Integrated Resource Plan 2015 FINAL SUPPLEMENTAL ENVIRONMENTAL IMPACT STATEMENT VOLUME 1 - MAIN TEXT TENNESSEE VALLEY AUTHORITY Integrated Resource Plan Document Type: EIS – Administrative Record Index Field: Final Environmental Impact Statement Project Name: Integrated Resource Plan Project Number: 2014-2 Supplemental Environmental Impact Statement July 2015 Proposed action: Integrated Resource Plan Lead agency: Tennessee Valley Authority For further information on the EIS, For further information on the project, contact: contact: Charles P. Nicholson Gary S. Brinkworth NEPA Compliance Integrated Resource Plan Project Manager Tennessee Valley Authority Tennessee Valley Authority 400 W. Summit Hill Drive, WT 11D 1101 Market St., MR 3K-C Knoxville, Tennessee 37902 Chattanooga, TN 47402 Phone: 865-632-3582 Phone: 423-751-2193 E-mail: [email protected] E-mail: [email protected] Abstract: The Tennessee Valley Authority (TVA) proposes to update its 2011 Integrated Resource Plan (IRP) to determine how it will meet the electrical needs of its customers over the next 20 years and fulfill its mission of low-cost, reliable power, environmental stewardship and economic development. Planning process steps included: 1) determining the future need for power; 2) identifying potential supply-side options for generating power and demand- side options for reducing the need for power; 3) developing a range of planning strategies encompassing different approaches, targets and emphasized resources; and 4) identifying a range of future conditions (scenarios) used in evaluating the strategies. Capacity expansion plans (portfolios) were then developed for each combination of strategies and scenarios, and these are evaluated for financial, risk, environmental, system flexibility and economic criteria. Five planning strategies, A – Reference Plan, B – Meet an Emission Target, C – Focus on Long-Term, Market Supplied Resources, D – Maximize Energy Efficiency and E – Maximize Renewables, a No Action Baseline Case alternative, and the Target Power Supply, the preferred alternative based on a combination of A, B and C, are analyzed. Under all alternative strategies and the Target Power Supply, a minimal amount of new baseload generation is added, coal-fired generation decreases and reliance on renewable and demand-side resources increases. Emissions of air pollutants, the intensity of greenhouse gas emissions and generation of coal waste decrease under all strategies. For most environmental resources, the impacts are greatest for the No Action alternative except for the land area required for new generating facilities, which is greater for the action alternatives, particularly Strategy E. INTEGRATED RESOURCE PLAN – 2015 FINAL SUPPLEMENTAL ENVIRONMENTAL IMPACT STATEMENT Summary Summary INTRODUCTION The Tennessee Valley Authority (TVA) has developed the Integrated Resource Plan (IRP) and associated programmatic supplemental environmental impact statement (SEIS) to address the demand for power in the TVA service area, the resource options available for meeting that demand, and the potential environmental, economic and operating impacts of these options. The IRP will serve as a roadmap for meeting the energy needs of TVA’s customers over the next 20 years. The Tennessee Valley Authority (TVA) is the largest producer of public power in the United States. With a generating capability of 37,000 megawatts, TVA provides wholesale power to 155 local power companies and directly sells power to 59 large industrial and federal customers. TVA’s power system serves 9 million people in a seven-state, 80,000-square-mile region (Figure 1). Figure 1 The TVA service area and generating facilities. S-1 INTEGRATED RESOURCE PLAN – 2015 FINAL SUPPLEMENTAL ENVIRONMENTAL IMPACT STATEMENT Summary Purpose and Need Like other utilities, TVA develops power supply plans. This planning process includes forecasting the demand for power and developing capacity expansion plans. TVA completed an IRP and associated EIS in 2011. Several changes in the power industry, both regionally and nationally, have led TVA to develop this new IRP and associated supplemental EIS. When completed, the new IRP will update and replace the 2011 IRP. The purpose of the IRP and EIS processes is to evaluate TVA’s current energy resource portfolio and alternative future portfolios of energy resource options at a least system-wide cost to meet the future electrical energy needs of the TVA region while taking into account TVA’s mission of energy, environmental stewardship and economic development. Energy resource options include the means by which TVA generates or purchases electricity, transmits that electricity to customers and influences the end use of that electricity through energy efficiency and demand response programs. As part of the IRP and EIS processes, TVA evaluated the future demand for electricity by its customers, characterized potential supply- and demand-side options for meeting future demand and assembled these options into planning strategies and capacity expansion plans or portfolios. TVA then evaluated the strategies for several criteria including capital and fuel costs, risk, reliability, compliance with existing and anticipated future regulations, environmental impacts and flexibility in adapting to changing future conditions. Following public review of the Draft IRP and SEIS, TVA has considered and addressed the public comments on the Draft IRP and SEIS, conducted further evaluations and has issued the Final IRP and SEIS. These reports identify TVA’s preferred resource planning strategy. TVA’s Board of Directors will decide whether to approve staff’s recommended plan or some other plan. Public Participation TVA conducted public scoping for the IRP and associated SEIS in October 2013 with the publication of the Notice of Intent in the Federal Register. TVA simultaneously issued news releases, posted notice on the project website and sent letters about the project to interested parties. During the 33-day scoping period, TVA held public scoping meetings at two locations and by webinar. About 45 people attended these meetings in person and about 50 participated by webinar. TVA received a total of 1,156 individual scoping comments. About 96 percent of the comments were from individuals with the remainder from organizations, businesses and state and federal agencies. Most of the comments from individuals were form letters and emails submitted in response to two advocacy campaigns. Comments from the largest of these campaigns thanked TVA for recent coal plant retirement decisions, urged TVA to prioritize the use of solar and wind energy, increase energy efficiency efforts and work to reduce the local economic impacts of coal plant retirements. Comments from the other campaign cited the abundance and stable cost of coal, the high capacity factor of coal plants, the employment provided by the use of coal and coal’s contribution of low and stable rates. Scoping comments addressed a wide range of IRP- related topics including potential energy resource options, impacts of power system operations and aspects of the integrated resource planning process. Results of the scoping process are available in the IRP EIS Scoping Report issued in June, 2014. To gain additional input, TVA established an IRP Working Group to more actively engage stakeholders throughout the development of the IRP. The 18-member group is comprised of representatives of state agencies, the Department of Energy, distributors of TVA power, S-2 INTEGRATED RESOURCE PLAN – 2015 FINAL SUPPLEMENTAL ENVIRONMENTAL IMPACT STATEMENT Summary industrial groups, academia, and energy and environmental non-governmental organizations. The members were expected to represent their constituencies and report to them on the IRP process, as well as provide input to TVA on the process. The group met at one- to two-month intervals beginning in November 2013. Additional information about the review group is available at http://www.tva.com/environment/reports/irp/index.htm. TVA held quarterly public briefings to educate the general public on the IRP planning process and to present results of major planning steps. Participants could attend these meeting in person or by web conference. The Draft IRP and SEIS were issued for public review and comment in March 2015. TVA held seven public meetings during the comment period. Comments were also accepted through an online form, by email, and by letter. TVA received about 200 unique comment submissions from about 2,400 people. TVA carefully reviewed the comments and responded to them in a comment response report. TVA’S RESOURCE PLANNING PROCESS TVA chose to employ a scenario planning approach in the IRP. The major steps in this approach include identifying the future need for power, developing scenarios and strategies, determining potential supply-side and demand-side energy resource options, developing portfolios associated with the strategies and ranking the strategies and portfolios. Need for Power The need for additional power is based on forecasts of the demand for power over the next 20 years and the ability of TVA’s existing energy resources to meet the forecasted demand. Demand forecasts are based on complex mathematical models that link electricity sales to regional economic activity, customer retention, the price of electricity, the price of substitute fuels and other factors for the residential, commercial and industrial sectors. The results are forecasts of peak load (the maximum amount of power used at a given