HOUSTON (Reuters) - The Tennessee Valley Authority (TVA) will invest as much as $5 billion to reduce coal-plant emissions to settle allegations of Clean Air Act violations at 11 coal-fired power plants in three states, the Environmental Protection Agency said on Thursday.
Federally owned TVA also will retire 18 older coal-fired units at three power plants, totaling 2,700 megawatts, starting next year, TVA said in a release. TVA operates about 17,000 MW of coal-fired generation.
The settlement requires TVA to address emissions at plants that account for 92 percent of its coal-fired capacity, EPA said, and will result in reductions in emissions of nitrogen oxide, sulfur dioxide, particulate matter and carbon dioxide.
"Modernizing these plants and encouraging clean energy innovation means better health protections and greater economic opportunities for the people living near TVA facilities," EPA Administrator Lisa Jackson said in a statement.
More stringent regulation of coal-fired power plants by the EPA may result in the shutdown of between 30,000 and 70,000 megawatts of generation in the next few years and the investment of as much as $80 billion by companies to clean up remaining plants, according to industry estimates.
EPA said additional pollution controls will prevent premature deaths, heart attacks and cases of asthma, resulting in $27 billion in annual health benefits.
The settlement agreement calls for TVA to spend $350 million for environmental projects and to promote energy efficiency in communities near its power plants.
TVA will pay $1 million to the National Park Service and the National Forest Service to improve forest and park land damaged by emissions from TVA plants, EPA said.
TVA will also pay a civil penalty of $10 million, with Alabama and Kentucky receiving $500,000 each and Tennessee getting $1 million.
Those states, along with North Carolina, the National Parks Conservation Association, Sierra Club and Our Children's Earth Foundation, were involved in developing the settlement, EPA said.
TVA will retire 10 1950s-era units at its Johnsonville plant in Tennessee along with units at the John Sevier and Widows Creek plants already identified as potential units to be shut.
Last month, TVA said it planned to idle as much as 4,700 MW of coal-fired capacity while increasing renewable, nuclear and natural gas-fired generation over the next two decades.
(Reporting by Eileen O'Grady; editing by Jeffrey Benkoe and Jim Marshall)