TVA cuts 400 jobs, spending on Ala. nuclear plant

The Tennessee Valley Authority will cut 530 jobs and trim millions of dollars in spending on its effort to revive a mothballed nuclear plant in Alabama, utility officials said Wednesday in a decision that calls into question the project's future.

A total of 35 TVA employees and 495 contractors will lose their positions at the Bellefonte Nuclear Power Station northeast of Scottsboro, Ala. The budget will fall from $182 million to $66 million, a reduction of roughly 64 percent. Some of the affected TVA employees may be reassigned to other roles within the utility.

The decision comes as the price of natural gas has plummeted, making it difficult for the electric industry to justify the massive costs of new nuclear plants. Utilities in California, Florida, New Jersey and Wisconsin have either shut down plants or will halt operations in the future because they are too costly to repair or upgrade. While the industry proposed building a new wave of reactors just a few years back, only a handful are likely to be completed in the Southeast because of the same economics.

Finishing the first reactor at Bellefonte by 2020 was expected to cost roughly $4.9 billion.

"Reducing spending at Bellefonte next fiscal year will help TVA focus resources — people, money, time and energy — on nearer-term priorities," said Mike Skaggs, TVA's senior vice president for nuclear construction, in a statement. "Some decisions are harder to make because they don't affect just what we do every day — they affect people."

Already, the TVA is under pressure to control its costs. An effort to finish another of its mothballed reactors at the Watts Bar Nuclear Plant in Spring City, Tenn., was originally expected to cost $2.5 billion. Finishing the project may require as much as $2 billion, according to utility estimates.

So far, the utility has not formally abandoned the Bellefonte project. However, Skaggs said TVA officials are in the process of determining how the plant fits into the utility's overall needs. Workers will continue performing maintenance at the site, protect the plant's records and keep working on an estimate outlining how much it would cost to finish one of the site's two reactors.

The TVA first secured a license to build two reactors at Bellefonte in 1974. But the electric industry overestimated the long-term demand for power, and they proved far more expensive to build than most utilities projected.

TVA officials decided to defer the construction of the first of Bellefonte's reactors in 1985 and put off the construction of the second reactor three years later. During the mid-1990s, the utility debated converting the facility into a fossil fuel plant or use it to produce tritium, a radioactive isotope of hydrogen needed in nuclear weapons.

More recently, the TVA considered using the site to build what was then expected to be the country's first brand-new nuclear plant in a generation. Instead, that first project was eventually shifted to a Southern Co. plant in eastern Georgia.

TVA serves roughly 9 million people in Alabama, Georgia, Kentucky, Mississippi, North Carolina, Tennessee and Virginia.

___

Follow Ray Henry on Twitter: http://twitter.com/rhenryAP.