In a move that will transform one of the nation's largest coal-burning utilities, the federally run Tennessee Valley Authority has agreed to shut down 18 of its oldest coal-fired boilers and to spend $3 billion to $5 billion more on air pollution controls for its remaining coal plants.

The 10-year plan, which will resolve claims from states and environmental groups that 11 TVA power plants in Alabama, Kentucky and Tennessee violated federal air pollution laws, was approved by the utility's board at a meeting today in Chattanooga, Tenn.

By requiring TVA to shut down boilers with 2,700 megawatts of capacity and upgrade many others, the deal will affect nearly all of the utility's current fleet of 59 coal units. It will cut TVA's total emissions of nitrogen oxides (NOx) by 69 percent and sulfur dioxide (SO2) by 67 percent.

U.S. EPA, which also signed off on the deal, estimates that the drop in air pollution will prevent 1,200 to 3,000 early deaths, 2,000 heart attacks and 21,000 asthma attacks per year. In dollars, those benefits are worth about $27 billion, EPA Administrator Lisa Jackson said today.

"Modernizing these plants and encouraging clean energy innovation means better health protections and greater economic opportunities for the people living near TVA facilities," Jackson said in a statement after the board's vote. "Investments in pollution control equipment will keep hundreds of thousands of tons of harmful pollutants out of the air we breathe, and help create green job opportunities that will reduce pollution and improve energy efficiency."

Of the 18 coal units that will be shut down, 10 are at TVA's Johnsonville Plant in central Tennessee, six are at the Widows Creek Fossil Plant in northern Alabama and two are at the John Sevier Fossil Plant in eastern Tennessee. Many of the boilers have been running since the early 1950s and have not been equipped with air pollution controls.

The deal was approved by a 7-1 vote, with the lone dissenting vote coming from board member Mike Duncan.

"I think the settlement is going to be very expensive," Duncan said during the meeting, the Nashville Tennesseean reported. "I think it takes away some flexibility for us in capacity. We don't know what's going to happen in the future."

Before today's announcement, TVA already was planning to idle about 1,000 megawatts of coal-fired units.

"We want to be a leader in cleaner energy and cleaner air and that means we will have to be less reliant upon coal," President Tom Kilgore said last year. "That doesn't mean that coal is going away, but we are looking at idling some of our coal units pretty soon" (Greenwire, Aug. 23, 2010).

The final plan was hailed by environmental groups, which had sued TVA to claim that several of the utility's plants were violating the Clean Air Act. They said the plants had not met the requirements of the New Source Review program, which requires older facilities to add modern pollution controls if they undergo major modifications.

As part of today's settlement, which was the 22nd of an EPA campaign to enforce the New Source Review rules, the utility also agreed to pay a $10 million civil penalty and spend $350 million on projects to reduce air pollution and boost energy efficiency.

That includes $240 million for efforts to retrofit low-income housing with technology to cut energy use, which would save residents money and prevent more air pollution.

"Today's landmark agreement is a game changer for how we power our homes and businesses in the Southeast," Mary Anne Hitt, director of the Sierra Club's Beyond Coal Campaign, said in a statement. "By phasing out the most dangerous coal plants and charting a course focused on less pollution and more clean energy, TVA is demonstrating that we don't have to choose between clean air and affordable energy -- we can and must have both."

Click here to read the consent decree with EPA.

Click here to read the compliance agreement with EPA.

Click here to read the consent decree with states and environmental groups.