Appeals court rules enviros can pursue suit against TVA

Washington (Platts)--5Mar2007

Tennessee Valley Authority can be sued for "a series of discrete violations"
at its Bull Run power plant in Clinton, Tennessee, that operates without a
permit limiting emissions as required under the Clean Air Act's New Source
Review program, a federal appeals court ruled Friday.

In a 2-1 vote, the 6th Circuit Court of Appeals panel reversed a district
court's ruling on the statute of limitations for the suit and said TVA could
be sued by a group of environmental organizations over alleged NSR violations,
even though more than five years have passed. TVA "has been and remains" in
violation of Tennessee's state implementation plan to meet the federal NSR
requirements that enforce the National Ambient Air Quality Standards
established under the CAA, Circuit Judge Karen Nelson Moore wrote in the
opinion.

The plant's operation without the NSR permit "manifests itself each day" the
plant runs, therefore meeting the statute of limitations requirement, Moore
wrote. The 6th Circuit ruled the environmental groups suing TVA can pursue
penalties for NSR violations occurring after February 13, 1996.

The appellant court in Cincinnati remanded the case to the US District Court
for the Eastern District of Tennessee in Knoxville to decide the merits of the
case that may include determining if TVA is entitled to sovereign immunity.

Penalties could be assessed back to 1997
In 2001, the National Parks Conservation Association, the Sierra Club and Our
Children's Earth Foundation argued that TVA violated the CAA and the Tennessee
SIP by failing to obtain a necessary NSR permit before modifying the 870-MW
Bull Run plant in 1988.

The groups also argued that TVA violated the law by continuing to operate the
plant, which went online in 1967, without installing "best available control
technology" to control its sulfur dioxide and nitrogen oxide emissions.

TVA countered that the environmental groups' complaint was invalid because it
was more than five years since the utility replaced tubing in the Bull Run
plant's boiler. The statute of limitations sets a five-year boundary.

But the 6th Circuit agreed with the plaintiffs that TVA's subsequent and
continuing failures to apply BACT and to obtain the construction permit with
emission limits are actionable under Tennessee's SIP provisions for NSR.

In a dissent, Judge Alice Batchelder said the case was not a "series of
discrete violations" as the court concluded but "involves, at most, a single
violation that occurred in 1988, and therefore, its statute of limitations
expired five years later."

If TVA is not entitled to sovereign immunity and the plaintiffs prevail on the
merits of the case in district court, they would seek the civil penalties due
to the US Environmental Protection Agency, said George Hays, the attorney for
the environmental groups. The penalties amount to $27,500 per day between
January 30, 1997, and March 15, 2004, and $32,500 a day after that, Hays said.

TVA maintains that its activities at Bull Run were routine maintenance and
exempt from NSR requirements. In addition, TVA is installing
"state-of-the-art" controls for SO2 that will begin operation in 2009 and
installed NOx controls in 2004 that operate during the summer months, a TVA
spokeswoman said.

Cathy Cash, cathy_cash@platts.com

For more news, request a free trial to Platts Coal Trader at
http://www.platts.com/Request%20More%20Information/index.xml?src=story