Senate Defeats Inhofe Measure to Overturn EPA’s Coal-Plant Rule

The Senate rejected a measure that would overturn a U.S. regulation to cut mercury and other toxic emissions from coal-fired power plants, a rule that is among the most expensive issued by the Environmental Protection Agency.

Senator James Inhofe, an Oklahoma Republican, sponsored the resolution, which failed today 46-53. The administration of President Barack Obama had threatened to veto the bill had it passed both houses, citing the health and economic gains of cleaning up pollution.

Bill supporters said the EPA’s rule, estimated to cost $9.6 billion when implemented, is imposing outsize costs on coal producers and electricity consumers struggling in a slumping economy.

“We have this agency stepping way beyond its boundaries,” Senator Joe Manchin, a West Virginia Democrat who supported the measure, said before the vote. “It’s putting a tremendous burden on our working Americans.”

The EPA’s regulation, issued in December, would force producers such as Southern Co. (SO) to install pollution-control devices or shut coal plants and substitute natural gas or wind generation. Most of the 1,100 U.S. plants already comply, the agency said when the rule was issued.

Five Republicans voted against Inhofe’s bill, including Massachusetts Senator Scott Brown, and five Democrats voted in favor, including Manchin and Virginia Senators James Webb and Mark Warner.

Save Lives

The EPA says the standard will save lives and create as much as $90 billion in annual benefits. It will also boost employment as power producers install scrubbing systems made by companies such as Babcock & Wilcox Co. (BWC) or Alstom SA (ALO), the agency said.

The business community has been split over the rule. Some companies such as Chicago-based Exelon Corp. (EXC) that have already installed improved pollution controls in anticipation of the rule backed it because it would level the playing field among individual companies.

The rule was accompanied by a presidential memorandum that directs the EPA to use authority in the law to give power companies more time beyond the three-year deadline to install equipment or shut old plants.

“The EPA has been very clear that they’re going to be willing to work to make sure they provide certainty to those utilities, to make sure they have the time,” Heather Zichal, the top White House adviser for energy, said today at a forum in Washington. “We have a rule that has been in the works since 1990. The notion that industry didn’t see this coming I think is a little surprising from my perspective.”

Critics say the rule will force plant closures, raising the cost of electricity and endangering the reliability of the electricity-distribution grid.

The Inhofe measure was offered under the Congressional Review Act, which lets lawmakers expedite votes to reject pending regulations. The Senate voted down a similar attempt to overturn a separate EPA regulation on power plants in November.

To contact the reporter on this story: Mark Drajem in Washington at mdrajem@bloomberg.net

To contact the editor responsible for this story: Jon Morgan at jmorgan97@bloomberg.net

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