AP quoted Fitch Ratings said that a federal appeals court ruling upholding greenhouse-gas-emission rules will limit the use of coal to generate electricity and make it unlikely that new coal-fired power plants will be built.

Fitch said the ruling could hasten the shutdown of some older coal-fired plants.

The use of coal to generate electricity has been under pressure already because of competition from cheap natural gas. Some utilities have switch fuels in their power plants.

On Tuesday, a three-judge panel of the US Court of Appeals in Washington upheld Environmental Protection Agency regulations designed to reduce gases blamed for climate change. The rules will cut emissions of six gases produced by power plants, factories and vehicles.

Coal-burning plants produce more of those gases, such as carbon dioxide and sulfur dioxide, than do plants that run on natural gas. The coal industry has struggled to find a cost-effective way to catch carbon dioxide before it escapes into the air.

Fitch said the court's ruling would increase US use of other fuels, especially natural gas. It said the ruling will make construction of new coal-fired plants unlikely and further strain the operations of older, smaller coal-fired plants already struggling to meet anti-pollution rules. Many of these plants may be prematurely retired.

Fitch said most of the older plants are in Pennsylvania, Ohio, Indiana, Illinois and Michigan. It said the effect on bondholders would vary depending on the plants' locations, state rules and rates, debt and other factors.

Source - AP

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