AIR POLLUTION:

White House gets an earful on power plant rules

High-level Obama administration officials have gotten involved as U.S. EPA has prepared to unveil a plan to crack down on toxic air pollution from coal- and oil-fired power plants, suggesting the White House is keeping a close eye on rules that could have the greatest impact of any environmental regulations issued under President Obama, experts say.

The Office of Management and Budget has held at least 10 meetings with stakeholders as it has reviewed the proposed rules, which have to be released by Wednesday under a legal deadline. Those types of meetings are nothing new, but as power companies, unions and advocacy groups have come to make their voices heard, they've sent the big guns -- and they've gotten to sit down with top officials who don't normally get involved in the day-to-day grind of the rulemaking process.

White House Chief of Staff Bill Daley attended one meeting last week with the CEOs of Constellation Energy, NextEra Energy Inc. and Exelon Corp., three utilities that are pushing EPA to press forward with the limits on mercury, acid gases and other types of air pollution. Also in the room were Cass Sunstein, who oversees the review of new rules at the White House, and Gary Guzy, the second in command at the White House Council on Environmental Quality.

Michael Livermore, a law professor at New York University and a close observer of the regulatory process, said their involvement suggests the White House is keeping tabs on a proposal with broad impacts -- both costs for utilities and health benefits for the public.

"These are not the kinds of folks who spend their time on run-of-the-mill permit applications," said Livermore, who is executive director of NYU's Institute for Policy Integrity.

The new regulations will replace the George W. Bush administration's Clean Air Mercury Rule, a cap-and-trade program that would have required the power sector to cut its mercury emissions by about 70 percent. A federal court rejected the program in 2008, saying that the Clean Air Act requires power plants to control more than 180 different kinds of toxic pollution -- not just mercury.

Based on the court decision, the Obama administration must now decide what utilities must do to cut down on their pollution. Many older power plants without pollution controls may need to install scrubbers and other pieces of costly equipment.

That has raised concerns among power companies, which might need to spend hundreds of billions of dollars to comply with the rules, as well as industries that make heavy use of electricity, which are worried about hikes in energy prices.

"The concern is that it's going to be hugely expensive and a very draconian rule," said Claudia O'Brien, an attorney at Latham & Watkins LLP whose clients include utilities. EPA staffers understand what's at stake, she said last week, but "they're hamstrung by a series of disastrous court opinions that didn't reflect what they should have reflected. It's a mess."

The White House has also been hearing from unions, which have usually been among the administration's biggest supporters. Groups such as the United Mine Workers of America, International Brotherhood of Electrical Workers and AFL-CIO met with the administration to discuss the rules last week to highlight their worries about possible job losses (see related story).

Meanwhile, environmentalists are asking EPA to think big. Many of the controls that cut down on toxic pollution also trap emissions that lead to soot and smog, leading to health benefits that would greatly exceed the costs to utilities, they say.

Several health groups, including the American Lung Association, have put out reports and launched advertising campaigns to drum up support for the new rules as they anticipate a protracted battle with industry (Greenwire, March 9).

Frank O'Donnell, president of the advocacy group Clean Air Watch, said he is concerned that Sunstein and other White House officials will weaken the rule before allowing EPA to move forward.

"If EPA is permitted to act honestly, every coal-fired power plant in America would have to clean up," he wrote in an e-mail last week. "If done correctly, EPA would require that the most toxic power plants be brought up to the standard of control used at the least toxic."

It is the longest slate of meetings on an EPA rule since early last year, when dozens of groups visited the White House to discuss a proposal to start treating coal ash as toxic waste. That rule has faced a backlash from companies that burn coal, or recycle the ash by using it as an ingredient in cement and other products.

EPA has not moved forward with a final rule since receiving tens of thousands of comments on the coal ash proposal. The agency is unlikely to make a decision by the end of this year, Administrator Lisa Jackson told lawmakers during a hearing earlier this month.

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