Tennessee Valley Authority

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Tennessee Valley Authority
Allen Lambert
Candace Kolassa
Steven Powell
Bryan DeMotts
Spring 2005
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Mission Statement

• To provide for the sustained, integrated
  development of the region by supplying
  affordable, reliable power, providing integrated
  river management and environmental stewardship,
  and stimulating economic growth.

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Creation The New Deal
Public power institutions should be forever a
yardstick to prevent extortion against the public
and to encourage the wider use of that servant of
the people- electric power.
Franklin D. Roosevelt
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TVA Goes to War

• As early as 1935, Chairman Arthur Morgan
  testified before Congress that an adequate
  supply of electric energy comes pretty close to
  being a matter of national defense.

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From Government Control to Market Control

• Deregulation is the process of restructuring
  an industry by reducing or removing government
  regulation and control.

• The move from government control to market
  control of electric power is under way.

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• TVA is preparing itself for deregulation by
  becoming ever more competitive and efficient,
  cutting its operating costs, increasing the
  generating capacity of its plants, and developing
  long-term plans to meet the energy needs of the
  Tennessee Valley.

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After doing rigorous competitive-risk analysis,
TVA has developed a strategic plan to consider
how a competitive market might function and how
TVA can prepare for it. Provides an analytical
framework in which TVA can set annual budgets,
develop annual performance plans, and make
projections about the regions power needs
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Six Strategic Objectives

• Improve life in the TN valley through integrated
  management of the river system and environmental
  stewardship.
• Meet customers needs with affordable, reliable
  electric power.
• Demonstrate leadership in sustainable economic
  development in the Valley.

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Objectives, continued

• Continue the trend of debt reduction.
• Reduce TVAs delivered cost of power relative to
  the market.
• Strengthen working relationships with all of
  TVAs stakeholders.

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Teamwork
Seven Corporate Values
Accountability
Integrity
Respect
Honest
for the
Innovation
Communi-
Individual
Flexibility
cation

Continuous
Improvement
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Three Types of Customers
Distributors There are 158 distributors (108
municipal utility companies and 50 cooperatives)
that resell TVA power to consumers. Directly
Served Customers 54 large industrial customers
and 8 federal installations buy TVA power
directly. Off-System Customers 12 surrounding
utilities buy power from TVA on the interchange
market.
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Customers
Percent of Total Revenue
Distributors
Directly
Served
85
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Off-System
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Service Area
TVAs power-service area covers 80,000 miles2 and
includes almost all of TN and parts of
Mississippi, Kentucky, Alabama, Georgia,
Virginia, and North Carolina. 8.5 million
customers
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• TVAs power system achieved its best
  performance ever in fiscal year 2004
• Produced 155 billion kilowatt-hours (kWh) of
  electricity.
• Revenues of 7.5 billion.
• For the fifth year in a row, TVA delivered power
  with 99.999 reliability.

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Inventory Management Strategy

• Because electricity generated by a power plant
  cannot be easily stored, it is usually used as it
  is produced. When the demand for electricity is
  high, power plants increase production. When the
  demand subsides, the plant cuts back. Balancing
  power production minute by minute is the job of
  TVAs Power Business Center in Chattanooga.

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Generation of Power
Fossil Fuel Plants
Nuclear Power
Hydropower
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Combustion Turbines and Renewable Energy Sources
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Hydroelectric Power
The generation and distribution of electricity
derived from the energy of falling water.

• 29 hydroelectric dams
• Raccoon Mtn. Pumped Storage Plant
• Reduce power-system costs
• Ensure overall reliability

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Raccoon Mountain
Supplies electrical power at peak demand times at
the lowest possible cost. When power use is low,
such as late at night, water is pumped from the
TN River to a reservoir on top of Raccoon
Mountain. When more power is needed, the water
is released from the reservoir. As it falls, it
turns turbines located in Raccoon Mountains
unique underground power plant, a process that
produces electricity. The water then flows back
down the river.
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Fossil Fuel Plants

• Fossil Fuel is a naturally occurring fuel such
  as coal, petroleum, or natural gas, formed from
  the remains of prehistoric organisms.

• Eleven fossil fuel plants
• 59 coal-fired units
• 64 combustion turbines

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Nuclear Power
In the 1960s and 70s, TVA began develop-ment of
its nuclear power program, conceived in response
to the urgent national need for cost-efficient
ways to meet projected power demands for the
region and the nation.

• Five units at three nuclear plant sites
• Sequoyah, Browns Ferry, and Watts Bar

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Pressurized Water Reactor System
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Green Power
Energy produced from three renewable sources
sun, wind, and methane gas.

• Nine solar facilities in Tennessee
• Three wind turbines in Oliver Springs
• Methane gas generated from the City of
  Memphis wastewater treatment facility, which is
  then provided to Allen Fossil Plant

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Facilities
Reservoirs
Fossil Plants
Nuclear Plants
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Transmission System
One of the largest and most reliable in North
America. In delivering power to its customer
with 99.999 reliability over the past five
years, TVA focuses on eliminating root causes of
outages.

• 17,000 circuit miles of transmission line,
  including 2,400 miles of extra-high-voltage
  (500,000) line.
• 535 substations, power switchyards, and
  switching station.

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Distributors
Distributors of TVA power provided approxi-mately
37.6 billion kilowatt-hours of electricity to
more than 2.4 million TN households in
2003. Distributor sales to 417,322 commercial
and industrial customers totaled more than 48
billion kilowatt-hours to outdoor lighting
customers.
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Five Largest Distributors

• Memphis Light Gas and Water
• Electric Power Board
• Huntsville Utilities
• Knoxville Utilities Board
• Nashville Electric Service

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Suppliers
TVA purchased 1.2 billion in materials and
services, 92.5 million in fossil fuel, and 10.3
million in nuclear fuel from TN vendors in 2003.

• ABB Corp.
• Power circuit breakers (60,000/breaker)
• Disconnect switches (7,500/switch)
• Transformers
• Alcoa
• Aluminum tubing (5/foot)

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Suppliers, continued

• Dossert
  
• Electrical connectors (50/connector)
• Metal Systems
• Switch houses (125,000/house)
• Newell Corp. Insulators
• Square D Receptacles (fuse boxes, etc.)
• TB Steel frames (5/lb)

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Transportation of Supplies
Most supplies transported by truck. Some
extremely heavy equipment, like giant
transformers, may come by train. All supplies,
except for large items, are brought to TVA
warehouses. The large items are sent directly to
the job site. ABB Corp. and Metal Systems use
their own trucks. The rest are transported
through other trucking companies. TVA does not
pay for the trucking services, their suppliers
pay for it.

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Order Time

• Small items take approximately 8 weeks to receive
• after order is made. Large items can take up to
• 9 months to receive. This is because these items
• are specially assembled for sub-stations and
• mostly made special for the specific
  sub-stations
• requirements. Therefore, it can take up to a
  year to
• go from design to actual physical construction
• completion. TVA must be very up to date as far
  as
• knowing when and where they will need to build a
• new sub-station.

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TVA is an equal opportunity and
affirmative-action employer. TVA ensures that the
benefits of programs receiving TVA financial
assistance are available to all eligible persons
regardless of race, color, sex, national origin,
religion, disability, or age.
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Where to Work?
Main Offices in Knoxville, Chattanooga, and
Nashville, TN and Muscle Shoals, Alabama Regional
Customer-Service Centers Watershed Team Offices
in Seven Regions Eleven Coal-fired Plants Six
Combustion Turbine Plants Three Nuclear
Plants Twenty-nine Hydroelectric Dams One
Pumped-Storage Plant
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References
www.TVA.com Special Thanks to William Lambert,
TVA electrical engineer, for supplying valuable
information.
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Questions?