Tennessee Valley Authority (TVA)


Tennessee Valley Authority (TVA) is the biggest government-owned utility [PDF] in the U.S. TVA was started as a means of modernizing the Tennessee region during the Depression. As a federal entity, TVA receives no support from taxes and all profits it earns are reinvested back into TVA’s utility operations. Unlike most utilities, state regulators have no control over TVA.

TVA creates about 46% of its power from fossil fuels. Six of TVA’s 11 plants use coal mined through mountaintop removal. The remaining 5 purchase from companies that practice mountaintop removal, even if mountaintop removal coal is not used by the plants.

Collectively, TVA’s coal plants cause $6 billion worth of health impacts per year, including costs associated with asthma, heart attacks and death. TVA is the 5th worst utility for emitting carbon dioxide in the nation and the 15th worst in the world.


Kingston coal ash spill:

An overarching issue at TVA has been the December 2008 coal ash spill at Kingston Fossil Plant in Harriman, Tennessee. The collapse of a containment pond unleashed 5.4 billion cubic yards of remnants from the burning of coal, destroying homes in the process. The spill was the largest of its kind in U.S. history.

TVA’s attempt to recover from the spill has been a not untroubled process. A June 2009 report from a TVA-hired consultancy, AECOM [PDF], concluded that the spill had been caused by, among other things, a thin layer of ash sludge “slimes” that had formed in one section of the pond. The layer caused the impoundment to shift with time until it finally broke forth. TVA engineers never detected the layer in their inspections, and a TVA lawyer later likened the situation to an airplane crew who would never detect an internal wing crack no matter how thoroughly they had conducted an inspection.

But the report was rebuked the following month by TVA’s Office of the Inspector General [PDF], which wrote that the report failed to investigate such things as the possible role of TVA’s management in the disaster, and that it “overemphasized” the role of the slimes layer. “TVA management handled the root cause analysis in a manner that avoided transparency and accountability in favor of preserving a litigation strategy,” the Inspector General reported.

Additionally, it is noteworthy that AECOM, the consultant firm hired by TVA, is an “associate member” of the American Coal Ash Association, a trade association whose stated mission is to “advance the management and use of coal combustion products in ways that are environmentally responsible, technically sound, commercially competitive, and supportive of a sustainable global community.”

In same month TVA’s inspector general criticized the AECOM report, another TVA-hired consultancy, McKenna Long & Aldridge, found that “the necessary systems, controls, standards and culture were not in place” to prevent the spill [PDF]. McKenna Long & Aldridge is not a member of the American Coal Ash Association.

Damages from the Kingston spill ran up to $1 billion, and despite claims by the company in 2010 that the clean-up had left the spill site “better than it was before the spill”, scientific work from that same year suggested the area remained adversely affected.

TVA’s liability for the spill came to a head during a trial in September and October of 2011. During the trial, witness testimony described the irresponsible practices that led to the disaster. One senior manager described the perfunctory attitude toward scientific monitoring at the impoundment, with unqualified employees collecting data for an uncertain destination. An outside expert also testified that TVA personnel were poorly prepared to carry out inspections. A TVA engineer who was conducting a study of the impoundment admitted that he removed the word “immediately” from a company report when referring to the need for repairs. He said the idea came from TVA’s public relations department. The engineer also testified that—in an effort to avoid confusing his colleagues—he actively removed data readings taken during the time surrounding the spill.

A decision on the September-October trial is pending as of this profile’s publication. A trial for another group of lawsuits is scheduled for November 2011.  

Coal Ash Regulation:

In June of 2010, the EPA proposed the first-ever federal regulations on coal ash storage. The proposal put forth the possibility that coal ash, previously determined as non-hazardous by the EPA, would be treated as “special” (i.e. hazardous) waste. After gathering public comments on the proposal, EPA head Lisa Jackson indicated in March that a final coal ash standard would not be revealed until at least 2012.

TVA owns a total of 24 coal ash ponds. After self-reporting in 2009 that the company had nothing but low hazard impoundments, TVA later reported that 4 of its impoundments qualified as high-hazard, with the majority of remaining sites labeled significant hazard. After TVA implemented adjustments to improve safety at its impoundments, a 2010 report by Stantec Consulting Services concluded that only one of TVA’s coal ash ponds were high hazard, the formerly high hazard impoundments having been reduced to significant hazards [PDF]. However, the environmental group Earthjustice noted that “the Kingston ash pond was never identified as hazardous before it collapsed.” It is also noteworthy that Stantec is an associate member of the American Coal Ash Association.

In a 2009 interview, TVA president and CEO Tom Kilgore declined to comment on EPA’s plans to regulate coal ash, citing the 2008 spill. Another TVA executive quickly added that the company supports “a national standard because right now there’s not one there. And that would certainly be a benefit to everyone”.

TVA, similar to AECOM and Stantec, is a utility member of the American Coal Ash Association. ACAA also has a front group, Citizens for Recycling First [PDF]. The group was formed in February 2010, and is headed by John Ward, who until 2011 volunteered as chairman of the Government Relations
Committee at the American Coal Ash Association [PDF].

Nuclear power:

TVA views nuclear power [PDF] as a key factor to becoming a cleaner company. TVA CEO Tom Kilgore is a known proponent of nuclear energy, and is a board member of the Institute of Nuclear Power Operations, as well as an executive committee member of the Nuclear Energy Institute. Most recently, TVA has restarted Unit 1 at Browns Ferry in Alabama and made plans to complete Unit 2 at Watts Bar and Unit 1 at Bellefonte.

At its board meeting in August 2011, TVA approved the revitalization of Bellefonte 1, a nuclear reactor that was licensed in 1974, but was stopped in 1988 due to reduced electricity needs. TVA estimates the reactor will be online by around 2020.

More than $1.6 billion in today's money has been spent on Bellefonte 1’s construction and maintenance thus far, with the costs of completion estimated at $4.9 billion. One industry analyst referred to such costs as potentially “crazy,” while Kilgore told the New York Times: “I can’t forecast out 8 or 10 years. We just know when we get there, Bellefonte 1 is a good economic proposition.”

Bellefonte 1 also faces engineering risks. The reactor site is surrounded by easily fracturable limestone formations. It is also located in an earthquake zone [PDF].

The completion of Watts Bar 2 has also raised controversy. Supposed to be finished by 2012, the project was extended by the TVA Board to 2015, with $1.5 to 2 billion in additional funding. That brought the cost for finishing the reactor to up to 80% more than the initial estimate. Former TVA board chair David Freeman was appalled, saying "I feel almost like Rip Van Winkle, waking up from a long sleep, and here we're still working on Watts Bar."