Sept. 13 (Bloomberg) -- The U.S. Senate voted to uphold an Environmental Protection Agency rule allowing creation of an emissions-credits trading system to reduce mercury pollution from coal-fired power plants.

A majority of fifty-one senators voted to reject a resolution to overturn the rule sponsored by Senator Patrick Leahy, a Democrat from Vermont. The rule was adopted by the EPA as an alternative to a proposal under the administration of former President Bill Clinton that would have required plant operators to install controls to reduce mercury emissions.

``We let some healthy sunshine into the Senate to expose a flawed rule that puts special interests over the health of the American people,'' Leahy said in a statement after his resolution was rejected.

The EPA in March set the first limits on airborne mercury pollution from about 600 U.S. coal-fired power plants, the largest man-made source of the substance, which can cause birth defects and brain damage in infants and children. The agency has called for reductions of up to 70 percent by 2018.

The Bush administration wants to set up industry-supported markets for mercury so that plant operators that don't meet emissions limits can buy credits from those that upgrade their equipment, under a system known as cap-and-trade. The EPA rule was endorsed by the largest U.S. coal users, including American Electric Power Co. and Southern Co., through their lobbying groups.

Legal Challenge

Health and environmental groups including the Natural Resources Defense Council Club and Physicians for Social Responsibility joined 13 states in lawsuits challenging the EPA's decision to remove mercury from a list of toxic substances regulated by the Clean Air Act. One suit was overturned by a Circuit Court in Washington. Others are still pending.

Power plant mercury emissions were added to the list by former EPA Administrator Carol Browner in 2000, just before the end of Clinton's second term. The designation would have required plant operators to install controls to reduce emissions. The EPA removed mercury from the list when it published the rule in March.

Supporters of the cap-and-trade system say the marketplace is the most efficient means to cut pollution. Forcing utilities to upgrade power plants would cost as much as $358 billion over the next three years, raising power prices and harming the economy, according to an estimate by the Energy Department's Energy Information Administration, the supporters note.

`Stay the Course'

``At the end of the day, the Senate voted to stay the course and deliver consumers significantly cleaner air without raiding their pocketbooks,'' said Dan Riedinger, a spokesman for the Edison Electric Institute, a utility lobbying group based in Washington.

Opponents of the rule say a cap-and-trade market would lead to ``hot spots'' of contamination near power plants that don't install controls. They want all power plants to install controls.

The EPA and the Food and Drug Administration last year recommended that women who could become pregnant, nursing mothers and young children avoid fish with high mercury levels. The department and health groups have said that mercury can damage the nervous systems of infants and children.

To contact the reporter on this story: Christopher Martin in Chicago at cmartin11@bloomberg.net.

Last Updated: September 13, 2005 15:13 EDT