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UPDATE 1-U.S. formally proposes replacing Obama's carbon-cutting plan

(Adds background on Clean Power Plan, comment from Republican and environmentalist)

WASHINGTON/NEW YORK, Oct 10 (Reuters) - The head of the U.S. Environmental Protection Agency released a formal proposal on Tuesday to scrap and replace a plan devised by the agency under former President Barack Obama to reduce greenhouse gas emissions from power plants.

EPA Administrator Scott Pruitt issued a notice that the agency intended to repeal the Clean Power Plan, which it said relied on "controversial" calculations of economic costs and benefits. Ending the plan could save up to $33 billion in compliance costs in coming years, it said.

The EPA set in motion a process to replace the plan, and will take comments on its proposal for 60 days.

The move is part of Republican President Donald Trump's plan to revive the country's coal industry and boost domestic fossil fuels production. His administration has promised to reduce regulations on coal and drilling, which tend to be in states that form part of Trump's voter base.

Last year, the Supreme Court put the brakes on the Clean Power Plan after energy producing states complained that the agency had exceeded its legal reach.

The plan had sought to reduce emissions from power plants by 32 percent below 2005 levels by 2030.

The Trump administration is legally required to form an alternative plan because the EPA is obliged to regulate carbon emissions after it proclaimed in 2009 that the pollution endangers human health.

Republicans praised Pruitt's move to repeal Obama's signature policy. Senator John Barrasso, chairman of the Senate's environment committee, said the Clean Power Plan would have hurt energy workers in his state of Wyoming, the country's top coal producing state.

Environmentalists said the move adds to uncertainty for electricity generators who are trying to make investments in new plants as coal and nuclear power stations age.

David Doniger, a lawyer at the Natural Resources Defense Council, said it would put Americans in greater danger from extreme weather and particulate pollution from coal plants, which is linked to heart and lung problems.

Doniger said Tuesday's action would trigger a legal battle, promising to take "Pruitt and his Dirty Power Plant to court." (Reporting by Emily Flitter and Timothy Gardner, Editing by Rosalba O'Brien)