F o s s i l
P o w e r
G r o u p
2011 in Review An evolving fleet to meet the needs of the Valley
“It’s the people of Fossil Power, and the people in the organizations that support us – that’s why we are successful.”
Message From Robert Fisher Fiscal year 2011 was a historic year for TVA’s Fossil Power Group (FPG) in many respects! The employees in FPG rallied and worked in tandem with other business units, vendors, contractors and TVA leadership to pull off some outstanding step changes in the fleet’s four cornerstones – Safety, Environment, Production and Cost. This is all part and parcel of the hard work, dedication and focus of FPG employees in response to TVA’s vision to be a leader in low-cost and cleaner energy by 2020. The Fossil Power Group intends to be an industry leader as well in establishing both operational and commercial excellence. If FY11 is any indication, we are well on the way. In these pages you will read just some of the FPG success stories that could be told. It is worth sharing and recognizing the immense effort that went into the results we had last year as an organization. We’ve been faced with many challenges, from new regulations to plant closure announcements to material condition issues and budget constraints. But despite adversity, we have had great success. We could not have done it without the support of our employees and our partners. As we move forward, we see the need to be increasingly transparent and to rely on the expertise of other organizations to help us move forward. I look forward to accelerating our progress for another banner year in 2012! With thanks to all in FPG and all our partners,
Robert Fisher Fossil Power Group
Safety The Fossil Power Group achieved significant safety milestones in fiscal year 2011. • FPG had a 50 percent improvement in safety over the previous year, with 15 of 18 business units hitting stretch targets. • Equipment Support Services as well as John Sevier and Kingston fossil plants all finished the year with zero recordable injuries. • The fossil fleet showed a 40 percent improvement in Human Performance events over the last 18 months. • Health and safety committees have been established at all sites and are taking ownership of the Brother’s Keeper program.
0.1000
0.10
FPG Fleet Significant HU Event Rate
0.09
0.0900 0.0843
0.0826
0.0813
0.0800
0.0798 0.0798 0.0799 0.0725 0.0701
0.0700
0.08 0.07
0.0696 0.0635 0.0589
0.0600
0.0577
0.06
Sep-11
Aug-11
Jul-11
Jun-11
May-11
Apr-11
Mar-11
Feb-11
Jan-11
0.04
Dec-10
0.0400 Nov-10
0.05 Oct-10
0.0500
“If you had told us a year ago that we would be having this kind of performance in safety and human performance, I know a lot of folks who would have said there was no way. It’s good to know we work for a company that puts our safety above production.”
Environment The Fossil Power Group made significant progress in a number of environmental areas in fiscal 2011, including reportable environmental events (REEs), energy efficiency, recycling and dry ash storage. • FPG had a 50 percent improvement in REEs over fiscal year 2010. • The fleet had a total of eight REEs, well below the target of 14 for the year. Allen, Cumberland, Gallatin, John Sevier, Kingston, Widows Creek and the entire gas fleet finished the year with no REEs. • The fleet met the SO2 target of 0.61, coming in at 0.60. • Several plants are working hard to reduce house load, including Colbert Fossil Plant, which has saved $586,832.40 by replacing traditional light bulbs with energy efficient bulbs. • FPG announced that environmental controls will be installed at Allen and Gallatin fossil plants, further testament to TVA’s commitment to cleaner coal technology. • TVA continues to expand the gas fleet with the purchase of Magnolia Combined Cycle Plant and the construction of John Sevier Combined Cycle Plant. • TVA’s environmental team rolled out new Environmental Protection Agency requirements to all impacted sites. • Fossil Power’s recycling program continues to grow. Cumberland is in the lead, having recycled more than 30,628 pounds of plastic last year. • Fossil Generation Development and Construction worked diligently to bring all ponds into compliance and to purchase land for expansion at sites where additional storage for coal combustion products is needed.
“FPG really pulled out all the stops to comply with the EPA Agreement this year. It was no small feat doing what we’ve been asked to do, and we have really stepped up.”
Production Fossil Power Group completed a number of projects to continue improving operational efficiency and reliability in 2011 and saw its oldest operating unit achieve a remarkable milestone. • The fleet’s seasonal equivalent forced outage rate (EFOR) was 6.4, well within the target of 7.8. Allen, Colbert, Gallatin, Kingston and Widows Creek plants met their stretch targets. • The simple-cycle combustion turbine fleet had a starting reliability of 98.5 percent, above its target of 98.3 percent. The fleet had a running reliability of 99.7 percent. • Johnsonville Unit 1 – the oldest operating fossil unit in the fleet – posted a record run of 1,082 days, the second-longest continuous run in the fleet and the nation. Shawnee Fossil Plant Units 2 and 7 had record runs in FY11. • FPG is eliminating $26 million in environmental risk through a demolition program. Projects started in FY11 included the demolition of Watts Bar and Bowling Green fossil plants, which will eliminate a $1.2 million annual cost for TVA. • The Power Service Shops have completed a new breaker shop where plants can send breakers for a drop-and-swap. This gives plants the ability to get high-quality 10-year breakers back faster and allows them ready access to spares. • Fossil Engineering addressed the drawing backlog in FY11, which peaked in 2010 at over 5,000 drawings. By the end of March 2011, the backlog was reduced to fewer than 100 drawings. In addition, the drawing backlog is currently maintained within industry best guidelines. • Fossil Power, in conjunction with the Transmission Reliability Organization, developed a commercial optimization program designed
to give real-time information on requested vs. actual plant capabilities, improving the ability to minimize any mismatch.
“We’ve made a lot of changes in the fleet that have allowed us to stay online longer and offer more dependable generation to the system.”
Cost All FPG organizations worked hard in 2011 to identify and implement cost-saving improvements. • Equipment Support Services saved TVA more than $1.6 million in capital through its stellar program to rebuild heavy machinery. • Through the hard work of the entire fleet, heat rate improvements will deliver $23 million in annual fuel cost savings. • The Fuels organization worked closely with the sites to implement a much broader risk
assessment. It has incorporated flexibility initiatives that have enabled the fleet to reduce costs by $30 million. • Financial Services’ work with Fossil Power to improve communication and teamwork contributed in large part to the fleet budget forecast coming within 0.5 percent of the target.
“Our planning process has matured to the point that we are able to do some really phenomenal things, all while lowering costs.”
People The people are the backbone of any organization, and Fossil Power Group is no exception. It’s only through the hard work and dedication of our employees and all the organizations that support us that we can meet our four cornerstones. • Throughout the process of announcing the idling of John Sevier Fossil Plant, the employees there have remained respectful and professional, ensuring that the legacy left by those 127 people will honor the contribution of the thousands who came before them in making John Sevier a star plant in the fleet. • Employee Resources has provided excellent support in helping navigate FPG through the idling by staying on top of open positions and proactively thinking about future unit idling to ensure everyone in Fossil has an option to stay in the organization. • FPG continues to recognize good catches and excellent performance through management review meetings, site recognition programs and the 101 Club. • During the natural disasters that occurred in 2011, including major flooding and a tornado outbreak, Fossil Power employees were at the ready, asking, “What can I do to help?” Shawnee and Allen remained online through the major April flood despite having to take drastic measures to ensure employee and equipment safety. After the tornadoes struck, hundreds of Fossil employees rolled up their sleeves to help fellow TVA employees pick up the pieces and start over. • Fossil Power employees continued the tradition of giving back to the community through their involvement in the Partners in Education program, donations to local charities, speaking engagements, plant tours, Earth Day events, and holiday donations of toys and food for those less fortunate. • The Combined Federal Campaign participation percentage increased from 68 percent in 2010 to 75 percent in 2011.
“We always have great participation from our employees when it comes to supporting the community.”
WINNING PERFORMANCE 2011
Rates | Reliability | Responsibility FPG Central Office Balanced Scorecard September 2011 Payout = 124.53%
Weight Status
Goals
Actual YTD Plan YTD YE Actual
Threshold
Target
Stretch
RATES FPG Total Spending ($Millions)
15% 1,098 1,103 1,098 1,133 1,103 1,076
TVA Net Cash Flow – Variance from Budget ($ Millions)
25%
161
0
161
-150
0
150
Reliability FPG Coal Seasonal EFOR (Percent)
15% 6.4 7.8 6.4 9.6 7.8 6.2
TVA Equivalent Availability Factor (Percent)
25% 85.1 86.0 85.1 84.1 86.0 87.9
Responsibility FPG Reportable Environmental Events 10% 8 14 8 17 14 11 FPG Safe Workplace (Recordable Injuries/Hours Worked)*
10% 0.70 1.55 0.70 2.15 1.55 1.23
Notes: * Includes TVA and Staff Augmented Employees. Hearing events are excluded. Any FPG employee or staff augmented contractor or permanent total disability will prevent payout for this indicator.
Status: = Actual YTD at or better than Plan YTD; Year End Actual at or better than Threshold = Actual YTD at or better than Plan YTD; Year End Actual worse than Threshold = Actual YTD worse than Plan YTD; Year End Actual at or better than Threshold = Actual YTD worse than Plan YTD; Year End Actual worse than Threshold
2.5M 12-079 12/11