By Timothy Gardner and Tom Doggett
WASHINGTON (Reuters) - Power plants in the eastern half of the United States will have to slash emissions of pollutants blamed for premature deaths under proposed rules issued on Tuesday by federal regulators.
The Environmental Protection Agency said the rules, part of a series of steps to control emissions from power plants, would overturn and toughen clean air regulations issued by former President George W. Bush's administration. The agency hopes they would begin taking effect in 2012.
The plan would cut sulfur dioxide emissions that drift across state lines by 71 percent from 2005 levels and nitrogen oxide emissions by 52 percent by 2014, the EPA said.
"It achieves greater reductions sooner," than the Bush era air plan, EPA air official Gina McCarthy told reporters. She said the new rules would cut sulfur dioxide emissions by a million tons more a year by 2012 than Bush's 2005 Clean Air Interstate Rule would have.
Companies heavily reliant on coal for power generation, such as Southern Co, Duke Energy, and American Electric Power, could face additional costs under the rules. Many firms are looking to invest in cleaner natural gas.
Like the Bush plan, the rules requiring 31 states to cut pollution, would encourage market forces to help cut emissions. Companies that cut emissions by installing scrubbers or other equipment to reduce the chemicals could sell pollution reduction credits to other emitters in cap and trade markets.
UTILITY-FIRST CLIMATE BILL
Some analysts said the proposed rules could push utilities to support a plan for climate legislation that would cap greenhouse gas emissions at power utilities first.
Utilities may seek to get relief from some air and water pollution controls from regulations in a climate bill in exchange for shutting down their least-efficient plants fired by coal, which emits more carbon dioxide than any other fossil fuel.
Whitney Stanco, an analyst at Concept Capital's Washington Research Group, said the idea could gain steam either this year or next if Congress pursues such a bill.
The EPA estimated the rules would cost industry $2.8 billion a year, but yield $120 billion to $290 billion a year in public health and welfare benefits by 2014. Those benefits included the value of avoiding 14,000 to 36,000 premature deaths, the EPA said.
Environmental groups welcomed the plan but also said the EPA needed to make further pollution cuts at power plants.
"As anyone who has tried taking a deep breath outside recently could tell you, we need to do more to clean up dirty air," said Frank O'Donnell, who heads Clean Air Watch. "EPA still needs to move ahead with plans next year to limit power plant emissions of toxic mercury and other hazardous air pollutants."
Bill Becker, who heads the National Association of Clean Air Agencies, also applauded the proposal, but said the agency's 2014 cap on nitrogen oxide emissions "will be insufficient for resolving the pervasive ozone problems throughout the East."
The EPA expects to begin taking public comment on the proposed rules for 60 days late this month and hopes to start the program in 2012.
(Reporting by Timothy Gardner, Tom Doggett and Eileen O'Grady in Houston; Editing by Marguerita Choy, David Gregorio and Lisa Shumaker)
