The Tennessee Valley Authority (TVA) on Friday appealed a January 2009 ruling by the Fourth Circuit Court of Appeals that declared emissions from the public company’s coal plants in eastern Tennessee and Alabama a public nuisance in North Carolina. Experts say that the landmark decision could pave the way for public nuisance suits to regain prominence in climate change–related litigation.

U.S. District Judge Lacy Thornburg said in the court’s Jan. 13 opinion on North Carolina ex rel. Cooper v. Tennessee Valley Authority that emissions from the TVA’s three coal-fired plants in eastern Tennessee and one plant in Alabama contributed to “significant hurt, inconvenience [and] damage’’ in North Carolina. It made the finding even though the TVA’s plants were deemed compliant with Clean Air Act permits and were meeting emissions limits set by the states of Tennessee and Alabama.

The federal court ordered the TVA to upgrade or install scrubbers to reduce sulfur dioxide and selective catalytic reduction (SCR) systems to reduce nitrogen oxide (NOx) at its Bull Run, Kingston, and John Sevier plants in Eastern Tennessee and at Widows Creek in Northern Alabama. The pollution controls would cost—at a minimum—about $1 billion, the court estimated.

But the TVA has been doing more to reduce its emissions than any other major electric utility in the region, said Bill McCollum, TVA’s chief operating officer, in a press release Friday. “Because we must deliver reliable electricity and be responsible stewards of ratepayer dollars, we must appeal the ruling.”

In 1977, after the nation’s largest public power provider was deemed the worst sulfur dioxide polluter in the U.S. and found in violation of the Clean Air Act, the company implemented an aggressive emission control program. It reports that by 2010, it will have spent about $5.7 billion ratepayer dollars on clean air modifications to its plants. It says that 30% of its coal-fired capacity (11 facilities with 59 units) are equipped with SO2 scrubbers, claiming that only 16% of coal-fired units belonging to surrounding utilities have scrubbers. It also says that 60% of its coal-fired fleet is fitted with SCR equipment to control NOx, compared to 28% of surrounding units.

With these controls, the TVA claims to have reduced NOx emissions by 80% below 1995 levels, and that it is “on track” to reduce SO2 emissions by 80% to 85% below 1977 levels by 2010.

McCollum also said that prior to the court’s decision, the TVA had already installed scrubbers and SCR systems at its Bull Run plant; it had installed SCR and was in the process of installing scrubbers at its Kingston plant; and it had installed SCR and upgraded the scrubbers at the two large units at its Widows Creek plant. The TVA board had approved the installation of SCR and scrubbers at the TVA’s John Sevier plant, and engineering for those controls was under way.

But the court told the TVA to accelerate the installation of these scrubbers and SCR for its John Sevier plant, giving it less than three years to install all the equipment. To meet this schedule, the TVA said it would have to install both the scrubbers and SCR systems at the plant at the same time. This would require TVA to shut down units at the plant for approximately 20 months and increase the risk of disruptions to the reliability of the power system.

“The accelerated schedule is a significant problem for the power system,” McCollum said. He said John Sevier is the TVA’s easternmost power plant, and electricity generated there anchors the eastern end of the TVA’s transmission system. Without generation in eastern Tennessee, the system is more likely to become unstable, especially during periods of peak demand. Because of this risk, the TVA had previously asked the court to modify its order on the schedule for John Sevier, but the court declined to do so.

The court’s order also required the TVA to install scrubbers and SCR equipment on the six small units at the Widows Creek plant—whose emissions have already been reduced through low-sulfur coals and combustion controls, the TVA said. Added to that, the court ordered that all the units at the four plants must meet emission limits that are much more stringent than limits that Tennessee and Alabama have determined are necessary to meet federal air quality standards.

To comply with these limits, the TVA said it may be forced to reduce generation from these units periodically and “instead generate from other units, resulting in increased emissions elsewhere on the TVA system.”

But, toxic tort and environmental attorney R. Trent Taylor writes in Toxics Law Reporter (PDF) that the case has even larger implications for the power industry. Public nuisance suits had fallen into disuse in recent years, but they could regain prominence—with the TVA decision as kindling—in global warming and climate change litigation.

Specifically, the TVA decision is likely to increase the number of public nuisance suits targeting coal-fired plants, Trent, a public nuisance case specialist at McGuireWoods LLP, wrote. “In fact, it is not inconceivable to expect coal-fired power plants to become the chief target in future public nuisance suits in much the same way handguns and lead paint have in the past.”

Sources: TVA, Fourth Circuit Court of Appeals, Toxics Law Reporter