Second-generation conflict in the Tennessee Valley: a case study

The purpose of this study is to determine if government can regulate itself in the public interest. Using the Environmental Protection Agency’s (EPA) regulation of the Tennessee Valley Authority (TVA) over implementation of air pollution control policy as the analytical focus, this study systematically inquires into the interplay of social, political, and economic forces involved in second-generation conflict and regulation. This study also examines how second-generation environmental conflict between EPA and TVA differs from first generation conflict. The first generation conflict occurred in the late 1970s when EPA and TVA had a legal dispute over compliance with air pollution control policy. The dispute involved a citizen lawsuit intended to produce TVA's compliance that was settled by a consent decree. The consent decree settlement cost TVA $760 million in compliance costs. The second-generation conflict began in November 1999 when EPA issued an administrative order against TVA and filed suit against seven private utilities claiming the utilities made modifications to their coal-fired steam plants without proper permitting. TVA claims EPA has issued a new interpretation of an existing regulation. The conflict surrounds a “grandfather"’ clause in the Clean Air Act that exempts older coal-fired plants from new clean air requirements. The study finds that government can regulate itself in the public interest and intragovemmental conflict in this case is representative of findings in previous studies concerning intragovemmental conflict and regulation. In this case, EPA and TVA have expanded the scope of the conflict to include other political and administrative actors. TVA has also attempted to maintain agency autonomy and prevent EPA from regulation that affects TVA’s ability to carry out the agency’s mission: the production of low-cost power.