OIL, GAS & CONSUMABLE FUELS INDUSTRY
Surplus TVA equipment finds new life through auctions [The Knoxville News-Sentinel, Tenn.]
Oct. 12–Surplus TVA equipment finds new life via auctions
It’s very easy for a valve meant for a TVA power plant to have a career in an oil refinery or a paper mill instead.
Don Williams, co-owner of Mobile, Ala.-based Industrial Valve, said that’s why his company bought about $90,000 worth of valves at a recent TVA auction.
“Valves are a very general piece of equipment and can cross industries very easily,” he said.
And that’s why he plans to go back to Hartsville, Tenn., when TVA holds two more auctions there Oct. 22 and Nov. 19, both at 9 a.m. CST.
“I would say about 95 percent of the material is new and unused,” Williams said. “For a surplus dealer, when you buy something you don’t have to put a lot of labor into in order to sell it, that’s great.”
The Tennessee Valley Authority is liquidating about $30 million in surplus materials and equipment through three auctions, the first of which was held Sept. 24.
Chattanooga-based Compass Auctions is handling the auctions, which are held at TVA’s warehouses at 488 J.D. Hood Lane in Hartsville, which is northeast of Nashville.
About 22,000 lots of inventory will be on sale at the October and November auctions. TVA spokesman Scott Brooks said this means many more than 22,000 items, though.
“One lot might be 500 bolts,” he said.
There are five warehouse buildings full of industrial equipment and materials to be auctioned, said Paige Holt, president of Compass Auctions. Inventory includes a wide range of surplus equipment, road trucks, trailers, heavy equipment, forklifts, Mack trucks, electrical equipment, transformers, valves, pumps, hydraulic cylinders and other items.
The Hartsville facility is on the site of a nuclear plant that TVA began building in the 1970s but then canceled construction in the mid-1980s. Hartsville is a major holding facility for surplus inventory from all over TVA’s seven-state service area, Brooks said.
The federal government-owned utility provides electricity for business customers and local power companies that serve some 9 million people in parts of seven states.
TVA’s Investment Recovery division, based in Chattanooga, keeps track of the surplus inventory and tries to sell it and get the best return for TVA, Brooks said.
These items are things that TVA bought but did not use. They might be materials and equipment left over from a project at a TVA site or just a case of not needing all items that were ordered.
“In most cases, TVA will try to sell it back to where we bought it, but if we can’t, we will look to see if we can reuse it in some way,” Brooks said.
If a use can’t be found, the item is declared surplus and sent to a holding center for auction.
Although TVA has instituted several cost-cutting initiatives this year, the auction is not part of that, Brooks said. TVA holds auctions from time to time as it accumulates surplus inventory, he said.
“We just decided this was a good time,” he said.
Holt said her company has worked with TVA on auctions before. In May, Compass auctioned surplus inventory from a TVA project to replace steam generators at its Sequoyah Nuclear Plant. The inventory there ranged from radiation monitoring equipment to fire extinguishers, welding equipment, hand tools, sheet metal and other items.
The TVA auctions draw an assortment of buyers, Holt said.
“We will have everything from industrial surplus companies to scrap and metal yard companies, power and energy companies, construction companies,” she said.
The Sequoyah auction drew about 640 people to the site and the September Hartsville auction drew about 400, Holt said. She expects about 400 people at the next two Hartsville auctions. People are able to take part in the auctions either in person or online through the company’s website, Holt said.
TVA’s auctions not only help her company and the buyers, but also allow TVA to get some money back to help keep electric rates lower, she said.
Williams said his company makes good use of auctions such as those held by TVA. Industrial Valve, which has operations in Alabama, Louisiana, Indiana and Cleveland, Tenn., provides various valve-related products and services, but a good bit of its focus is on surplus valves.
The company markets these as “better than new” valves that have never been used but which it sells at a discount price and with a warranty.
It also touts the quick availability of the valves compared with the time it can take a customer to order a new valve. The valves he buys at auction from TVA will pass from his company to many others, Williams said.
“We have a clientele that includes power companies throughout the Southeast, like Entergy and Southern Company, but we also do a lot of business with refineries such as Chevron, and we do paper mills,” he said.
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Image: Adam Lau – Knox News Sentinel