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Six coal-powered units in Alabama will close down and two others in Kentucky will end up converted to a natural gas plant, said officials at the Tennessee Valley Authority (TVA).

Increasingly stringent environmental regulations and flat power demand have made it necessary to rethink how the nation’s largest public utility generates power, said Chief Executive Bill Johnson at the Thursday board meeting in Oxford, MS.

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In fiscal year 2013, coal accounted for 38 percent of TVA’s portfolio while natural gas made up 8 percent. Johnson said he would like to see those numbers closer to 20 percent each over the next decade.

Senate Republican Leader Mitch McConnell met with Johnson last month to seek continued operation of all three coal-burning units at Paradise Fossil Plant in Drakesboro, KY. The board had previously approved upgrading the two oldest units with environmental controls. But Thursday, Chief Operating Officer Chip Pardee recommended building a natural gas plant instead.

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He said the third unit at Paradise is newer and has sufficient environmental controls to continue operating on coal.

Johnson said about 200 of the 400 jobs at Paradise will end up affected, and the units will continue to run until new environmental regulations come into effect. That could be in 2015 or even later, if there is an extension granted.

The TVA board also voted Thursday to close all five units at the Colbert plant in Tuscumbia, AL, where about 150 people have jobs, and one of two remaining units at the Widows Creek plant in Stevenson, AL. There are about 175 employees there.
Johnson said he does not yet know how many jobs at those two plants will feels the affects of the closures.

Johnson said two other coal-fired plants are still under evaluation — the Allen plant in Memphis, TN, and the Shawnee plant near Paducah, KY — as is the final unit at Widows Creek.

But TVA is not abandoning coal entirely. The utility is spending about $1 billion to upgrade a coal-fired plant in Gallatin, TN, and other units remain open.

In addition to reducing energy from coal, Johnson said he hopes to increase the percentage of nuclear power in the utility’s portfolio from 32 percent to 40 percent.

He told the board that the utility is on track to complete a second reactor at the Watts Bar Nuclear Plant in Spring City, TN, by the end of 2015. But there are no immediate plans to complete a reactor at the mothballed Bellefonte Nuclear Power Station northeast of Scottsboro, AL. Johnson said the estimated cost of completion has risen from $4.9 billion to between $7.4 and $8.7 billion.

Johnson said there is no short-term need for the plant, but the utility intends to maintain it as a viable option for the future.

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