One of the nation's largest coal-burning utilities said yesterday it will shutter 18 of its coal-fired boilers and pay billions to rein in pollutants at many of its remaining units, underscoring the evolving energy landscape in the United States.

The move by the Tennessee Valley Authority will result in nearly 1 percent of the nation's coal-fired power capacity going offline by the end of 2018, including 1,000 megawatts of coal-fired power TVA said it planned to retire last year. TVA's landmark deal with a suite of states and environmental groups and U.S. EPA resolves a number of lingering violation complaints EPA brought against the company for allegedly failing to comply with Clean Air Act pollution control requirements at 11 of its plants.

Environmentalists yesterday hailed the agreement as a success for public health that will result in major reductions of greenhouse gases on top of targeted benefits in reductions of sulfur dioxide (SO2) and nitrogen oxides (NOx).

EPA estimated that the agreement will cut TVA's NOx by 69 percent and SO2 by 67 percent, resulting in about $27 billion in annual health care benefits by averting thousands of early deaths, asthma attacks and heart attacks. EPA did not calculate specific greenhouse gas reduction figures.

The federally owned Tennessee Valley Authority will be closing 18 units at three of its plants in Tennessee and Alabama as part of the agreement, affecting about 16 percent of its coal-fired electricity generating system. TVA will also need to invest in pollution control retrofits for most of its remaining 41 coal-fired plants, which the company said could cost between $3 billion and $5 billion.

Another provision of the agreement requires TVA to inject $350 million into energy projects to slash pollution and save energy, with $240 million of that pot funding energy efficiency initiatives. A $40 million chunk of TVA's funds will also go toward reducing greenhouse gases and other pollutants through waste heat recovery, hybrid electric charging stations, solar installations and waste treatment methane gas capture projects.

"Today's announcement locks in the retirements ahead, so now we'll see what the next steps are for reductions in greenhouse gases and what will replace the coal-fired power plants," said Bruce Nilles, deputy conservation director for the Sierra Club, a group involved in the settlement. "Putting an end to burning millions of tons of coal means huge reductions in greenhouse gases," he said.

15 million tons of CO2 to be eliminated

The 18 units slated for closure emitted about 15 million tons of carbon dioxide in 2008, according to TVA.

To replace the electric capacity, TVA will look to "low-emission or zero-emission electricity sources, including renewable energy, natural gas, nuclear power and energy efficiency," the utility said in a statement.

Stephen Smith, executive director of the Southern Alliance for Clean Energy and an unpaid adviser for a group that crafted a long-term strategy for TVA's future resource use, estimates that the closures will shrink TVA's carbon footprint by about 10 percent.

"There are not the workhorse plants. These are older, lower-utilized plants," he said, noting that they would not typically be operating at full capacity.

Still, he called these coal reductions "very important," since TVA is one of the largest coal plant operators in the country and continues to be a major player in the southeastern United States. Other companies will see this choice and follow suit, since it will be expensive to install environmental controls on some of these older, inefficient plants, he said. With this announcement, he said, "you are seeing a major company in the southeastern United States announcing commitments to retire significant amounts of coal."

The central plank of the settlement agreement forged by TVA and EPA requires the retirement of two units at the John Sevier Fossil Plant in eastern Tennessee, six units at the Widows Creek Fossil Plant in northern Alabama, and all 10 of the units at TVA's Johnsonville Plant in central Tennessee. Almost all of those units date back to the 1950s and had no modern pollution controls installed.

"These units are among the first built by TVA and have served us well over the years. But as times change, TVA must adapt to meet future challenges," TVA President and CEO Tom Kilgore told his board yesterday in Chattanooga, Tenn., where the majority of the board signed off on the plan, according to a statement. Installing needed pollution control equipment at these facilities would not be cost-effective, he said.

EPA Administrator Lisa Jackson said TVA's transition sends an important signal to other companies: "This not only can be done, this is being done," she told reporters yesterday.

"The message here," she said, "is that we don't have anything against coal, but we have to reduce the pollution that comes from coal to our air, to our water and on our land."

Other companies are already taking steps to move away from coal.

Other utilities shrink CO2 footprint

North Carolina-based Progress Energy, which announced a $13 billion merger with Duke Energy in January, was among the first out of the box to lay out plans to replace a significant number of older coal-fired units with natural gas. Three combined-cycle gas-burning plants are now under construction or in the planning stages, and Duke and Progress are also waiting for federal regulatory approvals for three new nuclear power stations.

For its part, Duke is among the largest coal users in the country, but if state regulators buy into its plans, company chairman Jim Rogers has said its portfolio will shift to more gas, nuclear and high-efficiency coal plants.

Atlanta-based Southern Co. also expects to get the green light to start construction on two nuclear power plants in Georgia this year. In Kemper County, Miss., Southern is building a coal gasification plant. Meanwhile, just outside of Atlanta, subsidiary Georgia Power is replacing coal-fired units with three 840-megawatt gas units.

The TVA deal put a variety of options on the table to move toward a cleaner energy future. It set up a framework for the construction of up to 4,000 megawatts of natural gas power plants to be part of the mix, according to EPA.

Another option under the settlement agreement would be to move toward burning woody biomass and other waste instead of coal -- though such biomass facilities have been a hot-button issue on Capitol Hill, as some groups question the carbon footprint of burning woody waste and say those plants could drive deforestation.

"There are certainly many ways that we can use biomass to replace fossil fuels including coal and get real reductions in life-threatening carbon dioxide pollution and still protect our natural resources," said Franz Matzner, legislative director for the Natural Resources Defense Council's Climate Center. "What remains to be seen is what is on the table here. ... We need to be very cautious with how we proceed with the catch-all 'biomass,'" he said.

Reporter Joel Kirkland contributed.

Reprinted from Climatewire with permission from Environment & Energy Publishing, LLC. www.eenews.net, 202-628-6500