FLAGSTAFF, Ariz. — Federal rules aimed at limiting mercury emissions from coal-fired power plants factored into a plan by Arizona's largest utility to shut down three of five generating units at a northwestern New Mexico facility that it operates.

The 2,040-megawatt Four Corners Power Plant is one of the largest of its kind in the United States. It provides electricity to about 300,000 households in New Mexico, Arizona, California and Texas. Arizona Public Service plans to retire the three units in 2013, a decision that came toward the end of last year and that the utility partly attributed to rules targeting mercury and other toxic pollutants that the U.S. Environmental Protection Agency is expected to announce soon.

Dozens of coal-fired plants nationwide already meet at least some of the standards, but the EPA said about 44 percent of all such plants lack advanced pollution controls. The proposed rule unveiled earlier this year would give owners up to four years to meet the new standards by installing scrubbers, bag houses or other modern technology.

Four Corners is one of three coal plants on or near the Navajo reservation.

The San Juan Generating Station, also in northwestern New Mexico, said it stands ready to meet the new rules, already having seen dramatic reductions in mercury emissions since completing an upgrade in 2009. Mercury emissions dropped from nearly 500 pounds per year in 2006 to 66 pounds in 2010, said Don Brown, a spokesman for the plant's operator, Public Service Company of New Mexico.

The operator of Navajo Generating Station to the west in Page, Ariz., said the 2,250-megawatt plant will run as long as the owners are convinced there isn't a better alternative. But spokesman Scott Harelson said the plant is facing some challenges, the most pressing of which are EPA regulations, and negotiating coal supply agreements and a site lease — "any of which could put the plant at risk of closure."

The EPA rules represent the first national limits on mercury and other toxic air pollutants that are expect to affect 1,200 coal-fired units at 525 power plants. The EPA has said the rules would keep 91 percent of mercury in burned coal from being released into the air and cut down on the number of illnesses and deaths linked to toxic pollutants.

Stanley Wauneka said his community of San Juan on the Navajo Nation is divided between those who are concerned about pollution and health impacts, and those who see the power plants and the coal mines that feed them as economic drivers for a reservation where half the work force is unemployed. A gray haze hangs close to the horizon each day as he drives to work at a local government center just four miles from Four Corners Power Plant.

"If they would put in some modern technology, that would really help cut down on the pollution," he said. "It would really help the people's understanding that these things can be improved. If the company can do that, then the people would be more in favor of prolonging the power plants in the area."

APS spokesman Damon Gross said shuttering the three units at Four Corners that produce 560 megawatts of power will cut mercury emissions at the plant by 61 percent. APS still needs regulatory approval to move forward with the plan. The two remaining units have so-called bag houses installed that catch the bulk of mercury emissions, but additional upgrades are planned under the anticipated EPA rule, APS said.

Critics of the EPA rule limiting mercury, arsenic and other emissions at the power plants have characterized the rules as inefficient and costly.

Emerson Farley, a trustee with the Nal-Nish Federation of Labor who works at Four Corners Power Plant, said the union made up of trade groups from around the Navajo reservation has been advocating for EPA to minimize its mandates and take a more job-friendly approach to regulations. He said statements about pollution affecting people's health don't ring true with the plant's employees, who are close to the source of emissions.

"We have people working into their early 60s without any problems," he said. "We're seeing quite a bit of retirees at that age leading the plant. Those are celebrations on our part."

Quinn Smith, a 28-year-old who lives in the Navajo community of Shiprock, N.M., recalled stories from elders about the land being more lush before the power plants were built and the air more clear. Mercury has been linked to cancer, heart disease and premature death.

"Even right now, I'm looking out and there's a yellow mist," he said.

Farmington Mayor Tommy Roberts, whose New Mexico city sits in the shadow of the Four Corners and San Juan plants, said the challenge for city leaders with any EPA regulations has been to assess whether the benefits associated with them are real.

"I say as frequently as I can that we want clean water, we want clean air but we also want a healthy economy and the challenge is to find an appropriate balance," Roberts said.

Aside from oil and natural gas development, Farmington's economy depends on the hundreds of jobs and millions of dollars in taxes generated by the power plants, which straddle the San Juan River, and their associated mines.

Michael Capps, a 62-year-old Farmington resident who helped build Four Corners and the San Juan plants, doesn't buy the argument that pollution controls can help the aging plants.

"What people are not realizing is both plants are worn out," he said. "There's nothing you can do; they cannot be fixed. They need to be replaced. Period. That would solve a whole lot of problems."

Associated Press writer Susan Montoya Bryan reported from Albuquerque, N.M.