On the question of retiring Gallatin's four coal boilers, TVA decided that option "would not maintain an existing energy asset available to generate reliable and cost-effective energy for the region. Nor would it help meet TVA's plans and identified need for a more balanced energy resource portfolio."
Despite those findings, TVA's president and chief executive officer, Bill Johnson, acknowledged in a memorandum that the decision to approve the upgrades at Gallatin was "a close question."
He added that TVA is already committed to retiring 18 less-efficient coal units at plants elsewhere in Tennessee and in north Alabama, and that Gallatin should be considered for closure only after the air quality improvements expected from the first round of closures are fully calculated. "Despite their ages, these units have been some of the best performing coal units on the TVA system," Johnson wrote in the memo authorizing the retrofit work.
Environmentalists want Gallatin closed
But environmental groups, including the Sierra Club, which helped secure a 2011 settlement agreement with TVA requiring the utility to clean up its coal plant emissions, aren't satisfied with the Gallatin decision.
Along with three other groups, the Sierra Club late last month filed a lawsuit seeking to block the planned Gallatin retrofits. The groups charge that TVA's decision failed to comply with the National Environmental Policy Act because executives did not give sufficient consideration to the alternative scenarios, including closing Gallatin's four coal-fired boilers.
Louise Gorenflo, chairwoman of the Sierra Club Tennessee chapter's Beyond Coal campaign, in a statement called TVA's decision a misguided plan to spend "$1 billion in customer money to prop up an obsolete coal plant," adding that the decision was made in the face of strong public support for the alternative scenarios.
In addition to concerns about Gallatin's air emissions, environmental groups are also angered by TVA's plans to use a former wildlife management area to store coal ash; the discharge of wastewater into Old Hickory Lake, a tributary of the Cumberland River; and the planned relocation of an aquatic research facility dedicated to endangered species.
"Fundamentally, TVA short-circuited the NEPA process by ignoring the most obvious and cost-effective alternative to protect the environment -- retirement of the Gallatin Plant," states the court complaint filed in U.S. District Court in Nashville.
Stephen Smith, executive director of the Knoxville, Tenn.-based Southern Alliance for Clean Energy, which did not join the Sierra Club lawsuit, called TVA's decision on Gallatin shortsighted in light of potential future CO2 regulation and the utility's heightened exposure to financial and regulatory risk.
"All of us were disappointed that they decided to go the coal route," he said. "In hindsight, I think it will probably be viewed as a mistake."
But he said the decision does not necessarily reflect an abandonment of TVA's promises to reduce its reliance on coal-fired generation. Broadly, he said, TVA has been more receptive than many other utilities to shifting its portfolio away from coal, with projected retirements of between 2,400 and 4,700 megawatts over the coming decades. While the pace of those closures is slower than many environmental groups want, he noted that TVA is not entrenched.
"The Gallatin decision is one snapshot that will probably wind up being viewed as a mistake," he said. "But in the overall context, you still see TVA moving away from coal."