Judge orders mediation for TVA

Judge orders mediation for TVA

By ANDY SHER
WASHINGTON BUREAU

WASHINGTON - The U.S. 11th Circuit Court of Appeals in Atlanta has ordered the Tennessee Valley Authority and the Environmental Protection Agency to go to mediation in their legal dispute over EPA attempts to force TVA to clean up its coal-fired power plants.

The three-judge panel referred the case to the court's Kinnard Mediation Center. In doing so, judges said they would hold the case in abeyance for 60 days to see if TVA and EPA can resolve the dispute.

The parties are expected to report back to the court, according to the order.

"TVA welcomes the opportunity to settle our differences as long as it is fair to TVA and its ratepayers so we can continue to provide low-cost, reliable power," said Barbara Martocci.

The Paradise Fossil Plant near Drakesboro, Ky., is one of 11 coal plants where TVA says it is spending $5 billion to clean up.

power," said TVA spokeswoman Barbara Martocci.

Justice Department spokeswoman Dana Perino offered little comment.

However, Ms. Perino confirmed the department had not asked that the matter be referred for mediation. TVA didn't ask for mediation, either. The case was heard by the appellate court on May 21.

"It's an interesting and somewhat unusual development in the case, and I would say the petitioners (TVA and electric utility interests) remain cautiously optimistic about our chances of succeeding," said Eric Segal of the Electric Reliability Coordinating Council, a consortium of utilities sympathetic to TVA's arguments against EPA.

EPA took enforcement action against TVA and eight other utilities in 1999, contending the utilities made extensive upgrades to some of their oldest and dirtiest coal-fired power plants without installing new pollution control equipment.

The equipment, EPA said, is required under Clean Air Act provisions known as New Source Review.

After losing an administrative appeal, TVA went to the 11th Circuit to contest EPA's efforts.

Stephen Smith, executive director of the Knoxville-based Southern Alliance for Clean Energy, said environmentalists still are studying the court's order.

"I don't know if it bodes good," Mr. Smith said of the mediation order. "The case against TVA is very good."

TVA is spending $5 billion as part of a decadelong effort to remove more than 70 percent of the sulfur and nitrogen oxide emissions from its coal plants.

But utility officials claim the EPA order could cost TVA $2 billion more and force electric rates higher.

The enforcement issue, meanwhile, continues to play out in the political arena.

The Bush administration recently announced it was changing Clinton administration interpretations of the Clean Air Act that led to the EPA crackdown on TVA. EPA Administrator Christine Todd Whitman and other officials maintained it would have no impact on the lawsuit.

President Bush continues to push his Clear Skies initiative. The latest effort is expected to come with a visit by EPA Administrator Whitman to the Smokies National Park on Monday.

The Clear Skies proposal would cap certain types of air pollution emissions. But it also issues credits to companies that reduce their pollution. Companies then could buy and sell the credits.

The administration and industry advocates such as the Electric Reliability Coordinating Council say the "carrot" approach will lead to a decrease in pollution faster than the recently discarded provisions of the Clean Air Act.

On Monday, Ms. Whitman will join Sen. Bill Frist, R-Tenn., in the Smokies, where she is expected to detail regional benefits of the Clear Skies initiative for the first time.

Environmentalists, meanwhile, plan to come to the park and protest. Mr. Smith and Don Barger, Southeast coordinator for the National Parks Conservation Association, contend the Clear Skies proposal will not clean up the Smokies.

"We've asked Sen. Frist to hold his support for Clear Skies until we have a lot more information," Mr. Smith said, adding Administrator Whitman shouldn't use Monday's appearance as a "greenwashing" event.