[Federal Register Volume 76, Number 129 (Wednesday, July 6, 2011)]
[Notices]
[Pages 39470-39472]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-16840]


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TENNESSEE VALLEY AUTHORITY


Integrated Resource Plan

AGENCY: Tennessee Valley Authority.

ACTION: Issuance of Record of Decision.

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SUMMARY: This notice is provided in accordance with the Council on 
Environmental Quality's regulations (40 CFR parts 1500 to 1508) and 
TVA's procedures for implementing the National Environmental Policy Act 
(NEPA). TVA has decided to adopt the preferred alternative in its final 
environmental impact statement (EIS) for the Integrated Resource Plan 
(IRP). The notice of availability (NOA) of the Final Environmental 
Impact Statement for the Integrated Resource Plan was published in the 
Federal Register on March 11, 2011. The TVA Board of Directors accepted 
the IRP and authorized staff to implement the preferred alternative at 
its April 14, 2011, meeting. This alternative, the Preferred Planning 
Direction, will guide TVA's selection of energy resource options to 
meet the energy needs of the Tennessee Valley region over the next 20 
years. The energy resource options include new nuclear, natural gas-
fired, and renewable generation, increased energy efficiency and demand 
reduction, decreased coal-fired generation, and new energy storage 
capacity.

FOR FURTHER INFORMATION CONTACT: Charles P. Nicholson, NEPA Compliance 
Manager, Tennessee Valley Authority, 400 West Summit Hill Drive, WT 
11D, Knoxville, Tennessee 37902-1499; telephone 865-632-3582, or e-mail 
[email protected]; Randall E. Johnson, IRP Project Manager, Tennessee 
Valley Authority, 1101 Market Street, LP 5D-C, Chattanooga, Tennessee 
37402; telephone 423-751-3520, or e-mail [email protected].

SUPPLEMENTARY INFORMATION: TVA is an agency and instrumentality of the 
United States, established by an act of Congress in 1933, to foster the 
social and economic welfare of the people of the Tennessee Valley 
region and to promote the proper use and conservation of the region's 
natural resources. One component of this mission is the generation, 
transmission, and sale of reliable and affordable electric energy. TVA 
operates the nation's largest public power system, producing 4 percent 
of all the electricity in the nation. TVA provides electricity to about 
9 million people in an 80,000-square mile area comprised of most of 
Tennessee and parts of Virginia, North Carolina, Georgia, Alabama, 
Mississippi, and Kentucky. It provides wholesale power to 155 
independent power distributors and 56 directly served large industrial 
and Federal customers. The TVA Act requires the TVA power system to be 
self-supporting and operating on a non-profit basis and directs TVA to 
sell power at rates as low as are feasible.
    Dependable generating capacity on the TVA power system is about 
37,200 megawatts (MW). TVA generates most of this power with 3 nuclear 
plants, 11 coal-fired plants, 9 combustion-turbine plants, 3 combined 
cycle plants, 29 hydroelectric plants, a pumped-storage facility, and 
several small renewable facilities. A portion of delivered power is 
provided through long-term power purchase agreements. TVA has generated 
an annual average of about 153,100 gigawatt hours (GWh) of power in 
recent years. The major sources for this power were coal (52 percent), 
nuclear (28 percent), hydroelectric (6 percent), and natural gas (1 
percent). Other sources comprised less than 1 percent of TVA 
generation.
    The recently completed IRP updates TVA's 1995 IRP, entitled Energy 
Vision 2020. Consistent with Section 113 of the Energy Policy Act of 
1992, the IRP planning process evaluated a range of existing and 
incremental resources, including new power supplies, energy 
conservation and efficiency, and renewable energy resources in order to 
provide TVA's customers adequate and reliable service at the lowest 
system cost.

Future Demand for Energy

    TVA uses state-of-the-art energy forecasting models to predict 
future demands on its system. Because of the uncertainty in predicting 
future demands, TVA developed high, medium, and low forecasts for both 
peak load (in MW) and annual net system energy (in GWh) through 2029. 
Peak load is predicted to grow at an average annual rate of 1.3 percent 
in the medium-growth Spring 2010 Reference Case, decrease slightly and 
then remain flat under the low-growth forecast, and grow at an annual 
rate of 2.0 percent under the high-growth forecast. Net system energy 
is predicted to grow at an average annual rate of 1.1 percent in the 
medium-growth case, decrease slightly and then remain flat under the 
low-growth forecast, and grow at an annual rate of 1.9 percent under 
the high-growth forecast.
    Based on these load growth forecasts, TVA's current firm capacity 
(including TVA generation, energy efficiency and demand response (EEDR) 
measures, and power purchase agreements), and a 15 percent reserve 
capacity requirement, TVA would need additional capacity and generation 
or EEDR in the future. The medium growth case need for additional 
generating capacity or EEDR programs is about 9,600 MWs and 29,100 GWhs 
of generation in 2019 and about 15,500 MWs and 45,000 GWhs in 2029. 
Corresponding needs for the high growth forecast are about 15,000 MWs 
and 63,000 GWhs in 2019 and 27,000 MWs and 98,000 GWhs in 2020. 
Corresponding needs for the low growth forecast are about 1,500 MWs in 
2019 and 2,000 MWs in 2029; no additional generation would be required.

Alternatives Considered

    Five alternative energy resource strategies were evaluated in the 
Draft EIS and IRP. These resource planning strategies were identified 
as potential alternative means to meet future electrical energy needs 
on the TVA system (load demand) and achieve a sustainable future, 
consistent with the Board's vision and the TVA Environmental Policy. 
These alternative strategies are:

[[Page 39471]]

    Strategy A--Limited Change in Current Resource Portfolio: Under 
this strategy, TVA would continue to operate its existing generating 
resources as long as possible, continue to implement its existing 
Energy Efficiency and Demand Response (EEDR) programs, add renewable 
energy resources, and rely on power purchases to meet additional load 
demands on the TVA system.
    Strategy B--Baseline Plan Resource Portfolios: Under this strategy, 
which is the No Action Alternative, TVA would continue TVA's current 
power planning approach including increasing its EEDR programs, adding 
more renewable energy resources, and idling some existing coal-fired 
generating units. Increased load demands above the capacity of these 
resources primarily would be met by additional natural gas and nuclear 
capacity.
    Strategy C--Diversity Focused Resource Portfolio: Under this 
strategy, compared to Strategy B, TVA would increase EEDR efforts, the 
amount of renewable energy resources added to the power system, and the 
amount of coal-fired capacity idled. To help manage increased amounts 
of renewable resources and to further diversify the energy resources on 
the TVA system, additional energy storage resources would be 
constructed in the form of hydro-electric pump storage capacity. 
Increased load demands above the capacity of these resources primarily 
would be met by additional natural gas and nuclear capacity.
    Strategy D--Nuclear Focused Resource Portfolio: Under this planning 
strategy, additional EEDR, renewable, and energy storage resources 
would be added to the power system similar to those in Strategy C. 
However, this strategy includes the largest amount of idled coal 
capacity (7,000 MWs), and the likelihood that more nuclear capacity 
would be used to meet load demands is greater than in Strategy C.
    Strategy E--EEDR and Renewables Focused Resource Portfolio: Under 
this planning strategy, the largest amounts of EEDR and renewable 
resources would be added to the TVA power system. Of the strategies, 
the highest level of transmission system upgrades would be needed in 
Strategy E.
    The strategies were analyzed in the context of eight different 
scenarios. A scenario is a set of uncertainties relevant to power 
system planning and describes plausible future economic, financial, 
regulatory and legislative conditions, as well as social trends and 
adoption of technological innovations. One of the eight scenarios 
served as the IRP reference or baseline case. Potential 20-year energy 
resource plans or portfolios were developed for each combination of 
strategy and scenario using a capacity planning model. The capacity 
planning model built each portfolio from a range of potential energy 
resource options that included TVA's existing demand-side and supply-
side resources and new EEDR programs, coal-fired generation with carbon 
capture and sequestration, natural gas-fired generation, nuclear 
generation, renewable generation such as hydroelectric, solar, biomass, 
and wind energy, and energy storage resources. Each portfolio was 
optimized for the lowest net Present Value of Revenue Requirements 
while meeting energy balance, reserve, operational, and other 
requirements. The portfolios were then evaluated using an hourly 
production costing program to determine detailed revenue requirements 
and short-term rates. Additional metrics developed to rank the 
portfolios included financial risk, carbon dioxide emissions, thermal 
cooling requirements, waste handling costs, and changes in total 
employment and personal income.
    The two alternative strategies ranked highest for the cost and risk 
factors were Strategy C and Strategy E. Strategy B ranked in the middle 
of the range and Strategy D and Strategy A ranked lowest. Strategies D 
and E had the best (i.e., lowest) scores for the environmental metrics 
and strategies A and B had the worst scores. The environmental scores 
for Strategy A were lowest due to the continued operation of all TVA 
coal plants and the likely reliance on natural gas for most future 
capacity additions through power purchase agreements. The other four 
strategies all had reductions in coal capacity and, under most 
scenarios, nuclear capacity additions; these factors resulted in their 
lower carbon dioxide emissions. The ranking of the strategies by the 
two economic development metrics was similar. Strategies B and D 
performed similarly and had greatest increases in total employment and 
personal income under the high-growth scenarios. Strategies D and E 
also performed similarly and were in the middle of the range. Strategy 
A consistently ranked lowest for the economic development metrics.
    Based on this comparison two alternative strategies, Strategy A--
Limited Change Resource Portfolio and Strategy D--Nuclear Focused 
Resource Portfolio were eliminated from further consideration. An 
additional alternative strategy was later developed from a blend of 
features from the initial strategies in response to public comments on 
the Draft IRP and EIS and additional analyses.
    Strategy R--Recommended Planning Direction: Under this strategy 
which was staff's recommended planning direction, an optimized mix of 
diversified energy resources would be added to the TVA power system. 
Major components of this mix are as follows:
     EEDR--3,600 to 5,100 MW (11,400 to 14,400 GWh) by 2020, 
with subsequent further investment depending upon program success;
     Renewable additions--1,500 to 2,500 MW of cost effective 
energy by 2020;
     Coal-fired capacity idled--2,400 to 4,700 MW of maximum 
net dependable capacity by 2017, with consideration for increasing the 
amount of coal capacity idled;
     Energy storage--850 MW of pumped storage capacity in 2020-
2024;
     Nuclear additions--1,150 to 5,900 MW in 2013-2029;
     Coal additions--0 to 900 MW with carbon capture ability in 
2025--2029;
     Natural gas additions--900 to 9,300 MW in 2012-2029 used 
as intermediate supply source.
    This planning strategy is a blend of Strategies C and E which 
performed well financially, environmentally, and in terms of risk and 
was identified as the preferred alternative in the Final EIS.

Public Involvement

    TVA published a notice of intent to prepare the IRP EIS in the 
Federal Register on June 15, 2009. TVA then actively engaged the public 
through public scoping and public briefings during the development of 
the IRP and EIS. Participants could attend the briefings in person or 
by Web conference. TVA also established a Stakeholder Review Group with 
members consisting of individuals from government agencies and 
business, civic, and environmental organizations including TVA 
customers and the Tennessee Valley Public Power Association. These 
individuals were actively involved in the preparation of the IRP and 
provided TVA comments and critiques of IRP analyses and process steps.
    The Notice of Availability of the Draft IRP and EIS was published 
in the Federal Register by the U.S. Environmental Protection Agency 
(USEPA) on September 24, 2010. TVA accepted comments on the draft plan 
and EIS until November 15, 2010. During the comment period, TVA held 
five public meetings to describe the project and accept comments. 
Stakeholders could also participate in the meetings by Web conference. 
TVA received 501 comment submissions on

[[Page 39472]]

the Draft IRP and EIS. After considering and responding to all 
substantive comments, developing the new alternative Strategy R, and 
further evaluating the strategies, TVA issued the Final IRP and EIS. 
The NOA for the Final IRP and EIS was published in the Federal Register 
on March 11, 2011.

Environmentally Preferred Alternative

    Alternative Strategy E--EEDR and Renewables Focused Resource 
Portfolio would result in the lowest overall environmental impacts and 
is the environmentally preferred alternative. Strategy R--Recommended 
Planning Direction had the second lowest level of impacts to most 
environmental resource areas. The difference in impacts between 
Strategy E and Strategy R would be reduced if the amount of coal 
generating capacity that is idled as Strategy R is implemented 
approaches or exceeds the upper end of the 2,400 to 4,700 MW range.

Decision

    On April 14, 2011, the TVA Board of Directors accepted the IRP and 
authorized staff to implement the preferred alternative, the 
Recommended Planning Direction. The Board also directed staff to repeat 
the integrated resource planning process beginning no later than 2015.
    Compared to the best-performing of the initially considered 
alternative strategies, Strategy C--Diversity Focused Resource 
Portfolio, and Strategy E--EEDR and Renewables Focused Resource 
Portfolio, the recommend planning direction typically performed best 
under the various scenarios on total plan cost and risk/benefit 
comparisons and performed similarly to these other strategies with 
respect to general economic conditions in the Tennessee Valley region 
represented by total employment and personal income. However, it 
performed slightly worse than Strategy E, but better than Strategy C, 
with respect to environmental impacts.

Mitigation Measures

    The reduction of environmental impacts was a major goal in TVA's 
integrated resource planning process. As TVA deploys specific energy 
resources, it will appropriately review and take measures to reduce 
their potential environmental impacts. TVA's siting processes for 
generation and transmission facilities, as well as processes for 
modifying these facilities, are designed to avoid and/or minimize 
potential adverse environmental impacts. Potential impacts will also be 
reduced through pollution prevention measures and environmental 
controls such as air pollution control systems, wastewater treatment 
systems, and thermal generating plant cooling systems. Other 
potentially adverse unavoidable impacts will be mitigated by measures 
such as compensatory wetlands mitigation, payments to in-lieu stream 
mitigation programs and related conservation initiatives, enhanced 
management of other properties, documentation and recovery of cultural 
resources, and infrastructure improvement assistance to local 
communities.

    Dated: June 24, 2011.
Van M. Wardlaw,
Executive Vice President, Enterprise Relations.
[FR Doc. 2011-16840 Filed 7-5-11; 8:45 am]
BILLING CODE 8120-08-P