Despite a drop in power sales this year, TVA directors today approved supplier contracts valued at more than $4 billion to fuel and maintain the utility’s power plants over the next decade and a half.
General Electric landed the biggest contract. TVA agreed to pay GE up to $3 billion through 2024 for combustion turbines for both its fossil-fuel and nuclear units.
“Even a year ago, it would have cost a heck of a lot more,” TVA Director Howard Thrailkill said during a TVA board meeting today in Johnson City, Tenn.
Other major contracts were awarded to supply TVA’s nuclear plants, including a pact worth up to $500 million for the United States Enrichment Corp. for uranium hexaFLUORIDE and enrichment, $255 million for Areva NC Inc. for uranium and another $100 million to Urenco Enrichment Co. for uranium.
Siemen Energy Inc. will be paid up to $110 million for parts and services for TVA nuclear plant work and another $50 million for parts and service on TVA fossil plants over the next decade.
To help maintain and upgrade equipment at TVA coal and hydro units, G-UB-MK was awarded a contract for $347.4 million.
TVA President Tom Kilgore said the contractors help TVA maintain and fuel the utility’s power plants more efficiently than maintaining a permanent TVA staff to do such work.
TVA Director Dennis Bottorff said the spending under the contracts will have to remain within the annual capital budget set by TVA.
Mr. Kilgore told TVA directors today that TVA power sales in the current fiscal year are down nearly 5 percent from a year ago, reflecting the downturn in the economy of the Tennessee Valley. But long term, TVA expects electricity sales to continue to grow it the agency’s seven-state region.