Ctr. for Biological Diversity v. Tenn. Valley Auth.

491 F.Supp.3d 1180

CENTER FOR BIOLOGICAL DIVERSITY, et al., Plaintiffs,

v.TENNESSEE VALLEY AUTHORITY, Defendant.

Case No.: 3:18-cv-1446-LCB

United States District Court, N.D. Alabama, Northwestern Division.

Signed September 30, 2020

Anchun Jean Su, Pro Hac Vice, Howard M. Crystal, Pro Hac Vice, Center for Biological Diversity, Washington, DC, R. David McDowell, Huntsville, AL, for Plaintiffs.

David D. Ayliffe, Frances Regina Koho, Steven Chin, Office of the General Counsel, Knoxville, TN, Maria Victoria Gillen, Office of General Counsel, 400 West Summit Hill Drive, ET, for Defendant.

MEMORANDUM OPINION AND ORDER

LILES C. BURKE, UNITED STATES DISTRICT JUDGE

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 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

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.

Finally, the plaintiffs claim that TVA violated NEPA by enacting the 2018 rate change before completing its 2019 Integrated Resource Plan ("IRP"). According to the plaintiffs, the 2019 IRP will address for the first time the availability and use of DER, the effects of power production on the environment, and how DER should be considered in TVA's planning. By enacting the rate change before that IRP was complete, the plaintiffs say, TVA violated NEPA.

According to the plaintiffs, TVA's alleged failure to comply with NEPA will ultimately harm them by dis-incentivizing investments in DER, which, in turn, will increase reliance on TVA-generated power. Plaintiffs further allege that this increased reliance will cause TVA to burn more fossil fuels which, in turn, will harm the environment in the areas where they live and recreate. The plaintiffs have asked this Court to declare that TVA has violated NEPA and the APA; to set aside and remand the FONSI as well as TVA's 2018 rate change; and to order that TVA prepare an EIS regarding the rate change.

III. Standard of Review

As noted, the plaintiffs have filed a motion for summary judgment and the defendant has filed a motion for judgment on the administrative record. Neither party addresses the appropriate standard this Court should use in deciding the case. However, as will be discussed, the Court finds that the plaintiffs lack standing. To the extent TVA's motion seeks relief based on standing, the Court will treat the motion as one under FED. R. CIV. P. 56. "The party invoking federal jurisdiction bears the burden of establishing standing—and, at the summary judgment stage, such a party can no longer rest on ... mere allegations, but must set forth by affidavit or other evidence specific facts." Clapper v. Amnesty Int'l USA , 568 U.S. 398, 411–12, 133 S.Ct. 1138, 185 L.Ed.2d 264 (2013) (internal quotations omitted).

"The court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." FED. R. CIV. P. 56(a). To demonstrate that there is a genuine dispute as to a material fact that precludes summary judgment, a party opposing a motion for summary judgment must cite "to particular parts of materials in the record, including depositions, documents, electronically stored information, affidavits or declarations, stipulations (including those made for purposes of the motion only), admissions, interrogatory answers, or other materials." FED. R. CIV. P. 56(c)(1)(A). "The court need consider only the cited materials, but it may consider other materials in the record." FED. R. CIV. P. 56(c)(3).

When considering a summary judgment motion, the Court must view the evidence in the record in the light most favorable to the non-moving party and draw reasonable inferences in favor of the non-moving party. White v. Beltram Edge Tool Supply, Inc. , 789 F.3d 1188, 1191 (11th Cir. 2015). "[A]t the summary judgment stage[,] the judge's function is not himself to weigh the evidence and determine the truth of the matter but to determine whether...