U.S. environmental regulators finalized a rule on Thursday to slash air pollution from coal-fired power plants in 27 states east of the Rocky Mountains that result in unhealthy levels of smog and soot.

The Environmental Protection Agency measure, known as the Cross State Air Pollution Rule, will add costs for some power generators, but should cut health care bills for Americans.
Companies that could see higher costs include large coal burners Southern Co, Duke Energy and American Electric Power.

"No community should have to bear the burden of another community's polluters, or be powerless to prevent air pollution that leads to asthma, heart attacks and other harmful illnesses," said EPA Administrator Lisa Jackson.

The EPA rule will reduce power plant sulfur dioxide emissions by 73 percent by 2014, from 2005 levels, when combined with state environmental laws. It will cut nitrogen oxide emissions by 54 percent by 2014. Those cuts are slightly deeper than ones proposed by the EPA last year.

Power plants have to start cutting their sulfur dioxide emissions in January 2012 and their nitrogen oxide emissions that May.

In addition, the state of Texas will now be required to cut sulfur dioxide emissions in an annual program, a measure that was not included in last year's proposal.

The agency said the rule would prevent up to 34,000 premature deaths, and save $280 billion per year in health costs. The pollution is linked to heart attacks and lung problems including asthma.

Those benefits outweigh the $800 million projected to be spent by power plants and others annually on the rule in 2014 and the roughly $1.6 billion per year in capital investments already underway from previous rules, the EPA said.

The rule will also level the playing field for power plant operators that are already controlling these emissions by requiring more plants to take similar actions, it said.

Not everyone was happy about the regulation.

"The late decision to apply the rule to Texas and the modeling for the rule have resulted in wholly unreasonable mandates and unrealistic timelines for Texas," Luminant, a unit of private company Energy Future Holdings, and the biggest power producer in Texas, said in a release.

Shares of Southern Co were down 0.4 percent on Thursday, while Duke Energy and American Electric Power both rose less than 0.5 percent.

The rule resulted from a federal appeals court order instructing the EPA to strengthen a similar regulation issued in 2005 by the Bush administration.

It is opposed by many Republicans in Congress, who say it will kill jobs and could make transmission of electricity unreliable because it would force companies to shut some of their coal plants.

But the argument that the rule will hurt transmission is a "red herring" because plants integral to power delivery would not be allowed to shut down, said Susan Tierney, a managing principal at the Analysis Group, an organization of economic and financial consultants.

She said only the oldest, least efficient and smaller coal plants would be shut as a result of rules to be issued this year by the EPA on power plants.

Environmentalists praised the EPA. The Clean Air Task Force said the rule was a "solid victory for clean air and public health."

The EPA will take public comment for 45 days on a supplemental rule that would require six states -- Iowa, Kansas, Michigan, Missouri, Oklahoma and Wisconsin -- to reduce nitrogen oxide pollution in the summer months. That rule is expected to be finalized late this year.