New TVA Nuclear Plant Could Top Current Sites

December 12, 2008

CHATTANOOGA, Tenn. (AP) - The cost of building the Bellefonte Nuclear
Plant in Alabama could be more than the Tennessee Valley Authority
spent to build all three of its current nuclear generating stations.

The federal utility says in its latest filing to the Nuclear Regulatory
Commission that industry estimates to build an advanced twin-reactor
nuclear plant like Bellefonte, including escalating construction costs
and interest expenses, could be $9.8 billion to $17.5 billion.

TVA says its own estimates to build two Westinghouse AP-1000
pressurized water reactors at the Bellefonte site near Scottsboro,
Ala., if it could start today, would be $5.6 billion to $10.4 billion,
compared with a maximum estimate a year ago of $7.1 million.

Still, TVA President Tom Kilgore told the Chattanooga Times Free Press
on Thursday that Bellefonte likely=2
0will be a cost-effective source of
future power. It also would be a cleaner power source than coal-fired
plants.

"Everybody's costs are going up," Kilgore said. "But it's still
economical. If you take into account the fact that we also see carbon
(pollution) costs in some form, we think it's very prudent to keep
looking at our next nuclear options."

However, anti-nuclear activist Louise Gorenflo, a member of the
Bellefonte Efficiency and Sustainability Team, says the type of plant
TVA is proposing has never been built in the United States and the
prototype in Finland "has doubled in cost because of cost overruns and
delays."

Gorenflo contends TVA has "tried to minimize" the costs of these
plants, while "the projected price tag just keeps going up."

TVA's Watts Bar Unit 1 near Spring City, Tenn., was the last nuclear
power generator completed by a U.S. utility. It cost nearly $7 billion
in 1996. TVA's two other plants, the twin-reactor Sequoyah station near
Chattanooga and the three-reactor Browns Ferry plant near Athens, Ala.,
were completed in the 1970s at far lower costs.

TVA is working with a consortium of utilities and engineering companies
known as NuStart Energy LLC on the AP-1000 reactor construction and
operating license at Bellefonte. Kilgore said TVA ultimately could
build the plant itself or share ownership with other comp anies.

The TVA board will likely be asked next year to continue funding the
application process, Kilgore said.

Meanwhile, TVA is spending $2.5 billion to complete a second reactor at
the Watts Bar station by 2012, and devoting $10 million to study
completing two other reactors TVA virtually abandoned at the Bellefonte
site 20 years ago.

Knoxville-based TVA says it needs the additional capacity to meet
growing demand. TVA services about 8.8 million consumers in Tennessee,
Alabama, Mississippi, Kentucky, Georgia, North Carolina and Virginia.

"We've got to keep looking at this," TVA Chairman Bill Sansom said of
new nuclear power. "I personally think it is a great source of energy,
especially to help us become more energy independent."

TVA generates about 60 percent of its power from coal, about 30 percent
from nuclear and 10 percent from hydroelectric. Less than 1 percent
comes from renewable sources, such as wind, solar and methane gas.