EPA Sues 7 Utilities, Tells TVA to Stop Practices
By John J. Fialka
11/04/1999
The Wall Street Journal
Page B14
(Copyright (c) 1999, Dow Jones & Company, Inc.)
WASHINGTON -- In one of the largest environmental cases in U.S. history, the
Justice Department sued seven large utilities and ordered an eighth, the federally
owned Tennessee Valley Authority, to stop alleged violations of the Clean Air Act.
The allegations, if proved, could result in hundreds of millions of dollars of fines for
the companies, the installation of pollution controls costing billions and higher
electricity rates for millions of consumers. However, the total costs may not emerge
until after years of court battles.
The charges involve 32 older, coal-fired power plants, most of them in the South
and Midwest. They constitute 30% of the nation's coal-fired electricity-generating
capacity.
Environmental Protection Agency chief Carol Browner said a two-year EPA
investigation found that TVA and the private utilities made major overhauls that
extended the lives of "grandfathered" plants that were exempted from tougher
standards imposed by the Clean Air Act in the late 1970s.
A major upgrade of the plants required a federal permit, which would have triggered
requirements for air-pollution-control equipment that could cost $100 million or
more at each plant. Neither the companies nor TVA applied for the permits before
making the changes, Ms. Browner said.
"These are not close calls," she asserted at a Justice Department news conference.
"Next year these old, coal-fired plants will dump into the air 2.2 million tons of
sulfur dioxide, which cause acid rain, and 660,000 tons of smog-producing nitrogen
oxide." She also said that TVA may face fines for the alleged violations.
The companies named in the suits are American Electric Power (AEP), Columbus,
Ohio; Southern Co., Atlanta; Cinergy, Cincinnati; First Energy, Akron, Ohio;
Illinois Power, Decatur, Ill.; Southern Indiana Gas & Electric Co., Evansville, Ind.;
and Tampa Electric Co., Tampa, Fla.
Southern Co. spokesman Buddy Eller said, "We're extremely disappointed and
surprised that EPA is taking this action. We've been working with them over the
past 18 months to resolve their concerns on this issue. Our goal has been to
cooperate and find a workable solution. By their action today, they've taken this to
another level."
Cinergy spokesman Steve Brash said the company's repairs complied with federal
regulations. "EPA is trying to use lawsuits to achieve the policy goals that they've
had blocked in the courts," he said.
Illinois Power said the allegations are "without merit."
The other utilities couldn't be reached for comment late yesterday.
Paul Bailey, vice president of the Edison Electric Institute, an industry trade group,
said, "What EPA is doing reflects a revisionist view of history. EPA regulations
allow utilities to make changes to keep plants running. That's what our companies
have done."
One likely defense will be that EPA inspectors knew about the modifications and
condoned them. John McManus, manager of environmental strategy at AEP, which
has five plants involved, said state and federal environmental agencies have
conducted more than 14,000 plant inspections since the early 1980s without issuing
a violation notice to a coal-fired utility. "We believe agencies were aware of
activities we were undertaking," he said.
TVA, the nation's largest wholesaler of electricity, said EPA's action amounts to a
"new interpretation of an existing regulation" that permits utilities to conduct
maintenance projects to keep plants "in good working order."
The alleged violations carry civil penalties of as much as $25,000 a day; many
plants are accused of making major changes, such as installing new boilers, as far
back as the early 1980s. If the courts uphold EPA's position, the costs of new
antipollution equipment for AEP alone could be as much as $3.4 billion, Mr.
McManus said.
The complex lawsuits, filed in seven federal courts, could also resonate on the
campaign trail. Texas Gov. George W. Bush, the GOP front-runner, has claimed that
he got a jump on the Clinton administration by implementing a state law forcing
emission cuts by 136 power plants that had previously been exempted, or
grandfathered, under Texas law. And the federal action might not be welcomed in
coal states where Democrats must do well to win the next presidential election.
The federal grandfather exemption was used by lawmakers in the 1970s to build a
coalition for passage of the Clean Air Act. They assumed that older, coal-fired
plants would likely wear out in a decade or so and be replaced by cleaner-burning
facilities.
Frank O'Donnell, executive director of the Clean Air Trust, a Washington, D.C.,
environmental group, said EPA's move could prevent "thousands of premature
deaths, asthma attacks and other pollution-related health problems linked to
pollution from the plants."
The main beneficiary of yesterday's move, if successful, would be states along the
middle and upper East Coast and Canada. Officials there have complained for years
that high levels of acid rain and smog travel from the Appalachians and the
Midwest, where many plants are located near coal sources.
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