Citizens Stuck With Bill For Tenn. Cleanup

Utility Rates Will Rise To Pay For Removal Of Carcinogenic Ash

(AP)  The tab for a toxin-laden ash flood at a coal-fired power plant in Tennessee could reach hundreds of millions of dollars, and ratepayers for the nation's largest public utility will probably be stuck with the bill.

The total cost of cleaning up last month's accident isn't yet clear, but the bill will be staggering. Extra workers, overtime, heavy machinery, housing and supplies for families chased from their homes and lawsuits are among the costs that are piling up.

And with few other places for the Tennessee Valley Authority to turn to cover the costs, the utility's 9 million customers in Tennessee and six surrounding states will bear the brunt in higher electricity rate hikes in the future, TVA Chairman Bill Sansom told The Associated Press on Wednesday.

"This is going to get into (electric) rates sooner or later," Sansom said. "We haven't even thought about going to Washington for it."

When a dike broke Dec. 22 at the Kingston Fossil Plant, some 1.1 billion gallons of sludge was released from a 40-acre settlement pond, blanketing nearly 300 acres in a rural neighborhood up to 9 feet deep in grayish muck and spilling into the Emory River threatening drinking water.

Though Sansom said the utility hasn't totaled how much it has spent so far, it has put more than 200 employees and contractors with heavy equipment to work on the cleanup since the dike broke. And already, 230 families have contacted TVA for various assistance - everything from testing their private wells to monitoring their air, erecting fences, cleaning their driveways and providing temporary housing.

Forty of those families have joined a pending lawsuit with several environmental groups demanding the federal courts levy fines and assure the community is made whole. Attorneys involved expect the number of litigants to grow into the hundreds.

Several local residents traveled to Washington to attend a Senate hearing Thursday on the spill. "We are not looking to punish TVA, we just want them to clean up the mess they created," said Ron Smith of Harriman.

"We want it out of there," Teresa Riggs said of the sludge. "We are afraid for our health."

There are potentially huge claims for class-action damages. Environmental advocate Erin Brockovich, made a celebrity by Julia Roberts' Oscar-winning movie about a community's fight against contaminated water, and a New York law firm are coming to meet victims this week.

"I've heard some people say billions," said Steve Smith, director of the Knoxville-based Southern Alliance for Clean Energy. "I don't believe that number. I think it is probably hundreds of millions. I mean, I don't think they are going to get out of this thing for less than $100 million."

Everyone points to a similar ash spill in 2005 at PPL Corp.'s Martins Creek power plant in Pennsylvania as a clue to the costs facing TVA. Some 100 million gallons of ash and water escaped through a defective drain in a lined sediment pond, about a tenth of the size of the TVA flood.

The PPL spill covered a much smaller area, coating only 20 acres and affected no homes. Most toxins flowed into the Delaware River, where they were vacuumed up. That cleanup cost $37 million, including a $1.5 million fine.

"Ours was much smaller in a number of ways," PPL spokesman Paul Wirth said. "If you look at the ash alone, we had 85,000 cubic yards escape. They (TVA) had 5.4 million. That's less than 2 percent of the amount of ash that came out of our basin."

The TVA also faces costs if it changes the way it stores coal ash to prevent future disasters. TVA is likely to install a dry ash disposal system at Kingston at untold cost. After a leak at the Kingston dike in 2003, TVA considered switching from wet ash disposal to dry ash, but considered the $25 million estimate too expensive. Dry disposal increases chances the ash becomes airborne, but eliminates the need for sedimentation ponds.

"I can tell you it is going to be a lot more (to convert now) than the $25 million they refused to spend back then to make sure the structure is safe," said Bruce Nilles, director of the Sierra Club's national coal campaign.

A conversion to dry ash disposal at Kingston could prompt demand for similar safeguards at five other TVA wet-ash coal-fired power plants in Tennessee, Kentucky and Alabama. TVA gets 60 percent of its electricity from coal and has five coal-fired stations already with dry ash disposal.

If ratepayers do face an electricity increase, it would come on the heels of another hefty hike. TVA adopted a 20 percent electric rate increase last fall to support a $12.6 billion budget. The rate hike was the largest in three decades and blamed largely on rising fuel costs.

As a federal corporation, TVA can issue bonds but can't issue stock for financing, so its options to generate more money are limited. The cleanup bill also comes on top of hefty debt. While TVA has been able to trim its bonded debt by more than $2.5 billion since 1997 to about $25 billion, TVA watchers have worried the federal agency could hit its congressional limit of $30 billion if it pursues plans to complete or build more nuclear plants.

Sansom said TVA won't shirk its duty to victims of the ash spill even though it will be expensive to recover.

"We are embarrassed about it; wished it didn't happen," Sansom said. "But we have got to do what we can to make everything right."

[gophwy71]

""""The problem is that fining the company a mega amount will only cause even higher prices to be passed on to the consumer because on top of the cleanup bill, the cost of the fine will ALSO be passed on to the consumer. I say, let''''s do it the Chinese way and take the responsible engineer out the back and shoot him. This would be a cheaper solution indeed. There is something to be said about Chinese justice.
Posted by wardww at 12:26 PM : Jan 08, 2009""""

Doesn''t matter. The company needs to go on file in this case. The EPA should shut them down until they have the WHOLE mess cleaned up. And if they then prove to be headed in the same direction again, shut them down permanent.

Maybe some jail time for the execs of the company.

[garyl615]

What should be done and won''t be done is the head of TVA being criminally charged......Time in the pen for the big shots.....That''s what this country needs!!!

[wardww-2009]

The problem is that fining the company a mega amount will only cause even higher prices to be passed on to the consumer because on top of the cleanup bill, the cost of the fine will ALSO be passed on to the consumer. I say, let''s do it the Chinese way and take the responsible engineer out the back and shoot him. This would be a cheaper solution indeed. There is something to be said about Chinese justice.

[donevis-2009]

I''ve read reports of this spill being three times worse than the Exxon Valdise incident. More proof of TVA lack of maintenance. It''s okay, let the people pay for it, they still have Social Security money coming in..

[wdrussell1]

We turned our watchdogs into lapdogs and now we pay the price.

[rrozsa-2009]

Posted by krowe78 at 08:31 AM : Jan 08, 2009

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Another great post -- wow, you''re on a roll today!

[rrozsa-2009]

Posted by krowe78 at 07:32 AM : Jan 08, 2009

===============

Thank you for your helpful and informative post.

[rrozsa-2009]

I don''t know why I keep wasting my time clicking the videos on these CBS news stories. It just stops and sits there after the 15-second commercial. Anyone else experiencing that problem?

[gophwy71]

""""Please do not feed the ladyorgans troll. The statements are made to provoke, nothing more. You are just taking the bait.
Posted by mecury69 at 09:25 AM : Jan 08, 2009"""

Actually, ladyorgans makes a VERY valid point. Unlike you whack jobs who want the government to live and mandate your life for you.

[gophwy71]

""""So it''''s not too unreasonable to think that the deregulation promoted by the Neocon''''s Great God Reagan and his disciples like George Bush, Sr. and Jr., could have contributed to this.
Posted by jbrown88881 at 08:37 AM : Jan 08, 2009""""

...and another one.

So, you''re saying we''re not responsible for our OWN actions? What a whack... I guess we might as well tear down the prisons and let everyone free....

[antoniof123]

I think that the managers of this company should all be fired and their fortunes should be taken to help clean up the mess.

If we make an example of them many the next group will keep their eyes on what they are doing. We reward the rich who screw up and then punish the poor and middle who try to do things right.

I for one am getting to the point where I don''t want to take it anymore. Lets make those that are responisble for it clean it up.

[mecury69]

Please do not feed the ladyorgans troll. The statements are made to provoke, nothing more. You are just taking the bait.

[KRowe_]

@ ballpen1:
There is a simple reason that we have worse utilities than many other countries. All you really need to fig it out is a map like this one: http://en.wikipedia.org/wiki/File:Countries_by_population_density.svg

Any country which is darker than we are SHOULD have better utilities and it has nothing to do with monopolies or capitalism. It is because in order to get a pipe or wire to your house you need to go farther than in these other countries. If we crammed all of the US pop into a space the size of Texas we would be able to get fail safe systems for electric too as well as perfect cell phone coverage and a lower costs for it all.

The fact that our utilities are as good as they are is actually a statement on how we have spent our money frugally not one on how the country is full of greedy capitalists. BTW, some countries (India and China most notably) are tackling this problem by basically packing everyone into cities and then mostly ignoring the infrastructure in the rest of the country. This is why cities in China are able to keep high standards in the populated areas even though they have much denser pops.

Wouldn''t work so well here though because our pop is spread fairly evenly through the country and we also manage most of our infrastructure spending at the state level (so each state does what it can for itself but doesn''t do much to help the other states unlike countries like China which manage most of their infrastructure on the federal level).

[gophwy71]

""""If you check I am sure this disaster leads right back to the whitehouse and Bush and Co.
Posted by demswin08 at 06:31 AM : Jan 08, 2009""""

Oh, THAT kind of moron. The company is at fault. It''s their sludge, their mess and THEIR responsibility.

[gophwy71]

""""...Perhaps, both the state and federal governments, can share in the cost??
Posted by tireslinger at 07:32 AM : Jan 08, 2009""""

So. You''re saying that we should share in the cost of cleaning up THEIR mess? I don''t think so.

What kind of moron would even THINK of trying to blame this on the Bush admin?

[gophwy71]

Reap what you sow...

[exusmcsgt]

"The tab for a toxin-laden ash flood at a coal-fired power plant in Tennessee could reach hundreds of millions of dollars, and ratepayers for the nation''s largest public utility will probably be stuck with the bill."

TVA mismanaged the site resulting in massive damages and will take the money to correct the problem from their customers.

Pathetic.

[greeneyes222]

TVA''s behavior has been nothing short of criminal, and unfortunately the Board led by Sansom has shared in that. They refused to fix known problems at this plant for 20 years, while giving millions in bonuses, skyboxes at sporting events, living large for "recruiting," crooked land swaps to benefit their buddies. And oh yeah, this is a government agency so the other government agencies like EPA gave them a pass.

If they''re as sloppy in the management of their nuclear plants as their record indicates they have been, there are more problems to come.

20 years of neglect and now Sansom says we''ll pay. I''d like to see Sansom pay as well - from a jail cell somewhere.

[KRowe_]

@ those who want more large utilities: Do you have any idea how much a new power plant costs? It is a little over $2 BILLION dollars for an avg plant. That doesn''t include maintenance, labor or material costs. TVA has 13 of those, 9 combustion and 3 nuke plants in TN. That may sound like a lot of plants but they most likely barely cover the state peak demand needs. Do you really think your going to improve on your 8.76 cent per KWH cost for electricity by adding more plants? TN has one of the lowest cost per unit of power in the country. Try living in HA where it is closer to 37 cents per KWH.

Power is one of the few commodities which (because of gov regs) is a nearly perfect supply and demand model. You are charged less per KWH when the plant produces more power and more per KWH when it makes less power (this probably explains the cost of power in HA). So if you really want cheaper power you need to build less plants not more. There are regs in place to protect you from monopolistic practices. The reason you only have one power supplier is because with 2 major plants in your area they will BOTH most likely go under. To further prove my point reread the article and take note of their debt.

References:
http://www.tva.gov/power/xmission.htm
http://www.eia.doe.gov/cneaf/electricity/epm/table5_6_a.html

[tireslinger]

I''m no Bush fan either, but have to agree with an earlier post, regarding not seeing how this incident is his fault. To add to that, agreeing with another post, I do think that the government should mandate that there will be no rate hikes, to cover cleanup costs. Perhaps, both the state and federal governments, can share in the cost??