The Paducah Sun
The Paducah Sun

TVA chairman says he personally went to bat to save plant
The result was the power deal with USEC that is a 'win-win situation for everyone.'

By Bill Bartleman bbartleman@paducahsun.com--270.575.8650
LANCE DENNEE/The Sun--Power board: Tennessee Valley Authority directors Glenn L. McCullough Jr. (left) and Skila Harris listen to a speaker as Chairman Craven Crowell takes notes.


Tennessee Valley Authority Board Chairman Craven Crowell said he took a personal interest in helping to convince USEC Inc. to keep the Paducah Gaseous Diffusion Plant open.

Crowell said he met with top officials of USEC, including Chief Executive Officer William "Nick" Timbers. In the end, Timbers said the new contract with TVA was the deciding factor in last summer's decision to keep the Paducah plant open and close its sister plant in Portsmouth, Ohio.

"We realized the decision was very important for Paducah, for TVA and for USEC," Crowell said Wednesday while in Paducah for a TVA board meeting. For Paducah, it meant saving more than 1,000 high-paying jobs; for TVA, it meant keeping one of its largest customers; and for USEC, it meant annual savings of several million dollars.

"It was a win-win situation for everyone," Crowell said. Discussions with USEC were helped by the fact that he and Timbers serve on the board of the Nuclear Energy Institute, he said.

The 10-year contract signed last summer establishes a fixed price for power, rather than requiring USEC to pay higher prices that go up and down based on demand. The fixed price is approximately 2 cents per kilowatt-hour, a reduction of about 1 cent from prices that were being paid last summer.

The contract allows USEC to pay for some of its power with the nuclear fuel that it produces.

Since power makes up about 50 percent of the cost of operating the Paducah plant, the lower cost should reduce nuclear fuel prices by about 25 percent.

On another topic, Crowell said the privatization of TVA is unlikely anytime soon unless it is for political reasons. He said TVA opponents in Congress have introduced legislation calling for the agency's sale to private business. The legislation has not been considered but has generated some discussion.

"It is a political issue; it is not an issue that involves the efficiency of the operations of TVA," he said in an interview. "We are very efficient now."

Crowell said TVA has had opponents since its creation in the 1930s to provide low-cost power to poor, rural areas of the South. He noted that private companies operating in the TVA region filed a suit in the late 1930s challenging the constitutionality of the TVA Act. "It went all the way to the Supreme Court, and TVA won."

He said selling TVA to private investors would be detrimental to ratepayers who would see higher rates and a decline in the quality of service.

"Privatization is one of those issues that is easy to talk about, but when you start considering how it is to be implemented, it doesn't come out as a benefit to rate payers," he said.

Crowell, meanwhile, predicted that Congress will pass legislation to deregulate the power industry.

"Technology is making deregulation possible and the market is demanding that we change the monopoly status of all utilities," he said. Under deregulation, power users would have more choices of where they can buy power, similar to long distance telephone service.

"If deregulation is done in the right way, it would be very beneficial to TVA and its customers," Crowell said. He said it could open markets for TVA because its production costs are among the lowest in the nation.

He said TVA and the local utilities it serves are united in lobbying Congress for reasonable deregulation legislation that would benefit TVA. "We must be careful and do it right," he said.