Clean Air Act Agreements

TVA has agreed to phase out older coal-fired plants by the year 2020—and phase in cleaner, greener forms of energy.

In support of its mission to provide lower cost, cleaner energy to the Tennessee Valley by phasing out older coal-fired power plants by the year 2020, TVA has entered into agreements with the U.S. Environmental Protection Agency (EPA); the states of Tennessee, Alabama, Kentucky and North Carolina; and environmental advocacy groups the Sierra Club, The National Parks Conservation Association and Our Children’s Earth Foundation to resolve long-running issues about how the Clean Air Act applies to routine maintenance and equipment replacement at TVA’s fossil plants.

As a background, the Clean Air Act amendments of 1977 established a program called New Source Review to regulate and permit new and modified power plants. Under EPA’s interpretation, even normal maintenance that increases emissions can require utilities to seek new emission permits and install control upgrades.

The agreements result in lower air emissions, less dependence on coal, more reliance on cleaner power sources and a renewed emphasis on energy efficiency—all of which are key components of TVA’s Integrated Resource Plan and overall business strategy. The agreements also absolve TVA from liability under New Source Review for past work at its plants and provide assurance that TVA can continue to operate its fossil plants in the future.

TVA agreed to install new controls, convert to biomass or retire units by the year 2019. TVA will spend nearly $6 billion to upgrade emission-control equipment at its fossil plants, depending on how many units are retired.

Consistent with the agreements:

• TVA has retired John Sevier Fossil Plant in East Tennessee, retired six units at Widows Creek Fossil Plant in North Alabama and all 10 units at Johnsonville Fossil Plant in Middle Tennessee.
• TVA will have idled 2,700 megawatts of coal-fired capacity by the end of 2017.
• That capacity will be replaced with low- or zero-emission electricity sources including renewable energy, natural gas, nuclear power and energy efficiency.
• TVA will provide $350 million in funding for a variety of environmental improvement projects in support of clean energy and energy efficiency—some of which will be administered by the states.
• Finally, under the EPA agreements, TVA agreed to pay a $10 million civil penalty.