While North Carolina's 2006 lawsuit cited all 11 TVA coal-fired power plants, U.S. District Judge Lacy Thornburg in Asheville limited the ruling to the four plants closest to North Carolina - TVA's Bull Run, Kingston and John Sevier stations in East Tennessee and Widows Creek in north Alabama.
TVA already planned $3 billion in upgrades for most of the plants' sulfur dioxide and nitrogen oxide control systems. But the Knoxville-based agency objected to the judge's 2011 deadline, saying it would add $1 billion to the meet the judge's timetable.
TVA sought a one-year extension, but the judge turned down the request in April.
"TVA has been doing more to reduce its emissions than any other major electric utility in the region," TVA Chief Operating Officer Bill McCollum said in a statement. "We stand on TVA's record of environmental progress... (and) we will continue our efforts to help improve the region's air while making the wisest use of ratepayer dollars."
North Carolina Attorney General Roy Cooper, who brought the lawsuit, said his state won't stand for delays.
"A federal judge agreed with us that dirty air from TVA plants hurts North Carolina and that the TVA must clean it up quickly," he said. "Despite TVA's appeal, the judge's order is still in effect and we'll keep pushing to make sure the TVA complies."
TVA is dealing with budget problems on several fronts. Besides the cost of reducing emissions from these coal plants, TVA has so far spent $68.6 million on a massive coal ash spill cleanup at the Kingston plant that TVA says could ultimately cost nearly $1 billion.
The federal agency also notes it has already spent $6 billion on smokestack emissions over the years, resulting in an 85 percent reduction in haze-causing sulfur dioxide emissions since 1977 and an 82 percent drop in ozone-causing nitrogen oxide emissions since 1995.
The judge is expected to set dates in about a month for full legal briefs and responses.
TVA supplies electricity to 158 distributors serving about 8.7 million consumers in Tennessee and parts of Kentucky, Alabama, Mississippi, Georgia, North Carolina and Virginia.