TVA officials voted for the move Thursday morning at a board meeting in Mississippi, with CEO Bill Johnson citing stagnant demand for power and increasingly stringent federal regulations for coal-fuelled facilities.

In all, it is eight coal units at three plant sites making up a combined 3000 megawatts of capacity. They include all five coal units at the Colbert Fossil Plant in Tuscumbia, Alabama; one of two operating units at Widows Creek in Stevenson, Alabama; and two of three units at the Paradise facility near Central City, Kentucky.

Paradise Unit 3, one of TVA’s largest coal units, will continue to operate.

Officials said that some of the units were already idled or scheduled for idling or retirement under a prior deal with the US Environmental Protection Agency.

“This will support our focus on cleaner energy and bring additional, necessary balance into our portfolio for managing our current and projected load profile,” he said.

“Over the past months, we considered a number of capacity studies, including TVA’s 2011 Integrated Resource Plan and associated financial and environmental analyses.

“We also looked hard at the effect on rates, our employees and any potential economic impact to local communities.”

TVA officials said it came to the decision by conducting detailed analyses of the facilities, including an environmental assessment to review options for meeting new, stricter air quality regulations at the Paradise plant.

Some of those options included installing additional emission controls on Units 1 and 2, constructing a new gas-fired generating plant at the site, or taking no action at all.

Paradise, as a result, will see the construction of a gas-fired plant at an investment of about $US1 billion. The two coal units will be retired when the gas plant is available.

The new plan, which TVA said does not impact its recently approved FY 2014 budget, will leave the utility with a generation fleet of about 40% nuclear, 20% coal, 20% gas and 20% hydro, renewables and energy efficiency.

The diversified and more balanced portfolio, it said, will help it to manage its load growth and provide maximum flexibility.

“These were difficult recommendations to make as they directly impact our employees and communities,” Johnson said.

“But the plan is what’s best in terms of its positive impact on TVA’s rates, debt and the environment, and it will bring the greatest benefit to the people of the Valley.”

Johnson will now establish a schedule for the coal unit retirements.