Supreme Court Opts Not to Hear TVA Clean Air Case

By J.R. Pegg

WASHINGTON, DC, May 4, 2004 (ENS) - The U.S. Supreme Court announced Monday it will not consider an appeal of ruling that found the Tennessee Valley Authority (TVA) has the authority to ignore orders by the U.S. Environmental Protection Agency (EPA) to reduce pollution from its coal-fired power plants. The decision casts a further cloud over how the federal government will pursue alleged violations of the Clean Air Act's New Source Review program against the nation's oldest and dirtiest power plants.

The Supreme Court, as usual, did not offer details about its decision not to hear the case.

In its petition, the Justice Department asked the court to hear the appeal because the ruling of the federal appeals court "strikes at the heart of EPA's enforcement authority under the Clean Air Act."

The EPA's complaint with the Tennessee Valley Authority, a federal agency, stems back to 1999, when the agency alleged that TVA violated the New Source Review provisions when it carried out 14 projects at nine of its coal fired plants between 1982 and 1996.

TVA is the nation's largest public utility, serving eight million people in seven Southern states.

The Tennessee Valley Authority is the largest electricity generator in the United States. (Photo courtesy Oak Ridge National Laboratory)

Established in 1977, the New Source Review program requires that an air pollution source, such as a power plant or industrial complex, install the best pollution control equipment available when it builds a new facility or when it makes a major modification that increases emissions from an existing facility.

Routine maintenance of a plant is not subject to these provisions, and the interpretation of this clause remains at the center of the debate over New Source Review - and the focus on the EPA's complaints against the Tennessee Valley Authority.

As the TVA is a federally owned power company, the EPA believed it did not have the authority to take the federal entity to court.

Instead, the agency issued an administrative compliance order in 1999 against the TVA and brought the power company in front on the EPA's Environmental Appeals Board.

TVA refuted the charges that it had violated the routine maintenance clause of New Source Review, refused to comply with the order and challenged the agency in federal appeals court.

Last June a three-judge panel of the 11th Circuit Court of Appeals ruled that the government should not have used an administrative order to address TVA's alleged violations of the New Source Review program.

The government must prove these violations in court, wrote 11th Circuit Judge Gerald Tjoflat on behalf of the panel, and until it does TVA "is free to ignore" the order without risk of penalty.

The court determined that it had no jurisdiction over the matter because administrative compliance orders are "legally inconsequential and do not constitute final agency action."

The EPA "manufactured the procedures they employed on the fly," the court ruled, and should have treated the TVA as a "it does any private energy company for enforcement purposes."

In its petition for appeal to the Supreme Court, U.S. Solicitor General Theodore Olson wrote that the court's conclusion conflicts with decisions of at least two other federal appeals courts and "threatens EPA's Clean Air Act enforcement program in the states of the Eleventh Circuit.

Olson argued the court erred by ruling that "disputes between two Executive branch agencies are justiciable so long as the dispute is one that could occur between a private party and a government agency."

Environmentalists say the legal battles have kept the TVA from cleaning up its dirtiest coal-fired power plants. (Photo courtesy Tennessee Valley Authority)

Scott Segal, director of the Electric Reliability Coordinating Council, said the Supreme Court's decision "should bring the EPA actions against TVA to a close."

"In our judgment, the facts never supported application of the New Source Review program to these maintenance projects," said Segal, whose organization lobbies on behalf of coal fired utilities.

But the implications of the case are far from clear. The federal appeals court ruled was made strictly on procedural grounds, not on the merits of the alleged violations.

And there is still the possibility the Justice Department could pursue the alleged violations against the TVA in court.

Environmentalists caution that the Bush administration's attempted industry friendly revisions of the New Source Review program could undermine future cases.

The two sets of rule changes the administration has finalized to the New Source Review program have been challenged in federal court. Critics contend that they undermine the program and allow the nation's power plants to delay the adoption of new emissions controls.

The combined reforms will affect regulation of air pollution from the nation's 17,000 industrial facilities, which emit the majority of nitrogen oxide and sulfur dioxide released into the atmosphere by the United States.

These pollutants are leading contributors to smog, soot, haze and acid rain.