Jun. 1--COLUMBUS, Miss. -- The Tennessee Valley Authority plans to build more nuclear plants while promoting more energy conservation in the next decade.

With a leaner staff and improved productivity, TVA officials said Thursday they hope to improve the utility's capacity and its environmental performance without raising TVA's debt. Excluding adjustments for fuel costs, TVA predicts it can spend more tha $18 billion on new and improved plants by 2019 with only one electric rate increase. "We're taking a very businesslike, efficient approach to running TVA," said Tom Kilgore, the president and chief executive officer of the nation's biggest government-owned utility. After nearly a year of planning and debate, TVA directors adopted an updated strategic plan to guide the federal utility over the next decade.

The 10-year blueprint envisions finishing the incomplete Unit 2 reactor at the Watts Bar Nuclear Plant near Spring City, Tenn., by 2013 and adding a new nuclear reactor at the Bellefonte Nuclear Plant in Hollywood, Ala., in both 2018 and 2019. At the sa e time, TVA plans to try to limit the growth in power usage in the Tennessee Valley by working with distributors and customers on new technologies, pricing programs and consumer education. TVA Director Dennis Bottorff said the strategic plan outlines the long-term objectives for TVA and updates the plan adopted in 2004. The previous strategic plan focused on cutting TVA's debt, but Mr.

Bottorff said TVA's debt is manageable and the agency should focus on improving its assets, not just cutting its obligations. The implementation of the goals adopted Thursday will come with each year's budget, Mr. Bottorff said. No final decisions have been made about building more nuclear plants or starting more conservation programs. "The strategic plan gives us the framework for our future plans," said Mr. Bottorff, chairman of TVA's committee on finance, strategy and rates. For now, TVA does not anticipate any rate increase in the next year for the 8 million customers that buy its power in the seven-state Tennessee Valley.

Mr. Kilgore said a rate increase may come in fiscal 2009. But he said any increase would be less than 10 percent and should be the only non-fuel increase needed in the next decade. TVA twice raised rates in fiscal 2006, but most of those increases were due to higher fuel expenses. TVA has since implemented a fuel-cost adjustment to allow quarterly adjustments in rates based upon the cost of fuel. Mr. Kilgore said TVA is working to cut its operations and maintenance costs by $420 million over the next three years. Such cuts are needed to meet TVA's goal of operating among the top quartile of U.S.

utilities. Some cuts are expected in TVA's staff, but most of those staff reductions will come through retirements among TVA's own 12,600-employee staff and cuts in the agency's 6,000-employee contract work force, he said. Electricity demand in TVA's seven-state region is now growing about 1.9 percent a year. To meet that growth, TVA will need at least another 7,000 megawatts of production capacity, or the equivalent of nearly six more Sequoyah nuclear reactors. TVA wants to trim at least one year's worth of that growth from its power demand in the next decade by developing more incentives and assistance for consumers to use electricity more efficiently.

In response to more than 300 public and employee comments, TVA modified its original draft strategic plan to put more emphasis upon encouraging conservation and limiting production of greenhouse gases linked with global warming. Alex Tapia, assistant director for the Southern Energy Conservation Initiative, called the changes in the strategic plan about conservation fantastic. According to the Energy Information Agency, Tennessee leads the nation in per-capita residential elect icity consumption. Earlier this week, Tennessee's House of Representatives adopted a nonbinding resolution urging TVA "to make large-scale efforts to pursue energy efficient means of producing power" and to increase the use of renewable energy.

But to meet the bigger electric demand caused by the region's growing population and economy, TVA will need more power generation, Mr. Kilgore said. "We want to be a national leader in promotion conservation," Mr. Kilgore said. "But even if we are, we will still need to build more power plants." The new strategic plan calls for TVA to generate most of the power it sells in the Tennessee Valley and for the government utility to remain in both the generation and transmission of electricity. Elsewhere in the country, some utilities have split thei operations in response to industry deregulation.

TVA board members said the strategic plan highlights the changes in governance of TVA since a nine-member, part-time board replaced the former three-member, full-time board last year. "I believe in the history of TVA that this will go down as one of the key documents and a revolutionary turning event in the history of this organization," said TVA Director Don DePriest, who hosted Thursday's meeting in his hometown of Columbus. E-mail Dave Flessner at dflessner@timesfreepress.com