TVA Files to Appeal in North Carolina Lawsuit

May 29, 2009

TVA today appealed the decision in the North Carolina public nuisance lawsuit to the Fourth Circuit Court of Appeals.

In a January ruling, the federal District Court in western North Carolina said emissions from four TVA coal-fired power plants in Tennessee and Alabama constituted a public nuisance in North Carolina. The court ruled this despite the fact that these plants were in compliance with their Clean Air Act permits and were meeting emission limits set by the states of Tennessee and Alabama.

In one of the most aggressive clean-air programs in the nation, TVA has already invested more than $6 billion of ratepayer dollars to reduce emissions. Sulfur dioxide emissions from TVA plants are down 85 percent since 1977, and ozone-season nitrogen
oxide emissions are down 82 percent since 1995. In addition to installing scrubbers and selective catalytic reduction technology (SCRs) at its larger units, TVA has also shifted to
using cleaner-burning coals and employed other measures to reduce emissions from units.

“TVA has been doing more to reduce its emissions than any other major electric utility in the region,” said Bill McCollum, TVA’s Chief Operating Officer. “We stand on TVA’s record of environmental progress. We will continue our efforts to help improve the region’s air while making the wisest use of ratepayer dollars and continuing to deliver reliable, affordable power to the 9 million people we serve.”

The court ordered TVA to upgrade or install scrubbers to reduce sulfur dioxide (SO2) and SCRs to reduce nitrogen oxide (NOx) at its Bull Run, Kingston and John Sevier plants in East Tennessee and at Widows Creek in North Alabama.

Prior to the court’s decision, TVA had already installed scrubbers and SCRs at its Bull Run plant, had installed SCRs and was in the process of installing scrubbers at its Kingston plant, and had installed SCRs and upgraded the scrubbers at the two large units at its Widows Creek plant. The TVA Board had approved the installation of SCRs and scrubbers at TVA’s John Sevier plant, and engineering for those controls was under way.

The court also ordered TVA to accelerate the installation of scrubbers and SCRs already planned for the John Sevier plant, giving TVA less than three years to install all the equipment. To meet this schedule, TVA would have to install both the scrubbers and SCRs at the plant at the same time. This would require TVA to shut down units at the plant for approximately 20 months and increase the risk of disruptions to the reliability of the power
system.

“The accelerated schedule is a significant problem for the power system,” said McCollum. “Because we must deliver reliable electricity and be responsible stewards of ratepayer dollars, we must appeal the ruling.”

John Sevier is TVA’s easternmost power plant, and electricity generated there anchors the eastern end of TVA’s transmission system. Without generation in East Tennessee, the system is more likely to become unstable, especially during periods of peak
demand. Because of this risk, TVA had previously asked the court to modify its order on the schedule for John Sevier, but the court declined to do so.

The court’s order also required TVA to install scrubbers and SCRs on the six small units at the Widows Creek plant. Emissions from these units have already been reduced through the use of low-sulfur coals and combustion controls. Additional major equipment
was not scheduled for these small units because TVA gives higher priority to installing scrubbers and SCRs at larger units where more emissions can be reduced.

In addition, the court ordered that all the units at the four plants must meet emission limits that are much more stringent than limits that Tennessee and Alabama have determined are necessary to meet federal air quality standards. To comply with these limits, TVA may be forced to reduce generation from these units periodically and instead generate from other units, resulting in increased emissions elsewhere on the TVA system.

Overall, the ruling is expected to increase TVA’s cost by more than $1 billion beyond the cost of TVA’s already aggressive emissions reduction plan.

Prior to the court’s decision, TVA had already planned to invest an additional $3 billion to further reduce emissions from its coal-fired plants, and TVA is adding more renewable and non-carbon generating sources to its power system. Along with energy
efficiency programs, these actions will significantly improve the environmental footprint of TVA’s operations.

TVA is the nation’s largest public power provider and is completely self-financing. TVA provides power to large industries and 158 power distributors that serve approximately 9 million consumers in seven southeastern states. TVA also manages the Tennessee River and its tributaries to provide multiple benefits, including flood damage reduction, navigation, water quality and recreation.

Media Contact

Barbara Martocci, Knoxville, (865) 632-8632
TVA News Bureau, Knoxville, (865) 632-6000

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