Unlike its neighbors, Tennessee won't challenge EPA carbon limits

TVA President Bill Johnson talks about the start up of another reactor at the Watts Bar Nuclear Plant, which is helping TVA reduce its carbon emissions and meet new EPA rules. As a result, Tennessee is not challenging the EPA regulation like 27 other states are this year.

Across the Republican-controlled South, state attorneys general are suing the the Obama administration to stop the U.S. Environmental Protection Agency from imposing carbon limits on coal-fired power plants designed to help limit global warming.

But not in Tennessee.

Despite complaints from GOP lawmakers opposed to the new EPA rules, Tennessee Attorney General Herbert Slatery opted not to join in a legal challenge to the new carbon restrictions on power plants being pushed in 27 other states, including nearly all of Tennessee's neighbors.

photo Tennessee Attorney General Herbert Slatery III speaks to attendees at the Pachyderm Club meeting at 2 on the Roof on Monday, Oct. 26, 2015, in Chattanooga, Tenn.
photo Tennessee State Sen. Janice Bowling, R-Tullahoma
photo Tennessee State Sen. Mike Bell, R-Riceville

Critics of the new pollution controls contend the EPA overstepped its authority and warn the new rules will push up electricity rates as utilities are forced to replace cheaper coal-fired generation with lower carbon-producing alternative power sources. Paul Bailey, senior vice president of the American Coalition for Clean Coal Electricity, estimates the new EPA rules will cost utilities more than $300 billion, raise Tennessee power rates 10 to 15 percent a year "and have no impact on global warming" since most carbon comes from other sources around the world.

But Tennessee's primary power provider, the Tennessee Valley Authority, has already taken most of the steps required to meet the new carbon controls. In its power plan for the future, TVA estimates it can meet the new EPA standards and still raise rates less than in the overall pace of inflation - and less than its average increase over the past couple of decades.

"Investments already made by our ratepayers for available gas and renewable generation, combined with energy efficiency, places TVA's diversified portfolio in a position to meet these rules," John Myers, director of policy and regulatory affairs for TVA, told a legislative committee in Nashville last week.

Since 2005, TVA has already cut its carbon emissions by 30 percent and the federal utility expects to have cut such emissions by 40 percent by 2020. TVA has or soon plans to shut down more than half of the 59 coal-fired generators it once operated through the additions of new nuclear, natural gas, solar, wind and hydro generation.

Harlow Sumerford, communications director for the Tennessee Attorney General, said concerns about EPA's initial carbon control regulations "have been alleviated in the final rule" by allowing TVA to count its new Watts Bar Unit 2 reactor toward its carbon reduction targets and by extending the enforcement date for the new rules by another couple of years.

"We will continue to monitor the situation, as well as consult with impacted parties," Sumerford said, but Slatery decided against joining the lawsuit by Tuesday's filing deadline for such challenges.

That decision has upset many of the 59 legislators who signed a letter in August asking Slatery to join the lawsuit against EPA.

State Sen. Janice Bowling, R-Tullahoma, who authored the letter, said Tuesday she is "very disappointed" that Tennessee "is not doing the right thing" by challenging what she calls "junk science."

"Carbon dioxide is a colorless, odorless gas vital to life on earth," she said. "To act like we're going to be good soldiers to comply with something that is actually going to cost over $300 billion is not good public service, it does not help the environment ,and it certainly doesn't help businesses or the people of Tennessee."

State Sen. Mike Bell, R-Riceville, called the EPA rules "an overreach of the federal government" and urged Slatery to reconsider and join the fight against the new rules to avoid higher power rates for businesses and consumers.

The lawmakers also said they wish that Tennessee's Environment and Conservation Commissioner Bob Martineau had not flown to Paris this month for the United Nations climate change conference. His trip was paid for by the Climate Action Reserve and not state taxpayers, according to TDEC spokeswoman Kelly Brockman.

"He still shouldn't have gone and participated in an international event where we committed to a plan that will make power rates more costly," Bowling said.

But Myers said TVA expects annual rate increases of only a fraction of what critics claim. He said TVA rates should rise about 1.5 percent a year in the next decade, comparable to what it has raised rates for the past couple of years since Bill Johnson took over as TVA's CEO.

Stephen Smith, executive director for the Southern Alliance for Clean Energy in Knoxville, said conservation incentives in TVA's future power plans should actually reduce consumer bills by $85 a year even if power rates go up since consumption should decline.

"Local governments have already experienced major dividends from investments in energy conservation," he said.

Smith said Memphis cut its energy use at its downtown city and county building by nearly 50 percent thanks to energy efficiency retrofits and Knoxville cut its street light energy use by $250,000 a year through installation of LED streetlights.

But business groups are more wary about the new EPA rules and their costs.

Mike Knotts, director of government relations for the Tennessee Electric Cooperative Association, said the clean power plan threatens the reliability and cost of power.

"We do know that electricity rates will go up, and reliability could go down," he said.

Amy Martin of the Tennessee Chamber of Commerce and Industry said TVA is well positioned to meet the new regulations. But she said the Chamber "is deeply concerned" about the legality of the EPA's move.

"EPA is overstepping their legal authority under the Clean Air Act and industry is apprehensive about how this could be a model for future rule making," she said.

The NFIB, the Tennessee Mining Association and the Tennessee Chamber all urged the attorney general in Tennessee to challenge the legality of EPA rules.

Bowling said she is worried that costs will go up for goods made in other states that come into Tennessee and "and we can't act like we are in a bubble that has dodged the bullet" just because TVA has largely met the EPA requirements already

"That's a false sense of economy and well being because we are all interdependent upon one another," she said.

The final EPA rules and how Tennessee will address them are still being developed. Dr. Kendra Askovitz of the Tennessee Department of Environment and Conservation said the state is likely to ask for a 2-year extension in submitting its plans.

"We're in the process of evaluating the various compliance options that are available to us as well as their impact on various electric generation options in Tennessee," she said. "We're likely to begin our formal public outreach this spring and we're very likely to ask (EPA) for a 2-year extension in submitting our compliance plan.

Contact Dave Flessner at dflessner@timesfreepress.com or at 757-6340.