TVA announced some big delays and a bigger price tag to complete its second reactor at the Watts Bar Nuclear Power Plant near Spring City.
The Unit-2 reactor could cost nearly double what TVA estimated before it started construction plans in 2007.
TVA president Tom Kilgore updated workers and the media on the construction project Thursday at what he described as a "family meeting."
"I am here to admit to you in front of the media and the community and everyone else that we didn't do a good enough job in our leadership when we started in '07," said Kilgore.
In 2007, TVA estimated the second reactor should be up and running by the end of 2012 and cost a total of around $2 billion to $2.5 billion. Now TVA estimates the reactor will be complete by the end of 2015 at a total cost of around $4 billion to $4.5 billion.
Much of the drastic cost increase is simply because TVA underestimated the price. Kilgore said the underestimation could be the result of basing its budget on the construction of a reactor at TVA's Browns Ferry Nuclear Power Plant. However, Kilgore said those estimates were skewed because Browns Ferry was retooling an existing plant while the Unit-2 reactor at Watts Bar is entirely new construction.
About $600 million of the increased price is for new plans not included in the original design. TVA senior vice president Mike Skaggs said about $300 million is for construction requirements following the nuclear disaster in Fukushima, Japan. Another $300 million is for "risk and contingency."
"It's for a breakage you didn't expect or failures on equipment when you put [the reactor] in service that you didn't expect," said Skaggs. "It is to cover those types of ramifications."
Kilgore admitted the 2007 estimate was wrong, but said the new timeline and price tag are accurate following a seven-month construction review by a couple of outside entities.
"It is bad to miss it once. I don't want to miss it twice," said Kilgore. "There is a lot of pressure for us to get it right this time."
Kilgore said he does not believe the Watts Bar project will increase rates for TVA customers.
Dr. Stephen Smith, executive director of Southern Alliance for Clean Energy, issued a statement on Thursday saying TVA's decision to restart construction on Watt's Bar in 2007 was flawed from the beginning.
He also said someone must be held accountable for the $2 billion mistake, and questioned TVA's pursuit of nuclear power when he says there are less-financially risky energy options available, such as energy efficiency, natural gas and renewable energy.
Senator Lamar Alexander, a long-time advocate for expanding nuclear power, shared his ongoing support of the new reactor.
Alexander said, "I don't like to see TVA miss a budget target or a construction schedule, but it's more important to get it right. If TVA meets the new budget and schedule, the second Watts Bar reactor still will provide clean electricity at a cheaper average cost than TVA pays today for electricity."
When the Unit-2 reactor is up and running at Watts Bar Nuclear Power Plant, TVA will have a total of seven operational nuclear reactors.