EPA balked at TVA’s fossil fuel plant, then stepped aside

By Carlos Anchondo, Kevin Bogardus | 06/05/2024 07:11 AM EDT

The agency decided not to elevate a dispute over the electric utility’s review to the White House Council on Environmental Quality.

The Kingston Fossil Plant.

The Kingston Fossil Plant, operated by the Tennessee Valley Authority, is shown. Brian Stansberry/Wikipedia

Top EPA officials supported a rebuke of the Tennessee Valley Authority’s environmental review of a gas-fueled power plant this spring, but they backed off when the electric utility ignored their criticism.

A meeting between EPA staffers and TVA aides in March didn’t resolve the dispute — and a second meeting to discuss the plan to bring new fossil fuel energy online never happened, according to records obtained by POLITICO’s E&E News.

By early April, EPA let the matter drop after TVA decided to go ahead with the natural gas project west of Knoxville, Tennessee. EPA never brought the clash to the White House Council on Environmental Quality, which is responsible for implementing the National Environmental Policy Act.


Documents reviewed by E&E News outline how EPA leaders in Washington grappled with TVA’s plan to retire the nine-unit Kingston Fossil Plant, one of the largest coal plants in the utility’s fleet. In its place, TVA intends to build a gas, solar and battery storage complex.

The episode demonstrates the limits of the Biden administration’s drive to decarbonize the power sector, as the utility — part of the federal government like EPA — did not heed the agency’s plea to prepare a supplemental environmental impact statement. Green groups have blasted TVA’s gas proposal as both expensive and out of step with U.S. climate goals.

“It’s absurd that TVA continues to dismiss EPA’s feedback, particularly because the agency has raised concerns that the plans to build gas at Kingston will cost ratepayers over a billion dollars more than reliable, renewable alternatives,” said Chelsea Barnes, director of government affairs at the green group Appalachian Voices, in a statement.

In a March letter, EPA said TVA’s final EIS for the plant’s replacement failed to address concerns the agency identified in the draft version. That included a “limited range” of alternatives, an incomplete assessment of the project’s effects on communities historically overburdened by pollution and a failure to show how tax incentives provided by President Joe Biden’s 2022 climate law may affect each option’s costs.

Emails obtained under the Freedom of Information Act show that EPA sought to address those concerns with TVA after sending its letter. While one meeting between EPA and the utility occurred, the emails indicate a second meeting requested by EPA did not take place.

The documents show how senior aides at EPA headquarters were tracking the utility’s plan around the coal plant’s replacement and asking agency staff in Atlanta about interactions with TVA employees.

In a March 25 letter, EPA’s Region 4 branch told TVA that its final EIS for the Kingston Fossil Plant was “inadequate.”

“Attached is the signed letter from Region 4’s Acting [Regional Administrator], Jeaneanne Gettle,” said Ntale Kajumba, manager of the National Environmental Policy Act program office at EPA Region 4, in an email to colleagues.

Kajumba also thanked Vicki Arroyo, associate administrator for EPA’s policy office, and her staff for “elevating” the project to EPA Administrator Michael Regan and for “your coordination with others (CEQ/White House),” referring to the White House Council on Environmental Quality.

“Thank YOU, Ntale — for hanging in there and getting this over the finish line and into TVA today!” Arroyo responded. “Hoping they take us up on our offer to help.”

EPA and TVA employees held a meeting two days later — on March 27 — after the agency’s letter to TVA, which included nine additional pages of comments about the final EIS. In the missive, EPA called on TVA to prepare a supplemental review, arguing that the utility’s review didn’t satisfy requirements under NEPA, the country’s foundational environmental law.

Staff from several offices within EPA were listed to attend that follow-up call. Not just the NEPA team in Region 4, but officials from the policy, legal and air programs also were described as “participants” — although EPA’s Office of Air and Radiation was described as “(optional)” in an email.

EPA told E&E News last week that it fulfilled its obligations on the gas project with its review of TVA’s final EIS.

TVA spokesperson Scott Brooks said the utility appreciated EPA’s input as a cooperating agency. He did not address questions about how long the design phase for the new energy complex would last, if TVA has a construction timeline or cost estimate or if TVA believes the final EIS can withstand potential legal action.

“The Kingston Energy Complex is expected to be online in time for the announced retirement of Kingston Fossil Plant in 2027,” Brooks said in a statement last week.

‘We are all watching’

In emails after the March 27 meeting, EPA’s Arroyo asked staff members if they had “heard anything back from TVA,” noting that she was heading into a call with CEQ.

Told there was no response yet, she then said, “And I assume we are all watching for a [record of decision] in the meantime (just in case)?”

That would come soon enough.

Despite an EPA request to schedule another meeting on or after April 3, TVA staff responded April 2. TVA staff informed the agency that TVA CEO Jeff Lyash had already signed a record of decision, approving plans to develop a new “energy complex” centered on a new combined-cycle natural gas plant.

“We would like to continue to coordinate with EPA the implementation of this project as well as build on the good working rapport established through this NEPA consultation,” said Susan Jacks, general manager for environmental resource compliance at TVA, in an email.

“You and your team worked professionally with us during this period,” Kajumba replied. “We would appreciate coordinating with TVA as you move forward.”

Under Section 309 of the Clean Air Act, EPA reviews all draft EISs prepared by other federal agencies and carries out reviews of final documents to ensure that the lead agency has taken EPA’s comments into account.

EPA can send a matter to CEQ if a “project remains environmentally unsatisfactory,” according to the agency’s website.

In response to questions from E&E News, EPA spokesperson Remmington Belford said last week that “EPA’s headquarters reviews and concurs on any NEPA/Clean Air Act 309 comment letter that includes a finding of an inadequate analysis and a recommendation of a supplemental” EIS.

Belford also said that as “standard practice, EPA makes the Council on Environmental Quality aware of such findings in light of CEQ’s role” under a section of NEPA.

When asked about whether EPA had any comment on TVA not taking up the agency’s offer for a second meeting, Belford said EPA had nothing further to add.

“With the review of the final [EIS], EPA concluded its responsibilities under Section 309 of the Clean Air Act for this action,” Belford said.

CEQ spokesperson Justin Weiss said in a statement that “EPA did not refer this matter to CEQ.”

Weiss also said it’s common practice for EPA to inform CEQ when EPA sends a letter expressing concerns with another agency’s environmental review.

White House press officials didn’t respond to a request for comment.

Changing energy mix

TVA’s bid to develop new gas-fired generation comes as the Biden administration is trying to achieve a carbon-pollution-free U.S. power sector by 2035.

In April, EPA released a final rule to curb climate pollution from existing coal-fired and new natural-gas-fired power plants. Under the rule, new natural gas plants that run more than 40 percent of the time will need to reduce carbon emissions by 90 percent by 2032, installing carbon capture equipment by then.

The 69-year-old Kingston Fossil Plant, originally built to supply the energy demand from nearby Oak Ridge National Laboratory, can generate enough electricity annually to power more than 817,000 homes. It runs on coal.

In TVA’s final EIS for the Kingston Fossil Plant, the utility said the retirement of the facility is consistent with recommendations on near-term actions in TVA’s integrated resource plan from 2019.

TVA’s coal fleet is among the oldest in the United States, and a shift to cleaner sources of power will allow TVA to curb its greenhouse gas emissions, according to the impact statement, which was released in February.

Environmental groups have argued TVA shouldn’t be building more fossil fuel infrastructure. The utility’s plans for a new natural gas power plant also require a new pipeline to feed the project.

That proposal is being developed by East Tennessee Natural Gas, a subsidiary of Canadian energy company Enbridge. FERC released a draft EIS for that project last month.

In addition to the natural gas power plant with a capacity of at least 1,500 megawatts, the energy complex also is slated to include up to 4 MW of solar generation and 100 MW of battery storage, according to TVA.

Environmental and legal groups have continued to criticize the public utility over its plans to build a new gas power plant.

“TVA’s decision to plow ahead with the proposed Kingston gas plant despite lingering questions and significant concerns from EPA officials is unfortunately consistent with the utility’s pattern of ignoring serious criticism about its multibillion-dollar gas build-out,” said Amanda Garcia, a senior attorney at the Southern Environmental Law Center.