03-11161. Addition of Electric Generation Baseload Capacity in Franklin County, TN

AGENCY:

Tennessee Valley Authority.

ACTION:

Issuance of Record of Decision.

SUMMARY:

This notice is provided in accordance with the Council on Environmental Quality's regulations (40 CFR parts 1500 to 1508) and TVA's procedures implementing the National Environmental Policy Act. TVA has decided to adopt the No Action alternative identified in its Final Environmental Impact Statement for the Addition of Electric Generation Baseload Capacity in Franklin County, Tennessee.

The Final Environmental Impact Statement (FEIS) was made available to the public in August 2001. A Notice of Availability (NOA) of the FEIS was published by the Environmental Protection Agency in the Federal Register on August 31, 2001. The U. S. Air Force is a cooperating agency in the development of the EIS. In the FEIS ,TVA identified the construction of a natural gas-fired combined cycle power plant with a nominal output of 510 Megawatts (MW) for intermediate/baseload capacity at a site on the Arnold Air Force Base (AAFB) in Franklin County, Tennessee to be operational as early as June 2003 as the preferred alternative, contingent upon Air Force approvals. However, because projections for near-term baseload power demand changed to indicate that ample power from other generation sources within the TVA service area should be available to meet TVA's near-term power needs at competitive prices, TVA concluded in March 2002 that the most prudent course of action was to not proceed with the project.

FOR FURTHER INFORMATION CONTACT:

Bruce L. Yeager, Senior Specialist, National Environmental Policy Act, Environmental Policy and Planning, Tennessee Valley Authority, 400 West Summit Hill Drive, mail stop WT 8C, Knoxville, Tennessee 37902-1499; telephone [phone] or e-mail [e-mail].

SUPPLEMENTARY INFORMATION:

Background

In December 1995, TVA completed and published Energy Vision 2020—Integrated Resource Plan/Programmatic Environmental Impact Statement. Energy Vision 2020 projected demands for electricity in the TVA power service area through 2020 and evaluated and recommended ways of meeting the projected increases. Energy Vision 2020 evaluated an array of power supply technologies, both supply-side and demand-side. A portfolio of options drawn from several effective strategies was chosen as TVA's preferred alternative. This preferred alternative included the following portfolio components:

• Supply-side alternatives, including combined cycle plants, purchasing and exercising call alternatives, purchasing power from independent power producers, developing renewable energy resources, improving the existing hydroelectric generating system, and converting Bellefonte Nuclear Plant to an alternative fuel source, such as natural gas or gasified coal;
• Customer service alternatives, including demand-side management and beneficial electrification;
• Environmental control alternatives to reduce pollutant emissions including switching to cleaner fuels; and
• Resource management alternatives to reduce risks, including increased use of natural gas to meet future environmental regulations.

TVA projections in its annual report to the Southeastern Electric Reliability Council (SERC) indicate continued growth of baseload energy need at a rate of approximately 2% per year from 2001 through 2009 (equivalent to the medium growth projection of TVA's Energy Vision 2020). Recent experience indicated that the demand for baseload generation had been slightly greater than projections. When the FEIS was completed in August 2001, it appeared that without TVA-owned and operated new capacity, none of the other programs or portfolio components identified above, either individually or collectively, would be adequate to meet TVA's power generation need. Events in the interim period altered this perception.

Tiering from the Energy Vision 2020 EIS, the FEIS for Addition of Electric Generation Baseload Capacity in Franklin County, Tennessee presented a site-specific analysis of the impacts expected to result from the addition of a new combined cycle power plant to TVA's power system for meeting baseload and intermediate electricity needs. In addition to adding baseload/intermediate capacity to the TVA system, location of the plant in the project area would have increased system reliability.

Alternatives Considered

The No Action alternative would result in TVA not constructing a combined-cycle generating plant at either of the proposed sites in Franklin County, Tennessee. Under this alternative, TVA's overall ability to supply low cost, reliable power would rely upon other options from the Energy Vision 2020 portfolio. Although the FEIS states that relying on those approaches alone might not allow TVA to meet future customer demands for low-cost, reliable power, TVA's perception of the risk changed based on changes in economic and power supply conditions.

Feasible action alternatives for meeting the stated purpose and need include the entire portfolio of actions recommended in Energy Vision 2020. These actions include various supply-side actions, customer service alternatives, and environmental control alternatives. TVA is currently using all of these Energy Vision 2020 recommended options, and managing their use in a way which provides optimum flexibility at the lowest cost. However, at the time the FEIS was prepared, TVA's generation (or avoidance of demand) was not expected to be sufficient to meet near-term baseload demands. Within the time frame for which additional generation capacity was needed, the only action alternatives considered reasonable for detailed assessment in the EIS were the proposed construction and operation of a combined cycle power plant at one of two sites in Franklin County, Tennessee.

Two candidate sites were selected for detailed evaluation in the EIS based upon extensive screening using the following criteria: Transmission system connection (system support and connection cost); natural gas supply (pipeline availability, capacity and delivered fuel cost); air quality impacts (likelihood of the area being able to incorporate additional emissions); and water supply (surface or groundwater availability). The EIS assessed the impacts of one plant configuration. Infrastructure requirements for the site alternatives are very similar. Road upgrades, potential routes for a new 500-kV transmission line from the substation to the alternative sites, water supply/discharge pipelines, a construction/emergency power line, and a natural gas pipeline for connecting with an East Tennessee Natural Gas (ETNG) pipeline were evaluated for potential impacts. In addition, the EIS assessed the impacts of upgrading 26.5 miles of existing natural gas pipeline by ETNG to ensure adequate gas supply for the project.

Decision

Due to changing economic conditions and reduced forecasts of electric power supply requirements, TVA re-evaluated whether and under what conditions to proceed with the proposed combined cycle power plant project. Current projections indicated that ample power from generation sources within the TVA service area should be available to meet TVA's near-term power needs at competitive prices without the power from the proposed combined cycle plant. After careful consideration, in March 2002, TVA concluded that the most prudent course of action was to not proceed with the proposed project.

Environmentally Preferred Alternative

Except for four environmental criteria the impacts of constructing and operating the proposed 510-MW combined cycle plant and its associated infrastructure would be indistinguishable at the two alternative sites. Use of Site 2 would involve longer utility lines for connection to natural gas, water, potable water, etc., which would result in greater disturbance to the environment for trenching and equipment activity. However, these impacts would be minor with the use of best management practices. Considering all environmental factors, including, as discussed below, socioeconomic impacts and the speculative impacts of purchased power generation, the FEIS selected the construction and operation of a combined cycle combustion turbine electric generating plant at Site 4 in Franklin County, Tennessee as the marginally environmentally preferred alternative.

The No Action Alternative would have no known local impacts at either of the sites (i.e., baseline conditions would continue). Adoption of the No Action Alternative however, could increase the risks of TVA's possible inability to meet electricity demand and the consequent socioeconomic impacts to residents of the region. However, in light of changed projections for near-term demand and available known baseload generation sources, the risk of adverse socioeconomic impacts from TVA's possible inability to meet electricity demand is minimal. TVA has determined that the current mix of available and planned generation sources is sufficient to meet electricity demand. The FEIS also asserts that there would be speculative environmental impacts associated with generation of electricity from other unknown sources. While these impacts are too speculative for detailed analysis, it is unlikely that they would, by themselves (i.e., without the risk of socioeconomic impacts from not meeting power demand) outweigh the impacts of constructing and operating the proposed new generation plant. Therefore, TVA has concluded that the No Action Alternative is environmentally preferable.

Environmental Consequences and Commitments

With the continuance of baseline conditions under the No Action Alternative, no environmental consequences are anticipated, and, therefore, no commitments are required.

Dated: April 2, 2003.

Joseph R. Bynum,

Executive Vice President, Fossil Power Group,