TVA CEO: Clean Power Plan compliance, natural gas part of future strategy

Dive Brief:

  • The head of the Tennessee Valley Authority said in a conference call last week that a change in energy policies by the incoming Trump administration will not alter its move away from coal and towards a cleaner generation mix, in part due to cheap natural gas, the Chattanooga Times-Free Press reports. 
  • The utility has no plans to stop working on Clean Power Plan compliance, according to TVA CEO Bill Johnson, and that the stricter emissions regulations are well-aligned with customers' best interests.
  • TVA's Integrated Resource Plan filed last year laid out a plan to shutter 26 of its 59 coal plants by the end of 2016, with its future strategy leaning heavily on natural gas. 

Dive Insight:

President-elect Donald Trump campaigned on promises to revitalize the coal industry, but economic forces may be a bigger hurdle than regulation. According to the Times Free Press, the Clean Power Plan and the power sector's slow transition to decarbonization aligns with TVA's long-term strategy. 

"We have been following a path that is consistent with the direction of the Clean Power Plan, but we've been following it based on what's the best for our customers, and they happen to line up," Johnson said. "We really have been following the plan that says if we modernize the fleet as we diversify, what is the best economic and rate path to follow? And that's really what we will continue to do in every decision we make."

Part of that plan includes an increasing reliance on natural gas, according to TVA's IRP. 

If prices remain under $4/MMBtu through 2030 and under $6/MMBtu after that, they would be "well in the money in the generation space," he told Reuters. The utility's future strategy leans heavily on natural gas as it moves away from coal plants.

The utility's 20-year Integrated Resource Plan forecast no new coal or nuclear power plants while relying on natural gas peaker plants and power purchase agreements to supplement the utility's almost 4,000 MW of natural gas capacity. TVA also proposed boosting energy efficiency resources, which it said saved 451 MW of peak demand from 2012 to 2014. 

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