Washington (Platts)--27Oct2008

The US Environmental Protection Agency said Monday it will continue to
work on a revised rule for new source review requirements for electric power
plants despite calls by the US Congress to withdraw efforts lawmakers believe
will weaken current clean air regulations.

"Work continues on the rule," EPA spokesman Jonathan Shradar said, adding
that the EPA has set no timeline for completion of the rule.

But key US senators are urging the agency to halt its plans to put out an
NSR rule they believe will allow high-emitting fossil fuel plants to continue
to operate without pollution controls. The chairman of the US House Oversight
and Government Reform Committee, California Democrat Henry Waxman, also wrote
EPA last week on his concerns about the pending NSR rules.

EPA first proposed new NSR rules in 2005 and 2007 which would apply
hourly emissions tests to electric generating units rather than weigh their
total annual output of harmful emissions in determining whether these
facilities should install pollution control equipment.

The agency had said any additional emissions from these sources would be
offset by emission reductions required under its Clean Air Interstate Rule.

However, in July, a federal court threw out CAIR, which was challenged by
electric utilities over its provisions for a regional emissions trading
program. EPA has petitioned for an appeal.

The court's vacating of CAIR "throws into serious doubt the already
questionable wisdom and legality of the EGU hourly test proposal," said Senate
Environment and Public Works Committee Chairman Barbara Boxer and Senator Tom
Carper, chairman of the subcommittee on clean air and nuclear safety.

EPA's proposed NSR rule changes would allow power plants to boost their
operations and annual emissions without pollution controls, the senators said.

"As EPA's proposal recognized, the electric power companies are almost
certain to extend the life of these plants through renovations," Boxer, a
California Democrat, and Carper, a Delaware Democrat, wrote EPA Administrator
Stephen Johnson.

"Once renovated, these plants can be expected to operate for longer
periods of time without installing additional controls, which will result in
their annual, actual emissions increasing significantly, degrading air quality
to the detriment of human health and environment."

But the senators add that "given the weight of evidence against the rule,
if the EPA does promulgate the rule, this committee may be compelled to
undertake extensive investigation and oversight" of the agency's activities
related to the NSR proposal.