A new US EPA rule to cut power-plant emissions is setting supporters including some states, three power companies and at least one city on a collision course with generators, public utility commissions, and other states that oppose the plans.

The Cross State Air Pollution Rule, finalized by the agency in July, requires 27 states in the eastern half of the US to make significant reductions in sulfur dioxide and nitrogen oxide that crosses state lines and causes ozone and fine particle pollution in those areas.

The measures, due to become effective on January 1, 2012, would cost the industry $800 million a year to install emissions-control equipment, according to the EPA, in addition to an annual $1.6 billion already being spent to comply with the 2005 Clean Air Interstate Rule, which is being replaced by the new measure.

But opponents argue that compliance costs would be much higher, and are seeking an injunction against the rule by a Washington DC appeals court which is due to make a decision before the end of this year on whether the measure can be implemented on schedule.

Combined with the cost of complying with another proposed rule on reducing power-plant mercury emissions, generators will face a bill of about $17 billion a year, according to Jeff Holmstead, head of the environmental strategy group at the Washington law firm Bracewell & Giuliani, and the former head of the EPA’s air-quality division. Read more about pending ozone standards: Generators Hail Withdrawal Of Ozone Standard.

At least 40 entities including states, companies, and utility commissions are opposing the rule, Holmstead said, while three power companies – Exelon, Calpine and PSEG – support it.

Six eastern states – Connecticut, Delaware, Maryland, Massachusetts, Rhode Island and Vermont – have filed briefs with the appeals court supporting the rule, along with Washington DC, according to Mark McDonald, a spokesman for Philadelphia Mayor Michael Nutter, whose administration also filed a supporting motion on Oct. 24.

Others who have intervened in defense of the EPA include the State of New York, the Environmental Defense Fund, and the American Lung Association.

The rule would force some older plants to close, at least temporarily, and would drive up the retail cost of electricity by as much as 25% in some areas, Holmstead said. In its proposed form, the rule looked as if compliance would be manageable, but the final version sets tougher standards and gives power companies less than six months to comply.

“All these states thought that they were going to have manageable requirements,” he said. “But then they found they would have to reduce pollution by much more than they thought.”

In Philadelphia, officials argued that the rule will improve its residents’ health and save money by reducing air pollution.

“The benefits of CSAPR far exceed the cost of compliance, and the longer polluters delay implementation of this vital rule, the longer Philadelphia residents – particularly sensitive groups such as children, seniors and those with health issues – will be denied the tremendous health and economic benefits of cleaner air,” Mayor Nutter said in a statement.

According to the EPA, implementation would prevent as many as 34,000 premature deaths, 15,000 non-fatal heart attacks, and 400,000 cases of aggravated asthma every year, nationwide, worth up to $280 billion in health and environmental benefits.

By 2014, the rule is designed to reduce S02 emissions by 73% and N0x by 54% from 2005 levels, when combined with other state and EPA actions, the agency said.

Read more on emissions rules: Emissions Rules Could Boost Technology Additions.

Photo Caption: Smoke containing sulfur dioxide billows from chimneys of the Datong County Cement Plant on January 31, 2007 in Datong County of Qinghai Province, China.