Unlucky Break: TVA ratepayers will likely get ash-flood cleanup bill in form of a rate increase

Credit: AP Photo

This Dec. 29 photo shows coal-ash slurry left in a containment pond near the Kingston Fossil Plant after the dike at left broke.

By: JournalNow Staff | THE ASSOCIATED PRESS
Published: January 08, 2009

KNOXVILLE, Tenn.

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 is not yet clear, but the bill will be staggering. Extra workers, overtime, heavy machinery, housing and supplies for families driven 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 increases in the future, TVA Chairman Bill Sansom said yesterday.

"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 at the Kingston Fossil Plant on Dec. 22, 1.1 billion gallons of sludge were 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 that the TVA has not 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 assistance for 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 that the federal courts levy fines and assure that the community is made whole. Attorneys involved expect the number of litigants to grow into the hundreds.

Several residents went to Washington to attend a Senate hearing to be held today about 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.

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

"I've heard some people say billions," said Steve Smith, the director of the Southern Alliance for Clean Energy, based in Knoxville. "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."

The TVA also faces costs if it changes the way that it stores coal ash to prevent future disasters. It is likely to install a dry ash-disposal system at Kingston at considerable 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 high. Dry disposal increases chances that the ash becomes airbone, but eliminates the need for sedimentation ponds.