The Tennessee Valley Authority has a mixed environmental record that earned only a "fair" rating from its inspector general in a report released Monday.
Despite ongoing improvements in air quality and new efforts to improve coal ash disposal, TVA Inspector General Richard Moore said TVA's coal ash spill in Kingston nearly two years ago "represented one of the largest environmental disasters in U.S. history and demonstrated poor performance in managing coal ash" by TVA.
The federal utility also has one of the highest concentrations of transformers with toxic polychlorinated biphenyls, or PCBS, which new rules may require to be replaced. Moore said TVA also continues to trail many other utilities in promoting power generation from renewable sources.
PDF: TVA Inspector General report
"We deem that when taken as a whole, TVA's overall environmental performance was fair," he concluded in 56-page performance review of TVA's environmental record.
Moore said two years ago TVA's coal ash disposal "reflected a culture that coal ash was unimportant and relegated to the status of garbage at a landfill." But in response to the Kingston spill, Moore said TVA has revamped its approach "and taken effective steps to address the cultural problems that led to the spill."
TVA plans to spend up to $1.2 billion to clean up the 5.4 million cubic yards of coal ash that spilled out of a ruptured storage pond in Kingston three days before Christmas 2008. TVA expects to spend another $2 billion to replace wet ash storage systems at six TVA coal plants with dry ash recycling and storage processes.
TVA "will use [the auditors'] findings to improve our performance," spokeswoman Barbara Martoccia said in a statement released late Monday.
"TVA believes there is always room for improvement in the work that we do and the environmental performance inspection performed by the inspector general only helps clarify where changes can be made," she said.
TVA's new vision adopted in August calls for the utility to phase out some of the oldest of its 59 coal-fired units and replace that power with new nuclear units and more energy efficiency.
With its residential electricity priced about 20 percent below the national average, Tennessee uses the most electricity per capita of any state in the country, according to the Energy Information Administration.
The move to cut coal generation and promote conservation helped TVA earn more favor with environmental leaders.
"There are still problems with many of its coal plants on the west side of the state, but I think TVA has made some real air quality improvements, especially with some of its plants in East Tennessee," said John McFadden, executive director for the Tennessee Environmental Council.
McFadden praised TVA for its Green Power Switch and Generation Partners programs, which promote more solar, wind and geothermal generation. He also said he was encouraged by TVA's addition in June of Bob Balzar, a highly acclaimed conservation director from Seattle.
"TVA has just hired one of the top experts on energy efficiency," he said. "With enough conservation and efficiency, TVA could eliminate the need for new coal and nuclear plants."
But TVA's renewable portfolio, aside from its hydroelectric dams, is still smaller than most utilities' and well below the renewable portfolio standards set in 29 states.
In comparison with three dozen other utilities, Moore also found TVA to be one of the worst for having PCBs in its transformers. Although no longer produced in the United States, PCBs remain in many transformers. PCBs contain a variety of synthetic organic chemicals that are considered toxic. TVA still has nearly one fifth the nation's transformer PCBs, Moore said.
"If TVA does not take proactive action [to remove PCB in transformers], it may be forced into unscheduled outages to remove equipment to comply with anticipated rulemaking end dates," Moore said.
The inspector general's report found TVA's performance for radioactive waste storage and smog reductions were about middle of the pack among U.S. utilities.