WASHINGTON — Acting under federal court order, the Obama administration proposed new air-quality rules on Tuesday for coal-burning power plants that officials said would bring major reductions in soot and smog from Texas to the Eastern Seaboard.

The Environmental Protection Agency is issuing the rules to replace a plan from the administration of President George W. Bush that a federal judge threw out in 2008, citing numerous flaws in the calculation of air-quality effects.

Gina McCarthy, head of the E.P.A.’s air and radiation office, said the new rules would reduce emissions of sulfur dioxide and nitrogen oxides by hundreds of thousands of tons a year and bring $120 billion in annual health benefits. Those benefits, Ms. McCarthy said, include preventing 14,000 to 36,000 premature deaths, 23,000 nonfatal heart attacks, 21,000 cases of acute bronchitis, 240,000 cases of aggravated asthma and 1.9 million missed school and work days.

The rule would substantially reduce the unhealthy smog that shrouds American cities, especially during heat waves like the one now enveloping much of the East.

The cost of compliance to utilities and other operators of smog-belching power plants would be $2.8 billion a year, according to E.P.A. estimates.

“This is attempting to give people cleaner air to breathe,” Ms. McCarthy said.

The proposed regulation will require utilities operating coal-burning plants to install scrubbers and other technology to reduce emissions of the pollutants. Some companies may decide to retire older plants rather than invest in new control measures because other new rules under the Clean Air Act are expected in the coming years.

A spokesman for the utility industry said companies had already achieved large reductions in the pollutants since 1990.

“E.P.A.’s new proposal would require dramatic reductions in power-sector emissions, on top of major reductions to date, on a very short timeline,” said Dan Riedinger of the Edison Electric Institute, the main lobby for the utilities.

The companies were grateful, Mr. Riedinger said, that they would be allowed to trade emissions permits, but the prospect of tougher standards on other pollutants beginning in 2012 created “a great deal of regulatory uncertainty.”

Environmental advocates welcomed the new rules, saying they were better than those proposed by the Bush administration and more likely to survive legal challenge. But they also said that the E.P.A. still had a lot of work to do.

“The E.P.A. proposal is a big step in the right direction,” said Frank O’Donnell of Clean Air Watch, an advocacy group. “It’s a step toward taming the environmental beast known as the coal-fired power plant. But it is only a first step. E.P.A. still needs to move ahead with plans next year to limit power plant emissions of toxic mercury and other hazardous air pollutants.”

The new rules do not address power plant emissions of carbon dioxide and five other pollutants that contribute to global warming. The Obama administration is moving forward with a plan to phase in regulation of such heat-trapping gases, a move that is being challenged in Congress and in the courts.

The pollutants being singled out in the new rule making — sulfur dioxide and nitrogen oxides — react in the atmosphere to form fine particles (soot) and ground-level ozone (smog). They are easily carried by the wind and affect states and cities far downwind from the plants where they are produced. The proposed regulation, called a transport rule, would apply to power plants in 31 states east of the Rockies, with the exception of the Dakotas, Vermont, New Hampshire and Maine.

The agency will hold hearings in the coming months.

A version of this article appeared in print on July 7, 2010, on page A10 of the New York edition.