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EPA to Seek 30% Cut in Emissions at Power Plants


WASHINGTON--The Environmental Protection Agency will propose mandating power plants cut U.S. carbon-dioxide emissions 30% by 2030 from levels of 25 years earlier, according to people briefed on the rule, an ambitious target that marks the first-ever attempt at limiting such pollution.

The rule-making proposal, to be unveiled Monday, sets in motion the main piece of President Barack Obama's climate- change agenda and is designed to give states and power companies flexibility in reaching the target. But it also will face political resistance and become fodder in midterm congressional races, particularly in energy-producing states, and is destined to trigger lawsuits from states and industry that oppose it.

The rule would affect hundreds of fossil-fuel power plants--hitting the nation's roughly 600 coal-fired plants the hardest. The carbon framework seeks to strike a balance between what environmentalists want--an ambitious overall target--with what the utility industry wants--flexibility, a long compliance timeline and an earlier base-year calculation from which to meet the goal. Carbon emissions have dropped since 2005, making the overall reduction smaller when compared with recent years.

For the president, the rule is a major element of his attempt to secure a second-term legacy. While Mr. Obama is expected to remain out of the spotlight when the EPA unveils the rule Monday, he plans to join a conference call with the American Lung Association, casting the rule as needed to protect public health as well as to reduce the carbon emissions that scientists say contribute to climate change.

The rule, scheduled to be completed a year from now, will give flexibility to the states, which must implement them and submit compliance plans to the EPA by June 2016. States can decide how to meet the reductions, including joining or creating new cap-and-trade programs--which allow companies to trade allowances or credits for emissions--deploying more renewable energy or ramping up energy-efficiency technologies.

Each state will have different reduction standards, and the national average will be 25% by 2020 and 30% by 2030, people familiar with the proposal said. Additional details about the rule, including the percentage reduction for each state, and other particulars on how it would work, weren't available.

"EPA will release its proposed carbon pollution reduction rule on Monday, " agency spokesman Tom Reynolds said, offering no further comment until then.

Although the Obama administration has reached out to both companies and environmental groups to broadly lay out the rulemaking's goals, it in recent days tried to keep the proposal's details quiet in the run-up to Monday's announcement. Environmental groups and energy-industry officials said briefings over the weekend were postponed or pushed back.

The rule gives states and companies as many as 15 years to comply, which is more time than some environmental groups had wanted, and a base year favored by utility companies.

"We're already voluntarily reducing carbon emissions 14% based on 2005 baseline, so optimistically you could say we're headed in the right direction," said Brian Wolff, senior vice president at the Edison Electric Institute, a trade group representing the nation's investor-owned utilities. "No. 1 with a rule like this is how the companies can minimize costs to customers."

Frances Beinecke, president of the Natural Resources Defense Council, praised the proposal. "The new carbon pollution standards will be good for our health, good for our economy and good for our children and all future generations," Ms. Beinecke said in a statement. "Time is running out, but today the president is reminding us that we have the solutions."

EPA Administrator Gina McCarthy is announcing the proposed rule at the agency's headquarters in Washington Monday. The EPA is working on a parallel carbon standard for power plants not yet built, and in 2009, the administration finalized rules regulating carbon emissions from the nation's transportation sector.

"As President, and as a parent, I refuse to condemn our children to a planet that's beyond fixing," Mr. Obama said in his radio address Saturday, recorded at a children's hospital in Washington. "The shift to a cleaner energy economy won't happen overnight, and it will require tough choices along the way. But a low-carbon, clean energy economy can be an engine of growth for decades to come."

The proposal is already an explosive point of debate in some Senate and House midterm races, particularly in some energy-producing states where Democrats are vulnerable. Rep. Nick Rahall (D., W.Va.), who is seeking re-election, said he didn't think the rule's impact on coal-state Democrats is the White House's top priority.

"I'm sure that's not No. 1 in their minds. Probably, the president's legacy is No. 1," said Mr. Rahall, who opposes additional restrictions on coal plants.

Republicans are using the proposed rule to assert that Democrats will raise energy costs and kill jobs, and that carbon restrictions are futile in the absence of similar action by China and other large polluting nations. Many Republicans are linking the rule to other Obama administration actions that they view as overly intrusive in the economy.

While Democrats are more vocal than Republicans in saying that man-made climate change is a problem, some in energy- producing states are wary of backing a government response. Democratic Senate candidates Natalie Tennant in West Virginia and Alison Lundergan Grimes in Kentucky oppose the rule and plan to spend the week showing their support for coal jobs.

"I will fight President Obama and anyone else who tries to undermine our coal jobs," Ms. Tennant said in a statement. While she doesn't dispute the science of climate change, she says the federal government should allow more time to develop affordable new coal-production technology before the administration proposes new rules.

On Sunday, Mr. Obama called a group of Senate and House Democrats to thank them for their support of the proposal.

National Democrats without an allegiance to coal states say the EPA proposal could energize base voters--in particular young people--and also some of the party's top donors, such as billionaire environmentalist Tom Steyer, who is backing Democratic Senate candidates in many states.

"It's not going to be helpful in Kentucky or West Virginia," Rep. John Yarmuth (D., Ky.) said. "In terms of being able to do something to energize young people [in other states], this has the potential to do that for our side."

Other Democrats note that the president already is particularly unpopular in Kentucky and West Virginia, so allowing candidates in those states to show their independence may bolster them politically.

In fact, Ms. Grimes's campaign said the Democrat will try to link her opponent, Senate Minority Leader Mitch McConnell (R., Ky.), to the president, saying the longtime lawmaker is responsible for a decline in coal-industry jobs because he has failed to stop the federal government from its "war on coal."

Mr. McConnell will introduce legislation this week that would block the proposed rule from being implemented. The effort stands virtually no chance of advancing in the Democratic-controlled Senate.

Alicia Mundy contributed to this article.

Write to Amy Harder at amy.harder@wsj.com, Reid J. Epstein at reid.epstein@wsj.com and Kristina Peterson at kristina.peterson@wsj.com

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  06-01-142235ET
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