EPA declined to challenge federal utility on new gas plant

NASHVILLE, Tenn. — Critics have long blasted the nation's largest public utility over its preference to replace coal-burning power plants with ones reliant on gas, another fossil fuel.

The same advocates are now frustrated that federal environmental regulators won't stand in the way of the utility's latest extensive project, which clashes with the Biden administration's directives to fight climate change, despite their laundry list of concerns.

The gas plant decision by the Tennessee Valley Authority came January 10, capping a monthslong conflict between the TVA and the Environmental Protection Agency — two federal agencies that are both charged with a mission to protect the environment. It was also just a few weeks before the first meeting of TVA'S new board of directors, with a majority appointed by President Joe Biden, which will convene this Thursday.

The EPA had written to the TVA on Jan. 6 regarding its “substantial” concerns with the plan to bank on gas at the Cumberland Fossil Plant. But ultimately, the nation's environmental watchdog relented when it could have challenged the utility's claims about the gas plant's expected environmental impacts at the highest ranks of government — the White House.

In essence, the TVA “thumbed their nose at EPA'S comments,” said Pat Parenteau, an emeritus professor specializing in environmental law at the Vermont Law and Graduate School. The TVA provides power to about 10 million customers in parts of seven southern states.

The EPA had recommended integrating a combination of renewables, like wind and solar, along with projects that reduce the overall demand for electricity, like energy efficiency, to replace the mammoth aging coal plant near Cumberland City. Instead, TVA'S analysis of alternatives compared only new gas plants to a massive array of solar and battery storage.

TVA'S environmental impact statement confirmed a new combined-cycle gas plant will release earth-warming carbon dioxide and methane pollution for decades to come. However, the utility found the solar and battery option would take too long to build and cost $1.8 billion more than a new gas plant. The TVA also stated greenhouse gas effects from the two options would be “relatively close.”

The EPA took issue with TVA'S conclusions, saying the utility relied on misleading comparisons and inaccurate economic data. The environmental agency also noted the TVA could be left with “stranded assets” in the form of a plant it has to stop using before it has recuperated the cost of building. As for the environmental impacts, the utility's own analysis results in a $3 billion savings with the solar option over the 30-year life of the project, according to the EPA.

EPA'S decision not to take further action smacks of politics, Parenteau said.

“We know that the Biden administration is schizophrenic on gas,” he said, noting large gas exports under Biden and high rates of oil and gas leasing.“this, of course, is in total contradiction to what he campaigned on. But it does reflect, to be fair, the political reality of the day. It reflects the war in Ukraine. It reflects the prices at the gas pump, it reflects lots of stuff.”

Concerned citizens sent a letter on Jan. 4 to EPA Administrator Michael Regan urging him to refer TVA'S Cumberland Fossil Plant project to the White House Council on Environmental Quality. The Department of the Interior was the last agency to send the council a project in 2016. The EPA hasn't done it since 1996.

While referrals are rare, they have sometimes resulted in “major changes,” Parenteau said. “The abandonment of the jet port in the Everglades is one of them.”

Instead, the EPA sent a letter to the TVA on Jan. 6 outlining the deficiencies of its final environmental impact statement and urging the utility to address them in its record of decision. Four days later, TVA President and CEO Jeff Lyash issued that record of decision, moving forward with a 1,450-megawatt natural gas plant. It once again failed to address EPA'S concerns.

In an email to The Associated Press, EPA spokesperson James Pinkney said the agency carefully considered all available options.

“EPA determined that there were practical and achievable actions TVA could do within its Record of Decision, as well as with future actions, to improve environmental outcomes while meeting its need to retire the Cumberland coal plant,” he wrote.

Critics of TVA'S long-stated preference for gas have accused the utility of not giving serious consideration to other alternatives, as required by the National Environmental Policy Act.

“TVA clearly spent a lot of time and money developing the gas alternative,” said Amanda Garcia, Tennessee director for the Southern Environmental Law Center. “It did not do the same for solar and storage, let alone a range of alternatives like wind, energy efficiency and demand response,” which helps customers change their usage patterns to flatten peak demand periods.

The law center has pointed out that the TVA signed contracts with two gas companies months before it completed the environmental impact study that was supposed to guide its decision.

The utility corporation said the contracts were necessary to allow preliminary planning work. They were not binding agreements to choose gas, TVA spokesman Scott Brooks said in an email. They were contingent on TVA'S final fuel decision.

The TVA has faced criticism for other environmental reviews in the past.

The Sierra Club is suing the utility over its decision to install gas turbines at a retired coal plant in New Johnsonville. In that case, the TVA said the new gas plant will not have a significant environmental impact, so it did not have to complete an impact statement required under the National Environmental Policy Act — despite TVA'S own estimates that it will emit more than 1 million tons of carbon dioxide each year.

And the TVA has been involved in a decade-long lawsuit over its decision to begin clearcutting millions of trees around its transmission lines without completing an environmental impact statement. The 6th U.S. Circuit Court of Appeals has ruled against the corporation repeatedly in that case.

The utility, in turn, pointed to its recent victory in a lawsuit over its decades-long powerprovider agreements. A judge dismissed the challenge, ruling in part that the environmental act “does not require review of every major federal action.”

The new gas plant at Cumberland is not yet a done deal. A 32-mile pipeline still needs approval, requiring yet another environmental impact statement. TVA'S board members have remained mum about the project when contacted by the AP.

“It seems to me that enough serious questions have been raised that the new board might want to take a second look at it,” Parenteau said.