Outside the Law RestoRing AccountAbility to the tennessee VAlley AuthoRity Outside the Law RestoRing AccountAbility to the tennessee VAlley AuthoRity enViRonmentAl integRity PRoject December 2009 This report was made possible through a grant from Our Children’s Earth Foundation, www.ocefoundation.org © December 2009, Environmental Integrity Project The environmenTal inTegriTy ProjecT is a nonpartisan, nonprofit organization established in March of 2002 by former EPA enforcement attorneys to advocate for more effective enforcement of environmental laws. The Environmental Integrity Project has three objectives: To analyze how the failure to enforce or imple- ment environmental laws increases pollution and affects the public’s health; to hold federal and state agencies, as well as individual corporations, accountable for failing to enforce or comply with environmental laws; and to help local communities in key states obtain the protection of environmental laws. For more information about Environmental Integrity Project or for additional copies of this report, please visit: www.environmentalintegrity.org. cover PhoTos: Cumberland Fossil Plant, Aerial photo of Kingston Fossil Plant ash spill, and Ash and Water Discharge Pipe, available at TVA.gov and in the public domain under 17 U.S.C. § 105. Photo of home buried in coal ash from the Kingston Fossil Plant ash spill was taken by J. Miles Cary of the Knoxville News Sentinel and used with permission. Layout: www.cuttingedgedc.com contents Executive Summary v Summary v Recommendations vii Introduction 1 TVA’s Identity Crisis: Federal Corporation or Private Utility? 3 TVA’s Unique, Quasi-Federal Status 3 TV’s Shifting Legal Identity 4 TVA’s Claims of Sovereign Immunity & The Unitary Executive Theory 5 TVA’s Unique Financial Status 6 TVA’s Special Protections from Competition 7 TVA’s Environmental Footprint 9 TVA’s Coal Waste Spills 10 TVA’s Water Pollution 11 TVA’s Air Pollution 12 TVA’s Track Record of Noncompliance, Neglect, and Recalcitrance 15 TVA’s Clean Air Act Noncompliance 15 Clean Water Act Noncompliance 16 TVA Ignored Environmental Risks at Kingston 17 TVA’s Culture of Noncompliance 18 Recommendations and Conclusion 19 Restore Accountability at TVA 19 Reform and Reduce TVA’s Environmental Footprint 20 Conclusion 21 Notes 22 Appendix A. Select Coal Waste Discharges from TVA Fossil Plants 29 Figures Figure 1. Credit Rating of TVA and Eight Investor-Owned Utilities 7 Figure 2. TVA Fossil Plants 9 Figure 3. TVA Fossil Plants: CCW Surface Impoundments—Total Acres 10 Figure 4. TVA Fossil Plants—Surface Water Discharges 11 Figure 5. TVA Fossil Plants: CO2 Emissions 12 v o utside the Law Kingston Fossil Plant—Aerial View of Coal Ash Spill executiVe summary Nearly one year ago, the Tennessee to progressive management on behalf Valley Authority (TVA) made front page of the public interest, but TVA’s envi- news when an 84-acre coal combustion ronmental record and conduct in recent waste (CCW or coal waste) impound- years mock the vision that inspired its ment at Kingston Fossil Plant spilled founding. more than 1 billion gallons of toxic coal For example, a scathing report from waste—an amount nearly 100 times TVA’s own inspector general (IG), based greater than the Exxon Valdez oil on a review by an independent engineer- spill—into the Emory River and sur- ing firm, found that TVA’s own negli- rounding community. The spill covered gence led to the Kingston disaster. Worse land and water with coal sludge up to still, the IG reported that after the acci- 12 feet deep, and destroyed homes, play- dent, TVA’s investigation was deliberately grounds, businesses, roads, waterways, designed to limit its scope, minimize the and railroad tracks. company’s own liability, and avoid any- However, the evidence in this report thing that might call into question the reveals that the Kingston spill is only safety of the nearly 3,000 acres of coal the latest and most dramatic example of waste ponds still in use at other TVA coal environmental mismanagement at one plants.1 In separate reports, the IG found of the nation’s largest utilities. President that TVA bypassed air emission controls Roosevelt established TVA nearly eighty at the Cumberland, Widows Creek and years ago as a public utility dedicated Bull Run coal plants, resulting in well vi over a thousand tons of illegal emissions. In addition, the Justice Department According to the IG reports, TVA delayed (DOJ) has been reluctant to enforce fixing the problem or reporting the emis- environmental laws at TVA plants sions to regulatory authorities.2 despite longstanding compliance TVA’s environmental footprint is problems at TVA coal plants, like the enormous. Each year, TVA produces Clean Air Act violations identified by utside the Law staggering amount of air and water pol- EPA at over a dozen TVA coal-fired o 7 lution—over 104 million tons of CO2; over units in 2000. For example, the Justice 20 million pounds of hazardous air pol- Department’s “unitary executive” lutants; and 7 million tons of coal waste. theory, advanced during the Reagan In addition, TVA’s coal plants discharge Administration, discourages enforce- thousands of pounds of toxic metals ment actions between federal agen- like arsenic and selenium in U.S. waters cies because it requires two agencies every year. In fact, six of TVA’s 11 coal- to take opposing positions under fired plants rank among the nation’s top the same President.8 The “unitary 20 plants for total discharges of toxic executive” theory has roots in earlier metals to U.S. waterways.3 Although Executive Orders (No. 12,146 and EPA has determined that treatment 12,088) that advise federal agencies technologies are available and the Clean to resolve disputes outside the court- Water Act requires the elimination or room. The unitary executive doctrine at least the minimization of these toxic was adopted in part to avoid conflict effluents, most of TVA’s permits do not between the Justice Department’s duty include enforceable limits for discharg- to prosecute and its duty to defend es of toxic metals to surface waters. TVA federal agencies accused of violating is also home to some of the oldest and the law. However, this policy should least efficient coal plants in the U.S., not apply to TVA because TVA does not and spends less on their maintenance rely on DOJ for its defense and retains than its competitors.4 Unlike some utili- independent litigating authority.9 In ties, there is little evidence that TVA is addition, the 11th Circuit Court of making the transition toward cleaner, Appeals found TVA to be an unusual low carbon source of electricity—its federal agency, outside the bounds of recalcitrance may be aided by federal centralized control in Washington, and law that prohibits competition within invited EPA to file a lawsuit against TVA’s service area. TVA in federal court regardless of “uni- Equally troubling, TVA repeatedly tary executive” concerns.10 The EPA invokes its status as a “federal” agency to has never done so despite TVA’s ongo- avoid responsibility for its own environ- ing violations of environmental law.11 mental misconduct.5 TVA raises issues TVA is a federal utility, and presents of federal “sovereign immunity” to avoid Congress, the White House and U.S. penalties in environmental enforce- EPA with a tremendous opportunity ment cases filed by citizens in federal for reform. This report describes TVA’s court, yet TVA does not receive federal giant environmental footprint, and its funds or tax dollars drawn from the U.S. poor record of compliance with envi- Treasury.6 Limitations on the ability to ronmental laws. This report documents recover penalties from federal agencies TVA’s attempts to avoid its duty to com- are supposed to protect the taxpayer— ply with environmental laws due to its but TVA is completely self-financing, and status as a federal corporation. Finally, has not received federal appropriations this report provides detailed recom- in decades; any fines paid by TVA need mendations to reform TVA and limit its not come from the U.S. Treasury. environmental impact. Recommendations environmental wrongdoing. Similarly, vii (Full Recommendations on pg. 19) federal legislation allows TVA to o exclude competitors from its service utside the Law To bring TVA into compliance with all area and restrict access to its energy environmental laws and prevent another transmission system. Removing these disaster like the Kingston coal ash spill, special protections would make TVA the Obama Administration and Congress more competitive, result in a more should: energy-efficient grid, and create incentives for TVA to stay ahead of changing environmental and energy Restore Accountability at TVA: regulations. Clarify that EPA and the Justice Department Can Take TVA to Increase Environmental Court. A directive from the White Oversight. Congress can play a criti- House, clarifying that the “unitary ex- cal role in reforming TVA through its ecutive” theory does not prevent EPA oversight authority. The House and and DOJ from taking enforcement ac- Senate Committees charged with TVA tion against TVA will help bring TVA oversight have held multiple hearings into compliance with federal environ- regarding the Kingston spill, but long- mental laws and resolve environmen- term oversight of TVA’s environmen- tal violations that have lingered for tal management is needed to prevent years. The “unitary executive” theory, another disaster and transform TVA supported by Executive Orders (No. into a national example of envi- 12,146 and No. 12,088) should not pose ronmental sustainability and clean a roadblock to EPA and DOJ enforce- energy production. ment of environmental laws at TVA facilities. TVA does not rely on DOJ Reform and Reduce TVA’s for its defense and retains indepen- Environmental Footprint: dent litigating authority under the law.12 Unlike most federal agencies, Create a Culture of TVA is removed from centralized con- Environmental Compliance.