The Tennessee Valley Authority has added three years and $2 billion to its estimate to complete a partially built nuclear unit at its Watts Bar plant in Tennessee. TVA released the new estimates on April 5 after completing a seven-month project review triggered by rising costs and a slipping schedule. The unit now is set to come online in late 2015 at a cost of $4 billion to $4.5 billion. TVA originally said it would complete the 1,150-MW project by year's end at a cost of $2.5 billion. The unit is 70% finished.
"We're here to admit we were too aggressive in terms of time and cost," Tom Kilgore, TVA's CEO, said at an on-site briefing. He will ask TVA's board to approve the cost and schedule changes at its April 26 meeting. TVA spent $1.8 billion before shutting work down in 1985.
Kilgore said the added time will also benefit an engineering review of the Bellefonte plant site in Alabama, where TVA plans to finish completing a 1,260-MW unit. Work will not begin there until Watts Bar is on line, but Kilgore said "the economy is a bigger factor" in determining when Bellefonte will operate.
TVA's original estimate was based on its experience gained constructing the partially built Browns Ferry unit in Alabama. Mike Skaggs, senior vice president for nuclear construction, said management did not consider Watts Bar's unique aspects and started construction too early.
"We were not far enough down the path of engineering," Skaggs said. "Work packages were too complex and cumbersome." TVA has cut its site workforce to 2,000 from 3,500 and some project work to one daily shift from two 10-hour shifts.
The new estimate was based on industry benchmarking and confirmed by outside analysis. "This estimate is comprehensive," Skaggs said. In February, TVA replaced its site managers and implemented more direct lines of reporting and accountability. There was criticism of TVA's awarding Bechtel the construction contract after the firm provided initial cost estimates. But the utility said there will be no changes in the firm's engineering-procurement-construction contract, renegotiated last fall based on the review.
