may have been difficult, Sansom said.
Capital spending and TVA's overall debt will rise over the next two years as TVA works to finish its new Watts Bar Unit 2 reactor and installs scrubbers and other pollution controls at its Gallatin coal plant, among other major projects. But with the expected completion of a second reactor at Watts Bar in fiscal 2015, TVA's new borrowings are projected to fall in subsequent years until, and unless, TVA decides to finish its Bellefonte nuclear plant, build new small modular reactors at Oak Ridge or build more gas-fired generation.
"We're approaching the end of this capital investment period that we have been in," TVA Chief Financial Officer John Thomas told the TVA board last month.
Johnson said the debt cap was more onerous when power demand was still rising and new generation had to be added.
"When you look at the demand projections we had five years ago and the amount of capital spending that you could envision, there was a rightful concern about whether you could do it under the debt cap," Johnson said. "The picture has changed dramatically in just the past 24 months."
TVA has spent $12 billion in capital projects over the past six years, but TVA's debt has risen only $1.2 billion. That's because the board adopted a new approach in 2006 to finance its major new capital projects with less debt and to make sure the debt is paid down on power plants and other major capital investments over their useful life.
The slowdown in new borrowing from previous estimates also reflects the drop in power sales for TVA brought on by improved energy efficiency and the Great Recession and its aftermath.
TVA's electricity sales peaked in 2006 before the recession and have remained well below that level. The loss of TVA's biggest industrial customer in May with the shutdown of the U.S. Enrichment Corp. uranium reprocessing plant in Paducah, Ky., cost TVA about 5 percent of its sales and will help reduce the agency's overall power sales in the next fiscal year by an estimated 4.6 percent below this year's level.
TVA's peak power demand also has been cut by the utility's change in the way it bills the municipalities and cooperatives that distribute TVA's power. TVA switched in 2011 from end-use pricing that billed distributors simply on how much electricity was sold every month to a demand-and-energy pricing approach that bills distributors based upon both overall consumption and the peak demand for each period.
That switch has encouraged distributors to do what they can to shift load off of peak demand periods to stabilize it. TVA estimates that change cut the peak demand by 3.5 percent from among just EPB and the four other biggest TVA distributors in the past couple of years.
"We do not expect to get back to the historic peak level [reached in 2006] until 2024 -- and that's before we apply the energy and demand programs that could further limit the growth in demand," Thomas said.
Contact Dave Flessner at firstname.lastname@example.org or at 757-6340.
(c)2013 the Chattanooga Times/Free Press (Chattanooga, Tenn.)
Visit the Chattanooga Times/Free Press (Chattanooga, Tenn.) at www.timesfreepress.com
Distributed by MCT Information Services
Most Popular Stories
- 15 Myths That Could Ruin Your Hispanic Ad Campaign
- Bitcoin Clones Lurch Onto Financial Scene
- General Motors Names Mary Barra as First Female CEO
- Clinton to Keynote Annual Simmons Leadership Conference
- AIG to Create 230 Jobs in Charlotte
- How Bitcoin and Other Cryptocurrencies Work
- Californians Want to Legalize Marijuana
- Selena Gomez, Shakira Among Top Hispanic Searches
- Pacific Trade Pact Delay Hinders U.S. Pivot to Asia
- PhD Project Grooms Business Profs