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EPA Proposes First U.S. Standard for Coal-Plant Mercury

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March 16 (Bloomberg) -- The Obama administration proposed limiting toxins such as mercury, arsenic and acid gases spewed from coal-fired power plants, clearing the way for the first U.S. standards for such pollutants.

The regulations would require many power plants to install “widely available, proven pollution control technologies” to cut emissions tied to cancer and heart attacks, the Environmental Protection Agency said today in an e-mailed statement. A business group said the rules will be too costly.

The EPA, under court order to act after former President George W. Bush’s mercury standard was declared unlawful, said the rules would reduce mercury air pollution from coal by 91 percent. The regulations would cost $10.9 billion in 2016, according to the EPA. One industry group said limiting pollutants other than mercury is excessive and unnecessary.

“Such controls are extraordinarily costly with profound impacts on electricity supply and price, and job creation,” according to a report issued today by the Electric Reliability Coordinating Council, a Washington-based coalition of companies such as Atlanta-based Southern Co., the biggest utility owner by market value.

The group said the proposed rule is one of the most expensive in the EPA’s 40-year history and estimated that costs for industry to comply may be as high as $100 billion.

The council’s director, Scott Segal, has said that, except for mercury, the amount of pollutants from coal-fired power plants covered by the proposed standard is “negligible.”

Health, Economic Benefits

The EPA said companies would have as many as four years to comply with the limits, and estimated health and economic benefits of as much as $140 billion a year.

The rule would prevent as many as 17,000 premature deaths and 11,000 heart attacks a year, and support 31,000 short-term construction jobs and 9,000 long-term utility jobs, according to the agency.

Utility owners such as New Orleans-based Entergy Corp. have said they are concerned about the cost of controls they may have to install to cut gases.

“If you set a stringent level for acid gases, that might be what triggers the requirement that our facilities put in scrubbers,” Chuck Barlow, Entergy assistant general counsel for environmental law, said yesterday in an interview. “There seems to be a pretty big debate among scientists about whether there is any health impact from these acid gases.”

Exelon, Constellation

Barlow estimates costs for such controls may be as much as $500 million a unit. Less than 10 percent of Entergy’s electric-generating fleet is powered by coal, he said.

Exelon Corp., the biggest U.S. operator of nuclear reactors, Public Service Enterprise Group Inc., owner of New Jersey’s biggest utility, and Constellation Energy Group Inc., the biggest U.S. retail energy marketer, were among companies that praised the EPA’s proposal in a joint statement.

“While we are still evaluating the rule, we believe the Toxics Rule can be achieved in a cost-effective manner while maintaining the reliability of the electric system,” Anne Hoskins, a senior vice president for Newark, New Jersey-based Public Service, said in the statement.

The proposed standard may boost energy prices, Michael Worms, an industry analyst with BMO Capital Markets in New York said in a March 10 report to clients.

“At stake is how many older, smaller and inefficient coal-fired generating plants are forced to shut down or to add environmental equipment,” Worms said.

Coal-Unit Retirements

As much as 40,000 megawatts of older coal-fired plants may be retired as a result of the agency’s action, he wrote.

The rule is intended satisfy a requirement by Congress in 1990 amendments to the Clean Air Act to reduce emissions of hazardous air pollutants.

“Today’s announcement is 20 years in the making, and is a significant milestone in the Clean Air Act’s already unprecedented record of ensuring our children are protected from the damaging effects of toxic air pollution,” EPA Administrator Lisa Jackson said today in a statement.

The proposed national standard would apply to new and existing coal- and oil-fired power utilities. Emissions covered under the rule, such as mercury, acid gases, arsenic, nickel and heavy metals, are known or suspected of causing cancer and other harmful health effects, according to the EPA.

Coal-fired power plants are responsible for 99 percent of mercury emissions, which can harm developing brains and lead to learning and memory problems, according to the EPA.

President Barack Obama’s EPA is under fire from Republicans lawmakers and business groups that say the agency’s rules, such as greenhouse-gas regulations, are excessive and harmful to the economy.

Last month the EPA issued emissions standards for industrial boilers that were less strict than those it proposed last year. The agency also has postponed until July revised smog standards placing tighter restrictions on ground-level ozone.

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