NATURAL RESOURCES DEF. COUN., INC. v. Tennessee Val. Auth., Civ. A. No. 8062.

• Decision Date: 17 April 1973
• Docket Number: Civ. A. No. 8062.
• Citation: 367 F. Supp. 122
• Parties: NATURAL RESOURCES DEFENSE COUNCIL, INC., et al. v. TENNESSEE VALLEY AUTHORITY et al.
• Court: U.S. District Court — Eastern District of Tennessee

367 F. Supp. 122

NATURAL RESOURCES DEFENSE COUNCIL, INC., et al. v. TENNESSEE VALLEY AUTHORITY et al.

Civ. A. No. 8062.

United States District Court, E. D. Tennessee, N. D.

April 17, 1973.

Charles D. Susano, Jr., Knoxville, Tenn., Richard M. Hall, New York City, William A. Butler, East Setaukey, N. Y., Stephen C. Cawood, Barbourville, Ky., for plaintiffs.

Robert Young, Robert H. Marquis, TVA Gen. Counsel, Thomas A. Pedersen, L. Gray Geddie, Jr., Knoxville, Tenn., Holliman Langholz, Runnels & Dorwart, C. D. McDoulette, Jr., Tulsa, Okl., for defendants.

MEMORANDUM

ROBERT L. TAYLOR, District Judge.

This action was commenced by six conservation organizations seeking declaratory and injunctive relief requiring T.V.A. to comply with the National Environmental Policy Act of 1969.¹ The parties have agreed that plaintiffs' motion for a preliminary injunction and/or partial summary judgment relates only to the issue of whether § 102(2)(C) of NEPA requires that T.V.A. file an impact statement for each of the three long-term coal contracts in force between T.V.A. and the other defendants. Related to this is the question of whether T.V.A.'s regulations holding that such impact statements are not required are valid under NEPA.²

T.V.A. has the largest power system in the nation. It ordinarily supplies electrical power to an 80,000 square mile area. In order to meet the demands of consumers, T.V.A. has, in addition to hydroelectric plants, twelve coal-fired steam plants. These plants generate approximately 80% of T.V.A.'s electrical power.

In fiscal year 1971, 32.5 million tons of coal were used to supply these steam plants. Fifty-nine per cent of this coal came from surface mines; the remainder from underground coal mines. Since January 1, 1970, the date NEPA became effective, T.V.A. has entered into 106 long-term coal contracts to obtain sufficient coal to operate these coal-fired plants.³

There are three types of contracts used by T.V.A. in procuring coal: spot, emergency and term. Spot contracts are for a period of four weeks or less. Emergency contracts are generally for periods up to six months, and term contracts must be for a minimum of six months and must require a production level of not less than 500 tons per week and a total purchase of at least 25,000 tons. The three contracts involved in this action are term contracts. The contract between H & B Mining Company and T.V.A. provided for a weekly tonnage base of 2,500 tons and is to be in force from December 10, 1970, through December 13, 1973. Falcon Coal Company, successor to Kentucky Oak Mining Company, has a contract with T.V.A. to provide a base weekly tonnage of 50,000 tons of coal from July 1, 1970, and to continue through June 30, 1975. This contract was renegotiated in April of 1972 and is for the same tonnage but extended the termination date until March 29, 1981.⁴ Long Pit Mining Company, a division of A. B. Long, Inc., has in force with T.V.A. a contract and lease which requires defendant Long to provide and T.V.A. to purchase 10,000 tons of coal per week from December 1, 1971, through approximately March 1975. The estimated value of this contract is $10,920,000.⁵ The coal supplied by each of these contracts will come from surface mines.

Section 102(2)(C) of NEPA provides in part that:

The Congress authorizes and directs that, to the fullest extent possible . . . all agencies of the Federal Government shall . . . include in every recommendation or report on proposals for legislation and other major Federal actions significantly affecting the quality of the human environment, a detailed statement . . . (Emphasis Added)⁶

In November of 1971 T.V.A.'s Board of Directors passed the following resolution:

"WHEREAS the Board has made the following determinations concerning T.V.A.'s compliance with Section 102(2)(c)C of the National Environmental Policy Act as it relates to T.V.A. coal policies:

That individual procurement actions are not within the scope of Section 102(2)(c)C of the National Environmental Policy Act;

That individual coal procurement actions are incremental actions in furtherance of commitments to a program of coal-fired generation on the T.V.A. system, all of which commitments were made prior to the passage of the National Environmental Policy Act;

That if individual procurement actions were within the scope of Section 102(2)(c) C, the requirements of that section would conflict with the competitive bidding requirements of Section 9(b) of the T.V.A. Act, since competitive bidding as required by Section 9(b) would be severely restricted or rendered impossible by the Section 102 (2)(c) C procedure if applied to individual coal procurement actions,

That any requirements of Section 102(2)(c) C, which are applicable to coal procurement, will be met through the filing of a comprehensive statement dealing with TVA policies, with supplements as appropriate . . ."

In December of this same year T.V.A. published in the Federal Register its "Environmental Quality Management, Policy, Delegations, Reservations, and Procedures."⁷ Consistent with the resolution passed by the Board these regulations defined "actions" in such a manner as to lump all of T.V.A.'s coal procurement contracts under a single classification and thus avoid the filing of multiple impact statements. It is these regulations that plaintiffs attack as being illegal under NEPA.

In 1971 T.V.A. filed an environmental impact statement entitled "Policies Relating to Sources of Coal Used by the Tennessee Valley Authority for Electric Power Generation". This statement dealt with the problems of strip mining as well as deep coal mining. T.V.A.'s policies on reclamation and conservation were set forth including the 1971 mandatory contract provisions. This statement was filed to cover all of the present and future actions by T.V.A. dealing with coal procurement.

At the outset we must decide what significance to attach to the determination made by the Board of Directors of T.V.A. that the filing of individual impact statements for each term coal contract would result in a conflict with § 9 of the T.V.A. Act. The plaintiffs see the issue before this Court as purely a question of law. They state that what T.V.A. has determined is that ". . . no coal contract may be a major federal action significantly effecting the quality of the human Environment." As such, plaintiffs argue that the case presents a question of statutory construction that should be decided by this Court. See, Natural Resources Defense, Inc. v. Grant, 341 F.Supp. 356 (E.D.N.C.1972); Scherr v. Volpe, 336 F.Supp. 886 (W.D. Wis.1971). Were we inclined to accept counsel's statement of the issue presented at the hearing, namely, whether these coal contracts are major actions, we would agree with his conclusion as to the scope of review. However, as we read the record, the determination made by T.V.A. was not solely that these contracts were or were not major actions but that Section 9(b) of the T.V.A. Act required a reconciliation of the two statutory provisions. In order to avoid a possible conflict between NEPA and Section 9(b), T.V.A. determined that the filing of a single program statement covering its entire policy of procurement of coal would satisfy the mandate of NEPA. Therefore, this was, as plaintiffs argue, T.V.A.'s determination of what constituted the major action, but it was prompted by the apparent conflict between the two Acts. Thus, what is presented is a question of mixed law and fact and as such we use the rational basis test to review the T.V.A. determination. See, Citizens for Reid State Park v. Laird, 336 F.Supp. 783 (D.Me.1972); See generally, Hanley v. Kleindienst, 471 F.2d 823 (2d Cir. 1972).

The phrase in § 102 of the NEPA that "Congress authorizes and directs that, to the fullest extent possible . . ." has been consistently construed to require compliance with NEPA unless compliance would give rise to a violation of other statutory authority under which the agency is proceeding. See, EDF v. TVA, 468 F.2d 1164 (6th Cir. 1972); Alabama Gas v. Federal Power Comm'n, 476 F.2d 142 (5th Cir. 1973); Calvert Cliff's Coord. Comm'n. v. United States Atomic Energy Comm'n., 449 F.2d 1109, 1114-1115 (D. C. Cir. 1971).

Lynn Seeber, General Manager of T. V.A. and the official charged with seeing that NEPA is complied with, outlined in his affidavit the process involved in preparing and filing an impact statement. Initially, research is required in order to assemble the data from which a proposed draft is made. Once completed the proposed draft is circulated throughout the agency for suggestions and comments. Once these are processed, the final draft is prepared.

The final draft is then printed and copies are sent to interested state, local, and federal agencies. Notification is also given to the public via the news media and notice in the Federal Register. After the comments from these areas are received they are sent to specialists for further examination. At this point, additional environmental studies or research may be necessary.

Finally, a proposed final statement is prepared. After a recirculation of the draft throughout the agency, Mr. Seeber reviews the statement and discusses it with the Board of Directors. This final statement is then filed with C.E.Q. In all, this complete procedure takes between six months to a year.

It was found by the T.V.A. Board of Directors that to follow this process with each individual term coal contract would conflict with Section 9(b) of the T.V.A. Act.⁸ Section 9(b) provides in part that:

"All purchases and contracts for supplies or services, except for personal services, made by the Corporation, shall be made after advertising, in such manner and at such times sufficiently in advance of opening bids, as the Board shall determine to be adequate to insure notice and opportunity for competition . . ."

Prices in the coal market fluctuate greatly. Presently a bidder on a...