The Tennessee Valley Authority (TVA) is expected to buy nuclear fuel from Louisiana Energy Services, the company which is developing the national enrichment facility (NEF) outside Eunice, New Mexico.

TVA directors have reportedly agreed to pay LES $197 million for enrichment services over an eight year period, starting in 2012.

Jack Bailey, TVA’s vice president for nuclear generation development, said: “Today, we are 100% dependent upon a single supplier, USEC. We have a strategic direction right now to try to diversify our fuel supply beyond 2012.”

Initial production of enriched uranium from the $1.5 billion NEF is scheduled for 2009, and the plant should be in full production by 2014.

The news comes as the TVA authorises a comprehensive evaluation of the cost and schedule for completing the second unit at its Watts Bar Nuclear Plant to determine if it is a viable option to meet future power demand.

The Board approved a recommendation to begin a detailed scoping and planning study for Watts Bar Unit 2 with an initial budget of $20 million.

“Power demand in the region is growing at a rate of about 2% a year, so we must begin now to evaluate all available options to meet this demand,” said TVA president and acting CEO Tom Kilgore.

TVA stopped construction of Watts Bar Unit 2 in 1985.

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