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Kentucky Coal Ass'n, Inc. v. Tennessee Valley Authority

United States District Court, W.D. Kentucky, Owensboro Division

December 19, 2014

KENTUCKY COAL ASSOCIATION, INC, ET AL., PLAINTIFFS
v.
TENNESSEE VALLEY AUTHORITY, DEFENDANT

Decided: December 18, 2014.

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For Kentucky Coal Association, Inc., James Rogers, III, J.L. Rogers Family LLC, Talmage Rogers, Talmar of FL, LLC, Pat Early, Kirstine Early, Buckingham Hollow, LLC, Kevin Lawrence, Big Bucks, LLC, Plaintiffs: Courtney Ross Samford, Gregory Brian F. Wells, LEAD ATTORNEYS, Wyatt, Tarrant & Combs LLP - Lexington, Lexington, KY; Donald J. Kelly, Lisa Catherine DeJaco, LEAD ATTORNEYS, Wyatt, Tarrant & Combs LLP - Louisville, Louisville, KY.

For Tennessee Valley Authority, Defendant: Edwin W. Small, Frances R. Koho, Maria V. Gillen, LEAD ATTORNEYS, Tennessee Valley Authority, Knoxville, TN.

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MEMORANDUM OPINION AND ORDER

Joseph H. McKinley Jr., Chief Judge, United States District Court

This matter is before the Court on the Plaintiffs' motion for preliminary injunction seeking to preliminarily enjoin Tennessee Valley Authority (" TVA" ) from carrying out any activities that will implement its decision to retire Paradise Units 1 and 2 and construct a new gas-powered generating facility and accompanying gas transport infrastructure. [DN 17] The Court held a preliminary injunction hearing. Fully briefed and argued, this matter is ripe for decision.

I. BACKGROUND

On February 16, 2012, the EPA issued regulations known as the Mercury and Air Toxics Standards (MATS) requiring operators of coal-fired power plants, including TVA, to reduce hazardous pollutants emitted from their plants by April 16, 2015, or by April 16, 2016, if an extension was granted. In August of 2012, TVA Board of Directors approved a budget that included the funding to upgrade the existing emission controls at Paradise Units 1 and 2 by installing pulse jet fabric filter systems to comply with MATS emission mandates. In April of 2013, TVA again indicated its intent to upgrade Paradise Units 1 and 2.

In August of 2013, in an effort to comply with MATS, TVA announced a change in its position regarding Paradise Units 1 and 2. TVA released a Draft Environmental Assessment (" EA" ) that proposed the following alternatives: (1) the No Action Alternative, under which TVA would allow

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the facility to operate out of compliance with the governing laws and regulations (Alternative A); (2) construction and operation of pulse jet fabric filter systems for emission control on Paradise Units 1 and 2 (Alternative B); and (3) retirement of Paradise Units 1 and 2 and construction and operation of a new natural gas-fueled power generating CT/CC plant (Alternative C). Unit 3 at Paradise would remain operational. According to the Draft EA, TVA also considered six other emission reduction alternatives, but eliminated them from detailed analysis because they were determined not to be technically or economically practical or feasible. TVA offered a 30-day comment period, which TVA notes was not required. TVA received 304 comments on the draft EA and most of those comments supported the second alternative.

In November of 2013, TVA issued a 153-page Final EA determining that Alternative C, the proposed action of retiring Paradise Units 1 and 2 and replacing them with a natural gas fueled power plant, was the preferred alternative. TVA determined that the proposed action would not significantly impact the environment and issued a Finding of No Significant Impact (" FONSI" ) in accordance with the National Environmental Policy Act (" NEPA" ), the Council on Environmental Quality (" CEQ" ) regulations, and TVA's procedures. TVA represents that the Paradise EA builds on or tiers from Environmental Impact Statements (" EIS" ) that TVA issued for its 1995 and 2011 Integrated Resource Plan (" IRP" ). According to TVA, an IRP is the culmination of a comprehensive utility planning process that evaluates the merits of using different kinds of energy resources to meet forecasted future demand for electricity with the goal of meeting demand reliably and cost effectively. According to TVA, tiering permits an agency to go from a broader NEPA review to a more site-specific NEPA review without readdressing issues or repeating information. TVA states that its decision to replace two coal-fired units with natural gas generation at its Paradise Plant is supported by two linked environmental reviews--the 2011 IRP and the Paradise Final EA.

On July 10, 2014, the Plaintiffs, Kentucky Coal Association, Inc., James Rogers III, J.L. Rogers Family, LLC, Talmage Rogers, Talmar of FL., LLC, Pat Early, Kirstine Early, Buckingham Hollow, LLC, Kevin Lawrence, and Big Bucks, LLC, filed an eight-count complaint seeking a declaration that Defendant, Tennessee Valley Authority, violated the National Environmental Policy Act (NEPA), 42 U.S.C. § 4332, the Administrative Procedures Act, 5 U.S.C. § 555 et seq, and the TVA Act, 16 U.S.C. § 831n-4(f), by conducting a faulty Environmental Assessment, improperly issuing a FONSI, and failing to prepare and issue an EIS concerning the project. On August 27, 2014, the Plaintiffs filed this motion seeking a preliminary injunction enjoining TVA and its representatives from any activities that will implement TVA's November 13, 2013, decision to retire Paradise Units 1 and 2 and construct a new gas-powered generating facility and accompanying gas transport infrastructure.

Plaintiffs allege that TVA has failed to undertake required environmental analysis under NEPA and failed to engage in least-cost planning under the TVA Act in connection with its decision to proceed with Alternative C. Plaintiffs argue that rather than conducting an EIS for this project which is required by NEPA, regulations of CEQ, and TVA's own NEPA implementing regulations, TVA conducted only a more limited EA. To avoid the required EIS, TVA characterized the construction of a new 1,025 MW gas-fueled facility and its related infrastructure as an " upgrade" or

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" maintenance" of the existing coal-fueled facilities when in fact the existing coal-fueled units will be decommissioned, demolished, and replaced by a separate and distinct gas-fueled facility. Plaintiffs claim that without a preliminary injunction, the declaratory and permanent injunctive relief Plaintiffs are pursuing will be a pyrrhic victory.

II. PRELIMINARY INJUNCTION STANDARD

A preliminary injunction is an extraordinary remedy that is generally used to preserve the status quo between the parties pending a final determination of the merits of the action. In determining whether to issue a preliminary injunction, the Court considers four factors: " (1) whether the movant has a strong likelihood of success on the merits; (2) whether the movant would suffer irreparable injury without the injunction; (3) whether issuance of the injunction would cause substantial harm to others; and (4) whether the public interest would be served by the issuance of the injunction." Certified Restoration Dry Cleaning Network, L.L.C. v. Tenke Corp., 511 F.3d 535, 542 (6th Cir. 2007) (quoting Tumblebus Inc. v. Cranmer, 399 F.3d 754, 760 (6th Cir. 2005)). It is unnecessary for the Court to make findings regarding each factor if " fewer are dispositive of the issue." In re DeLorean Motor Co., 755 F.2d 1223, 1228 (6th Cir. 1985) (citing United States v. School Dist. of Ferndale, Mich., 577 F.2d 1339, 1352 (6th Cir. 1978)).

III. DISCUSSION

A. Likelihood of Success on the Merits

The Court must first consider whether the Plaintiff has demonstrated a strong likelihood of success on the merits. Tenke, 511 F.3d at 543.

The National Environmental Protection Act " is 'our basic national charter for protection of the environment,' 40 C.F.R. § 1500.1(a), and is designed to 'declare a national policy which will encourage productive and enjoyable harmony between man and his environment[, and] to promote efforts which will prevent or eliminate damage to the environment and biosphere and stimulate the health and welfare of man.' 42 U.S.C. § 4321." Tennessee Environmental Council v. Tennessee Valley Authority, 32 F.Supp.3d 876, 2014 WL 3810740, *3 (E.D. Tenn. Aug. 1, 2014). NEPA requires federal agencies to take a " hard look" at the environmental consequences of their projects before taking action. Id. (citing Marsh v. Oregon Natural Res. Council, 490 U.S. 360, 374, 109 S.Ct. 1851, 104 L.Ed.2d 377 (1989); 42 U.S.C. § 4332(2)(C)). " NEPA also requires that federal agencies follow the necessary process in assessing the environmental effects of projects; it does not, however, mandate a specific result." Id. (quoting Robertson v. Methow Valley Citizens Council, 490 U.S. 332, 350, 109 S.Ct. 1835, 104 L.Ed.2d 351 (1989)); see also Strycker's Bay Neighborhood Council, Inc. v. Karlen, 444 U.S. 223, 227-28, 100 S.Ct. 497, 62 L.Ed.2d 433 (1980). " In other words, NEPA's mandate is essentially procedural." Id.

" A primary provision of NEPA is the requirement that all federal agencies prepare an EIS for 'major [f]ederal actions significantly affecting the quality of the human environment.'" Id. at *4 (citing 42 U.S.C. § 4332(2)(C); 40 C.F.R. § § 1502.1, 1508.15; Southwest Williamson Cnty. Ass'n, Inc. v. Slater, 243 F.3d 270, 274 n. 3 (6th Cir. 2001)). " Major" has no meaning independent of " significantly," and " actions" include " new and continuing activities, including projects and programs entirely or partly financed, assisted, conducted, regulated, or approved by federal agencies; new or revised agency rules, regulations, plans, policies, or procedures;

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and legislative proposals." 40 C.F.R. § 1508.18. An EIS is the most detailed and comprehensive level of review under NEPA regulations. Tennessee Environmental Council, 2014 WL 3810740, *4 (citing 40 C.F.R. § 1508.11; 40 C.F.R. Part 1502); Heartwood, Inc. v. Agpaoa, 628 F.3d 261, 264 (6th Cir. 2010).

" Prior to preparing an EIS, the agency may, however, prepare an EA as a preliminary step in determining whether the environmental impact of the proposed action is sufficiently significant to warrant an EIS." Tennessee Environmental Council, 2014 WL 3810740, *4; 40 C.F.R. § 1508.9(a)(1). " The EA is to be a 'concise public document' that '[b]riefly provide[s] sufficient evidence and analysis for determining whether to prepare an [EIS].'" Id. (quoting Department of Transp. v. Public Citizen,541 U.S. 752, 757, 124 S.Ct. 2204, 159 L.Ed.2d 60 (2004) (alterations in original) (quoting 40 C.F.R. ยง 1508.9(a)). If, pursuant to an EA, " an agency determines that an EIS is not required under applicable [regulations issued by the Council on Environmental Quality (" CEQ" ) ], it must issue a '[FONSI]' which briefly ...


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