The Tennessee Valley Authority, created during the Great Depression to harness the power of the Tennessee River, is beginning the 21st century by turning to nuclear power and natural gas for additional electricity.

But coal still is the primary fuel source for the electricity delivered to homes and businesses in TVA’s seven-state region. Burning coal generated more than 60 percent of TVA’s power last year.

Despite concerns over air pollution and global warming caused by coal plants, TVA expects to continue to stoke coal in most of its major power plants for decades to come. Although TVA has no plans to build any more coal-fired plants, none of the 59 coal-fired units now in operation are scheduled to be shut down for at least another 15 years.

“Coal is the workhorse of our system,” said Jacky Preslar, general manager of TVA’s fossil fuel supply.

But TVA’s workhorse faces new economic, legal and environmental burdens.

The cost of mining, transporting and cleaning up coal is raising costs of the energy source even though industry groups estimate the United States has a 240-year supply of coal. The spot market price of coal has jumped 163 percent in the past five years, although TVA has avoided most of that increase so far through long-term contracts negotiated in previous years.

Pollution concerns

TVA spends nearly $1 million a day on pollution controls, but the federal utility still faces at least a half dozen lawsuits and violation notices over emissions from coal plants. North Carolina’s attorney general has called TVA “a public nuisance” for polluting the Tar Heel state, while some environmentalists want TVA to quit burning coal altogether to limit greenhouse gases they contend cause global warming.

“We’ve got to get off fossil fuels,” said John McFadden, executive director of the Tennessee Environmental Council. “TVA has made a lot of improvements, but the burning of coal is causing all kinds of problems that we never imagined in the past.”

TVA officials insist that coal is a critical source of power at least for the foreseeable future. Coal plants have helped TVA achieve one of the highest reliability rates of any utility in the country, even when TVA’s nuclear plants were idled for safety repairs or when hydroelectric production was cut because of droughts.

Most cost effective

Although coal prices continue to rise, Mr. Preslar said coal still is far cheaper than natural gas, which has risen even more in price. TVA estimates coal plants can generate power at less than a fifth the costs of wind or solar generating facilities.

John Myers, TVA senior manager for environmental strategy and management, said the utility leads the region in pollution control spending and already has cut smog emissions from coal plants by more than 80 percent since 1977 by installing scrubbers, selective catalytic reduction, or SCR, devices and other equipment.

“By 2010, we will have spent $5.8 billion in emission control investments,” Mr. Myers said. “We continue to invest heavily in our clean-air programs.”

By 2019, TVA will have cut current levels of smog emissions in half again to meet EPA’s Clean Air Interstate Rules.

TVA is installing a new scrubber at its Bull Run Fossil Plant near Oak Ridge this year and will finish installation of scrubbers at the Kingston Steam Plant in 2009. The TVA board last week authorized spending $597 million to install a scrubber and SCRs at the four-unit John Sevier plant near Rogersville, Tenn., by 2012. TVA expects most of its coal plants to have scrubbers over the next decade.

Scrubbers strip 95 percent of the plant’s emissions of sulfur dioxide, the pollutant most responsible for smog and haze, while selective catalytic reduction devices cut out most nitrogen oxide emissions.

Interstate feud

TVA President Tom Kilgore contends that North Carolina utilities contribute more to their state’s air pollution than does all of TVA. Unlike Tennessee, North Carolina also is considering building another coal power plant, the Cliffside Steam Station west of Charlotte.

“We have eight scrubbers on the TVA system (with plans for another 15) and North Carolina has only one,” Mr. Kilgore said. “Tennessee hasn’t chosen to go after North Carolina because the wind does blow this way, too. I’m not trying to get Tennessee to do that. We’re just going to defend ourselves.”

But in North Carolina, one of the states served by TVA, Attorney General Roy Cooper sees it differently. Mr. Cooper has dusted off an old legal approach to claim simply that TVA is a “public nuisance” for spewing too much air pollution into North Carolina.

“TVA’s pollution is making North Carolinians sick, damaging our economy and harming our environment,” he said in 2006 when the case was filed.

The lawsuit, which a federal appellate court decided last month will go to trial in July, “is a significant and potentially precedent-setting case,” according to John Walke, clean air director for the Natural Resources Defense Council.

Mr. Walke says TVA’s claim that North Carolina pollutes even more than Tennessee doesn’t deal with the merits of the case against TVA.

“You can’t excuse your illegal behavior by saying your neighbor is even worse,” Mr. Walke said. “All that allows is for Tennessee to make a claim against North Carolina, which maybe it should.”

The North Carolina suit blames TVA coal plants for up to 1,400 premature deaths from asthma, breathing problems and other air-related illnesses in North Carolina. Using the EPA’s estimated $6 million value for each premature death, that could mean $8.4 billion in damages, according to John Whitehead, an economics professor at Appalachian State University.

Future of coal

Dr. Whitehead said North Carolina’s case “could be very significant” if it is able to prove its fatality claim. If successful, the suit could force TVA to add scrubbers sooner and to far more of its 59 coal units and could even push TVA to scrap one of its oldest and smallest coal plants, the Johnsonville plant in West Tennessee.

North Carolina is getting some help from a former TVA chairman, S. David Freeman. The 82-year-old Chattanooga native criticizes the federal utility for still operating plants such as the Kingston Steam Plant he helped design as a young engineer in 1950.

“When a plant is getting nearly as old as I am, maybe it should be retired,” he said. “With the threat today of global warming, it’s pretty clear that we need to wean ourselves from these old dirty coal plants. Most of TVA’s plants still don’t even have scrubbers.”

But since the lawsuit was filed, TVA has started or completed the installation of scrubbers on all three plants near the Great Smoky Mountains and North Carolina, which could undercut the damages alleged by North Carolina.

Nonetheless, Sandy Kurtz, a volunteer with the Tennessee Environmental Council and Tennessee Greenways and Trails Commission, said Chattanooga will have trouble meeting EPA’s proposed new ozone standards unless TVA does more to phase out or clean up its dirtiest coal plants.

“TVA is to be commended for what it has done, but it’s still not enough,” she said.

Dr. Whitehead insists the future of coal “is still very bright because it is abundant and relatively cheap” — at least for now — even with pending regulations, lawsuits and taxes on carbon emissions.

Coal industry officials insist that new technologies should be developed to burn coal cleaner and limit carbon dioxide emissions linked to global warming.

“We’re simply not stepping up to invest enough in new technologies to make sure we take advantage of our main domestic fuel source,” said Luke Popovich of the National Mining Association. “The United States has more energy in its domestic coal reserves than the oil under the sands of the Middle East.”

But the next president and Congress could place new restrictions on how those reserves are used and what must be done with any emissions.

All three of the major presidential candidates this year — U.S. Sens. John McCain, R-Ariz., Hillary Clinton, D-New York, and Barack Obama, D-Ill., — favor restrictions on carbon dioxide emissions from fossil fuel plants. Congress also is considering stricter smog standards and new mercury controls on coal-fired plants.

Mr. Kilgore said he expects TVA can meet existing mercury control proposals with its scrubbers, although a recent Supreme Court decision could alter those requirements.

“We’re going to wait until the air is cleared — pun intended — on the legislation on carbon before we make any decisions on existing plants,” the TVA president said.

Some proposed reductions in carbon emissions could push up electricity prices by more than 60 percent in the coming decade, Mr. Kilgore said he has been warned.

“A carbon-constrained world could change how everybody behaves,” he said. “We have to be light on our feet. But we also have to make sure we maintain the reliable electric service the valley depends upon.”

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