TVA IRP and EPA Settlement Moves Region Towards a Clean Energy Future

Guest Blog | April 14, 2011 | Energy Policy
TVA announcement of coal retirements and investments in clean energy is a historic first step for the agency and the Tennessee Valley.
TVA announcement of coal retirements and investments in clean energy is a historic first step for the agency and the Tennessee Valley.

A settlement announced today between TVA, the EPA and several states and public interest organizations is a historic step towards ending our reliance on dirty coal and moving the Valley towards a cleaner, brighter energy future.

The settlement, announced at this morning’s meeting of TVA’s Board of Directors, settles lawsuits brought more than a decade ago against TVA for violations of the federal Clean Air Act. The Clean Air Act regulates the emission of air pollutants such as mercury, sulfur dioxide and nitrous oxides, three of the leading pollutants of coal-fired energy generation along with carbon dioxide.

In order to settle the enforcement action by the EPA as well as the lawsuits brought by TVA-served states, the Sierra Club and the National Parks Conservation Association, TVA has agreed to permanently retire 2,730 megawatts (MW) of its oldest and dirtiest coal-fired generation. The settlement also requires TVA to install advanced pollution controls or retire additional coal units by 2018 and invest $350 million in clean energy projects and pay a $10 million civil penalty.

In all, it’s a huge step forward for the Tennessee Valley as we transition away from dirty coal and begin seriously investing in a clean energy future.

All 10 units at TVA's Johnsonville Fossil plant will be retired by 2017 as part of the settlement.

The coal units set to be retired are all ten units at the Johnsonville plant located near Waverly, Tennessee; units 1-6 at Widows Creek plant in northeast Alabama; and 2 units at John Sevier close to Rogersville, Tennessee, by 2017. The Johnsonville and Widows Creek facilities are the two facilities that SACE called out for retirement in the video we released in late March.

Some of the units announced for retirement today were already scheduled to come offline when TVA announced in August 2010 that it would idle 1,000 MW of coal-fired generation. This new settlement turns last summer’s announcement into an enforceable commitment.

TVA's IRP, also adopted at today's Board meeting actually recommends retiring 4,000 MW or more of TVA's coal-fired fleet to reduce cost and risk to TVA.
TVA's IRP actually recommends retiring 4,000 MW or more of TVA's coal-fired fleet to reduce cost and risk to TVA.

What is really remarkable is that today’s announced retirements shouldn’t make energy more expensive for TVA or Valley residents. In fact, the 2,730  megawatts that TVA will be bringing offline is still less than what is recommended by TVA’s Integrated Resource Plan (IRP) that was also adopted at this morning’s Board meeting. The IRP presents a range of coal retirements, from 2,400 MW to 4,700 MW, but clearly shows that TVA can retire at least 4,000 MW of coal-fired generation and doing so would actually be less costly and risky to TVA and its ratepayers. This leaves another 700 MW of coal that TVA should commit to retiring as quickly as possible.

As opposed to the legal proceedings that resulted in the settlement, the IRP was the result of nearly two years of detailed analysis, public engagement and review. SACE served on the Stakeholder Review Group for the IRP process and we feel strongly that TVA can easily achieve the 4,000 MW of coal-fired retirements recommended by the IRP and should be looking to retire all 7,000 MW that currently do not have advanced pollution controls installed.

Once all the retirements and pollution control upgrades required by the settlement are in place by no later than 2019, compared to the year 2008, TVA will have reduced their emissions of nitrogen oxides by 69 percent and sulfur dioxide by 67 percent. The EPA estimates that these emissions reductions will create nearly $27 billion in health benefits, through reductions in the number of heart attacks, premature deaths and asthma attacks. Needless to say today’s announcement is a clear victory for public health in the southeast and a break from an energy source that TVA has embraced since the 1940’s.

Out of the $350 million also required by the settlement to be spent by TVA on clean energy investments, four states are granted a total of $60 million for clean energy projects of their choice. Alabama, Kentucky, North Carolina, and Tennessee will be able to choose how to spend the money within limits provided in the settlement. Energy efficiency projects will also receive a big boost with $240 million slated for programs that help with demand and transmission projects.

TVA will now permanently and fully retire 16% of its coal fleet. The units set to retire represent a important step because they are some of the oldest, dirtiest and least efficient units in TVA’s portfolio, but there are other dirty units that TVA must still address. TVA’s most efficient units, such as Cumberland, Kingston and Bull Run already have advanced environmental technologies to reduce acid rain causing sulfur dioxide and ozone forming nitrogen oxides. Ultimately all this means that in the next seven years TVA’s coal fleet will either clean up or shut down.

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