12/01/11 5:03pm

Article By: Marty Niland

The Obama administration said today that upcoming pollution rules from the Environmental Protection Agency won't make electricity service less reliable in the coming years.

Some power companies have expressed concern that the Cross-State Air Pollution Rule, which was finalized in July and takes effect Jan. 1, and Mercury and Air Toxics Standards, which will be finalized by Dec. 16, will force them to close coal-fired units instead of investing in pollution controls, diminishing their ability to supply electricity. Power-plant owners will have three years to comply with MATS and may apply for a one-year extension.

But the Department of Energy released a report today that says even with the new rules, utilities will have adequate resources to supply power without regional or nationwide shortages.

Assistant Energy Secretary David Sandalow and the EPA’s air and radiation chief, Gina McCarthy, discussed the report with reporters in a teleconference. Sandalow said the model used for the report assumed that utilities would make more stringent modifications and bring on less new capacity than the EPA rules would require. It concluded that by 2015, only a small amount of additional new generation capacity might be needed to maintain regional planning targets. The DOE said some of that power-generation capacity is already under development.

McCarthy said the rules would achieve major health benefits for Americans that far outweigh the costs associated with them. “The real reason for these rules is to protect public health,” she said.

Some utilities have said the new rules do not give them enough time to comply and they will be vulnerable to outages without an extension. Luminant, a major power supplier in Texas, posted a statement on its Web site expressing “serious and very real concerns" about the compliance timeline for both new rules. Thomas Farrell, the CEO of Virginia-based power company Dominion Resources, told the Federal Energy Regulatory Commission yesterday the EPA should give utilities at least four years to comply, Bloomberg reports.