updated 1/25/2007 5:41:46 PM ET 2007-01-25T22:41:46

California regulators approved rules Thursday banning power companies from buying electricity from high-polluting sources, including most out-of-state coal-burning plants.

The rules — aimed at reducing emissions of heat-trapping gases linked to global warming — could have a far-reaching effect on the energy market across the West.

While there are almost no coal-fired plants in California, the nation’s most populous state, about 20 percent of the state’s electricity comes from coal plants in other Western states.

“It represents a significant milestone in our ongoing efforts to address the challenge of climate change,” said Michael Peevey, president of the Public Utilities Commission.

The commission voted 4-0 to prohibit utilities and other energy providers from entering into long-term contracts with sources that emit more carbon dioxide than a modern natural gas plant.

The new standard is aimed at encouraging investment in cleaner energy sources such as wind and solar, while discouraging the use of coal and other high-polluting fuels.

Coal is cheap and plentiful but releases high levels of carbon dioxide, a gas blamed for trapping heat in the Earth’s atmosphere and raising temperatures worldwide.

The rule is expected to take effect Feb. 1.

A landmark global warming bill Gov. Arnold Schwarzenegger signed into law last year required the commission to adopt emissions standards for utilities.

The Public Utilities Commission regulates the state’s three investor-owned utilities from which most Californians get their power. The California Energy Commission is drawing up a similar emissions standard for municipal utilities.

Environmentalists praised the decision, saying it could encourage other states to adopt similar rules.

“Other states may look at it and decide that they also want to transition from dirty coal power to cleaner, green power,” said Jim Metropolus of the Sierra Club.

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