Federal appeals court sets aside ruling against TVA

By Kathy Helms-Hughes

   The 11th Circuit Court of Appeals in Atlanta has set aside a ruling against Tennessee Valley Authority by the U.S. Environmental Protection Agency which alleged that TVA had violated portions of the Clean Air Act at several of its coal-fired plants.
   According to the order, TVA is now "free to ignore" the EPA order without being assessed penalties for noncompliance, until such time as EPA proves in district court the existence of a Clean Air Act violation.
   In 1999, EPA concluded that TVA violated the federal act when it undertook 14 rehabilitation projects at nine of its coal-burning plants without first obtaining permits.
   EPA then issued an administrative compliance order, requiring TVA to undertake "several costly and burdensome compliance initiatives," according to the June 24 opinion by Circuit Court Judges Gerald Tjoflat, Rosemary Barkett and Charles R. Wilson.
   TVA claimed that EPA had an incorrect understanding of the law and facts and refused to comply with the EPA order. The Appeals Court judges said EPA then "created a scheme in which the Environmental Appeals Board was delegated the task of 'reconsidering' the [order]." The board ruled that TVA had indeed violated the Clean Air Act, and TVA, in turn, filed a petition for review before the Appeals Court.
   John Shipp, TVA environmental policy manager, said Thursday, "We are very pleased with the decision and we believe it is a very important victory for the 8.3 million people that we serve."
   Shipp said that in the 1999 administrative compliance order, EPA alleged that TVA had violated a portion of the Clean Air Act known as New Source Review.
   "What New Source Review says is that new facilities that were built after 1977, which was when that portion of the law became law, had to be built with new state-of-the-art, or what is called 'best available control technology' to reduce the emissions. It further said that if an existing facility was modified in such a way that it became more like a new facility, then it also had to install best available control technology," Shipp said.
   For 22 years, from 1977 to 1999, EPA had known about and had viewed routine maintenance projects undertaken by TVA and had not considered them major modifications, Shipp said.
   "Just like if you replaced the fan belt on your car. Is your car now new? If we had a pump go out, we would go in and we might just repair that pump, but we might also replace that pump with a new pump. It certainly doesn't make our whole plant new. It means we have an existing plant with a new pump on it.
   "In 1999, EPA changed their interpretation of that rule and they issued this order to us, saying, 'You've been violating the law for 22 years.' They cited certain repair projects that we had done and said these should have been considered 'major modifications' and we should have added these new emissions controls," Shipp said.
   TVA, of course, objected, "because certainly we had not been intending to break the law and didn't believe that we were breaking the law at all; and we believed that EPA didn't believe that for 22 years."
   TVA met with EPA on a number of occasions and tried to resolve their differences. "Once we saw we were going to be unable to do that, they devised this process and had a hearing on very short notice before a panel of administrative law judges called an Environmental Appeals Board. All of those judges report to EPA, and that appeals board upheld EPA's action," Shipp said.
   "So we really had no other recourse. We had no way to have our case heard by an impartial panel of judges other than to take it to the 11th Circuit Court of Appeals in Atlanta; and that is what we did."
   Among the judges' findings, the proceeding against TVA before the EPA board was "rushed, giving TVA little time to prepare its defense." TVA was given less than eight weeks' advance notice of the hearing and the basis of EPA's case was not divulged until three weeks before the hearing. Procedures used by the board against TVA were "on the fly, entirely ignoring the concept of the rule of law."
   "Basically what they decided was that EPA had indeed used an unfair process in bringing this compliance order against us," Shipp said. "The court rendered that compliance order null and void and said that TVA could consider it null and void and could go on maintaining our plants like we had been maintaining them. ... When something breaks and maintenance is required, we can go in and do that maintenance and bring that plant back on line."
   All of TVA's coal-fired plants are equipped with electrostatic precipitators, which reduce particulate matter from the air by more than 90 percent but do not remove nitrogen oxides and sulfur dioxides. Shipp said. "If you drove over by John Sevier [Steam Plant] right now, even though it's obviously operating on a hot day like this, you wouldn't see any smoke coming out of that stack because it has electrostatic precipitators," he said.
   The technology used by TVA to reduce nitrogen oxide is called SCR, or Selective Catalytic Reduction. Scrubbers are then added to reduce sulfur dioxide. TVA is in the midst of a very aggressive program to reduce nitrogen oxide and sulfur dioxide emissions, according to Shipp.
   "We've already spent $3 billion reducing emissions from our plants, and we're in the process of spending another $2.6 billion by the end of the decade." When completed, nitrogen oxide emissions will have been reduced by 75 percent and sulfur dioxide emissions by 85 percent.
   "We're adding those SCR controls to 25 of our 59 units. We already have six scrubbers on six units, and by the end of the decade we will add five more scrubbers to 12 more units," for a total of 11 scrubbers on 18 units, he said.
   TVA is spending an average of $1 million a day over the rest of this decade to reduce emissions. But the EPA issue of New Source Review has never been about making emissions reductions, Shipp said. "The NSR issue has been about whether or not we can continue to maintain our plants, that is, fix things when they break.
   "If you're going to take a plant down [for an outage], you do everything then that you possibly can. ... You might go ahead and do some preventive maintenance while you have that unit down. You might also do some corrective maintenance" in hopes that on a hot, humid day like Thursday, "when you need all of the electricity that you can get, that that plant is going to work and it's going to work efficiently.
   "That's really the basis of TVA's being able to continue to provide affordable, reliable electricity," he said.