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FILE - In a June 3, 2014, photo, the Paradise Fossil Plant stands in Drakesboro Ky. A group of landowners and a Kentucky coal industry group are asking a federal judge to halt plans to shut down two coal-fired units at the Tennessee Valley Authority power plant in western Kentucky. The Kentucky Coal Association argues in the suit filed Thursday, July 10, 2014, that the TVA did not follow proper federal procedure and its own rules in deciding to close the units at the Paradise Fossil Plant. (AP Photo/Dylan Lovan, File)

A federal judge has dismissed a lawsuit brought by the coal industry against the Tennessee Valley Authority that tried to block TVA's plans to shut down two of the three units at a Kentucky coal plant.

U.S. District Judge Joseph McKinley said TVA didn't violate federal rules in the way it decided to replace the oldest coal-fired generation at the Paradise Fossil Plant in western Kentucky with a new combined-cycle natural gas plant.

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The Kentucky Coal Association and a group of landowners near the Paradise plant sued TVA in July, claiming that a full environmental impact study was required for a new gas-fired plant to be built to replace the 55-year-old Paradise units. TVA conducted an environmental assessment, but the plaintiffs claim TVA failed to follow its own rules for the more extensive environmental impact study of the new gas plant. The plaintiff's called TVA's decision "arbitrary capricious and an abuse of discretion."

But McKinley rejected such claims and ruled that through its integrated resource plan, environmental assessment and public hearings, TVA had met its standard for a decision on the coal-fired plants.

"The court's ruling affirms that TVA took the proper considerations into account in making this important decision for the people of the Tennessee Valley," TVA spokesman Scott Brooks said today.

Brooks said TVA is in the early phases of construction of the combined-cycle gas plant at Paradise, and is moving forward with the permitting process. TVA will continue to operate one coal-fired unit at Paradise.

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