Mediation fails in pollution dispute TVA-EPA

AUGUST 23, 2002

Mediation fails in pollution dispute TVA-EPA

KNOXVILLE, Tenn. (AP) — A court-ordered attempt has failed to get the Tennessee Valley Authority and the Environmental Protection Agency to resolve their dispute over cleanup of TVA's old coal-fired power plants.

That sends the case, closely watched by environmentalists and other utilities facing similar liability for violating the Clean Air Act, back to the 11th U.S. Circuit Court of Appeals in Atlanta for a verdict.

A three-judge appeals panel two months ago ordered the two government agencies to try to reach an agreement.

"Despite the extensive efforts of the parties, they were unable to settle their differences and resolve the case to the court," chief mediator Lowell Garret wrote Wednesday, returning the case to the court.

Dana Perino, a Justice Department spokeswoman, said EPA continues "to believe that ... this case is fully supported in law and fact and should prevail before the 11th Circuit."

TVA spokesman Gil Francis said the country's largest public utility was barred by the court from discussing the impasse.

"But it is our understanding the court will proceed to make a decision," he said, possibly in two months or less.

Stephen Smith, executive director of the Knoxville-based environmental group Southern Alliance for Clean Energy, said he was very disappointed.

"This means that we are still not progressing towards cleaning up the air," he said, particularly in the Great Smoky Mountains, which has noted 34 days of unhealthy air this summer and is on pace for a record year.

"Remember this is what this whole case is about," Smith said.

EPA sued TVA as well as 12 utilities in the South and Midwest in 1999 to impose tougher air quality standards under the Clean Air Act. One utility settled, but the rest are waiting to see what happens to TVA.

The EPA said TVA violated the act for 20 years by making improvements at seven of its 11 coal-fired plants in Tennessee, Alabama and Kentucky without installing new pollution control equipment.

The TVA contends that work on the plants fell under the category of routine maintenance rather than major modifications, which exempted them from the upgrades.

TVA and EPA negotiated for months trying to resolve the issue before EPA imposed an order and TVA countersued. In January, the 11th Circuit ruled that TVA could appeal the order.

At stake is the diminishing air quality of the Tennessee Valley, particularly in the tourist-rich Great Smokies area of Tennessee and North Carolina. Emissions from coal-fired plants lead to acid rain, smog and haze, unhealthy conditions.

TVA has voluntarily adopted a nearly $5 billion program to reduce nitrogen and sulfur emissions from its 1970s levels, officials say.

TVA provides electricity to about 8.3 million people in Tennessee, Georgia, Kentucky, North Carolina, Virginia, Alabama and Mississippi.