FYI
---------------------- Forwarded by Christi L Nicolay/HOU/ECT on 04/24/2000 
10:33 AM ---------------------------


Ben F Jacoby
04/23/2000 10:54 AM
Sent by: Ben Jacoby
To: Christi L Nicolay/HOU/ECT@ECT
cc:  
Subject: TVA Press Release on Generation Plans

Thought you might be interested in the press release below.

Ben
---------------------- Forwarded by Ben Jacoby/HOU/ECT on 04/23/2000 08:59 AM 
---------------------------


"Gary Hasty" <ghasty@pd-engineers.com> on 04/22/2000 08:37:16 AM
Please respond to <ghasty@pd-engineers.com>
To: "Ben Jacoby (E-mail)" <ben.f.jacoby@enron.com>
cc:  
Subject: TVA Press Release on Generation Plans



This item appeared in The Times & Free Press on Saturday, April 22, 2000.
Thought you might be interested in it.

Gas Turbines Help Meet New Power Peaks for TVA

     By DAVE FLESSNER
     Business Editor

The Tennessee Valley Authority hasn't started building any new coal or
nuclear power plants in more than 25 years.

But the federal utility is still adding to its power to meet the growing
demand for electricity.

In each of the next three years, TVA is adding eight gas-fired turbines to
help meet ever-higher electricity peaks in the summer months.

The new units won't run most of the time, unlike the base-load plants
erected during the first half-century of TVA's history. But TVA is still
spending more than $700 million for all of the new plants and contracting to
spend more money buying power from other producers in the Tennessee Valley.
"Our summer peaks are growing from 2 to 3 percent a year and we need these
units to meet our power demand," said TVA spokesman Gil Francis. "These are
the most reliable and best-cost option for us at this time."  With an extra
600 megawatts of capacity from eight of the gas- or oil-fired turbines this
summer, TVA officials insist they are ready for an expected record-breaking
demand for electricity later this year.

"We don't control the weather," TVA Senior Vice President Greg Vincent told
agency directors earlier this week. "A real extreme weather event could
cause us problems, and a lot of other people problems. But outside of that,
we have taken every measure we can."  TVA consumers demanded a record 28,295
megawatts last July 30 when temperatures across the valley averaged 96
degrees. TVA projects the demand will be up 2 to 3 percent this year because
of the growing number of homes, businesses and air conditioners in its
7-state service territory.

TVA is adding four gas turbines at both its Gallatin and Johnsonville fossil
plants in Tennessee. The turbines will cost about $200 million and give TVA
a total of 28.  The agency will build another eight units next summer, and
its board on Wednesday approved a $246.8 million contract with General
Electric for another 680 megawatts of peaking power from eight more units.
Those units, equipped to burn either coal or oil, are scheduled to come on
line in June 2002.  "There's a long waiting period for these units, so
you've got to get in line to get them ready when you need it," Mr. Francis
said.

But the scheduling and cost for the peaking units is far less than building
a major power plant. The Watts Bar Nuclear Power Plant, which TVA began in
1972, wasn't completed until 1996. The Unit 1 reactor alone cost $6 billion
to complete.  To pare its $27 billion debt, TVA's board adopted a 10-year
plan three years ago to limit new borrowings and to turn to other suppliers
or peaking units to meet future energy growth.  Next year, TVA also has
contracted to begin buying up to 440 megawatts of power from the Red Hills
Power Project, a privately owned, lignite-powered plant in Mississippi.

TVA has a backup plan this summer to buy up to $100 million in electricity
from outside its system if needed to ensure it has a cushion of about 16
percent, Mr. Vincent said.  Drought conditions that could have limited power
generation from TVA's 29 hydro units eased some with early April rains.
However, valley rainfall still stands about 11/2 inches below normal for the
year.

Gary L. Hasty
57 White Plains Drive, Suite 200
Jackson, TN  38305
(901) 664-0209 Office
(901) 660-2631 Fax
(901) 267-6672 Cellular
ghasty@pd-engineers.com