Power Plants Face Potentially Costly New Air-Pollution Rules

By IAN TALLEY
WASHINGTON -- The Environmental Protection Agency has agreed to issue new air-pollution rules for coal- and oil-fired power plants by November 2011, according to court documents.
While the new regulations will likely reduce emissions of cancer-causing pollutants by millions of tons annually, they could mean costly technology upgrades for the industry.
A consent decree released late Thursday follows a lawsuit filed by medical associations and environmental organizations against the EPA in December, alleging the agency wasn't drafting new power-plant emission rules fast enough as required by the Clean Air Act.
At issue were final "maximum achievable control technology" emission standards for hazardous air pollutants such as mercury, arsenic, cadmium, other heavy metals, acid gases and dioxins. The agreement marks a major victory for the medical and environmental groups after years of legal battles against the industry and the Bush administration EPA.
"This is big," said Ann Weeks, legal director at the Clean Air Task Force, who has been fighting for new standards for nearly a decade. "We are very pleased with the outcome of this case, and look forward to working with the EPA to develop emissions standards for this industry that mandate the deep cuts in this pollution that the law requires."
The EPA said addressing hazardous pollutants emitted by utilities is a high priority. "the agency is committed to developing a strategy to reduce harmful emissions from these facilities, which threaten the air we all breathe," the agency said. it plans to propose standards for oil and coal-fired generation by march 2011.
At American Electric Power Co., one of the nation's largest operators of coal-fired power plants, spokesman Pat Hemlepp said the company was concerned the EPA won't have time to fully review emissions and develop a sound technical basis for its rule. Southern Co. and Duke Energy Corp., also major operators of coal-fired power plants, didn't have immediate comment.
Dan Riedinger, a spokesman for the Edison Electric Institute, the industry's trade association, called the schedule "a pretty aggressive timeline for a new rule," and expressed concern that the agency "may not be able to get the quality data it wants and needs" before it must act. The EPA earlier this year sought public comment on how to collect pollution data that would provide the basis for new emission regulations.
Mr. Riedinger said it is too early to estimate potential costs to the industry.
Ms. Weeks at the Clean Air Task Force dismissed concerns about costs, saying the health and societal benefits far outweigh the industry's costs, which ultimately will be borne by electricity customers.
Write to Ian Talley at ian.talley@dowjones.com