EPA Rules May Add $300 Billion in Costs, Southern Chief Says

U.S. pollution rules may put half the nation’s coal-fueled power generation at risk and cost industry about $300 billion in the next five years, Southern Co. (SO) Chief Executive Officer Tom Fanning said, citing a study.

“The reliability of the nation’s electric generating system is at risk because of the number of new rules and regulations,” Fanning said in testimony to a House Energy and Commerce Committee hearing today on new and pending Environmental Protection Agency rules. Atlanta-based Southern is the biggest U.S. utility owner by market value.

President Barack Obama’s EPA is under fire from Republicans and some Democrats who say the new regulations threaten the economy. Lawmakers are seeking to stop or curtail rules such as proposed cuts in mercury spewed from coal-fired power plants and limits on carbon-dioxide emissions blamed for climate change.

The measures are part of an Obama administration “war on coal,” said Representative Ed Whitfield, a Kentucky Republican and chairman of the House Energy and Commerce Committee’s panel on energy and power.

The EPA is “determined to pass regulations to increase the cost of coal and make other energy sources more competitive,” Whitfield said.

Lawmakers examined three EPA actions: a proposal to reduce hazardous air pollutants at coal-fired power plants, standards for air toxics stemming from the cement industry and final rules cutting emissions from industrial boilers.

The House will begin considering next month legislation that would delay the EPA’s plans, Whitfield said yesterday.

Public Health Assault

Representative Henry Waxman of California, the ranking Democrat on the House Energy and Commerce Committee, said such attempts are an assault on public health.

“If we delay these requirements to clean up toxic air pollution, our children and many other Americans will suffer serious and in many cases irreversible harm,” Waxman said.

Fanning said pending EPA rules may put in jeopardy 50 percent of U.S. coal-generating power by 2015 because the agency isn’t giving the industry enough time to install pollution controls or replace the coal with new fuels. Fanning cited a study distributed to companies this year by the Edison Electric Institute, a Washington-based trade organization for the power industry.

“The economic impact of controlling or replacing retired coal-fired generation nationwide will range from increased electricity rates and lower discretionary spending, to losses of jobs and tax revenues at power plants and energy-intensive manufacturing,” Fanning said in his prepared testimony.

DTE Energy Co. (DTE) Executive Chairman Anthony Earley Jr. and Titan America LLC President Aris Papadopoulos joined environmental group representatives at the hearing.

EPA officials declined an invitation to attend, according to Whitfield, whose subcommittee arranged the meeting. The panel will hold another hearing to ensure EPA participation, Whitfield said.

To contact the reporter on this story: Kim Chipman in Washington at kchipman@bloomberg.net

To contact the editor responsible for this story: Larry Liebert at lliebert@bloomberg.net

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