Judge orders mediation in TVA-EPA dispute

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Posted 2:29PM on Sunday, June 30, 2002

CHATTANOOGA, TENNESSEE - The Tennessee Valley Authority and the Environmental Protection Agency must use a mediator to resolve their dispute over cleanup of TVA's coal-fired power plants, the U.S. 11th Circuit Court of Appeals has ordered. A three-judge panel referred the case on Friday to the Kinnard Mediation Center in Atlanta, saying it would hold the case in abeyance for 60 days to give the two parties time to resolve their dispute. The order requires the parties to report back to the court by August. ``TVA welcomes the opportunity to settle our differences as long as it is fair to TVA and its ratepayers so we can continue to provide low-cost, reliable power,'' said TVA spokeswoman Barbara Martocci. Neither EPA nor TVA asked for the mediation, according to both parties. ``It's an interesting and somewhat unusual development in the case and I would say the petitioners (TVA and electric utility interests) remain cautiously optimistic about our chances of succeeding,'' said Eric Seagull, a spokesman for the Electric Reliability Coordinating Council, a consortium of utilities sympathetic to TVA's arguments against EPA. Stephen Smith, executive director of the Knoxville-based Southern Alliance for Clean Energy, said environmentalists were still studying the court order. ``I don't know if it bodes good,'' Smith said. ``The case against TVA is very good.'' EPA sued TVA as well as 12 utilities in the South and Midwest in 1999 to impose tougher air quality standards under the Clean Air Act. The EPA said TVA violated the act for 20 years by making improvements at seven of its 11 coal-fired plants in Tennessee, Alabama and Kentucky without installing new pollution control equipment. The TVA contends that work on the plants fell under the category of routine maintenance rather than major modifications, which exempted them from the upgrades. TVA and EPA negotiated for months trying to resolve the issue before EPA imposed an order and TVA countersued. In January, the 11th Circuit ruled that TVA could appeal the order. At stake is the diminishing air quality of the Tennessee Valley, particularly in the tourist-rich Great Smoky Mountains area of Tennessee and North Carolina. Emissions from coal-fired plants lead to acid rain, smog and haze, unhealthy conditions. TVA, the nation's largest public power producer, has voluntarily adopted a nearly $5 billion program to reduce nitrogen and sulfur emissions from its smokestacks by up to 85 percent over 1970s levels, officials with the federal utility say. TVA provides electricity to about 8.3 million people in Tennessee, Georgia, Kentucky, North Carolina, Virginia, Alabama and Mississippi.