Texas power company says EPA rules force it to close plants, cut jobs

By Andrew Restuccia - 09/12/11 02:13 PM ET

A major Texas-based power company said Monday it will close two coal-fired power units in the state and lay off 500 workers in order to comply with an Environmental Protection Agency air pollution regulation.

The company, Dallas-based Luminant, also filed a lawsuit aimed at overturning the regulation in the state and pushing back a deadline to comply with the new rules.

The move could have wide-reaching political ramifications in Washington, where the EPA has become the target of much scorn in GOP circles.

Republicans and other critics of the EPA are likely to pounce on the announcement in an effort to bolster their claims that the agency’s regulations will impose huge burdens on the economy. But environmental and clean air groups say the rules are essential for protecting public health, insisting that power company's concerns are overblown.

The announcement comes amid growing resistance to EPA regulations from the country’s electric utilities. American Electric Power, for example, said in June that it will be forced to shutter five coal-fired power plants in order to comply with the agency’s pending rules.

Luminant, in a statement released Monday, said it will shut down two generating units at its Monticello power plant in order to meet requirements under EPA’s Cross-Air Pollution rule, which would limit toxic air pollution that crosses state lines in Texas and 26 other states.

The units began operation in 1974 and 1975 respectively. The move will cut the company’s generating capacity by 1,200 megawatts.

Under the EPA rules, Texas power companies are required to reduce sulfur dioxide (SO2) and nitrogen oxide (NOx) emissions from power plant smokestacks by Jan. 1, 2012.

Luminant, the largest power generator in Texas, said Monday that the deadline is unrealistic.

“We have spent the last two months identifying all possible options to meet the requirements of this new rule, and we are launching a significant investment program to reduce emissions across our facilities,” Luminant CEO David Campbell said in a statement. "However, meeting this unrealistic deadline also forces us to take steps that will idle facilities and result in the loss of jobs.”

In an effort to block the regulation, Luminant filed a lawsuit in the United States Court of Appeals for the District of Columbia Circuit. The suit aims to overturn the rule in Texas and calls for a judicial stay in order to prevent companies from having to comply with the regulation next year.

EPA says the regulations will result in major health and economic benefits. The rules will prevent 34,000 premature deaths, 15,000 heart attacks and 400,000 cases of asthma starting in 2014, which would amount to $280 billion a year in health benefits, according to the agency.

EPA did not immediately respond to a request for comment on Luminant’s announcement.

The Texas Commission on Environmental Quality, responding to Luminant’s announcement, blasted EPA’s cross-state regulations Monday.

“These rules, imposed on Texas without adequate notice and without adequate scientific justification, will kill jobs, put the brakes on economic growth, increase energy costs and impair our energy security—all with little or no positive environmental effects,” the commission said in a statement.

The Sierra Club, for its part, cheered Luminant's announcement.

“The announcement by Luminant today is a victory for all Texans who care about clean air. Coal-fired electricity is the primary source of toxic mercury pollution and is a leading trigger of asthma attacks. Children, the elderly, and anyone with respiratory illness are especially vulnerable to air pollution emitted from coal-fired power plants,” said Eva Hernandez, a coordinator of the environmental group's Beyond Coal campaign in Texas.

This story was updated at 2:40 p.m.