Center for Biological Diversity v. Tennessee Valley Authority

The federal district court for the Northern District of Alabama dismissed on standing grounds a lawsuit asserting that the Tennessee Valley Authority’s (TVA’s) environmental review for rate changes that affected rates for distributed energy resources such as rooftop solar did not satisfy the requirements of the National Environmental Policy Act. The court agreed with TVA that individual members of the plaintiff organizations had failed to prove an injury “fairly traceable” to the rate change because the plaintiffs did not provide evidence that a decrease in investment in distributed energy resources would result in an increase in fossil fuel use. The court concluded, moreover, that even if the link could be proved, the plaintiffs failed to demonstrate the “requisite geographic nexus between the alleged pollution and their particular interests.”

Five environmental groups filed a lawsuit in federal court in Alabama challenging the Tennessee Valley Authority’s (TVA’s) new rate structure, which the plaintiffs alleged would have the effect of “discouraging businesses and homeowners from investing in renewable energy and energy efficiency measures.” The plaintiffs alleged that the rate changes—which they referred to as the “Anti-Solar Rate Changes”—involved lowering energy rates for large customers, reducing the wholesale service energy rate, and lowering rates for customers who use the most electricity. The complaint cited TVA’s statements that without reductions in large companies’ electricity rates, the companies would have “increased incentives to pursue uneconomic DER [distributed energy resources]” such as solar. The plaintiffs asserted that TVA violated the National Environmental Policy Act and acted arbitrarily and capriciously because TVA’s environmental assessment had not “meaningfully” addressed the rate changes’ environmental impacts. The plaintiffs also charged that TVA finalized the rate changes before completing an update to its integrated resource plan (due to be completed in 2019), in which the plaintiffs alleged TVA would “for the first time” address availability and use of DER, the effects of power production on the environment (including climate change), emissions of greenhouse gases, and air quality.