By Tom Doggett

WASHINGTON (Reuters) - The U.S. Environmental Protection Agency agreed to issue rules by November 2011 to cut toxic air pollution at electric generating plants that burn coal or fuel oil, a federal court ruled.

The court-ordered agreement issued on Thursday will reduce mercury pollution and soot that cause asthma, bronchitis and other heath problems, particularly in children. The EPA acted after a coalition of environmental and public health groups sued the agency.

The fallout of mercury and other metal emissions from power plants can occur within 100 miles of the source, and then move up the food chain through fish and other animals.

"Power plants are the largest unregulated industrial source of air toxics. It is unconscionable that 19 years after the Clean Air Act of 1990, we still do not have air toxics controls on these large existing sources of pollution," said James Pew of Earthjustice.

"Cleaning up dirty coal-burning power plants is the best way to make the air healthy for the American people," said John Walke, senior attorney with the Natural Resources Defense Council.

Under the settlement, the EPA has to propose its rules by March 16, 2011, and issue the final rules by November 16, 2011.

The EPA said tackling hazardous air pollutants from utilities was a "high priority.". "The agency is committed to developing a strategy to reduce harmful emissions from these facilities, which threaten the air we all breathe," it said.

The EPA was required under the Clean Air Act to slash toxic air emissions at power plants by December 2002. The former George W. Bush presidential administration asked Congress to end that requirement, but lawmakers said no.

The Bush administration then tried to convince the courts that the pollution controls were not needed, a move that was rejected in February 2008. The groups sued and now the EPA under the Barack Obama administration agreed to issue the rules within two years.

(Reporting by Tom Doggett; Editing by Lisa Shumaker)

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