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EPA Rule for Coal Plants Deemed ‘Unfortunate’ by Industry

The U.S. Environmental Protection Agency’s rule to curb toxic emissions from power plants drew criticism from industry and Republicans, and praise from environmental groups even before it is released this week.

The regulation, the most expensive order being considered by President Barack Obama’s administration, was signed by the agency Dec. 16. Groups representing power producers that use coal have urged the EPA to give companies an additional year to comply.

“The final rule is expected to be pretty close to the proposed rule, which is unfortunate,” Scott Segal, a lobbyist at Bracewell & Giuliani LLC in Washington, representing operators of coal-fired plants such as Southern Co., said yesterday in an e-mail. The “rules will impose significant costs on consumers and on industries that depend on affordable and reliable power to remain competitive.”

The rule, estimated to cost $11 billion when proposed by the EPA this year, was initiated after a federal court threw out standards issued by the Bush administration to limit mercury pollution. Under the proposal, plants have three years to install controls curbing the release of toxic materials when coal is burned to generate electricity.

The final regulation includes details for how companies such as American Electric Power Co. and Southern can apply for additional time to cut emissions of mercury, arsenic and acid gases, said Howard Learner, executive director of the Environmental Law & Policy Center in Chicago.

‘Modest Waivers’

“There are some provisions for EPA to grant modest waivers,” Learner said in an interview, citing a briefing on the rule. Overall, “these standards mean power plants will invest in modern pollution controls, and that investment will create jobs, cleaner air and better public health.”

The Washington Post reported in its Dec. 17 edition that the regulation was signed in time to meet a deadline negotiated with a federal court.

“We will make details available when we are ready to make an announcement,” Betsaida Alcantara, a spokeswoman for the EPA, said in an e-mail Dec. 17. “As we have made clear, any standard will maximize flexibilities, while providing extensive public health protections from dangerous pollutants.”

The EPA proposal incorporates three separate limits: one for mercury, a second for acid gases and a third for particulate matter, which is used to target emissions of metals such as chromium, selenium and cadmium. Taken together, the health and economic benefits from cleaning up pollution will dwarf the costs to industry, according the agency’s analysis.

Estimated Costs

“This will be the signature achievement of the Obama administration’s EPA,” John Walke, clean-air director for the New York-based Natural Resources Defense Council, said today in an interview. “We anticipate strong emission limits.”

As recently as Dec. 14, the leaders of the industry trade group, Edison Electric Institute, met with White House officials, according to records published on the White House website. The group has organized the effort to garner extra time to comply with regulation.

The agency has resisted the industry push. Under the rules of the Clean Air Act, plant operators get three years to install pollution scrubbers. The EPA has said it will grant additional time on a case-by-case basis, and is likely to stick to that, Walke said.

The final rule gives the companies details for seeking more time to comply in limited instances, Learner and Walke said.

Jobs, Lives

American Electric, based in Columbus, Ohio, said in June that proposed EPA rules would force it to close parts or all of 11 power plants, eliminating 600 jobs. Complying with the rules would cost $8 billion, most of it on cleaning up or shutting plants that lack pollution-control equipment, it said.

The EPA says the rule would save lives and create 9,000 more jobs than would be lost, as power plants invest billions of dollars to install pollution scrubbing systems or build cleaner natural-gas plants. It estimates the regulation could prevent 17,000 premature deaths from toxic emissions.

Segal said that the agency’s job estimate is off.

“For every one job that may be created in order to comply with the rule, we expect four higher-paying energy and manufacturing jobs to be lost,” he said.

Open to Challenge

The release of the rule by the Obama administration leaves the issue open to challenge by Congress or in the courts, Michael Worms, a New York-based utilities analyst for BMO Capital Markets Corp., a unit of BMO Financial Group, said in a report today. The fights over the regulation are “far from over,” he said. “We expect litigation to ensue almost immediately and for Congress to become involved.”

Senator James Inhofe, an Oklahoma Republican, said in a memorandum to other senators last week that he would push for a joint resolution that would “effectively overturn” the EPA’s standard.

“A strong vote” against the regulation “will send a powerful message to the administration and may enable future legislative efforts that allow for emissions reductions without widespread job losses,” Inhofe said in his memo on Dec. 16.

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