The Tennessee Valley Authority (TVA), facing a near-$1 billion bill for the cleanup of a massive coal ash spill at its Kingston, Tenn., coal-firing plant, a pension shortfall, waning power sales, and court-ordered environmental upgrades, says it will increase electric rates, borrow up to $3 billion over three years, and cut spending in order to pay its due.
The nation’s largest utility has been caught in a swarm of bad luck, beginning with the largest drop in sales it had ever seen in its 76-year history, thanks to a struggling national economy. That was compounded by court-ordered clean-air improvements to its plants, which will cost the TVA millions over the next several years. But the biggest slam to the agency is last December’s impoundment pond breach that sent more than a billion gallons of toxic coal ash tumbling down on to a neighboring community. The wave of sludge toppled houses, damaged property, and contaminated neighboring waterways.
A months-long cleanup is underway and expected to ring in at nearly $1 billion before it is complete. That cost doesn’t include money the agency is paying out to buy damaged property and pay off suffering residents. The TVA is also facing a mountain of lawsuits from residents and at least one business owner who suffered because of the spill.
TVA is also spending a pretty penny to salvage its tainted public image. Raising customers’ rates won’t help, but because fuel costs continue to drop, the TVA says most customers will actually see a reduction in their monthly power bills despite the rate change.
Aside from cutting or freezing cost-of-living pension increases and increasing rates, TVA will also defer capital projects in hopes of saving nearly $2 billion over the next three years.
Source: Associated Press