TVA’s CEO Bill Johnson said today the utility is studying proposed new federal rule changes aimed at cutting carbon emissions, but cutting emissions is a trend TVA has been following since 2005.
Johnson said in a conference call this afternoon that TVA has cut its carbon dioxide emissions by about 30 percent since 2005 and expects a 40 percent reduction by 2020. TVA said by 2020, its carbon emissions will be about half of what they were at the 1995 peak.
Coal plants are considered the chief sources of carbon emissions and the proposed EPA plan looks for an overall carbon emissions cut of 30 percent by 2030, using 2005 as the starting point.
In a formal statement TVA said it supports “achieving environmental goals in a manner that allows for efficient operations, affordable electricity rates and reliable generation across the Tennessee Valley to meet the needs of our customers.”
While TVA has been cutting coal emissions and shutting down coal plants, coal remains the Tennessee Valley Authority’s largest fuel source, accounting for 43 percent of its power generation, according the utility’s last annual report. Nuclear generation is second at 36 percent of TVA’s generation.
Johnson said coal will remain important to TVA, but he expects nuclear power generation and hydro-dam generation to play a larger role, with coal generation being reduced to 20-25 percent of TVA’s overall energy generation by 2020.
He said TVA’s plans for the next couple of years are unlikely to be affected by the proposed rule changes, but it is too early to assess the impact on the longer term outlook.
Johnson said TVA is studying the regulations and expects to participate in the comment period that is open for the next couple of months. The final rules are scheduled to be put in place a year from now, but a political fight is looming and the U.S. Chamber of Commerce has predicted the proposals would have a sharply negative impact on the U.S. economy.
TVA has previously been involved in litigation over efforts to regulate carbon emissions. Johnson said he doubts the utility would join a lawsuit to block the new regulations under consideration. A 2011 settlement over emissions included TVA announcing it was phasing out some coal units and spending more than $1 billion on scrubbing, pollution controls.
With nuclear power expected to play a larger role in future generation, Johnson was asked about TVA’s plans to resume work on the never-completed Bellefonte plant in Hollywood. Johnson said Bellefonte’s construction was scaled back in 2012 due to slowed energy demand among TVA customers.
Johnson said when the TVA board decided to move forward and resume work at Bellefonte – in 2011 — TVA was seeing about 3 percent annual increases in power demand. Given a loss of a major industrial customer, increased energy efficiency and the effects of the recession, current demand is less than 1 percent.
“Obviously this proposal makes nuclear more attractive, the issue on Bellefonte is the greater need for large baseload generation, when that demand will come,” Johnson said.