TVA wins court battle over EPA coal rules

TVA wins court battle
over EPA coal rules
Pollution conflict could be fought again in court

BY DAVE FLESSNER
BUSINESS EDITOR

A federal court handed the Tennessee Valley Authority a major victory Wednesday in its fight to avoid a costly cleanup of its coal plants.

But the war over whether the government utility must spend another $3 billion to bring its aging fleet of coal-fired plants up to today's stricter air pollution standards may not be over.

The three-judge panel in Atlanta unanimously ruled that TVA is "free to ignore" U.S. Environmental Protection Agency orders to reduce smokestack emissions from 14 coal-burning power plants. The 11th Circuit Court of Appeals said EPA officials were "ignoring the concept of the law" in their enforcement action initiated against TVA four years ago.

"We look at this as a win for TVA and our 8.3 million customers," said John Shipp, TVA's general manager of environmental policy and planning. "This allows us to continue to maintain our plants in a way that allows us to continue to reduce our air emissions and still provide reliable and affordable power."

EPA still may sue TVA in federal court over the way the utility has maintained and extended the life of its coal plants. Environmentalists said Wednesday that TVA still must do more to upgrade its pollution controls on older coal plants grandfathered in under less stringent pollution laws.

"The court never got to the fundamental merits of this case, and when they do, they will recognize that TVA has skirted the law for years," said Stephen Smith, executive director of the Southern Alliance for Clean Energy. "The sad thing is that this decision means more delay in cleaning up the air in the Tennessee Valley."

Air said the 11th Circuit's decision "takes breathers in Tennessee, North Carolina and throughout the Southeast and sends them to the back of the line for clean air. These people have been waiting over three years for the law to be enforced."

Judge Gerald Tjoflat wrote that EPA first must prove its case against TVA in a federal district court. EPA initially issued an "administrative compliance order" against TVA in the waning months of the Clinton administration. The court said EPA didn't afford TVA enough time and rights to protest the administration order. EPA contends that TVA and at least eight other utilities violated the Clean Air Act when they revamped coal-fired electric power plants without permits. TVA insists the work was the type of maintenance EPA previously had allowed since the Clean Air Act was first adopted in 1977.

"We have and remain committed to reducing emissions from our coal plants," Mr. Shipp said. "This case is really about whether we can maintain our coal plants, which remain the backbone of our power system."

TVA derives nearly 60 percent of its power from its 59 coal units. By 2010, TVA expects to have spent $5 billion to cut its sulfur dioxide emissions by 75 percent and reduce its nitrogen oxide pollutants by more than 80 percent from the peak levels reached in the 1970s.

U.S. Justice Department spokesman Blaim Rethmeier and EPA spokesman John Millett said federal officials are still reviewing Wednesday's decision and have not decided on their next move. The Justice Department, which is handling the case for EPA, could appeal the case to the entire 11th Circuit. The 45-day deadline for filing such an appeal is Aug. 8.

Ms. Ledford said the Bush administration should immediately refile the case in district court.

She said if the administration maintains they can't do so because TVA is a federal agency, then "President Bush should immediately order TVA plants to meet modern pollution standards."

EPA Administrator Christie Whitman, who is leaving her job Friday, has negotiated settlements in several similar cases in which utilities have agreed to upgrades costing in the hundreds of millions of dollars. TVA negotiated with EPA in 2000 and tried to mediate an agreement last year without success.

Scott Segal, an attorney for six large utilities, said Wednesday's court decision "sends a clear message that there are deep procedural problems in the way EPA has handled the TVA case."

But the head of an environmental group suing TVA over its air pollution near the Great Smoky Mountains said he is disappointed in the court's action.

"It's almost incomprehensible that this court would take more than a year to decide that it lacked jurisdiction to decide the merits of this case," said Don Barger, Southeast director of the National Parks Conservation Association. "Unfortunately, this will delay the needed cleanup of our air and our national parks."

Staff writer Andy Sher contributed to this report.