Integrated Resource Plan, 48987-48989 [2019-20104]

Agencies

• Tennessee Valley Authority

[Federal Register Volume 84, Number 180 (Tuesday, September 17, 2019)]
[Notices]
[Pages 48987-48989]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-20104]


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TENNESSEE VALLEY AUTHORITY


Integrated Resource Plan

AGENCY: Tennessee Valley Authority.

ACTION: Issuance of record of decision.

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SUMMARY: The Tennessee Valley Authority (TVA) has decided to adopt the 
preferred alternative in its final environmental impact statement 
(Final EIS) for the Integrated Resource Plan (IRP). The TVA Board of 
Directors approved the IRP and authorized staff to implement the 
preferred alternative at its August 22, 2019 meeting. This alternative, 
identified as the Target Power Supply Mix in the Final EIS, will guide 
TVA's selection of energy resource options to meet the energy needs of 
the Tennessee Valley region over the next 20 years. The energy resource 
options include continued investment in TVA's hydroelectric resources, 
license renewal for nuclear resources, expansion of solar and natural 
gas-fired generation, increased energy efficiency, demand response, and 
energy storage, and decreased coal-fired generation.

FOR FURTHER INFORMATION CONTACT: Hunter Hydas, IRP Project Manager, 
Tennessee Valley Authority, 1101 Market Street, Chattanooga, Tennessee 
37402; telephone 423-751-2453, or email [email protected]. Matthew 
Higdon, NEPA Project Lead, Tennessee Valley Authority, 400 West Summit 
Hill Drive, Knoxville, Tennessee 37902-1499; telephone 865-632-8051; or 
email [email protected].

SUPPLEMENTARY INFORMATION: This notice is provided in accordance with 
the Council on Environmental Quality's regulations (40 CFR 1500 to 
1508) and TVA's procedures for implementing the National Environmental 
Policy Act (NEPA).
    TVA is an agency and instrumentality of the United States, 
established by an act of Congress in 1933, to foster the social and 
economic welfare of the people of the Tennessee Valley region and to 
promote the proper use and conservation of the region's natural 
resources. One component of this mission is the generation, 
transmission, and sale of reliable and affordable electric energy. TVA 
operates the nation's largest public power system, providing 
electricity to nearly 10 million people in an 80,000-square mile area 
comprised of most of Tennessee and parts of Alabama, Georgia, Kentucky, 
Mississippi, North Carolina, and Virginia. It provides wholesale power 
to 154 independent local power companies and 58 directly-served large 
industries and federal facilities. The TVA Act requires the TVA power 
system to be self-supporting and operate on a nonprofit basis and 
directs TVA to sell power at rates as low as feasible.
    Dependable generating capability on the TVA power system is 
approximately 37,500 megawatts (MW). TVA generates most of the power it 
distributes with 3 nuclear plants, 6 coal-fired plants, 9 natural gas-
fired combustion turbine plants, 8 natural gas-fired combined-cycle 
plants, 29 hydroelectric plants, a pumped-storage hydroelectric plant, 
a diesel-fired facility, and 14 small solar photovoltaic facilities. 
TVA has gas-co-firing potential at one coal-fired site as well as 
biomass co-firing potential at its coal-fired sites. A portion of this 
delivered power is provided through long-term power purchase 
agreements. In fiscal year 2018, TVA efficiently delivered 163 billion 
kilowatt-hours of electricity to customers from a power supply that was 
39 percent nuclear, 26 percent natural gas-fired, 21 percent coal-
fired, 10 percent hydroelectric, and 3 percent wind and solar. The 
remaining one percent results from TVA programmatic energy efficiency 
efforts. TVA transmits electricity from generating facilities over 
16,200 circuit miles of transmission lines. Like other utility systems, 
TVA has power interchange agreements with utilities surrounding its 
service territory and purchases and sells power on an economic basis 
almost daily.
    TVA completes IRPs to determine the most effective energy resource 
strategies that will meet demand for electricity in its service area 
over a 20-year planning period. The recently completed IRP updates 
TVA's 2015 IRP. Consistent with Section 113 of the Energy Policy Act of 
1992, codified within the TVA Act, TVA employs a least-cost system 
planning process in developing its IRPs. This process takes into 
account the demand for electricity, energy resource diversity, 
flexibility, reliability, costs, risks, environmental impacts, and the 
unique attributes of different energy resources.

Future Demand for Energy

    TVA uses state-of-the-art energy forecasting models to predict 
future demands on its system. Because of the uncertainty in predicting 
future demands, TVA developed high, medium, and low forecasts for both 
peak load (in MW) and annual net system energy (in gigawatt-hours, GWh) 
through 2038. Peak load is predicted to change at average annual rates 
of +0.3 percent in the medium-load forecast (Current Outlook Scenario), 
-0.7 percent in the low-load forecast, and +1.7 percent in the high-
load forecast. Net system energy is predicted to remain flat in the 
medium-load forecast, decline at an average annual rate of 1.5 percent 
in the low-load forecast, and grow at an average annual rate of 2.0 
percent in the high-load forecast.
    Based on these load forecasts, TVA's current firm capacity (TVA 
generation, energy efficiency and demand response measures, and power 
purchase agreements), and including planning reserve margins of 17 
percent for the summer peak season and 25 percent for the winter peak 
season, TVA would need additional energy resources in the future. The 
medium-load case needs are about 2,700 MW of additional capacity and 
effectively no additional energy by 2028, growing to about 5,600 MW and 
1,700 GWh by 2038.

Alternatives Considered

    Five alternative energy resource strategies were evaluated in the 
Draft EIS and IRP. These resource planning strategies were identified 
as potential alternative means of serving future electrical energy 
demands on the TVA system while meeting least-cost system planning 
requirements. These alternative strategies were:
    Strategy A--Base Case (No Action Alternative): This strategy 
represents the continued implementation of the 2015 IRP, but also 
reflects subsequent

[[Page 48988]]

decisions made by the TVA Board of Directors. This alternative 
incorporates TVA's current assumptions for resource costs and applies a 
planning reserve margin constraint, which also applies in every other 
strategy.
    Strategy B--Promote Distributed Energy Resources (DER): This 
strategy is similar to the Base Case, but focuses on increasing the 
pace of DER adoption by incentivizing distributed solar and storage, 
combined heat and power, energy efficiency, and demand response.
    Strategy C--Promote Resiliency: This strategy promotes higher 
adoption of small, agile capacity to increase the operational 
flexibility of TVA's power system, while also improving the ability to 
respond locally to short-term disruptions.
    Strategy D--Promote Efficient Load Shape: This strategy promotes 
targeted electrification, demand response, and energy management to 
optimize load shape, including energy efficiency programs targeting 
low-income populations.
    Strategy E--Promote Renewables: This strategy promotes renewables 
at all scales to meet growing prospective or existing customer demands 
for renewable energy.
    The alternative strategies were analyzed in the context of six 
scenarios or future ``worlds'' that were determined to be reasonably 
possible to occur. The scenarios were TVA's Current Outlook, Economic 
Downturn, Valley Load Growth, Decarbonization, Rapid DER Adoption, and 
No Nuclear Extensions. Each scenario incorporates a set of 
uncertainties relevant to power system planning that include plausible 
future economic, financial, regulatory and legislative conditions, as 
well as social trends and adoption of technological innovations. 
Potential 20-year capacity expansion plans or resource portfolios were 
developed for each combination of alternative strategy and scenario 
using a capacity planning model. The model built each portfolio from a 
range of potential energy resource options that included TVA's existing 
energy resources and new nuclear, coal, natural gas, hydroelectric, 
wind, solar, and biomass generation, energy storage, energy efficiency, 
demand response, and electrification as well as facility retirement 
options. Each portfolio was optimized for the lowest Present Value of 
Revenue Requirements (PVRR) while meeting energy balance, reserve, 
operational, and other requirements. The portfolios were then evaluated 
using an hourly production costing program to determine detailed 
revenue requirements and near- and long-term system average costs. 
Recognizing the uncertainty in long-range planning studies, extensive 
stochastic analyses were also conducted to identify risk exposure 
within each scenario. Metrics were developed to rank the portfolios and 
included financial risk, carbon dioxide emissions, water consumption, 
land use, coal waste generation and changes in regional personal 
income. These metrics were used to compare the alternative strategies 
and their associated portfolios.
    Strategies A and B had similar scores for most metrics with the 
exception of total resource cost and environmental impacts. Higher 
total resource cost and lower environmental impacts for these two 
strategies is driven by the promotion of distributed resources.
    Strategy C had slightly higher PVRR and system average costs than 
Strategies A and B and had moderate financial risk compared to other 
strategies. Strategy C had the lowest environmental impact overall, due 
to the largest amount of coal retirements across scenarios, but had 
high land use impacts due to the large amount of solar expansion. 
Flexibility scores were comparable to Strategies D and E.
    Strategy D had the highest PVRR and system average cost due to the 
promotion of storage, was mid-range among the strategies in total 
resource cost, and had the highest risk exposure across all strategies. 
Strategy D had low environmental impact overall, but high land use 
impacts due to large solar expansion. Flexibility scores were 
comparable to Strategies C and E.
    Strategy E had slightly higher PVRR and system average costs than 
Strategies A and B. Similar to Strategy C, Strategy E had moderate 
financial risk compared to other strategies. Strategy E had low 
environmental impact overall, but higher land use impacts due to large 
solar expansion. Flexibility scores were comparable to Strategies C and 
D.
    These results were released in the Draft IRP and EIS for public 
review to solicit input and to better inform the development of the 
preferred alternative. In response to public comments received on the 
Draft IRP and EIS, TVA conducted additional sensitivity analyses that 
varied key resource assumptions involving natural gas prices, capital 
costs, energy efficiency and demand response market depth, integration 
costs and flexibility benefits, pace and magnitude of solar additions, 
higher operating costs for coal plants, more stringent carbon 
constraints, and variation in climate. The results of these analyses 
supported the energy resource ranges identified in the initial 
portfolios.
    TVA then developed a preferred alternative, the Target Power Supply 
Mix. In developing it, TVA took into account its least-cost planning 
requirement and customer priorities of power cost and reliability, as 
well as comments it received during the public comment on the Draft IRP 
and EIS. The Target Power Supply Mix establishes ranges of resource 
additions and retirements by the end of the first 10 years of the study 
(2028) and by the end year of the study (2038) in megawatts (MW). The 
recommended ranges are based on all scenarios and sensitivities 
evaluated, expressed over the 20-year planning period, with more 
specific direction over the first 10 years. The recommendation also 
highlights expectations under the Current Outlook Scenario based on 
TVA's current projections for key drivers such as electricity demand 
and commodity prices. Shifts in resource additions within the ranges 
would be based on key input variables, including changing market 
conditions, more stringent regulations, and technology advancements. 
The Target Power Supply Mix is described in detail in Section 3.8 of 
the Final EIS and in Section 9.4 of the Final IRP. Chapter 10 of the 
Final IRP describes near-term actions that TVA will take to implement 
the IRP and policy considerations that will guide the implementation of 
the IRP.

Public Involvement

    TVA published a notice of intent to prepare the IRP EIS in the 
Federal Register on February 14, 2018 (83 FR 6668). TVA then actively 
engaged the public through public scoping and public briefings during 
the development of the IRP and EIS. TVA also established an IRP Working 
Group to more actively engage stakeholders. Group members included 
representatives of local power companies (distributors of TVA power), 
state agencies, direct-served customers, academia, and energy and 
environmental non-governmental organizations. Members of the group met 
frequently with TVA IRP staff to review and provide input during the 
development of the plan. In addition, the Regional Energy Resource 
Council, a Federal Advisory Committee, provided review and advice 
periodically throughout the process.
    The Notice of Availability (NOA) of the Draft IRP and EIS was 
published in the Federal Register by the U.S. Environmental Protection 
Agency (USEPA) on February 22, 2019 (84 FR 5760). TVA accepted comments 
on the Draft IRP and EIS until April 8, 2019. During the comment 
period, TVA held

[[Page 48989]]

seven public meetings and a public webinar to describe the project and 
accept comments. TVA received about 300 comment submissions signed by 
about 1,270 individuals and organizations. After considering and 
responding to these comments, further evaluating the alternative 
strategies, and developing the Target Power Supply Mix, TVA issued the 
Final IRP and EIS. The NOA for the Final IRP and EIS was published in 
the Federal Register on July 5, 2019 (84 FR 31268).
    Following the publication of the NOA for the Final IRP and EIS, TVA 
received about 1,000 public comments via a form email through a Sierra 
Club campaign. These comments reiterated comments received on the Draft 
IRP and EIS and urged TVA to adopt the greatest amount of DER and 
renewable energy in the Target Power Supply Mix. Over 400 of these 
messages included statements added by the commenters. These statements 
did not raise issues of relevance to this IRP that were not previously 
raised in the comments on the Draft IRP and EIS and addressed by TVA in 
Appendix F of the Final EIS.

Environmentally Preferable Alternative

    All of the alternative strategies, as well as the Target Power 
Supply Mix, have several common features that affect their anticipated 
environmental impacts. No baseload generation is added, but there is a 
need for new capacity in all scenarios to replace expiring or retiring 
capacity. Solar expansion plays a substantial role in all scenarios, 
and gas, storage and demand response additions provide reliability and/
or flexibility. Emissions of air pollutants, including carbon dioxide, 
the intensity of carbon dioxide emissions, water use and consumption, 
and generation of coal waste decrease under all strategies. Although 
the differences between Strategies A through E are small, the impacts 
to most environmental resources are greatest for Strategy A (the No 
Action alternative) and least for Strategy C (Promote Resiliency), 
followed closely by Strategies B, D and E. The impacts of the Target 
Power Supply Mix span the range of Strategies A through E for most 
environmental and socioeconomic resources. An exception is the impact 
to land use, quantified as the land area needed to accommodate new 
generating and storage facilities, which is potentially greatest under 
the Target Power Supply Mix with the addition of up to 14,000 MW of 
solar capacity occupying up to about 103,000 acres (in a high-load 
forecast scenario). Under all strategies and the Target Power Supply 
Mix, at least 97 percent of the land area required for new generating 
and storage facilities would be occupied by solar facilities. Compared 
to other types of generation, the impacts of solar facilities to land-
based resources are relatively small and of shorter duration as 
described in Sections 5.2.3 and 5.5.5 of the Final EIS. Given these 
conditions, Strategy C is the environmentally preferable alternative.

Decision

    On August 22, 2019, the TVA Board of Directors adopted the 
preferred alternative, the Target Power Supply Mix. The Board also 
directed staff to monitor future developments to help determine when 
deviations from the recommended resource ranges should be made and to 
initiate an update to the IRP no later than 2024 and earlier if future 
developments make this appropriate.

Mitigation Measures

    The reduction of environmental impacts was an important goal in 
TVA's integrated resource planning process and all of the alternatives 
assessed by TVA do that. Because this is a programmatic review, 
measures to reduce potential environmental impacts on a site-specific 
level were not identified. As TVA deploys specific energy resources, it 
will review and take measures to reduce their potential environmental 
impacts as appropriate. TVA's siting process for generation and 
transmission facilities, as well as processes for modifying these 
facilities, are designed to avoid and/or minimize potential adverse 
environmental impacts.
    Potential impacts will also be reduced through pollution prevention 
measures and environmental controls such as air pollution control 
systems, wastewater treatment systems, and thermal generating plant 
cooling systems. Other potentially adverse unavoidable impacts will be 
mitigated by measures such as compensatory wetlands mitigation, 
payments to in-lieu stream mitigation programs and related conservation 
initiatives, enhanced management of other properties, documentation and 
recovery of cultural resources, and infrastructure improvement 
assistance to local communities.

    Authority:  40 CFR 1505.2.

    Dated: September 9, 2019.
John M. Thomas III,
Executive Vice President and Chief Financial Officer.
[FR Doc. 2019-20104 Filed 9-16-19; 8:45 am]
 BILLING CODE 8120-08-P