The Tennessee Valley Authority announced yesterday that it will halt construction of three nuclear power plants on which it has spent $2.1 billion, a move that will lay off 4,800 workers in Tennessee and Alabama, where unemployment is above the national average.
"We simply don't need all the plants we have under construction, we have to put these plants in mothballs," S. David Freeman, a TVA director, said in a telephone interview. "Our electrical load forecast is way down at the same time that the costs of construction have escalated at an unbelievable rate." Freeman is one of the two, out of three, directors who voted to defer construction.
Construction will be halted on two reactors at Hartsville, Tenn., just north of Nashville, and on one reactor at Yellow Creek, in the northeast corner of Mississippi. One of the Hartsville reactors was 40 percent complete and the other was 30 percent complete, as was the Yellow Creek reactor.
About 2,800 workers will be laid off in Tennessee, where unemployment is at 12 percent. Deferral of Yellow Creek will lay off 2,000 workers, most of whom are from the Muscle Shoals region of Alabama, where unemployment is over 19 percent.
The three reactors would have generated almost 4 million kilowatts of electricity, and would have cost $10.3 billion. They make a total of eight nuclear power units to be deferred by the TVA in the last three years. The TVA has four reactors operating and is completing five more.
Freeman said that construction costs of the three plants were rising so rapidly that their electricity would have cost 13 cents a kilowatt hour when they began producing power after their scheduled completion in 1990 and 1991. This is more than three times the TVA's wholesale charge for electricity today.
"We still have five nuclear units under construction that are further along than these three and will produce much cheaper electricity," Freeman said. "We're stopping our three most expensive nuclear plants, those suffering the most from the inflation rate and those that must be back-fitted with most of the engineering changes mandated by the accident at Three Mile Island."
Freeman said that forecasts of how much electricity the TVA will have to generate to the end of the century have fallen sharply in recent months, due largely to public and private measures to conserve energy and reduced consumption of energy because of higher prices.
The two uranium enrichment plants at Oak Ridge, Tenn., and Paducah, Ky., which consume 12 percent of the TVA's power and are its biggest customers, are operating at 40 percent of capacity because of the worldwide excess of enriched uranium.
"They're using more than 1 million kilowatts less than what they contracted for," Freeman said. "They're paying us for electricity they're not using and probably won't use for some time."
Freeman said that nuclear construction costs have risen so fast that the TVA now could build three coal-fired plants to generate 900,000 kilowatts that would cost no more to build and operate than one large nuclear plant generating 1 million kilowatts.
"Coal in this part of the country is competitive with nuclear for the first time in a long time," Freeman said. "It looks like coal and nuclear are in a real horse race in the TVA area."
Voting with Freeman to defer construction was TVA Director Richard Freeman (no relation). TVA Chairman C.H. Dean Jr. voted to slow construction of the three plants.