Center for Biological Diversity v. Tennessee Valley Authority

CourtDistrict Court, N.D. Alabama
DecidedSeptember 30, 2020
Docket3:18-cv-01446
StatusUnknown

This text of Center for Biological Diversity v. Tennessee Valley Authority (Center for Biological Diversity v. Tennessee Valley Authority) is published on Counsel Stack Legal Research, covering District Court, N.D. Alabama primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Center for Biological Diversity v. Tennessee Valley Authority, (N.D. Ala. 2020).

Opinion

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF ALABAMA NORTHWESTERN DIVISION CENTER FOR BIOLOGICAL ) DIVERSITY, et al., ) ) Plaintiffs, ) ) Case No.: 3:18-cv-1446-LCB v. ) ) TENNESSEE VALLEY ) AUTHORITY )

Defendant.

MEMORANDUM OPINION AND ORDER

The plaintiffs, Center for Biological Diversity, Alabama Center for Sustainable Energy, Friends of the Earth, GASP, and Southern Alliance for Clean Energy, filed this lawsuit on behalf of their members alleging that the defendant, Tennessee Valley Authority (“TVA”), violated the National Environmental Policy Act, 42 U.S.C. § 4321, et seq., (“NEPA”), when it enacted a certain set of rate changes in 2018. On August 26, 2019, the Court denied TVA’s motion to dismiss. (Doc. 27). Before the Court is the plaintiffs’ Motion for Summary Judgment (Doc. 37) and TVA’s Motion for Judgment on the Administrative Record (Doc. 43). After the motions were fully briefed, the Court conducted a hearing on June 26, 2020. For the reasons that follow, the Court finds that the plaintiffs lack standing under Article III of the United States Constitution. I. Background As explained in the Court’s memorandum opinion denying TVA’s motion to

dismiss, TVA is a constitutionally authorized executive branch corporate agency and instrumentality of the United States created by the TVA Act of 1933, 16 U.S.C. §§ 831, et seq. One of TVA’s statutory objectives is to provide adequate, affordable,

and reliable electricity to more than nine million people in TVA’s seven-state service area. TVA generates electricity through a variety of methods that it then sells to 154 municipal and cooperative local power companies (“LPCs”), which then distribute it to residential, commercial, industrial, and governmental customers. TVA also

sells electricity directly to some industrial and governmental customers with large or unusual power demands. The plaintiffs are environmental groups whose thousands of members live and recreate in the areas served by TVA.

In 2018, TVA enacted a new rate structure for its provision of electricity to businesses and individual households. TVA’s rate change reduced the “wholesale Standard Service energy rate” and added a “grid-access charge.” (Doc. 15, p. 8), see also (Doc. 1, p. 1). According to TVA, the purpose of the grid-access charge was to

ensure that all customers, including customers who use distributed energy resources (“DERs”), like rooftop solar panels, in addition to power from TVA’s grid, contributed to the maintenance of TVA’s infrastructure. TVA’s rate change also

lowered energy rates for large commercial customers and increased rates for certain other customers. TVA also lowered the rate it paid to customers who generated their own electricity through distributed generation (“DG”) systems like rooftop solar

panels. In particular, TVA changed the rate at which it bought such power from consumers under its Green Power Providers Program. (“GPP Program”). Under the GPP Program, customers who generated their own power from solar panels were

able to sell that power back to TVA. Part of the 2018 rate change was to decouple the rate it paid to GPP Program participants from retail rates.1 The Court will refer to all of these changes collectively as the “rate change.” According to TVA, the 2018 rate change would not change the amount of

revenue collected by TVA nor would it alter any of its operations or require any changes to its generation or transmission systems. TVA stated that its purpose in enacting the rate change was to “better align its wholesale rates with underlying

costs.” (Doc. 15, at 7). TVA has explained that customers who generate their own power still rely on TVA’s power grid to supply energy when they are unable to produce enough. TVA claimed that the rate change, specifically the grid access charge, sought to ensure that these customers contributed their fair share to

maintenance of the power grid. The plaintiffs have a different interpretation of the 2018 rate change. According to the plaintiffs, TVA’s rate change was implemented as a way to

1 The GPP Program was ultimately eliminated in 2019. discourage both businesses and individual household from adopting DERs, thus making them more reliant on electricity generated by TVA. Throughout their

pleadings and briefs, the plaintiffs refer to the 2018 rate change as the “Anti-Solar Rate Change.” The plaintiffs allege that the rate change disincentivizes the adoption of DER, which will lead to TVA burning more fossil fuels to generate power, which

will then lead to environmental damage in the areas where the plaintiffs’ members live and recreate. Before enacting the rate change that is the subject of this litigation, TVA conducted an environmental assessment (“EA”) pursuant to NEPA in order to assess

the probable environmental consequences of its actions. TVA stated that it received 1,741 comment submissions from the public and other stakeholders regarding the probable environmental consequences of its proposed rate change. After completing

the study, TVA determined that its proposed rate change would not significantly impact the environment and issued a finding of no significant impact (“FONSI”). Because it found that the proposed rate change would not significantly affect the environment, TVA did not prepare the more intensive Environmental Impact

Statement.2

2 NEPA requires a federal agency to prepare the most intensive study, an Environmental Impact Statement (“EIS”), only when a major federal action is expected to “significantly” affect the quality of the human environment. 42 U.S.C. § 4332(C). An agency may prepare an EA for a proposed action in order to determine whether or not an EIS is needed. 40 C.F.R. §§ 1508.9, 1501.3, 1501.4(b) & (c). If, based on the EA, the agency determines that the impacts of the proposed action will not significantly affect the environment, then it issues a FONSI and an EIS is II. Plaintiffs’ Complaint In their complaint, the plaintiffs allege that TVA’s EA did not meaningfully

assess the environmental impacts of the 2018 rate change. According to the plaintiffs, TVA violated NEPA by enacting the rate change based on an allegedly deficient EA in a manner that was arbitrary and capricious and contrary to law in

violation of the Administrative Procedure Act (“APA”), 5 U.S.C. § 706.3 The plaintiffs also allege that TVA violated NEPA by failing to consider the environmental impacts of its rate change along with the reduction in the DG rate paid to customers who generate their own electricity, i.e. the changes to the GPP

Program. Additionally, the plaintiffs claim that the 2018 rate change, “(a) ‘may establish a precedent for future action with significant effects’; (b) will have ‘highly controversial’ and ‘highly uncertain’ effects; (c) is related to other actions with

cumulatively significant impacts; and/or (d) ‘threatens a violation’ of the TVA Act, 40 C.F.R. § 1508.27….” (Doc. 1, at 24-25). Based on those assertions, the plaintiffs claim that TVA was required to conduct an EIS and, by failing to do so, violated NEPA.

not required. 40 C.F.R. § 1501

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Center for Biological Diversity v. Tennessee Valley Authority, Counsel Stack Legal Research, https://law.counselstack.com/opinion/center-for-biological-diversity-v-tennessee-valley-authority-alnd-2020.