FYI
---------------------- Forwarded by Christi L Nicolay/HOU/ECT on 01/13/2000 
08:55 AM ---------------------------


"Tracey Bradley" <tbradley@bracepatt.com> on 01/13/2000 08:15:04 AM
To: "Jeffrey Watkiss" <dwatkiss@bracepatt.com>, Christi L 
Nicolay/HOU/ECT@ECT, jharts@enron.com, Sarah Novosel/Corp/Enron@ENRON
cc:  
Subject: Tennessee Valley Authority Plans New Natural-Gas Fired Plant



I've highlighted the portion of the article that discusses Enron.

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Tennessee Valley Authority Plans New Natural-Gas Fired Plant
Dave Flessner , Chattanooga Times/Free Press

( January 13, 2000 )

Jan. 13--The Tennessee Valley Authority is preparing to locate its first new 
power plant in a generation.

But unlike the massive and controversial nuclear plants TVA proposed in the 
1960s, the newest power generating facility will be much smaller and less 
controversial than any plant TVA has erected in the past half century.

TVA is proposing to build a natural gas-fired plant on farmland in Haywood 
County, Tenn., about 40 miles north of Memphis. TVA has optioned to buy any 
of three different farms near Brownsville, Tenn., to locate a plant capable 
of generating between 1,000 megawatts and 1,700 megawatts of electricity.

The preferred plant size would be a Westinghouse unit costing TVA over $200 
million and capable of generating 1,400 megawatts of power -- slightly more 
than what each reactor at the Sequoyah Nuclear Plant produces at full power.

But the new plant will generate power less than 30 percent of the year when 
TVA's power demand is at its peak.

"We need additional peaking power in the western portion of our service 
territory and these sites are well located near natural gas pipelines and one 
of TVA's 500-kilovolt transmission lines," said Roy V. Carter, project leader 
for the proposed new plant.

Mr. Carter said the natural gas-powered plant won't have the pollution 
problems of either coal or nuclear plants. The new plant would be the first 
that TVA has ever built not on a river or lake. But the underground water 
supplies should be adequate since the plant will typically operate only a few 
hours a day, even during the summer and winter peak demand periods.

Environmentalists who have fought TVA's nuclear and coal plants in the past 
are welcoming the switch to natural gas.

"We support TVA getting a larger share of generation from natural gas because 
it is a much cleaner source of fuel," said Dr. Steve Smith, executive 
director of the Tennessee Valley Energy Reform Coalition, a consumer and 
environmental advocacy group. "We would hope that TVA will try to use these 
type of plants to replace some of the dirtier coal plants, which are major 
sources of air pollution in the Valley. These shouldn't just be used to 
generate more and more power for TVA to sell without any type of demand 
management strategy to also encourage consumers to use less electricity."

But TVA officials insist the extra power is needed just to keep pace with 
rising power consumption in TVA's 7-state service territory. Electricity 
consumption in the Valley -- already one of the highest regions in the 
country -- is growing twice as fast as the national average.

TVA has signed option purchase agreements to buy power from other producers. 
Enron has even built three natural gas-fired plants on the western edge of 
the TVA territory. The energy company built a 475-megawatt peaking plant in 
Brownsville, Tenn., last year near where TVA wants to build its newest plant. 
Last year, Enron also began operations on a 475-megawatt plant in Caledonia, 
Miss., and a 390-megawatt plant in New Albany, Miss.

"We will continue to buy power, when needed, from other sources," TVA 
spokesman John Moulton said. "But we've found that in the crunch times in the 
summer it is good to have your own power source."

A hearing on TVA's new plant is scheduled in Brownsville at 5:30 p.m. 
tonight. But because the new plant is located in a rural area and will 
generate only between 12 and 30 permanent jobs, it has not attracted much 
public comment yet, Mr. Carter said.

The environmental review is expected to be completed this summer and the 
plant should be in operation by June 2001.

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(c) 2000, Chattanooga Times/Free Press, Tenn.