Kentucky Coal Association, Inc. v. Tennessee Valley Authority

The court granted summary judgment to TVA. TVA’s National Environmental Policy Act procedures provide that a new power generating facility usually requires an environmental impact statement (EIS), but the court agreed with TVA that it had discretion to determine whether an EIS was warranted in a particular case. In this case, TVA determined there would be no major environmental impacts, and that there would in fact be environmental benefits, including significant benefits to regional air quality, a significant reduction in carbon dioxide emissions, reductions in water withdrawals and heated discharges into the Green River, and reduction of the production of coal combustion waste. The court upheld all the challenged aspects of TVA’s review. It rejected claims that TVA failed to consider the importance of the availability of an adequate supply of electricity at a reasonable price and that it did not consider the significant employment impacts if the facility stopped burning coal. The court also concluded that the assessment of impacts did not improperly segment the decommissioning of the coal-fired units (which the court characterized as a “too speculative” possibility) or the construction and operation of a natural gas pipeline (the impacts of which the court determined TVA had assessed to the extent possible). Nor was the court persuaded by plaintiffs’ contentions that TVA had understated emissions of greenhouse gases from natural gas, that it arrived at a predetermined outcome, or that it had used an improper no action alternative. The court also determined that TVA’s decisionmaking regarding least-cost planning under the Tennessee Valley Authority Act of 1933 was not arbitrary and capricious. Plaintiffs have appealed the court’s judgment to the Sixth Circuit.

A group of plaintiffs that included Kentucky landowners and a nonprofit organization representing eastern and western Kentucky coal mining operations commenced a lawsuit in the federal district court for the Western District of Kentucky alleging that the Tennessee Valley Authority (TVA) did not comply with the National Environmental Policy Act when it decided to retire coal-fired electric generating units and replace them with a new combustion turbine/combined cycle natural gas plant at a facility in Muhlenberg County in Kentucky. Plaintiffs alleged that TVA was required to prepare an environmental impact statement for its action, rather than relying on an environmental assessment. They contended that “viewed holistically” the switch to natural gas would have more significant adverse environmental impacts than upgrading emission controls on the existing coal units, including impacts associated with building new facilities and natural gas pipelines. Plaintiffs alleged that TVA had inappropriately elevated consideration of carbon dioxide emissions and related air quality issues above other environmental impacts “in an attempt to ‘comply’ with President Obama’s Climate Action Plan, which lacks force of law.” Plaintiffs further alleged that TVA’s evaluation of greenhouse gas emissions was deficient because it did not consider emissions from the entire life cycle of natural gas production. The suit also alleged that TVA failed to adhere to its obligation under the Tennessee Valley Authority Act of 1933 to conduct least-cost planning.