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UPDATE 1-TVA to retire 3,000 MW of coal power in Alabama and Kentucky

Scott DiSavino
Thursday, 14 Nov 2013 | 3:01 PM ET

(Adds units to be shut)

Nov 14 (Reuters) - U.S.-owned electric company Tennessee Valley Authority (TVA) said Thursday its board of directors approved a plan to retire eight coal-fired power units at three sites in Alabama and Kentucky that together can generate more than 3,000 megawatts.

The company also said in a statement it would invest about $1 billion to build a new natural gas-fired power plant at its Paradise plant in Kentucky.

A spokesman for TVA, Duncan Mansfield, said the company has not yet determined when it would shut the coal units or build the new gas plant.

In 2011, TVA agreed with the U.S. Environmental Protection Agency (EPA) to retire 18 of its 59 coal units representing about 2,700 MW by 2018.

Mansfield said the announcement Thursday would add eight more units, bringing the total number of closures to 26 or about 5,700 MW.

The current retirements affect all five coal units at the Colbert plant in Tuscumbia, Alabama; one of two operating units at the Widows Creek coal plant in Stevenson, Alabama; and Units 1 and 2 at the Paradise coal plant near Central City, Kentucky.

TVA said it would continue to operate Unit 3 at Paradise, which is one of its largest coal units.

TVA said it would retire the 628-MW Unit 1 and 602-MW Unit 2 at Paradise once the new gas plant enters service. The company did not say how big the new gas plant will be.

Electricity traders guessed a $1 billion gas plant would be about 1,000 MW.

TVA said the new round of coal retirements will move the company toward a more balanced generating fleet of about 40 percent nuclear, 20 percent coal, 20 percent gas and 20 percent hydro, renewables and energy efficiency.

TVA provides electricity for business customers and local power distributors serving 9 million people in parts of seven southeastern states.

(Reporting by Scott DiSavino; Editing by Gerald E. McCormick and Diane Craft)