Watts Bar nuclear power plant over budget and schedule

Watts Bar

The Tennessee Valley Authority (TVA) on April 5 provided an update on the progress of construction at the Watts Bar 2 nuclear power plant near Spring City, Tenn. Expected to be completed by 2013 with a total cost of $2.49 billion, TVA President and CEO Tom Kilgore said the estimates on both cost and time were wrong.

“Based on the findings to date, we will be asking the TVA board of directors to approve the continued funding and the extended construction time for Unit 2 at Watts Bar Nuclear Plant,” Kilgore said. “We didn’t do a good enough job when we started in 2007. While our intentions were well founded, our execution and progress reviews were not.”

Kilgore said the initial detailed scoping, estimating and planning study (DSEP) done on the unit in 2007 and approved by the TVA board appeared “aggressive but doable” at that time. The DSEP approved by the board in 2007 projected a 60-month construction schedule and a cost of $2.49 billion.

TVA now expects the project to cost an additional $1.5 billion to $2 billion to complete, putting the total cost to complete Watts Bar 2 near $4 billion to $4.5 billion. TVA also said they will not complete the project by 2013, as expected and approved in the 2007 construction schedule, but should have the plant operational between September and December 2015. The Board of Directors of TVA must still approve both the cost and schedule increases.

The “team has completed a rigorous assessment of the Unit 2 project,” said Mike Skaggs, TVA senior vice president of Nuclear Construction. “Our assumptions led us down an incomplete path. The work is complex and there are many lessons learned.”

Skaggs added that walkdowns to support the initial estimate were not completed.

“Management was misaligned, and planning was poor,” he said.

Construction began on TVA’s third nuclear plant started in 1973 and Unit 1 at Watts Bar entered commercial operations in 1996. TVA, in 1988, suspended construction activities on Unit 2 due to a reduction in the predicted power demand growth. In 2007, TVA approved completion of Unit 2 after finishing studies of energy needs, schedule, costs, environmental impacts, and financial risks.

The project will add 1,180 MW to the TVA power system. TVA expected to have about 2,300 contract workers on site at the height of construction. When complete, Watts Bar 2 will create 290 permanent jobs.

Kilgore said a new leadership team is now in place to correct the problems and successfully complete Watts Bar 2.

“We have unfinished business,” he said.

Kilgore said Watts Bar 2 remains a cost-effective solution, even with the increased cost projection, to meeting the region's baseload power needs.

Skaggs briefed the board in February on the review’s preliminary findings. These new assessments of the unit’s cost and schedule will be considered by the board in April.

Currently, Watts Bar Unit 1 has a capacity of 1,170 MW.

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