By Steven Siros

On July 6, 2011, U.S. EPA finalized its Cross-State Air Pollution Rule (APR) which will require substantial reductions in SO2 and NOX emissions at power plants in 27 states.  The new rule is intended to act as a replacement to the previously vacated Clean Air Act Interstate Rule.  The APR is estimated to effect approximately 1,000 power plants in these 27 states and will require these power plants to cut their SO2 emissions by 73% and NOX emission by 54% from 2005 levels by 2014.  The new rule is expected to force power plants to install new pollution control equipment and/or switch to cleaner burning fuels such as natural gas.  According to U.S. EPA, the new rule will prevent at least 13,000 premature deaths and will result in $120-$280 billion in annual health and welfare costs by 2014, which far outweighs U.S. EPA's cost estimate of $2.4 billion.  Critics of the new rule, however, argue that the January 12, 2012 compliance deadline doesn't provide sufficient time for companies to come into compliance with the new rule. At the same time that the final rule was published, U.S. EPA also issued a supplemental notice of proposed rulemaking seeking to require six states (Iowa, Kansas, Michigan, Missouri, Oklahoma, and Wisconsin) to implement summer-time NOX reductions.