New EPA pollution plan likely to affect power rates in Kentucky, 26 other states

In 27 states, including Kentucky, a federal agency is clamping down on power-plant pollution that the agency says contributes to unhealthy air downwind.

The move will contribute to higher electricity costs in Kentucky and elsewhere. But the reduction in pollution will save tens of thousands of lives and cut down on heart attacks and asthma problems, achieving billions in health benefits, the U.S. Environmental Protection Agency estimates.

EPA administrator Lisa Jackson announced the plan Thursday. It is designed to reduce pollution from power plants that drifts to other states, causing smog and soot in those downwind sites. The emissions combine with air contaminants in receiving states, making it impossible for them to meet air quality standards.

Kentucky is one of 27 states, most of them in the eastern half of the country, that will be required to reduce the fine particles of pollution its coal-fired power plants release.

Officials with East Kentucky Power, Kentucky Utilities and American Electric Power, which all operate coal-fired power plants in Kentucky, said the new rule and other EPA mandates will require plant modifications, which will in turn lead to higher rates for customers.

"The bottom line is, it's definitely driving up rates," said Nick Comer, a spokesman for East Kentucky Power, which produces electricity for 16 member cooperatives across the state.

State residents can expect average rate increases of 20 percent during the next five years to meet environmental rules, utility officials told state lawmakers last month.

Supporters, however, said the health benefits of cleaner air will far outweigh costs associated with the rules.

"This long overdue and much-needed action will help communities clean up their air and save lives by curbing millions of tons of air pollution that travel downwind and across state lines each year," Michael Brune, head of the Sierra Club, said of the rule announced Thursday.

The provision will cut emergency-room visits and lost work and school days, supporters said.

The EPA chief said the regulation would make sure no community has to bear the burden of polluters in another state.

"Pollution that crosses state lines places a greater burden on (downwind) states and makes them responsible for cleaning up someone else's mess," Jackson said

In addition, the EPA proposed requiring power plants in Oklahoma, Iowa, Kansas, Michigan, Missouri and Wisconsin to control nitrogen oxide emissions during the summer smog season.

Critics called it another step by the Obama administration to crack down on coal-fired power plants. The regulation is one of several expected from the EPA that would target pollution from the nation's 594 coal-fired power plants, which provide nearly half of the country's electricity — but also a significant share of its pollution.

Coal-fired plants in Kentucky produce more than 90 percent of the state's electricity.

While the EPA says the suite of regulations will not cause the power to go out, almost everyone agrees that it will help close down some of the oldest, and dirtiest, coal-fired facilities. At the remaining plants, operators would have to use existing pollution controls more frequently, use lower-sulfur coal or install additional equipment.

"The EPA is ignoring the cumulative economic damage new regulations will cause," said Steve Miller, president and chief executive of the American Coalition for Clean Coal Electricity, a pro-coal industry association. Along with other pending regulations, Miller said, they "are among the most expensive ever imposed by the agency."

Pat D. Hemlepp, spokesman for AEP, said the company has concerns about the "unrealistic" timetable for utilities to comply.

Those time lines will force some plants to close, "taking jobs and taxes out of communities much earlier than expected and leading to immediate significant increases in electricity prices in a region of the country struggling to recover from the economic downturn," Hemlepp said.

The industry plans to talk with members of Congress about concerns over the deadlines, he said.

The regulation announced Thursday replaces a 2005 Bush administration proposal that was rejected by a federal court.

The rule will start taking effect next year and will cost power plant operators $800 million annually in 2014, according to EPA estimates. That's in addition to the $1.6 billion spent per year to comply with the Bush rule that was in effect until the government drafted a new one.

During the first two years, the EPA estimates, the regulation and some other steps will slash sulfur dioxide emissions by 73 percent from 2005 levels, and nitrogen oxides will be cut by more than half.

Sulfur dioxide and nitrogen oxide pollution from power plant smokestacks can be carried long distances by wind and weather. As they drift, the pollutants react with other substances in the atmosphere to form smog and soot, which have been linked to various illnesses, including asthma.

"This rule makes power plants behave like good neighbors by cutting their pollution that spreads across the border," said Albert A. Rizzo, a pulmonary and critical care physician with the American Lung Association.

The EPA estimated the rule would produce up to $280 billion a year in health benefits — such as fewer heart attacks — a total far greater than the cost utilities face to comply with the changes.

The migrating pollution also produces haze in parks, and damages forests and lakes with acid rain.

The 27 states subject to the rule include all those on Kentucky's border.