Groups sue to stop TVA’s funding of “lobbyists”

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Citizens protest TVA's continued use of fossil fuels during an August rally in front of TVA headquarters in Market Square in downtown Knoxville. Photo by Amy Rawe/Southern Alliance for Clean Energy. Used by permission.

Editors Note: This report is a collaboration with East Tennessee’s best environmental publication, Hellbender Press. You can check out their coverage and contact their editor, Thomas Fraser, at https://hellbenderpress.org

A coalition of environmental groups who joined forces to stop TVA from using ratepayer money to fund trade groups who allegedly lobby against anti-pollution regulations has filed a federal lawsuit against the utility.

They claim the practice potentially raises conflicts of interest and throws into doubt TVA’s willingness to comply with clean air laws even as the utility retires its coal plants in order to transition to a mix of fossil gas and nuclear power.

 The 20-page lawsuit was filed Sept. 9 in federal court in Knoxville by a half-dozen groups including the Knoxville-based Southern Alliance for Clean Energy and the Center for Biological Diversity (CBD).  The groups aren’t seeking monetary damages other than court costs and legal fees.

TVA has invested millions of dollars in measurable improvements as it prepares to divest from coal as a main electricity source. Nevertheless, TVA paid membership dues to interest groups such as Edison Electric Institute and Energy and Wildlife Action Coalition, according to the plaintiff’s suit.

TVA spokesperson Jim Hopson issued a statement early Thursday morning, after the first version of this story had been published.

“TVA has not been officially served with the lawsuit, so it would be inappropriate to comment on its specifics,” he said.

“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,” he continued. “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.”

“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 CBD’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.”

Maggie Shober, director of utility reform at the Southern Alliance for Clean Energy, said that TVA has a special responsibility to support environmental protections.

“TVA is unique in the power industry in that environmental stewardship and economic development are codified in the agency’s founding mission,” she said. “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.”

Daniel Tait, chief operating officer of plaintiff Energy Alabama, said: “TVA has forced its customers to make political speech by taking money from their utility bills and using it for anti-clean energy advocacy. 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 path that led to the lawsuit began when the groups used the Freedom of Information Act to discover that TVA paid $200,000 in 2018 to the Utility Water Act Group, which lobbies against parts of the Clean Water Act. They also learned the utility was paying $500,000 a year to join the Edison Electric Institute, a group that represents all private, investor-owned utility companies in the country. 

The coalition had initially filed a petition a with TVA on May 20, 2020. asking the utility to stop the payments. They allege that TVA’s response was “arbitrary and capricious,” prompting them in turn to file the lawsuit last week, court records show.

“The Petition extensively documents both these third-party organizations’ activities and TVA’s financial support for them. For example, it details that many of these groups support political organizations and regularly lobby on issues that undermine the health and safety of TVA ratepayers. Other groups, such as the ‘Utility Water Act Group,’ regularly oppose environmental protections in courts and before agencies. TVA collectively pays these groups millions of dollars collected from TVA ratepayers through electricity sales,” the complaint filed in federal court states. 

The coalition makes two separate arguments for requiring TVA to curtail its spending.

First, they claim that TVA’s support for the groups “contravenes its Congressional mandate to protect the health and welfare of the millions of people TVA serves and the environment in which they live.”

Also, they maintain that “using TVA ratepayers’ funds to support political activities contravenes ratepayers’ First Amendment right against compelled subsidy of speech with which ratepayers disagree.”

Several of the environmental groups named individual members whose First Amendment rights are allegedly being violated by TVA, which is “forcing them to fund third-party groups engaged in activities they do not support,” records show. 

CBD, for instance, listed University of Tennessee professor John Nolt and attorney Chris Irwin — both of whom are longtime environmental activists — as ratepayers who oppose TVA’s actions.

“TVA responded to the Petition by simply asserting that TVA’s funding for these third-party groups is appropriate, without at all responding to the substantial evidence and specific arguments included in the Petition, or even indicating that the Petition was being denied,” the lawsuit claims.

“TVA’s letter did not deny that, in addition to their research and analysis work, these third-party organizations regularly engage in lobbying, political contributions, and other advocacy activities—including opposing regulatory and other initiatives intended to protect human health, wildlife, and the environment,” according to the complaint.

“TVA’s letter acknowledges that ‘TVA ratepayers have the right to express their views and support preferred causes,’” the plaintiffs continued. “However, the letter did not explain how TVA’s use of TVA ratepayers’ funds to support trade associations and other third-party groups engaged in lobbying and other advocacy activities that TVA ratepayers do not support is consistent with TVA ratepayers’ First Amendment rights.”

Bull Run Steam Plant, set for decommissioning within two years.

The funding of EWAC was galling to some environmentalists, as its alleged environmental and legal intransigence has entered into the realm of threatening endangered species protection as it relates to energy production. 

EWAC, for instance, filed a friend-of-the-court brief in Weyerhauser vs. U.S. Fish and Wildlife Service, an endangered species challenge that was eventually heard by the Supreme Court. The plaintiffs were successful and the case was remanded back to the appeals court for further consideration.

That suit contended the U.S. Fish and Wildlife Service had “…unlawfully designated an area in Louisiana as ‘critical habitat’ for the endangered dusky gopher frog (Rana sevosa) even though there is no occurrence of the species on those lands, that area cannot sustain the species, now or in the foreseeable future, and there is no connection to any area that is actually habitable by that species.”

“Critical habitat designations can affect the renewal of authorization for use of the federal lands, affecting existing infrastructure and constraining operation and maintenance of existing facilities on both private and public lands,” EWAC wrote in its brief supporting challenges to the Endangered Species Act that might inhibit the construction of energy infrastructure.

“There are real consequences for the nation’s electricity generation, transmission, and distribution infrastructure that will result from designating areas uninhabitable by a listed species as ‘critical habitat’ and from extending the protections of the ESA to those areas. Through this amicus brief, EWAC offers the Court a window into how the Fifth Circuit’s decision could disrupt the development and ongoing operation of its members’ facilities,” the brief continued.

The full list of plaintiffs in the Sept. 9 lawsuit also includes the Alabama Center for Sustainable Energy d/b/a Energy Alabama, Appalachian Voices, Solar United Neighbors, and Sowing Justice.

“TVA ratepayers want energy freedom,” said Glen Brand, director of policy and advocacy for Solar United Neighbors. “TVA shouldn’t be using their money to take that freedom away. It should use that money to help them save money and take control of where their electricity comes from with rooftop solar energy. It shouldn’t be shoveling it to monopoly utility front groups like the Edison Electric Institute.”

A separate petition was filed early this year before the Federal Energy Regulatory Commission concerning the private utility funding of the groups listed in the lawsuit, according to a CBD press release.

“That petition, which is pending, would amend FERC’s Uniform System of Accounts to make these payments presumptively non-recoverable from ratepayers, which would force utilities to either demonstrate how funding these groups is in the public interest or provide this funding from shareholders rather than ratepayers,” the release said.

Thomas Fraser, editor of Hellbender Press, co-wrote this report. He can be reached through the publication’s website at https://hellbenderpress.org.

J.J. Stambaugh can be reached at jjstambaugh@hardknoxwire.com.

Published on September 16, 2021.