TVA looks again at Watts Bar schedule

06 February 2012

Construction efficiency is the priority for Tennessee Valley Authority (TVA) as it examines the Watts Bar completion project and the start-up date for the new reactor slips backwards.

As a nationally owned non-profit utility group, TVA supplies electricity in seven states of the southeastern USA. As well as many hydro and fossil power units, it owns three nuclear power plants: Browns Ferry, Sequoyah and Watts Bar and is preparing to complete another reactor at Bellefonte.

On 3 February, when reporting its performance in the first quarter of FY2012, company CEO Tom Kilgore said it had seen lower productivity as well as a rise in costs for the project to complete Watts Bar 2. As a result, TVA has begun a process to review its estimates for the completion of the reactor.

Having stood 55% completed since the 1980s, TVA began the Watts Bar project in late 2007 under Bechtel's management. There was an 'aggressive' five-year schedule for completion that would have had it start up this year, but by August 2011 TVA had taken back control of the work and set a new completion target of 2013.

Watts Bar (TVA) 480x305
Watts Bar (Image: TVA)

A more recent increase in costs has not yet been quantified because it is too complicated for a quick answer, said senior executives in a conference call. TVA must first ascertain whether the change in costs is due to a decline in productivity or poor estimation in the first place.

TVA is looking at a number of areas, said Kilgore, including the labour hours required to install each outstanding unit of piping or cabling. Although there is direct experience on which to base a revision the company is not yet satisfied that it has a good estimate for the final few percent of construction work, which can be the slowest and most difficult.

At the same time, productivity per worker has varied with the number of workers on site, improving after layoffs from a peak workforce of around 2300. The company is investigating how the amount of supervision can be reduced in line with a smaller workforce.

Reviewing the above factors will take several weeks, but TVA said it expects to report again at the next quarterly update. Kilgore said, "I don't want to be wrong a second time" and stressed that he has told staff "cost is four times more important than schedule."

Admitting the completion date could slip to 2014, Kilgore said he would set the new schedule according to the best conditions for productivity: "Date is not really critical to us, given the loads are down. It's really about how efficiently we can finish Watts Bar 2 more than anything else."

Factors for cleaner power

Kilgore's reduced focus on construction speed is partly due to lower demand and easier operating conditions for TVA. In addition to a currently slow economy, TVA's region has just seen the mildest December for 50 years with the coldest day over 10 deg C warmer than December 2010. At the same time, high rainfall meant TVA had 30% more hydro power available, compared to the same period in 2010.

All TVA's nuclear reactors operated throughout the entire last quarter. At the same time natural gas prices are very low, prompting TVA to increase the use of that fuel as well as make some extra fuel purchases.

Chief financial officer John Thomas said these factors enabled TVA to supply its customers with "cheaper and cleaner" energy at an average cost fo just 6.5c per kWh.

Researched and written
by World Nuclear News