The changes to the contentious "New Source Review" section of the Clean Air Act proposed by the Environmental Protection Agency (EPA) would let utilities calculate emissions on an hourly, rather than annual basis.

That would allow existing plants to emit more pollutants without triggering federal emission-reduction requirements, environmentalists said.

The EPA said its proposal would allow US industry to boost plant efficiency and reliability without the threat of impending lawsuits.

"This is not about getting rid of New Source Review," EPA Administrator Stephen Johnson told reporters. "No one's air gets any cleaner when you are sitting in a courtroom."

The Bush administration's Clean Air Interstate Rule, when it takes full effect around 2020, will reduce emissions of sulfur dioxide, nitrogen oxides and mercury by about 70 percent, Johnson said.

Rewriting New Source Review has been a priority of the Bush administration.

The White House sought to relax program requirements in an oil refinery bill approved by the US House of Representatives with a two-vote margin last week.

However, the New Source Review language was dropped from the bill at the last minute as Republicans scrambled to win more votes.

Environmental groups said the EPA's plan, if finalized, means US utilities can spew more nitrogen oxides and sulfur dioxide -- precursors of acid rain and smog linked to respiratory diseases like asthma.

"Under the new rule, emissions can increase entirely without limit, as long as a facility's hourly efficiency rate increases," the National Environmental Trust said.

EPA's proposal came two days after the agency announced a clean air settlement with Exxon Mobil Corp., which agreed to spend $570 million to clean up emissions at some of the nation's biggest refineries.

Critics also said the new rules could jeopardize ongoing enforcement cases against giant utilities like American Electric Power and Southern Co. filed by the Clinton administration.

"The action is clearly designed to cripple ongoing cases," said John Walke at the Natural Resources Defense Council.

EPA officials said they will prioritize their enforcement cases to focus on companies that violate the new proposed rules. The agency said it will still pursue filed cases.

In internal EPA memos distributed by environmental groups, an EPA enforcement official said the proposed rule is "largely unenforceable as written."

"The effect of the rule is to make very few, if any, changes modifications that trigger NSR," according to the memo, provided by the Natural Resources Defense Council.

Utility industry officials said a myriad of federal pollution rules will require them to reduce emissions regardless of the fate of New Source Review.