King Coal Cries Foul in Kentucky

The Environmental Protection Agency is scheduled to impose strict new limits on smog-creating emissions like sulfur dioxide. The guidelines aren't due until next year, however, which has inspired a last-minute push for leniency in the coal-rich states of Appalachia. Last month the CEO of E.On U.S., which runs Kentucky's biggest utilities, warned residents that the costs of compliance could add 20 percent to their bills. But does the math check out?

The company did not respond to requests for its calculations, but three energy analysts NEWSWEEK talked with suggest that E.On's estimates—as well as those by other utilities in nearby states—seem to have forgotten about the recession. Yes, the EPA's rules will most likely require a hefty investment to outfit plants with cleaner technologies. But with labor costs at historic lows, total conversion costs could be "a fraction" of what they would have been in rosier times, says Susan Tierney of Analysis Group. At the most efficient plants, she adds, King Coal might even make money off the investments.