On April 14, 2011, the EPA announced the settlement of a twelve year dispute with Tennessee Valley Authority (TVA) over Clean Air Act violations. In the settlement, TVA agrees to permanently retire 2,700 MW of coal power from Alabama, Kentucky and Tennessee and invest an estimated $3 to $5 billion on new and upgraded state-of-the-art pollution controls on 11 coal fired plants. The EPA estimates that this action will prevent an estimated 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 dispute stems from an administrative compliance order that EPA issued to TVA in November 1999, alleging that TVA modified a number of coal-fired units at nine of TVA's plants without first obtaining preconstruction permits and installing and operating state-of-the-art pollution control technology. Under the settlement agreement, TVA will upgrade 92% of its remaining coal fired fleet by either installing state-of-the-art selective catalytic reduction, flue gas desulfurization, or repowering the assets to burn renewable biomass. The settlement also requires TVA to spend $240 million on energy efficiency initiatives and to provide $1 million to the National Park Service and the National Forest Service to improve, protect, or rehabilitate forest and park lands that have been impacted by emissions from TVA’s plants, including Mammoth Cave National Park and Great Smoky Mountains National Park.

TVA, a corporation owned by the U.S. government, provides electricity for 9 million people in parts of seven southeastern states at prices below the national average. TVA, which receives no taxpayer money and makes no profits, developed an “Integrated Resource Plan,” detailing two portfolio standards, 2,500 MW or 3,500 MW of renewable energy by 2020. Notably, only 2 of TVA’s 7 states, North Carolina and Virginia, are subject to RPS standards.

This settlement is a major boost for the renewable energy industry. By 2012, TVA will have 1,625 MW of renewables in its portfolio. In addition to needing 1,000 – 2,000 MW of new renewable generation to fill its renewable energy portfolio, it now must offset its retired 2,700 MW coal power by 2018.

For more information:

EPA Press Release on Settlement: http://yosemite.epa.gov/opa/admpress.nsf/ab2d81eb088f4a7e85257359003f5339/45cbf1a4262af67b8525787200516dd7!OpenDocument

EPA’s Overview and Settlement with TVA:

http://www.epa.gov/compliance/resources/cases/civil/caa/tvacoal-fired.html