and landfill gas.

As of last year, 26 states and Washington, D.C., adopted various renewable energy standards, though none of the seven TVA states were included on the list. For example, Florida, just outside the TVA boundary, has promised 20 percent of its energy will come from renewable sources by 2020.

One percent of TVA's power comes from renewable sources.

TVA introduced a program, now called the Green Power Switch, where residents can pay extra on their bill to include renewable energy sources. In eight years, 12,259 households have signed up, a sliver of the 8.8 million customers TVA serves.

"TVA's mission is not to use more renewable power or have more renewable power; our mission right now in concert with everything else is to have less effect on global climate change," Kilgore said. "If renewables can do that, good, if we can do it another way, then that's what we're going to do."

Renewables may be a tough sell in the region. The cost of solar-generated electricity is more than four times the price TVA customers pay, according to data from Solarbuzz, a multinational solar energy research and consulting company.

Also, many in the Tennessee Valley don't have the motivation to change their consumption habits, according to TVA research.

"The target ought to be about the carbon impact, not the percentage of renewables," Kilgore said.

For many observers today, TVA acts unseen in the background much like the electricity it produces. The Muscle Shoals reservation, originally created for World War I nitrate factories and where much of TVA's fertilizer research occurred, is one remnant of TVA's past, with its nature trails in the north and former industrial sites in the south.

Most of the reservation, what was congressionally mandated to be TVA headquarters, has remained untouchable for development, but that may change.

TVA recently started discussions with local government officials to determine if certain sites south of Reservation Road could be turned over to the community for development.

"We're starting the dialog with the communities now to see if they are interested in moving forward with more industrial type development in that area," said Bridgette Ellis, senior vice president for TVA's office of environment and research.

The nature trails and park spaces throughout the reservation would not be part of the discussion, Ellis said.

There is some doubt, however, that the reservation land will ever change from federal to local hands.

"It's kind of like the Alabama Legislature wanting a new State House. I think the first time I heard of that was in 1975," said David Bronner, chief executive officer for the Retirement Systems of Alabama. He is considered a top economic development figure in Alabama.

"It's very easy in big government organizations for people to throw up ideas and then they die," he said.

Local environmentalists are also skeptical about the move to develop the reservation land and say that economic development is just one option of many available.

"What if TVA just met with environmentalists and asked, 'How would you like to make this into a wildlife sanctuary?' and left the other guys out?" said Nancy Muse, vice president of the Shoals Environmental Alliance that opposes potential commercial development of the reservation.

"Developing land does not equal economic success. That is an urban myth. Look at the Southgate Mall sitting there waiting for something good to happen," she said referring to the Muscle Shoals mall that saw a decrease in stores, and shoppers, after Wal-Mart moved from the mall in the early 1990s.

For now, a small cluster of red bricked buildings remains on the TVA reservation, fenced away from public access. The village, once bustling with workers manufacturing and researchers formulating fertilizers, now acts as storage and workshop space for TVA.

One low-lying building boarded up with green corrugated fiberglass panels stands as a reminder of TVA's formation and possibly part of the reservation's future.

The white granite cornerstone of the building reads March 13, 1918, and is the last remaining building of the original nitrate factories. Built to produce bombs during wartime and fertilizer during peacetime, the factories became the flash point of controversy of how Congress could redevelop a costly endeavor.

The project, that included the factories and Wilson Dam, eventually gave way to TVA, an experimental federal utility that helped transform the Tennessee Valley.

Now TVA officials, including the agency's nine member board of directors, are charged with plotting the next 75 years.