Coal-to-Gas Switch by Tennessee Utility Upheld

(CN) - The Sixth Circuit found that the Tennessee Valley Authority had the right to change some coal-fired power plants to natural gas, rejecting a coal association's challenge.

The Tennessee Valley Authority, or TVA, is a federal agency that operates three nuclear plants, 15 natural-gas plants, 30 hydropower plants and 10 coal plants, according to court records.

The Environmental Protection Agency told TVA in 2012 that it needed to reduce emissions from some its coal-fired plants to comply with the Clean Air Act.

After a year of study, the TVA decided to switch certain units from coal to natural-gas generation, including two at Paradise Fossil Plant in Drakesboro, Ky., rather than retrofit coal units.

"The Kentucky Coal Association, as its name hints, was not a fan of this decision," Judge Jeffrey Sutton wrote for a Sixth Circuit three-judge panel.

The coal association and some local businesses and landowners sued TVA, claiming the decision to make the switch exceeded its authority.

A federal judge rejected their argument earlier this year, and the Sixth Circuit upheld the decision Friday.

While retrofitting the plant would cost substantially less than switching to gas, "plaintiffs overlook the reality that the term 'costs' means more than dollars and cents," Sutton wrote. "It also includes 'harms that [a decision] might do to human health or the environment.' The TVA considered all of these costs when making the Paradise decision, and it reasonably concluded that its decision would do more good than ill when measured by these considerations."

The Cincinnati-based appeals court also found that TVA's decision did not conflict with its 2011 plan aimed at providing customers with electricity "at the least system cost" over a 20-year period.

"[The plan] does not dictate a specific series of actions' or '[f]inalize specific asset decisions' at particular plants. It thus sets nothing in stone about the appropriate amount, even the appropriate range, of coal or natural-gas generation across the entire system, much less at the Paradise plant in particular," Sutton wrote. "The plan gave the TVA freedom to 'fine-tun[e]' system-wide processes to develop specific policy choices at specific locations, which is what the TVA did when picking its best option at the Paradise plant."

The local businesses suing the TVA claimed the switch from coal to gas will cause job losses, and TVA has acknowledged that its decision will result in a 2 percent reduction in the county's workforce. The agency said this negative effect would not have a significant impact on the surrounding community's economy.

Quoting its own precedent, the Sixth Circuit said economic questions were not part of its analysis.

"The National Environmental Policy Act is 'not a national employment act,' and its '[e]nvironmental goals and policies were never intended to reach social problems such as those presented here,'" Sutton wrote.

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