SPRING CITY (WATE) - The Tennessee Valley Authority said Thursday its initial estimates to complete the Watts Bar Nuclear Plant Unit 2 reactor were incorrect. The federal utility seeks up to $2 billion to finish the project.
The new estimate of $1.5 billion to $2 billion is part of a seven-month construction review at Watts Bar. Utility officials say the completion estimate is between September and December 2015.
The TVA board instructed management to review the Watts Bar project.
"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," said TVA President and CEO Tom Kilgore.
"Watts Bar Unit 2 remains a cost-effective solution for meeting the region's base load power needs with clean energy at a competitive rate," he added. "Even with the estimated added cost, Unit 2 at Watts Bar will still be a competitive, reliable generation source for the people of the Tennessee Valley."
Mike Skaggs, TVA senior vice president for Nuclear Construction, said the estimate puts the total cost of completion "in the range of $4 billion to $4.5 billion.
Skaggs, who started the construction review in October 2011, said corrective actions would address "the root cause findings and help deliver on the cost and time estimates."
During Thursday's announcement at Watts Bar, Kilgore said the initial detailed scoping, estimating and planning study done on the unit in 2007 and approved by the TVA board appeared "aggressive but doable" then.
The plan approved by the board in 2007 projected a 60-month construction schedule and a cost of $2.49 billion.
"Our estimates on time and cost were wrong," Kilgore admitted. "While our intentions were well founded, our execution and progress reviews were not."
Skaggs said the construction review has shown "walk downs to support the initial estimate were not completed. Management was misaligned, and planning was poor."
New management is in place at the site, TVA said in a press release.
Skaggs also said that in the utility's new plan, it has added "contingency and an allowance for addressing Fukushima impacts."
Kilgore said he would follow the "trust but verify" approach going forward at Watts Bar Unit 2. "There is a measure of trust that Mike and his team have earned," he said. "At the same time, we will verify that the decisions being made, the money being spent, and the unfettered flow of information are accurate as part of how we ensure transparency and conduct our business."
Sen. Lamar Alexander issued a statement Thursday supporting the utility's new plan. "I don't like to see TVA miss a budget target or a construction schedule, but it's more important to get it right," he said. "If TVA meets the new budget and schedule, the second Watts Bar reactor still will provide clean electricity at a cheaper average cost than TVA pays today for electricity. And the cost of finishing Watts Bar II still will be much cheaper than the cost of building a new reactor."
The TVA board will consider the new estimates later in April.
Watts Bar is TVA's third nuclear power plant. (source: TVA)
