TVA Sees Cost Benefits From Watts Bar Unit 2

The Tennessee Valley Authority said they had seen a quick economic benefit with the addition of the Watts Bar 2 nuclear reactor to its generation mix, noting the new reactor had enabled the company to keep costs down while a drought lowered output from its hydroelectric generators.

Watts Bar Unit 2TVA said that it had a net income of $313 million for the first half of fiscal year 2017, which was a $32 million gain from the same period last year.

We've been able to complete major capital projects that provide clean, reliable and affordable energy for the seven-state Tennessee Valley region while managing our debt, even with a decline in electricity sales,” said TVA President and Chief Executive Officer Bill Johnson.

With the drought conditions we experienced in the first half of the year, which limited power production from our dams, Watts Bar Nuclear Unit 2 played an important role in keeping costs low,” Johnson said.

TVA's sales were lower in the second quarter of the 2017 fiscal year, down 7 percent compared to the same quarter in 2016. The TVA attributed most of the decline to a mild winter.

For the first half of fiscal 2017, compared to the same period in 2016, sales were off by about 1 percent, TVA said.

Revenues, however, were up 5 percent or by $242 million for the six months ended March 31, 2017 compared to the same period in the prior year. “This was due to higher base rates and higher fuel cost recovery revenues. Fuel and purchase power expense increased by $109 million for the period due to higher effective fuel rates, driven by changes in the mix of generation resources,” the company announced.

The changes in the mix: “Significantly less hydroelectric generation and higher market prices for natural gas.”

The big addition to the mix was Watts Bar Unit 2, which entered into commercial operation on October 19, 2016 as the first new nuclear reactor in the country to be added to the grid in the 21st Century.

More recently, TVA added a gas-fired power plant to its capacity fleet. The Paradise Fossil Plant in Kentucky began commercial production on April 7, 2017.

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