June 19, 2006

States challenge EPA mercury emissions plan

SAN FRANCISCO (Reuters) - California and 15 other states on
Monday challenged the U.S. Environmental Protection Agency's
plan to set up a "cap-and-trade" system to reduce toxic mercury
emissions from coal-fired power plants.

California Attorney General Bill Lockyer said the EPA
requirements to cut emissions "fail to protect women and
children from a toxic substance that can cause birth defects
and learning disabilities."

The states and five environmental groups had asked the EPA
to reconsider the rules the agency unveiled in March 2005, but
the EPA essentially kept its original proposal intact.

"The mandatory declining caps, coupled with significant
penalties for noncompliance, will ensure that mercury reduction
requirements are achieved and sustained in a cost-effective
manner," the EPA said last month.

Regulators say the program should cut mercury emissions by
70 percent by 2018 through a cap-and-trade system that allows
power plant operators to swap pollution rights.

California, New York and other states filed a suit last
year in the U.S. Court of Appeals for the D.C. Circuit,
challenging the trading rule and a separate regulation that
removed power plants from a list of pollution sources subject
to emissions controls under the U.S. Clean Air Act.

The suit was put on hold when the EPA agreed to reconsider
the rules.

Lockyer said a petition filed on Monday will allow the suit
to move ahead in the D.C. court.

The trading system will allow "localized, high-level
mercury exposure to continue unabated near plants that choose
not to reduce emissions," Lockyer said.

Complying with the Clean Air Act and required control
technology, however, would cut emissions by about 90 percent,
he said.

The nation's 1,100 coal-burning units now emit about 48
tons of mercury per year. The new EPA rule sets the cap at 38
tons per year by 2010 and 15 tons per year in 2018.