Bloomberg News

TVA Shelves Work at Alabama Nuclear Plant Amid Industry Struggle

June 13, 2013

Less than a week after another utility announced it will give up trying to restart a pair of nuclear reactors, the Tennessee Valley Authority said it will shelve a project in northeastern Alabama and eliminate 530 jobs.

TVA, the largest U.S. government-owned power company, will cut 495 contractor jobs and 35 employees supporting work at the Bellefonte plant in Hollywood, Alabama, according to a statement yesterday from the Knoxville, Tennessee-based authority. It will also cut $116 million in spending as it focuses on completing another reactor in Tennessee.

“Over the past few months, TVA has been looking across the company, including at our nuclear construction projects, to determine the work that is most important to perform,” Mike Skaggs, the TVA senior vice president for nuclear construction, said in the statement. “Hard decisions are necessary.”

The U.S. nuclear industry is wrestling with competition from a glut of natural gas, which has lowered its price and made the fuel more attractive for electric utilities. At the same time, U.S. regulators are writing safety rules following a triple meltdown at Japan’s Fukushima Dai-Ichi plant in 2011.

Reactor owners including Rosemead, California-based Edison International (EIX:US) are permanently shutting operating reactors. Edison announced June 7 it will shut its San Onofre plant near San Diego, bringing to four the number of U.S. reactors to be removed from service this year. That’s the most in any year since the nation embraced nuclear energy.

Budget Cuts

President Barack Obama in his 2014 budget proposed selling all or part of the TVA. The deal would raise as much as $35 billion as the administration seeks to reduce the national debt. The U.S. created the authority during the Great Depression to bring electricity to rural communities.

The TVA will cut spending for Bellefonte to $66 million in the year ending Sept. 30, 2014, from $182 million this year, as it seeks to complete its Watts Bar Unit 2 reactor, about 60 miles (97 kilometers) southwest of Knoxville.

The spending cuts are unrelated to Obama’s sale proposal, Duncan Mansfield, a TVA spokesman, said in a phone interview. The power authority is seeking to cut consumer rates as it focuses on completing the Watts Bar unit, scheduled to be in operation by the end of 2015, he said.

About 140 employees and contractors will remain at Bellefonte in 2014 for work including maintenance and security, according to the TVA. The authority will seek work within the corporation for some of the displaced workers, Mansfield said.

To contact the reporter on this story: Brian Wingfield in Washington at bwingfield3@bloomberg.net

To contact the editor responsible for this story: Jon Morgan at jmorgan97@bloomberg.net


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