The city received an economic boost in 1942 with the Tennessee Valley Authority's completion of Watts Bar Dam and its associated reservoir southeast of the town. That same year saw the completion of the Watts Bar Fossil Plant, TVA's first coal-fired plant. In 1973, TVA began building Watts Bar Nuclear Plant. Its first reactor, Watts Bar Unit 1, became active in 1996. The construction of the second reactor, Watts Bar Unit 2, was originally suspended in 1985, but resumed in 2007. It entered commercial operation in October 2016.