[Federal Register Volume 60, Number 163 (Wednesday, August 23, 1995)]
[Notices]
[Pages 43830-43832]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-20860]



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TENNESSEE VALLEY AUTHORITY


Operation of Watts Bar Nuclear Plant Unit 1

AGENCY: Tennessee Valley Authority.

ACTION: Issuance of record of decision.

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SUMMARY: This notice is provided in accordance with TVA's procedures 
implementing the National Environmental Policy Act. TVA has determined 
that to meet the increasing need for electric power in the TVA region, 
it should continue with its plans to operate its Watts Bar Nuclear 
Plant (WBN) Unit 1 in 1996. On July 10, 1995, TVA announced that it had 
decided to adopt a Final Supplemental Environmental Impact Statement 
(FSEIS) on operation of WBN. 60 FR 35,577. This FSEIS was issued by the 
Nuclear Regulatory Commission in April 1995. Notice of the availability 
of the adopted FSEIS was announced by the Environmental Protection 
Agency at 60 FR 35393.

FOR FURTHER INFORMATION CONTACT: Jon M. Loney, Manager, Environmental 
Management Staff, Tennessee Valley Authority, 400 West Summit Hill 
Drive, WT 8C-K, Knoxville, Tennessee 37902, (615) 632-2201.

SUPPLEMENTARY INFORMATION: TVA is the electric supplier to an 80,000-
square mile area containing parts of seven States. It and the 
distributors of energy, which TVA generates, serve about 7.5 million 
people. TVA currently has 25,600 megawatts of generating capacity on 
its power system. This includes coal-fired units, nuclear units, 
hydroelectric units, combustion turbines, and pumped storage hydro 
units.
    TVA's WBN is located in Rhea County, Tennessee, approximately 80 
kilometers (50 miles) northeast of Chattanooga, Tennessee. The site is 
located adjacent to TVA's Watts Bar Dam Reservation at Tennessee River 
Mile 528. WBN is a two unit pressurized water reactor nuclear plant. 
Each of its units has a net electrical output 1,160 megawatts. In 
August 1970, TVA proposed to construct and operate WBN. After 
completing an environmental impact statement, TVA decided to proceed 
with the plant in 1973.
    Completing and licensing of the plant has been delayed. The delay 
was due in part to installation of modifications that NRC ordered for 
nuclear plants following the 1979 incident at the Three Mile Island 
nuclear plant. In addition, the need for power in the TVA region and 
elsewhere in the country dramatically changed from the need forecasted 
in the early 1970s. Plant licensing was further delayed in the mid-
1980s while TVA resolved a number of WBN-specific safety concerns. To 
respond to these concerns, TVA implemented a series of corrective 
actions and plant modifications to prepare WBN Unit 1 for operation. 
Fuel is now scheduled to be loaded in WBN Unit 1 in late 1995 with 
commercial operation expected in Spring 1996. TVA has determined that 
Unit 1's generation is needed in 1996 and has decided not to change its 
earlier decision to proceed with the unit.
Under TVA's Load Forecasts, WBN Unit 1 is Needed

    The determination that WBN Unit 1 is needed in 1996 is based on 
TVA's forecasts of future power needs in the region that it serves. 
These forecasts rely on national and regional economic data and are 
produced through the use of state-of-the-art computer models. TVA 
prepares three types of forecasts of future power demands--a low-, 
medium-, and high-load forecast. There is substantial uncertainty in 
forecasting future power needs. Using a range of forecasts helps 
address this uncertainty.
    The high-load forecast is designed to project a level of future 
energy demand that has 90-percent probability of not being exceeded 
(there is only a 10-percent chance that the forecast would be too low 
and that the demand would be greater). The medium-load forecast has a 
50-percent probability. The probability for the low-load forecast is 10 
percent--there is a 90-percent chance that the demand for energy in the 
TVA region would be greater than this estimated level.
    Under all of TVA's current load forecasts, there is a need for 
additional energy resources in the immediate future to meet the demand 
for energy in the TVA region. Under TVA's medium-load forecast, there 
is a need in 1996 for the capacity of WBN Unit 1, as well as an 
additional 850 megawatts. Under TVA's high-load forecast, there is a 
need for 1,500 megawatts plus WBN Unit's capacity. Only under the low-
load 

[[Page 43831]]
forecast is there a slight surplus of capacity in 1996 of 300 megawatts 
with WBN Unit 1 operating.
    TVA has received comments that its load forecasts are too high and 
the need for WBN Unit 1 has been questioned. TVA acknowledges that load 
forecasting is inherently uncertain and that future demand in the TVA 
region may be less than TVA's forecasts. However, since 1985, TVA's 
forecasting methodology has produced forecasts that have been within 
plus or minus 5 percent of actual demand. This is better than the 
utility industry standard of plus or minus 8-percent accuracy.
    Because of concern about the accuracy of its forecasts, TVA asked 
Barakat & Chamberlin, Inc., a nationally-recognized expert in energy 
resource planning, to review TVA's forecasting approach in 1991. 
Barakat & Chamberlin concluded: ``on a comparative basis, TVA's 
forecasting procedures compare very favorably with the best-practice 
procedures in the United States utility industry.''
    More recently, in connection with the preparation of its integrated 
resource plan and programmatic environmental impact statement, Energy 
Vision 2020, TVA asked George McCollister with Spectrum Economics, 
Inc., to review TVA's 1994 load forecast. Dr. McCollister is a load 
forecasting expert and was retained to provide independent advice to 
members of an outside stakeholders review group who oversaw preparation 
of Energy Vision 2020. Dr. McCollister suggested some improvements to 
TVA's load forecasting methodology but concluded: ``TVA uses state-of-
the art models to forecast electric sales to residential and commercial 
customers in its power service area. TVA has acquired vast amounts of 
data and conducted many studies to support these models. TVA produces 
excellent documentation for its economic forecast, and perhaps does the 
best job of any utility in the country in forecasting the range of 
uncertainty in both its economic and electric load forecasts. TVA is 
highly commended for its achievements.''
    It takes many years to plan, permit, and construct new energy 
sources or to plan and deploy energy conservation measures (demand-side 
management programs). Years before the demand for energy arises, 
electric utilities must make decisions about how to meet forecasted 
demands. If no decisions are made or if the utility's forecasts are too 
low, those needing electric service in the future may not get it. TVA 
decided years ago that WBN would be needed to meet future demands on 
its system. Its current forecasts show that WBN Unit 1 is needed next 
year, and TVA chooses to rely on these forecasts and its experts. Even 
under the forecasts produced by those questioning TVA's forecasts, 
there is still a need for additional energy resources to meet energy 
demands in the TVA region. WBN Unit 1 would meet those needs while 
offseting generation from the existing coal-fired system, thus reducing 
environmental effects.

Alternatives Considered

    TVA considered a number of alternatives to constructing and 
completing WBN in its 1972 final environmental impact statement (FEIS). 
Among those alternatives were construction of coal-fired units, 
hydroelectric units, gas-fired units, and oil-fired units. These 
alternatives were deemed not feasible, more costly, and/or more 
environmentally detrimental than construction and operation of WBN. TVA 
also considered purchasing firm power from neighboring utilities but 
concluded that its neighbors would not be able to supply sufficient 
firm power to meet TVA's needs and that the environmental impacts of a 
neighboring utility generating that power would like be similar to or 
greater than the impacts associated with operating WBN.
    WBN Unit 1 is not essentially complete and the alternatives 
available to TVA in light of the status of the unit and need for it are 
limited. TVA considered continuing with the unit (the No-Action 
Alternative because it involves not changing TVA's current course of 
action), delaying completing the unit and purchasing power, or 
canceling the unit and purchasing power. TVA concluded that continuing 
with WBN Unit 1 was the most cost effective and environmentally 
preferable alternative among the viable alternatives remaining to it.
    TVA has invested approximately $6.4 billion in Unit 1 and the 
facilities it shares with Unit 2. Since these costs have already been 
incurred, changing TVA's course of action and deciding not to operate 
the plant would not avoid the costs. TVA would still have to recover 
these costs in the rates it charges for its electricity. If TVA does 
not complete the unit, it would have to write off approximately $200 
million to $600 million in costs annually, depending on the period for 
the write-off. Operating the unit would allow TVA to begin earning a 
return on the agency's investment in the form of generation from the 
unit and allow TVA to recover the costs of building the facility over a 
longer period of time (40 years versus the traditional write-off period 
of 10 years).
    Compared to purchasing power or meeting future demand with coal-
fired generation or combustion turbine units, operation of WBN Unit 1 
will be more economical. WBN Unit 1's operating costs are projected to 
be approximately 1.7 cents/kwh. The operating costs of alternative 
generating sources range from 2.0 to 6.0 cents/kwh.
    It is difficult to project the potential environmental impacts 
associated with purchasing power because there are a number of 
different kinds of sources that could provide this power. If it comes 
from a neighboring utility system, TVA's analyses indicate that the 
power is likely to be produced by coal-fired units because these are 
the units that are economically marginal to operate (the utility will 
be operating other, lower-cost generation to meet its own needs). As 
explained in TVA's 1972 FEIS, coal-fired units result in substantially 
larger amounts of air pollution than would operation of WBN Unit 1. 
Gas-fired units would also produce more air emissions pollution. As a 
closed-cycle plant, WBN Unit 1 is also likely to produce fewer water 
emissions than a coal-fired unit or another nuclear unit which is open 
cycle.
    The environmental consequences of completing and operating WBN Unit 
1 are set out in TVA's 1972 FEIS and its adopted 1995 FSEIS. Most of 
the impacts associated with Unit 1 result from constructing the unit 
and have already been experienced. The impacts associated with actually 
operating the unit are relatively minimal. They include: (1) Releases 
of small quantities of radioactivty to the air and water; (2) release 
of minor quantities of heat and nonradioactive waste waters to 
Chickamauga Reservoir; and (3) release of significant quantities of 
heat and water vapor from the plant's cooling towers to the atmosphere. 
Conversion of the site from agricultural use to an industrial use has 
largely occurred with the construction of the plant.
    TVA also considered as a possible, but nonviable, alternative the 
deployment of energy conservation programs to reduce the demand that 
WBN Unit 1 would serve. There are a large number of these programs that 
could be deployed in the TVA region. However, it takes three to five 
years to put such programs in place and to begin to achieve noticeable 
energy savings. The combination of sufficient programs to offset Unit 
1's capacity is estimated to cost approximately 7.0 cents/kwh, well 
above Unit 1's operating costs. It is, therefore, not feasible to 
deploy sufficient energy conservation programs in time to meet the need 
in 1996; and, 

[[Page 43832]]
even if such programs could be deployed in time, they would cost much 
more than operating WBN Unit 1.

Mitigation and Monitoring Measures

    The 1972 FEIS and the 1995 FSEIS identify a number of mitigation 
and monitoring requirements. These have either been incorporated in the 
plant's construction permit or National Pollutant Discharge Elimination 
System (NPDES) permit and, as appropriate, are expected to appear as 
conditions in the operating license issued by NRC for the unit.

    Dated: August 11, 1995.
Mark O. Medford,
Vice President, Engineering and Technical Services.
[FR Doc. 95-20860 Filed 8-22-95; 8:45 am]
BILLING CODE 8120-01-M