Nuclear downsizing

› TVA to cut workforce as last reactor is finished › 3,500 employees get offer to leave in cost-cutting move

As it prepares to start up its last remaining unfinished nuclear reactor this summer, the Tennessee Valley Authority is preparing to cut its nuclear power staff to its lowest level since the federal utility launched America’s most ambitious nuclear construction program a half century ago.

TVA is offering the 3,500 employees in its nuclear unit incentives to voluntarily quit or retire within the next three months to help pare its staff and operating expenses to meet its fiscal 2017 budget targets. TVA has not announced yet how many jobs it intends to cut. But in a similar company-wide program over the previous three years, TVA eliminated about 2,000 jobs and reduced its overall staff to just over 10,000 employees.

At its peak in 1981 when TVA was building nuclear units across its seven-state region, TVA had 51,709 employees.

“We continually evaluate our business to determine the right way to keep our costs down while operating our units safely and efficiently,” TVA spokesman Jim Hopson said Thursday. “It’s an ongoing assessment of all of our business units to help meet our congressional mandate to keep our rates as low as possible.”

TVA is conducting final power ascension tests this summer to soon start its Watts Bar Unit 2 reactor near Spring City, Tenn. — the last of seven reactors TVA has built since it launched its nuclear power program in 1967. Although TVA once planned to build 17 nuclear reactors, it has no further plans at this time to build or finish any more nuclear units.

With no more reactors being designed or built, TVA is phasing out most of its construction and design staff and focusing on operating its nuclear reactors at Sequoyah and Watts Bar in Tennessee and at Browns Ferry in Alabama.

Hopson said TVA is still studying whether to build small modular reactors in Oak Ridge at the site of the abandoned Clinch River Breeder Reactor, but that project currently employs only a handful of TVA workers.

Any decision to pursue small modular reactors in conjunction with the U.S. Department of Energy is likely years away. TVA’s long-term power plan adopted last year doesn’t forecast any need for a major new power plant until after 2030.

Gay Henson, president of Local 1937 of the TVA Engineering Association, said the planned staff cuts will hurt many communities in the Tennessee Valley and limit the scope and power of the federal utility by eliminating many skilled and highly paid engineers and nuclear operators.

“The effects of the decline in TVA’s workforce is far reaching,” she said. “Whole communities have been hit pretty hard, especially in rural areas of the valley.”

Henson said TVA “is equipped with some of the most highly skilled and experienced power industry workers in North America.”

“I am concerned about the continued cuts and believe this announcement of further reductions is simply a cost cutting measure,” she said in a statement Thursday. “We have no fat left to cut. TVA is now cutting into the meat — critical employees whose expertise is coveted within the power industry.”

All 3,500 of TVA’s nuclear power employees who have at least one year of experience are eligible to apply for the early retirement incentives from July 11 to July 29. Hopson said the incentive package has not yet been detailed, but TVA regularly pays displaced workers one week’s pay in severance for every year an individual has worked for the Authority.

Employees opting to leave TVA would have to apply for such a severance and TVA would have the option whether or not to accept each retirement or resignation, Hopson said. TVA is trying to complete the voluntary reduction-inforce plan in the nuclear division by Sept. 30, the last day of its current fiscal year.

TVA President Bill Johnson, who was appointed CEO three years ago, has sought to cut TVA operating expenses to help bring the utility’s rates more in line with some of its low-cost competitors in the Southeast. TVA decided earlier this year to sell its unfinished Bellefonte Nuclear Power Plant in Alabama, and the utility has shut down its Widows Creek and Colbert coal plants, also in Alabama.

Over the past three years, TVA reorganized its staff and trimmed more than $600 million in annual operating expenses to help keep its annual rate increases below the general inflation rate. The full streamlining of the nuclear division was delayed until this year when TVA hired Chief Nuclear Officer Joe Grimes, who has reorganized his division while finishing the $4.7 billion completion project at the Watts Bar Unit 2 reactor.

The new unit at Watts Bar is the first new reactor added to America’s electricity grid in 20 years. The reactor began generating power in early June, but it has had two unplanned trips since and remained offline Thursday while TVA conducts tests and prepares to restart the reactor in the next few days.

TVA hopes to complete its startup testing, bring the unit to full power and declare Watts Bar Unit 2 to be a commercial unit later this summer, Hopson said.

The cutbacks in TVA’s nuclear power staff announced this week are part of a nationwide decline in employment among utilities operating nuclear power plants.

Last week, California’s largest electric utility, Pacific Gas & Electric Co., announced it would close the state’s last operational nuclear power plant at Diablo Canyon. U.S. utilities have announced plans to shutter five nuclear power plants in recent years, more than offsetting the four new reactors being built in Georgia and South Carolina.

From 1973 to 2010, electricity generated by nuclear plants in the United States rose tenfold to more than 800,000 megawatt hours and five years ago U.S. Sen. Lamar Alexander, R-Tenn., urged American utilities to build another 100 nuclear reactors in the next two decades. But as power demand slowed and natural gas became cheaper, nuclear power generation declined and several plants have been retired with more scheduled to shut down over the next two decades.

There are currently 56,000 employees working at 99 operating nuclear reactors in the United State, according to the Nuclear Energy Institute, an industry trade group.

“The total number of nuclear employees has dropped in recent years due to the closing of five nuclear power plants,” said Elizabeth McAndrew-Benavides, senior manger of strategic workforce planning for the Nuclear Energy Institute. “We expect the number to continue to decrease as additional units are closed. However, plants that are shut down do not let go of all of their staff. They typically retain 20 percent of their staff to maintain emergency response positions and oversee decommissioning efforts.”

Last month, GE Power, which acquired the Paris-based Alstom Power Corp., last year, announced it would shut down Alstom’s nuclear turbine manufacturing facility in Chattanooga by the end of the year, cutting out the last of the plant’s 235 jobs. The company said the decline in new nuclear orders contributed to the decision to close the Chattanooga facility.