TVA reviewing 'extensive' new EPA emissions, coal ash rules, CEO says

As the Tennessee Valley Authority forges ahead with a strategy to close all its coal plants and replace them mostly with natural gas, another emissions-heavy fossil fuel, strict new rules from the Environmental Protection Agency are likely to affect the federal utility unevenly.

The EPA issued four final rules on April 25 aimed at drastically limiting emissions both from old coal plants still operating and new gas plants yet to operate. It also expanded previous limits on water pollution from coal plants and regulations on coal ash to include waste landfills at retired coal plants.

It's too early for TVA to know exactly how it will comply with the new rules, said CEO and President Jeff Lyash on an April 30 earnings call.

Two TVA actions make the utility more prepared to comply with the rules, Lyash said, and both came in the years since a disastrous coal ash spill at TVA's Kingston coal plant in 2008.

The first is the utility's rapid push to close coal plants, which could be accelerated in response to the EPA rules. Since 2012, TVA has closed seven coal plants. Along with scrubber technology that removes certain emissions before they hit the air, the closures have allowed the utility to cut its emissions from all fuels by around 60% since 2005.

TVA plans to close all its coal plants and reduce its emissions 80% by 2035, even as it builds more natural gas plants.

The second action is a high-tech monitoring system TVA developed for buried coal ash sites – the first of its kind in the country – which uses more than 16,000 sensors to collect data on waste storage sites every hour of every day.

Coal ash, the waste product of burning coal, contains contaminants including arsenic and mercury, and can pose significant environmental and human health risks if it leaks into groundwater or drinking water.

Hundreds of workers hired by TVA's coal ash spill cleanup contractor Jacobs Solutions sued Jacobs, alleging it failed to protect them from the waste, leading to widespread death and illness of workers. Jacobs settled with the workers last year for an undisclosed amount.

TVA will examine how to integrate new EPA regulations into its coal ash monitoring program, Lyash said.

"They're pretty extensive. They're complicated," Lyash said, referring to the new rules. "We'll take a look at these new EPA regulations and incorporate them into that program to make sure we're compliant. And of course, we'll be evaluating the cost impact of that over the coming months."

TVA delayed a draft of its long-term planning document, which will outline how the utility plans to meet both increased electricity demand and its goal of net-zero carbon emissions by 2050.

The decision to delay the plan was informed by the upcoming EPA regulations, Lyash said. Now that the rules are official, TVA staff expect to release the long-term plan in the coming months, taking the new regulations into account.

EPA emissions rules could speed TVA coal closures

The EPA's new rules to cut carbon emissions at coal plants fall into two categories, based on how long the coal plant is expected to operate:

• Coal plants that will operate on or after Jan. 1, 2039, must reduce emissions 90% by 2032

• Coal plants that will operate between 2032 and 2039 must reduce emissions 16% by 2030

TVA has only four coal plants operating and two of them will be retired by 2032: the Kingston Fossil Plant by 2027 and the Cumberland Fossil Plant by 2028.

The two giant plants will be replaced with natural gas fed by pipelines, a move TVA leaders have described as a "bridge" to clean energy but which has upset environmental groups that want the utility to expand solar and wind energy instead.

Environmental groups are happy with the EPA's new emissions rules, which could spell the end of coal plants in the U.S. since carbon capture technology will likely be too expensive to return the investment in aging plants. U.S. coal plants set to retire by 2035 will have about 50 years of service, according the Energy Information Administration.

TVA's coal plants are among the oldest in the nation, and they supplied only 13% of its power in 2023. The majority of TVA's electricity is produced by carbon-free sources like nuclear plants and hydroelectric dams.

Two TVA coal plants do not have firm retirement plans: Gallatin Fossil Plant in Tennessee and Shawnee Fossil Plant in Kentucky. If they close by 2032, they will not be governed by the new EPA rules, though it's too early for TVA to commit to accelerating its timeline for closing them, Lyash said.

"In general, I think our plan already puts us on a path toward compliance with this EPA regulation," Lyash said. "It may accelerate, it may not. We'll sort that out as we pour through this and do the analysis."

EPA gas emissions rule targets new plants

Between coal and gas plants, the EPA's new regulations are projected to eliminate 1.38 billion metric tons of carbon pollution through 2047, the same as preventing the annual emissions of 328 million gasoline cars or an entire year of emissions from the U.S. power sector, according to the agency.

The new rules, finalized under the Clean Air Act, also are projected to bring $370 billion in climate and public health benefits over the next 20 years, the EPA said.

While TVA may be exempt from the new standards for coal by closing plants, it will need to make its new gas plants more efficient with lower emissions to comply with the new regulations. Still, there is a path to make the regulations less of a lift.

The EPA chose to regulate gas plant emissions depending on how much a utility relies on gas. If TVA chose to use its new gas plants at Cumberland and Kingston as "base load" generation, firing them at 40% or more of their capacity, it would need to capture 90% of their carbon emissions by 2032.

Other uses do not come with carbon capture requirements. If TVA fires the plants between 20% and 40% of their capacity, it will need to meet certain efficiency standards when the plant begins operating. If TVA fires the plants at or below 20% of their capacity, it will need to use low-emission fuels.

TVA produced 22% of its power from natural gas in 2023. Several of its newest gas plants in Alabama and Kentucky are designed to be used on an as-needed basis, starting up quickly to meet peak power demands.

EPA extends coal ash rule after court ruling

Another environmental issue that looms large at TVA is coal ash, a concentrated waste product from burning coal which contains dangerous metals and can emit radiation.

The EPA first regulated how coal ash should be stored in 2015, though the rule applied only to waste produced after the rule came into effect. In a new rule released April 25, the agency expanded the regulations to include historical or "legacy" buried coal ash sites at plants that have not operated for years. The rule will become effective in six months.

One impetus for the new rule was a 2018 ruling by the U.S. Court of Appeals for the District of Columbia Circuit that overruled the 2015 provision exempting inactive coal ash storage sites.

Another motivation was the risks posed by older coal ash sites, which are "more likely to be unlined and unmonitored, making them more prone to leaks and structural problems than units at utilities that are currently in service," according to the EPA.

The rule was applauded by climate advocacy groups such as Earthjustice, an environmental law nonprofit that maintains a map database of coal ash sites, including those which were not previously federally regulated.

"We applaud the Biden administration for taking historic action to protect public health and advance climate progress," Abigail Dillen, president of Earthjustice, said in a statement. “EPA’s integrated approach to cleaning up power plant pollution will also drive better planning and smarter choices by the energy industry."

TVA made several updates to how it stores coal ash after the Kingston spill in 2008, when about one billion gallons of liquified ash covered the surrounding community.

Though TVA was not a party in the lawsuits against its contractor Jacobs, the cleanup cost $1.2 billion and forever changed how the utility stores and monitors coal ash.

Rather than wet ponds, the utility stores coal ash at operational and retired coal plants in a dry form. When the spill occurred, TVA generated 62% of its power from coal. Today, that number is down to 13%.

Daniel Dassow is a growth and development reporter focused on technology and energy. Phone 423-637-0878. Email daniel.dassow@knoxnews.com.

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This article originally appeared on Knoxville News Sentinel: TVA CEO Jeff Lyash on EPA rules about gas emissions, coal ash