WASHINGTON — The Bush administration yesterday finalized a regulation for the eastern United States that would cut power-plant pollutants that cause smog, acid rain and soot by about two-thirds over 10 years.

The rule — which will cost about $3.6 billion a year to implement but is expected to save $85 billion in annual health benefits — "will result in the biggest health benefit of any EPA rule in more than a decade," said Jeffrey Holmstead, the Environmental Protection Agency's assistant administrator.

The EPA predicts that the rule will prevent 17,000 heart and respiratory deaths caused by pollution from coal-fired power plants. The rule is aimed at reducing nitrogen oxide, which causes smog, and sulfur dioxide, which causes acid rain and soot.

Consumers who receive electricity from affected plants can expect their monthly power bills to increase eventually by up to $1 to pay for the changes.

The new rule is part of a two-prong effort to fulfill President Bush's pledge to clean up pollution from power plants built before the nation's air-pollution laws were enacted. A more controversial rule to reduce mercury — one criticized as being too slow and weak — will be finalized next week.

Because yesterday's regulation is designed to reduce pollution that travels across state lines, it applies only to 28 Eastern and Midwestern states and the District of Columbia.

Unlike most past regulatory efforts, the rule doesn't tell power plants how to reduce pollution. Instead, it caps emissions and allows utilities to decide how to meet those limits.

One cap would reduce allowable nitrogen-oxide emissions by 53 percent in 2009 and would cut permitted sulfur-dioxide pollution by 62 percent in 2010. A more stringent cap for both would take effect in 2015: 61 percent below current levels for nitrogen oxide and 73 percent below current levels for sulfur dioxide.

The key to the rule is that utilities are given a free-market tool that allows them to trade the right-to-pollute among power plants much like pork-belly futures on the Chicago Mercantile Exchange — a method that helped cut acid rain in the 1990s. A utility that can't reduce its emissions can buy the right-to-pollute from a utility that exceeded cleanup requirements.

Yesterday's rule drew measured praise from industry and environmental groups. But environmental groups and state and local air regulators also said it doesn't do enough quickly enough and will leave some Northeastern cities with dirty air even after the toughest rules go into effect.

Ed Krenik, executive director of an association for state and local air regulators, and Edison Electric Institute, an industry lobbying group, said the regulation wasn't really what they wanted. They wanted Bush's more controversial rewrite of the Clean Air Act, which was killed in the Senate on Wednesday.

The president's more comprehensive proposal — killed by a tie vote in the Senate Environment and Public Works Committee — had the shrinking emission limits and cap-and-trade.

But it also would have eliminated several key aspects of the Clean Air Act that utilities said were duplicative. Environmental groups argued the aspects were crucial tools to reduce pollution. The proposal also would have applied to the entire country.

The cost to consumers was reported by The Associated Press.