Washington (Platts)--19Dec2011/449 pm EST/2149 GMT
The US Environmental Protection Agency says it agrees with a request by coal-fired utilities that a federal court should avoid disrupting the markets for emissions allowances and electricity when it decides on whether to stay a new rule to reduce interstate air pollution from the power sector. The agency, in a filing Friday, told the US Court of Appeals for the District of Columbia Circuit that there is "significant public interest in protecting the integrity of these trading markets," and the court should take appropriate measures to ensure market interests learn of any decision on the stay motions at the same time. The court has yet to indicate when it will rule on motions to stay the Cross-State Air Pollution Rule, which takes effect January 1. The new rule will replace the Clean Air Interstate Rule with stricter emission reductions for coal-fired power plants in 27 states and a tighter emission allowance pool than under the current rule. Article continues below... Request a free trial of: Electric Utility Week Electric Utility Week focuses on the fundamental news that matters to utilities, including: the state of utility industry earnings, stock prices and strategies, regional grid organizations, prospects for transmission investment, new areas of opportunity like broadband-over-power-line service.
The US Environmental Protection Agency says it agrees with a request by coal-fired utilities that a federal court should avoid disrupting the markets for emissions allowances and electricity when it decides on whether to stay a new rule to reduce interstate air pollution from the power sector. The agency, in a filing Friday, told the US Court of Appeals for the District of Columbia Circuit that there is "significant public interest in protecting the integrity of these trading markets," and the court should take appropriate measures to ensure market interests learn of any decision on the stay motions at the same time. The court has yet to indicate when it will rule on motions to stay the Cross-State Air Pollution Rule, which takes effect January 1. The new rule will replace the Clean Air Interstate Rule with stricter emission reductions for coal-fired power plants in 27 states and a tighter emission allowance pool than under the current rule.
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Electric Utility Week focuses on the fundamental news that matters to utilities, including: the state of utility industry earnings, stock prices and strategies, regional grid organizations, prospects for transmission investment, new areas of opportunity like broadband-over-power-line service.
By 2014, the cross-state rule expects to reduce power plant emissions of sulfur dioxide by 73% and of nitrogen oxides by 54% of 2005 levels. "Allowances representing thousands of tons of SO2 and NOx have been traded and the pace of trading has been increasing, while prices have been declining. Participants in the allowance market are undoubtedly aware of the pending stay motions and the court's resolution of those motions could affect the price of allowances," EPA said in its response to GenOn Energy's recent request to the court to avoid disrupting the markets when it acts on its motion to stay the rule. GenOn Energy filed suit against the cross-state rule and has asked the court to stay the rule until proceedings and a decision on the merits of the regulation are complete. Several other energy companies, claiming many power plants would shut rather than meet the rule's emission targets, have filed similar requests with the court. GenOn last week asked the DC Circuit to give the markets advance notice that a decision on a stay is pending or release its decision after the markets close so as to avoid millions of dollars in trading losses seen when the court unexpectedly tossed out CAIR, the rule's predecessor. The goal of the request is to ensure that everyone in the markets has the same opportunity to see the court ruling at the same time, said Jeff Holmstead, a former EPA official who now represents GenOn and other coal-fired utilities at Bracewell & Giuliani. Power plants covered under the cross-state rule's annual SO2 and NOx programs must comply by March 2013. Units covered by the rule's NOx ozone season-only limit face a November 30, 2012, compliance deadline.--Cathy Cash, cathy_cash@platts.com
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