Supreme Court rulings against Duke Energy, EPA could affect TVA plants

 

Apr 4 - McClatchy-Tribune Business News Formerly Knight Ridder/Tribune Business News - Andrew Eder The Knoxville News-Sentinel, Tenn.

A pair of Supreme Court decisions could bring about a change in the legal and regulatory environment TVA faces involving coal-fired power plants that emit carbon dioxide and other greenhouse gases.

In one decision Monday, the court ruled 9-0 against Charlotte, N.C.-based Duke Energy Corp. in a case involving the Clean Air Act's New Source Review program, which requires utilities to install up-to-date pollution controls when making significant changes to power plants.

Duke had argued that it didn't need permits under the program for power plant upgrades because hourly emission rates at the plant didn't increase.

The court disagreed, finding that Duke should have examined total annual emissions to determine whether the permits were required.

TVA has New Source Review cases pending regarding Bull Run Fossil Plant near Oak Ridge and Colbert Fossil Plant in Tuscumbia, Ala.

"It helps enormously," said Bruce Nilles of the Sierra Club, a plaintiff in each case. "This whole dispute that ended up in front of the Supreme Court was one of the primary defenses the utility industry was trying to use to avoid judgment day."

TVA spokesman John Moulton said the decision has no immediate impact on the Colbert case, which was dismissed by a district court in Alabama before being revived on appeal.

Moulton said the Duke decision also "does not resolve all the issues" in the Bull Run case, which was recently sent back to district court in Knoxville after an appeals court found the statute of limitations had not run out on the alleged violations.

Moulton said the utility's legal team was still reviewing the decision.

"We are disappointed in the outcome," he said. "It will take a while to determine the full implications of the decision and what it may mean for other NSR cases as well as utilities' maintenance practices."

In the other decision, the Supreme Court, in a 5-4 ruling, declared that carbon dioxide and other greenhouse gases are pollutants under the Clean Air Act, and the Environmental Protection Agency must reconsider its refusal to regulate emissions from new cars and trucks.

Although the case dealt with automobile emissions, the decision could have widespread ramifications.

"There are going to be ripple effects across the Clean Air Act and across the regulatory landscape," said Vickie Patton, a senior attorney with the nonprofit Environmental Defense, a plaintiff in the case.

A pending lawsuit in the Federal Court of Appeals in Washington, D.C., challenged recent EPA standards for new coal-fired power plants, in which EPA declined to regulate carbon dioxide emissions. That case was stayed until the Supreme Court issued its decision in the automobile emissions case.

Now that the court has decided greenhouse gases should be regulated under the Clean Air Act, it's likely the court will order EPA to reconsider the rules, Patton said. There's also the possibility that the new Democratic Congress will take action to establish federal limits on emissions of greenhouse gas, which many scientists believe are causing global warming.

"It is the beginning development of a regulatory scheme that impacts everyone that burns fossil fuels," Nilles said. "Carbon dioxide can no longer be considered free, and you can't dump large amounts of it into the air without consequence."

Moulton said the decision had no immediate impact on TVA but could affect future EPA actions and other litigation. TVA operates 11 coal-fired power plants, including three in East Tennessee.

The federal utility is installing scrubbers, which reduce acid rain and haze-causing sulfur dioxide emissions, at each of the three East Tennessee plants.

TVA says it has spent $4.6 billion to reduce emissions at its power plants as of September 2006, and it expects to spend an additional $1.2 billion by 2010.

TVA is looking to nuclear power, which emits no carbon dioxide, and natural gas, which burns cleaner than coal, for future power needs. Moulton said TVA has "voluntarily reduced, avoided or sequestered" 305 million tons of carbon dioxide.

"We're closely watching developments in this area," he said, "and the pressure to reduce emissions is one of the reasons we're looking at nuclear as we plan to expand our capacity."