The Southern Highland Reader

FONTANA VILLAGE–A legal battle is brewing between Fontana Village Resort and Graham County government over a first-time $80,000 property tax bill that the resort says is being levied against leased property.

At issue is whether the property leased by the resort from the Tennessee Valley Authority is taxable. Erma Phillips, Chief Tax Assessor for Graham County, contends that a recent court ruling makes “leasehold” properties taxable, and that the Village land is such a property,

Attorneys for Fontana Village say that fees of a comparable amount, paid annually by the TVA, stand in place of the taxes, and that Graham County’s collection attempts amount to double taxation.

Read a story by James Budd of the Graham Star here.

NATIONAL–11th District congressman Heath Shuler has been cleared by the House ethics committee of any wrongdoing in a Tennessee land deal, according to the Washington Post.

An excerpt from the Post:

According to a letter sent to Shuler Wednesday by the ethics committee, that IG investigation “could not find any evidence that you violated any ethics rules.” And after its own “thorough review,” the committee said it “has determined that your actions in these matters were not improper in any way and did not violate House rules.”

Read the piece here.

REGIONAL-The smidgen of Tennessee lakefront property at the heart of a controversy involving 11th District congressman Heath Shuler was listed as a Shuler asset in 2007, but not 2008, reports the Hendersonville Times News.

An excerpt:

Shuler, who went into real estate development in East Tennessee after his career as a quarterback at the University of Tennessee and the NFL, claimed ownership of between $9 million and $42 million in real estate assets in his 2007 financial disclosure statement. The largest asset was the Cove at Blackberry Ridge near Knoxville, which became the subject of a TVA inspector general’s report into whether the agency was showing favoritism in granting water access development permits.

The entire story.

KNOXVILLE-11th District Congressman Heath Shuler on Wednesday denied knowledge of the working of a land deal between the Tennessee Valley Authority — over which he has some oversight in Washington — and a land development company in east Tennessee in which holds interest.

The Tennessean’s lead:

North Carolina Rep. Heath Shuler said Wednesday that he did not contact the Tennessee Valley Authority while the agency was considering a water access deal that was key to a housing development in which he was an investor.

The Waynesville, N.C., Democrat’s statement appears to contradict the conclusion in a report by TVA’s inspector general released Tuesday, and it further clouds a complex and politically charged issue.

The Tennessean’s story is here.

REGIONAL–The Knoxville News Sentinel and reporter Josh Flory have followed for over a year the story of Rep. Heath Shuler’s involvement in a real estate development company that swapped some land with the Tennessee Valley Authority.

The significance is that the TVA is a federal agency, and that Shuler sits on a committee that provides oversight of that agency.

Here’s some background.

In a blog post today, Flory reports that a TVA employee seemed to be playing duck’n'cover. Flory’s lead:

A former TVA employee allegedly provided false information to the agency’s inspector general in connection with an inquiry that involved U.S. Rep. Heath Shuler, according to an IG’s report.

The allegation was included in a report that was released to the News Sentinel under the federal Freedom of Information Act.

According to the TVA IG’s “Report of Administrative Inquiry”, which was released on Monday and dated June 9, the former employee denied knowing that Shuler, a North Carolina Democrat, held an ownership in The Cove at Blackberry Ridge LLC, a waterfront project in Roane County.

<snip>

The controversy centers on TVA’s Maintain and Gain Lakeshore Management Program, which allowed landowners to gain water-access rights in one location by trading rights they owned somewhere else on a reservoir.

Last year, the News Sentinel reported that an entity with ties to Shuler — a former University of Tennessee football star — received approval for a transaction that provided 145 feet of water-access rights along the shoreline of Watts Bar Reservoir in Roane County.

That entity, The Cove at Blackberry Ridge LLC, agreed to relinquish 150 feet of water-access rights in Rhea County and also provide about $15,000 for a shoreline bank stabilization project at a different location on Watts Bar Reservoir. Investors in The Cove at Blackberry Ridge included Shuler, who was formerly a member of the House transportation committee’s Subcommittee on Water Resources and Environment. That subcommittee is one of two congressional panels that provide formal oversight of TVA.

Read the whole piece here.

REGIONAL/NATIONAL–The Knoxville News Sentinel reported on Tuesday that the story about congressman Heath Shuler’s involvement in a small Tennessee land swap with the Tennessee Valley Authority isn’t dead.

From my earlier post on the subject:

The swap essentially provides water access at Watts Bar Resevoir to a [housing] development called The Cove at Blackberry Ridge, in exchange for an equal amount of shoreline elsewhere on the same lake and $15,000. Shuler is an investor in the Cove at Blackberry Ridge.

Shuler has ties to the development company, and sits on a committee that exercises oversight over the TVA. This suggests the possibility of conflict of interest, although no evidence of such has been presented. When I posted about it a year ago, it struck me as much ado about not-so-much, but the News Sentinel reported in its Tuesday that a sealed report on the matter has been forwarded to the house ethics committee.

The News Sentinel, by the way, has sued to have the report made public.

STATE/REGIONAL–Federal Judge Lacy Thornburg, a Webster resident, will retire in August.

The Raleigh News and Observer reports today that Thornburg announced his plans in a letter to court employees.

The 79-year-old Thornburg has served for 14 years on the federal bench and also served two terms as N.C. attorney general, 16 years as a Superior Court judge and three terms in the state House.

In a recent high-profile decision, Thornburg ruled in favor of the state of North Carolina in its lawsuit against the Tennessee Valley Authority, concluding that pollution from coal-burning plants was having a negative impact upon North Carolina residents, and ordering the TVA to install pollution-control systems in four plants in east Tennessee.

President Barack Obama will appoint Thornburg’s replacement.

STATEWIDE–Federal judge Lacy Thornburg, of Webster, ruled in favor of North Carolina in its lawsuit against the Tennessee Valley Authority yesterday, and ordered the TVA to install pollution control systems on its four plants closest to the North Carolina border.

From Clarke Morrison’s story in the Asheville Citizen-Times:

Judge Lacy Thornburg said in his order that pollution from TVA plants harms the health of North Carolina residents.

“I’m pleased that the court ordered the TVA to clean up air pollution coming from its plants closest to North Carolina,” said Attorney General Roy Cooper, who sued the giant utility in 2006. “This will help our air, our health and our travel and tourism economy.”

The lawsuit claimed pollution from the TVA’s plants in Tennessee, Alabama and Kentucky drifts into North Carolina and harms the health of people living here while degrading the environment.

The lawsuit seeks to force TVA to make reductions of emissions of sulfur dioxide, nitrogen oxides, mercury and soot similar to those required of utilities in North Carolina by the Clean Smokestacks Act.

RALEIGH–The Associated Press reports today that Progress Energy has received permission from the North Carolina Utilities Commission to raise the average household electricity bill by just over 10%. The company had requested a 16% increase, citing higher fuel prices.

Rates will increase in December.

Meanwhile, the Tennessee Valley Authority, on the other side of the Blue Ridge, has announced a 6% reduction in electric rates, citing lower fuel costs.

I suppose it depends on what part of the wave you’re surfing.

All of which reminds me of a trip to the post office a few weeks back. I was heading in when a pretty girl, age 20 or so, bolted out, yelling, I DON’T KNOW WHY I BOTHER TO PAY RENT ON A POST OFFICE BOX WHEN ALL I EVER GET IS DISCONNECT NOTICES FROM THE LIGHT COMPANY!

Overview

North Carolina Attorney General Roy Cooper filed suit against the Tennessee Valley Authority in 2006, alleging that the federally-owned corporation hasn’t done enough to control pollution from 11 coal-fired power plants it operates in Kentucky, Tennessee and Alabama.

Cooper alleges that the TVA is significantly to blame for Western North Carolina’s poor air quality.

The case was tried through mid-July in Asheville, before federal judge Lacy Thornburg, a Webster, NC, resident. There was no jury. Testimony ended Wednesday, July 30.

The Asheville Citizen-Times reported on Thursday, July 31st, that a decision by Thornburg was weeks, maybe months, away. Attorneys for both sides have until September 15 to file followup paperwork, and no decision will come before that time.

Western North Carolina’s Canary Coalition has been involved in the political fight for improved air quality for nearly a decade. Avram Friedman, Executive Director of the organization, has this to say about the current trial: “[The outcome will be] very significant, with broad implications about the responsibility of the utility industry toward air quality in downwind states. But, if we get a favorable opinion … it will almost certainly be appealed by the TVA, probably delaying meaningful action for years. Nonetheless, it will put the utility industry on notice that their days of irresponsibility without accountability are numbered.”

Coverage from Clarke Morrison at the Asheville Citizen-Times:

First Week: Monday, Tuesday, Wednesday, Thursday, Friday
Second Week: Monday, Tuesday, Wednesday, Thursday, Friday
Third Week: Tuesday, Wednesday, Friday

Coverage from the Tennessean’s Anne Paine.

Raleigh News and Observer gives an overview of North Carolina’s clean air fight in this editorial
New York Times Editorial on Clean Air Interstate decision here.
Asheville Citizen-Times editorial here.

Our previous thoughts here.

After seeing witnesses brought by the TVA and witnesses brought by the state of North Carolina give testimony that was in many cases diametrically opposed, we stumbled upon this article, called “The Price of Advocacy” in a New York Times series called “American Exception”. The series discusses ways in which the American justice system is different from other those of other countries.

Day-by-day

ASHEVILLE/REGIONAL-North Carolina’s suit against the Tennessee Valley Authority, seeking to force the nation’s largest utility to clamp down on pollution from its plants, got underway in U.S. District Court in Asheville Monday, July 14, and is likely to end sometime during the last week of the month.

Here’s a roundup of testimony so far:

Smog over the Plott Balsams

MONDAY: In opening arguments, the state began to craft its assertion that the TVA should modernize its 11 coal-fired plants to the west and south of North Carolina at least to the standards set forth in North Carolina’s 2002 Clean Smokestacks legislation. Witnesses provided testimony that the North Carolina mountains are significantly and negatively impacted by pollution from TVA plants, and that the TVA has a track record of acting only under legal pressure.

The TVA, meanwhile, argued that it has made significant strides in reducing emissions, and asserted that it alone couldn’t be held responsible for North Carolina pollution.

In addition, TVA attorney Frank Lancaster said: “North Carolina is not suffering significant harm to its air quality, there will be a lot of evidence the air quality in North Carolina is good.”

TUESDAY: Jim Staudt, an expert in air pollution control technology and president of Andover Technology Partners (a major consultant on pollution control technology) testified Tuesday that the Tennessee Valley Authority could move faster to cut emissions from its coal-fired power plants.

“Their emissions are at an unreasonable rate,” he said.

Staudt also noted that Friday’s action by a Federal Appeals Court to strike down the 2005 Clean Air Interstate Rule will have a “chilling effect” on pollution control progress.

WEDNESDAY: More testimony from emissions experts underscored a fundamental irony of the air quality issue in the mountains: under federal regulations, communities with high ozone levels face restrictions of transportation funds and possible restrictions on development if air quality isn’t improved. Frequently though, outside sources of pollution contribute significantly to local problems. Furthermore, last Friday’s action by a Federal Appeals Court to strike down the 2005 Clean Interstate Air Rule eliminates a partial solution to this riddle, and makes North Carolina’s case all the more compelling.

Additional testimony from the same consultant made clear the relatively drastic improvements in visibility that could be expected if the TVA were to meet the standards that North Carolina plants have been forced to meet through the 2002 NC Clean Smokestacks legislation.

THURSDAY: Three witnesses took the stand for the state on Thursday, two speaking to the health effects of polluted air, and one to the impact on visibility.

FRIDAY: Jonathan Levy of the Harvard School for Public Policy testified Friday morning that if the lawsuit is successful, each year in North Carolina there would be:

• 99 fewer premature deaths from cardiovascular and respiratory diseases.
• 19,000 fewer asthma attacks.
• 60 fewer hospital admissions.
• 55 fewer emergency room visits related to asthma.
• 2,300 fewer lost school days.

Levy called the estimates “reasonable and reliable” and said they were based the “best available science.”

From the Asheville Citizen-Times:

“Under cross-examination by one of TVA’s attorneys, Levy acknowledged the calculations don’t take into account the installation of scrubbers that are planned or under way at three power plants in eastern Tennessee.

MONDAY: Three tourism representatives, Todd Morse, of Chimney Rock Park, and Bill Cecil, Jr., President and CEO of Biltmore Co., along with an outdoor outfitter and trail guide testified for the state that smog is bad for business.

TUESDAY: Bruce Buckheit, former director of air enforcement for the Environmental Protection Agency, said that an investigation by that agency found that TVA plants emitted more than 1 million tons of “illegal emissions” over 20 years.

“We were stunned,” Buckheit said. “This is one of the most significant violations I’ve ever seen.”

Under cross-examination, Buckheit acknowledged that no court has ever found the TVA guilty of violating New Source Review rules of the clean air act, although he pointed out that the matter is still tied up in court.

WEDNESDAY: The Tennessee Valley Authority opened its defense on the trial’s second Wednesday, and John Myers, TVA’s senior manager of environmental policy and regulatory outlook took the stand.

Myers stressed one of the TVA’s fundamental arguments, emphasizing that TVA’s coal-fired plants produced about 30 percent more electricity last year than plants in North Carolina, while emitting about the same amount of sulfur dioxide.

But, reported the Asheville Citizen-Times:

“Under cross-examination, Myers acknowledged that Duke Energy and Progress Energy are poised to significantly reduce emissions as required by the Clean Smokestacks Act approved by state lawmakers in 2002.”

Myers touted the TVA as one of the early innovators in pollution control, but also acknowledged that many of the company’s implementations of such technology have been driven by state and federal controls.

THURSDAY: Thomas Tesche, an expert in computer air dispersion modeling, was called by the TVA, and argued with highly technical testimony that very little of the haze that impacts the Smokies originates in Tennessee. He took exception with the “air modeling” of scientists called by the state of North Carolina earlier in the week.

FRIDAY: Suresh Moolgavkar, an epidemiologist with the University of Washington, told U.S. District Court Judge Lacy Thornburg: “I’m of the opinion that there isn’t sufficient evidence to support a causal relationship,(between pollution from TVA plants and health issues in North Carolina).” In sometimes sharply-worded testimony, Moolgavkar contradicted last Friday’s testimony for the state from Jonathan Levy of the Harvard School of Public Health.

Moolgavkar said Levy’s statistics “fly in the face of common sense,” and went on to say, “these numbers cannot be taken seriously. The assumptions underlying them are meaningless.”

Clarke Morrison at the Asheville Citizen-Times described N.C. Senior Deputy Attorney General James Gulick’s cross-examination of Moolgavkar this way:

Moolgavkar acknowledged his studies and papers were funded by groups like the American Iron and Steel Institute and the American Petroleum Institute.

Gulick said such organizations have a financial stake in conclusions reached about the association of air pollution and ill health effects.

A second witness, Elizabeth Anderson, who worked in risk assessment for the U.S. Environmental Protection Agency before becoming a private consultant, questioned Levy’s statistics, and said that TVA pollutants reaching North Carolina are on their way to being “exceedingly small.” Gulick countered that Anderson’s statistics were based on statistics that were dependent on the existence of the Clean Air Interstate Rule, which was struck down recently by a federal appeals court.

TUESDAY: (Court was not in session Monday) Quincy Styke, deputy director of the Tennessee Division of Air Pollution Control took the stand in defense of the Tennessee Valley Authority, saying that the TVA does a good job of helping clean  the air. When asked why Tennessee hasn’t enacted legislation similar to North Carolina’s 2002 Clean Smokestacks bill, Styke said: “Tennessee has not enacted similar legislation because it’s not necessary. We don’t need a statute. Tennessee’s been about the business of controlling its emissions.”

When cross-examined by attorneys for the state of North Carolina, writes Clarke Morrison in the Asheville Citizen-Times, Styke “acknowledged that Nashville and other metropolitan areas in Tennessee don’t meet federal standards for the air pollutant ozone, which experts say can cause respiratory illness and other health problems.”

WEDNESDAY: Attorneys made their closing arguments before lunch today.

The gist of the arguments, as quoted by the Asheville Citizen-Times Clark Morrison:

North Carolina Senior Deputy Attorney General James Gulick:

“It is especially important there be a mandate, a schedule and a firm deadline. Mandates work, your honor.

“TVA’s emissions have created a nuisance that is going on today. Those emissions are causing harm to public health throughout the region. The nuisance is happening now and North Carolina is entitled to relief.”

TVA attorney Frank Lancaster:

“TVA’s approach is steady reductions over time. That’s TVA’s history and that’s TVA’s future.”

“Your honor, there has been a complete failure of proof of any ongoing nuisance. TVA has been making steady reductions for years and there is no evidence it will change its course. We ask that this case be dismissed, your honor.”