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EPA Looks to Crack Down on Power Plant Pollution; Will Utilities Take Heed?

The Environmental Protection Agency has proposed new rules to limit sulfur dioxide and nitrogen oxide pollution from power plants. It hopes to implement the rules in 2012.

The move ups the pressure on lawmakers who prefer congressional action to EPA regulation but have been wary of carbon-pricing legislation. With the threat of EPA restrictions growing ever stronger, it’s getting increasingly difficult for these lawmakers to ignore the issue.

Equally important is the utilities sector, some of whose leaders have backed the notion of comprehensive climate legislation. But utility CEOs have been more skeptical of a bill that would impose emissions limits only on power plants.

A Senate aide familiar with the energy and climate negotiations tells me that the utilities are unlikely to sign on to any legislation that does not feature some guarantee that other sectors will be capped down the line, even if only utilities are subject to the cap at first.

But the utilities’ bargaining power is likely to diminish with each new EPA assertion of authority. Faced with a choice between EPA regulation and a bill that will put a price on their carbon emissions — but one that they can help shape — they’re likely to choose the latter.

For an energy and climate bill that’s still facing tough odds, the timing of the EPA’s announcement couldn’t have been better.

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