TVA sued over support of trade groups that critics say do 'dirty work' that hurts environment

The Tennessee Valley Authority is being sued for what environmental groups claim were illegal contributions of millions of dollars by the federal utility to industry trade groups that lobbied Congress against implementing environmental rules for utilities.

In a 20-page lawsuit filed in federal court in Knoxville, a coalition of a half dozen environmental groups charge that TVA's membership and support of industry groups such as the Edison Electric Institute, the Energy and Wildlife Action Coalition and the Utility Water Act Group which have lobbied Congress against some proposed stricter air and water quality standards for coal and natural gas power plants.

"As the nation's largest public power provider and a federal agency, the Tennessee Valley Authority needs to demonstrate leadership by halting the financing of groups propping up the fossil fuel economy," said Howard Crystal, legal director at the Center's Energy Justice program. "Instead it funds these groups to do its dirty work while it moves forward with building new fossil gas plants. TVA can and must do better."

TVA insists that none of the funds it provides the industry trade groups that it belongs to are using any TVA money for lobbying activities.

"As a federal agency, TVA is prohibited from participating in lobbying activities, and the TVA board has directed that any dues, membership fees, or financial contributions paid to external organizations not be used for purposes inconsistent with TVA's statutory mission or legal obligations," TVA spokesman Jim Hopson said. "Like other major utilities, TVA's membership in a diverse array of external organizations allows TVA access to specialized expertise and analysis that directly benefits all of our customers at a cost significantly lower than if TVA were to undertake such work alone."

The Center for Biological Diversity and other environmental allies are asking the court to compel TVA to address a petition the groups filed with TVA last year seeking to restrict TVA's payments to third-party groups that work against new air and water pollution regulations. The petition, which was filed after the groups sued TVA to obtain information under the Freedom of Information Act, said TVA paid $200,000 in 2018 to the Utility Water Act Group, which opposed the Clean Water Act protections, and pays annual dues of around $500,000 o be a member of the Edison Electric Institute, which also has opposed some proposed decarbonization measures.

TVA, the petition asserted, is violating its customers' First Amendment rights by forcing them to fund these groups.

"TVA has forced its customers to make political speech by taking money from their utility bills and using it for anti-clean energy advocacy," said Daniel Tait, chief operating officer of the Alabama Center for Sustainable Energy, also known as Energy Alabama. "We have repeatedly called on the TVA inspector general to investigate this misuse of customer funds but after hearing and seeing nothing, we felt compelled to act."

The Energy and Policy Institute previously sued TVA to obtain spending records that TVA denied providing because TVA lawyers said such payments are "confidential commercial and financial information" that TVA is not required to disclose under the federal freedom of information act.

The groups sought to obtain records about TVA's support for the Utility Air Regulatory Group (UARG) and the Utility Solid Waste Activities Group (USWAG), which has fought stricter EPA rules on coal pollution.

In previous Congressional testimony, TVA said it has been a member of UARG since 1987 and contributed $7.3 million to the industry lobbying group since August 2001 before the group was disbanded in May, 2019. TVA spokesman Jim Hopson said UARG helped TVA understand and comply with Clean Air Act regulations, but he said the federal utility "does not participate in or fund any UARG litigation or lobbying."

The Utility Air Regulatory Group was an association of power generating companies and national trade associations coordinated through the law firm Hunton Andrews Kurth that lobbied and sued federal agencies over regulatory policies regarding utility coal power plants. In 2019, a Congressional committee questioned how EPA adopted rules similar to those written by the Utility Air Regulatory Group, which used two attorneys in the past who later worked at EPA.

The lawsuit also challenges TVA's support of the Nuclear Energy Institute, a Washington D.C.-based trade association of utilities and other businesses involved in nuclear power.

"NEI advocates in favor of nuclear power, which the U.S. Supreme Court has characterized as a "controversial issue" of public policy in light of safety issues," Knoxville attorney Rachel Wolf said in her filing in federal court

Wolf said "TVA's long-standing payments to such industry trade groups involve millions of dollars for "controversial activities" opposed by the plaintiffs in the lawsuits.

"TVA's financial support (for the trade groups) contravenes both TVA's statutory mission and ratepayers' First Amendment rights," Wolf said.

The lawsuit asks the court to block further TVA payments to such outside trade groups to save money and better protect the environment.

"Our communities already shoulder among the highest energy burdens in the country," said Marquita Bradshaw, executive director of Sowing Justice, another one of the plaintiffs in the case. "It adds insult to injury for TVA to be sending ratepayer funds to groups that are directly undermining the urgent transition away from the fossil fuel plants disparately impacting front-line communities."

TVA has already shut down most of the 59 coal-fired generating units it once operated and plans to phase out all of its coal generation by 2035. Since 2005, TVA has cut its carbon emissions by more than 63% and has set a goal of reducing carbon output by 80% by 2035.

But the environmental groups want TVA to do more, citing President Biden's goal of making U.S. electric utilities carbon free by 2035.

The latest lawsuit over TVA payments to industry groups follows a separate petition filed earlier this year before the Federal Energy Regulatory Commission concerning private utility funding of Edison Electric and similar groups. That petition, which is still pending before the regulatory agency, would amend FERC's Uniform System of Accounts to make such trade group payments non-recoverable from ratepayers.

Environmental groups contend TVA as a public power entity should be held to an even higher standard than investor-owned utilities.

"TVA is unique in the power industry in that environmental stewardship and economic development are codified in the agency's founding mission," said Maggie Shober, director of utility reform at the Southern Alliance for Clean Energy. "It is imperative that the largest public power utility operate with accountability and transparency, stop funding anti-environment and anti-green jobs work, and invest in clean energy that will support the health of the Valley and the people who depend on it."

Contact Dave Flessner at [email protected] or at 423-757-6340.