EPA rules could cost TVA $4 billion more

EPA rules could cost TVA $4 billion more

By Dave Flessner, Business Editor
The Chattanooga Times Free Press

ChattanoogaTNUSA - The Tennessee Valley Authority estimates it will have to spend at least $4 billion more on pollution controls over the next decade to meet new air quality standards announced Thursday.

A day after a Senate panel defeated President Bush's top environmental bill, the U.S. Environmental Protection Agency finalized its Clear Air Interstate Rules to cut smog and soot from power plants in 28 states in the eastern half of the United States.

In Tennessee, the new rules will require that by 2015 power plants cut their sulfur dioxide emissions by 53 percent and nitrogen oxide pollutants by 80 percent from 2003 levels, EPA officials said. In Georgia, sulfur dioxide emissions will have to be cut by 54 percent and nitrogen oxide emissions by 37 percent.

"TVA will have to make significant reductions in our emissions beyond what we are already planning with our current program," said John Shipp, vice president of environmental policy at TVA. "This rule is very aggressive, but we think it is achievable."

TVA is already in the midst of a $5.6 billion program to cut sulfur and nitrogen oxide emissions by more than 75 percent from the peak levels reached in the 1970s. The federal utility likely will have to install scrubbers and other clean-air devices on most of its 59 coal-fired units to meet the new standards.

Emissions from power plants owned by TVA and utilities in neighboring states are blamed for much of the smog and fine particulate pollution in Chattanooga and other Tennessee cities.

The new rules could add another $1 per month to consumers' electricity bills, according to EPA estimates. But the agency estimates the health advantages from cleaner air would offset such costs. EPA said the benefits outweigh the costs, dollar for dollar, 25-to-1.

The new rules are projected to prevent 17,000 premature deaths, 22,000 nonfatal heart attacks and 700,000 respiratory ailments from bronchitis and asthma each year, EPA said. The rules also will reduce haze in the Great Smoky Mountains and help cities such as Chattanooga lower fine particulate pollution and bring them into compliance with stricter federal air standards adopted last year.

"The action we are taking will require all 28 states to be good neighbors, helping states downwind by controlling airborne emissions at their source," EPA Acting Administrator Stephen Johnson said.

The new regulations establish a trading system to allow utilities to buy pollution allowances from other

at overcomply with the new rules. Mr. Shipp said he expects TVA will use the so-called "cap and trade" system to buy and sell allowances to help smooth out the costs of its compliance efforts. Ultimately, TVA expects to reduce emissions enough to meet the new standards on its own without buying pollution allowances from other utilities, he said.

"This is the best we could hope for in the current political environment," said Stephen Smith, executive director for the Southern Alliance for Clean Energy in Knoxville. "This is similar to the standards in President Bush's Clear Skies legislation, but in some ways it goes beyond those requirements, and it also doesn't weaken the current air pollution laws now on the books."

Dr. Smith said the reductions in sulfur and nitrogen oxide emissions from power plants, combined with new diesel engine, fuel standards and speed limits, should help bring Chattanooga into compliance with air quality standards in the next decade.

The Associated Press contributed to this story.

E-mail Dave Flessner at dflessner@timesfreepress.com