Washington (Platts)--19Nov2012/450 pm EST/2150 GMT

Proposed revisions to the Mercury and Air Toxics Standards rule to limit emissions from new coal- and oil-fired power plants are based on the industry's best performing units and would not require significant additional costs going forward, the US Environmental Protection Agency said Monday.

"The updated standards would only apply to future power plants; would not change the types of state-of-the-art pollution controls that they are expected to install; and would not significantly change costs or public health benefits of the rule," the agency said in a statement.

EPA filed a notice of the proposed revisions Monday with the US Court of Appeals for the District of Columbia Circuit, where developers of electric generating units filed suit in White Stallion Energy Center v. US EPA (No. 12-1272) over the MATS standards set for new power plants.

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EPA's proposed revisions to the MATS rule impact only new power plants fueled by coal and oil, not the nation's existing fleet, which remain under the standards finalized by the agency in December 2011. The proposal, once published in the Federal Register, will be subject to a 30-day public comment period and a possible public hearing.

The revised rule, which was based on new data that became available after MATS was issued, will be finalized in March 2013, EPA said.

Most standards for new generating units under the proposal do not go "beyond the floor" or would not require additional technology, practices and costs for compliance beyond what the industry's best-performing units are achieving, according to EPA. These include standards for particulate matter from coal units and for mercury from units burning nonrank virgin coal. PM standards for new solid oil-derived fuel-fired units also would not require additional control devices or "secondary downstream 'polishing,'" the agency said.

"As with the coal-fired source, such a device would add considerable costs to the project, and the incremental cost-effectiveness would not be reasonable," EPA said in its proposal.

The agency, however, is proposing "beyond-the-floor" standards for hydrogen chloride for new coal-fired units to achieve 90% to 98% control, depending on the chloride content of the coal.

A floor level of control for new electric generating units is based on the emission control achieved in practice by the best controlled similar source, in accordance with the Clean Air Act that requires hazardous air pollution to be regulated with maximum achievable control technology, or MACT.

Industry lawyers representing the developers said they were still evaluating the proposed updates to the MATS rule but at least one attorney said EPA's revisions looked "very promising."

Although EPA is not imposing that new power plants install additional control equipment to combat most of the pollution regulated under MATS, health and environmental groups said the revisions would continue to protect against hazardous air pollutants.

"The modest weakening of the emissions limits for new plants is unfortunate, but EPA appears to be reasonably acting in response to where the data took them," said John Walke, senior attorney at the Natural Resources Defense Council and director of its clean air program. "The overwhelming health benefits and toxic pollution reductions will continue to come from existing power plants, which remain unaffected by this recent rulemaking proposal."

While EPA's proposal revises standards for new power plants, Paul Billings, a senior vice president at the American Lung Association, noted that the "strong existing source standards remain in place."

"Power plants should not be allowed to spew unlimited amounts of any pollution into the air -- not mercury, not arsenic, not particles and not carbon," he said.

--Cathy Cash, cathy_cash@platts.com

--Edited by Jason Lindquist, jason_lindquist@platts.com

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