Environmental Enforcement: TVA Shuts Coal Units After $3bn-$5bn Settlement

The Tennessee Valley Authority (TVA) will spend $3 billion to $5 billion on pollution controls after reaching a settlement yesterday with the Environmental Protection Agency (EPA), over alleged Clean Air Act Violations at all 11 of its coal-fired plants.

TVA will also invest $350 million on clean energy projects designed to reduce pollution, save energy and protect public health and the environment, and will pay a civil penalty of $10 million.

The authority immediately announced plans to retire 18 of its 59 coal-fired generation units, at three power plants. Units will be shut down at John Sevier in east Tennessee and Widows Creek in northern Alabama, and Johnsonville Fossil Plant in middle Tennessee will close completely, TVA said.

The Widows Creek plant was the subject of a $450,000 civil penalty that the TVA agreed to pay last month, to resolve EPA allegations that it released unpermitted sulphur dioxide and nitrogen oxide at the site in violation of the Clean Air Act.

TVA yesterday said the retirements include about 1,000 MW previously slated for idling, and in total TVA will have idled or retired about 2,700 MW of its 17,000 MW of coal-fired generation by the end of 2017.

TVA said the capacity will be replaced with low- or zero-emission sources, including renewables, natural gas, nuclear and energy efficiency. These changes are in alignment with the utility’s Integrated Resource Plan, according to the TVA announcement, and also consistent with the EPA settlement.

The EPA said the pollution controls and other required actions will address 92 percent of TVA’s coal-fired power plant capacity, reducing emissions of nitrogen oxide (NOx) by 69 percent and sulfur dioxide (SO₂) by 67 percent from 2008 emissions levels. The settlement will also significantly reduce particulate matter and carbon dioxide (CO₂) emissions, the EPA said.

The controls will prevent approximately 1,200 to 3,000 premature deaths, 2,000 heart attacks and 21,000 cases of asthma attacks each year, resulting in up to $27 billion in annual health benefits, the EPA added.

Uncontrolled releases of harmful air pollution like sulfur dioxide from power plants can affect breathing and aggravate respiratory and cardiovascular diseases, especially in sensitive populations like children and the elderly.

The $350 million in environmental projects will include $40 million for renewable technologies such as hybrid-electric charging stations, $8 million for a clean diesel and electric vehicle project for public transportation systems, and $240 million for energy efficiency initiatives including a Smart Energy Communities project that will focus on low-income communities.

The alleged violations occurred at TVA’s 11 plants in Alabama, Kentucky and Tennessee. Those three states, together with the National Parks Conservation Association, Sierra Club, and Our Children’s Earth Foundation, were involved in development of the settlement and are signatories to a companion consent decree that will be lodged in federal district court in the Eastern District of Tennessee.

EPA is accepting public comments on the agreement for a 30-day period.

In its announcement yesterday, TVA also said it will ask its board to decide whether to start construction of a nuclear unit at Bellefonte, Ala., “after TVA has a clear understanding of the Japanese nuclear situation and any potential impact on the project.” Previously approved construction at Watts Bar Nuclear Plant Unit 2 in east Tennessee is proceeding on schedule, the authority said.

Chief financial officer John Thomas noted that uncertainty from the slow economic recovery and from the Japanese nuclear crisis could increase the volatility of TVA’s revenue for the rest of the year, although cold weather has increased demand for its electricity since the fiscal year began in October.

TVA is an independent, corporate agency of the federal government that provides wholesale power to 155 municipal and cooperative power distributors, direct service to 56 large industrial and government customers, and power to nine million people across Alabama, Kentucky, Mississippi, Tennessee, Georgia, North Carolina and Virginia.

In 2008, a TVA storage site in Kingston, Tenn., leaked and created a massive coal ash spill, which by some estimates was eight times as large as the Deepwater Horizon spill in the Gulf of Mexico.