very proud of the Watts Bar team. Weve accomplished a lot
over the last several years, and the No. 1 rating from the Institute
of Nuclear Power Operations confirms that everyone at Watts Bar
is doing a great job.
Chemical Laboratory Analyst, Watts Bar Nuclear Plant, Spring City,
TVA helps generate
prosperity in the Valley by providing the electric power to meet the
changing needs of power distributors and directly served customers.
year TVAs power system produced record amounts of power, with
a remarkable degree of reliability. In particular, the summer of 1999
was the most challenging ever for our power-generating facilities and
On July 30, during
the extended heat wave that tested power producers across the nation,
TVA met an all-time peak demand of 28,295 megawatts, marking the seventh
time in nine days that TVA met demands higher than the 1998 record of
27,253 megawatts. By summers end TVAs power system met 16
peak demand days higher than the 1998 peak. From July 22 through July
31 TVA set a new system generation record of more than 5.2 billion kilowatt-hours.
For the year, TVA generated more than 148 billion kilowatt-hours.
In line with TVAs
long-term commitment to meeting the electricity needs of the Tennessee
Valley, we have taken the steps necessary to keep up with our regions
ever-increasing demand for electric power. During the past 10 years,
as the Valleys economy grew at about 4 percent annually, the demand
for TVA power increased an average of around 3 percent annually, compared
with our earlier projections of 2.2 percent.
TVA has added baseload
generating capacity in the past five years, and we are studying how
we can best meet future demand. Since 1994 TVA has added substantial
generating capacity, including 2,321 megawatts from the restart of Browns
Ferry Nuclear Unit 3, the start-up of Watts Bar Unit 1, and the power
upgrades of Browns Ferry Units 2 and 3. Over the next several years
TVA plans to add another 2,100 megawatts of generating capacity through
improvements to existing units and the addition of peaking units.
TVA has also been
able to reliably meet increasing demand for power because the power
system as a whole is operating more efficiently than at any time in
the past three decades. TVAs nuclear system ended the year with
a net capacity factor of 90.5 percent, generating an all-time high of
more than 44.5 million megawatt-hours. TVAs fossil and hydro modernization
efforts continue to reduce costs, improve efficiency and boost generating
output. Overall, TVA has increased output by about 20 percent since
to support regional economic growth is dependent upon both a reliable
supply of power and competitive prices. TVAs Ten-Year Business
Plan challenges TVA to ensure that its electricity prices remain competitive
as the electric power industry is restructured.
Since TVA adopted
the Ten-Year Business Plan in 1997, it has made progress toward ensuring
that its prices remain competitive through excellent operational performance
and sound financial management with the following results:
- Reducing debt
by a total of $1.3 billion from its peak in 1996.
- Saving over
$350 million in annual interest costs.
- Reducing the
amount of interest expense compared to sales to 26.9 percentthe
in 20 years.
- Managing a $724
million fund to cover the future costs of decommissioning all of TVAs
Efforts by the
Tennessee Valley Congressional Delegation and the Administration on
behalf of TVA in 1998 to refinance the $3.2 billion in high-interest
debt held by the Federal Financing Bank (FFB) significantly contributed
to lowering TVAs interest costs in 1999. Completion of the FFB
refinancing in 1999 marked the transition of all power bonds into the
public bond market, where TVA has used innovative issues to steadily
expand its investor base to more than 370,000 investors in all 50 states
and in 35 countries around the world, contributing to lower interest
costs for TVA.