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UPDATE 4-U.S. EPA air chief under ethics scrutiny resigns

Valerie Volcovici and David Shepardson

(Adds EPA comment in paragraph 8)

WASHINGTON, June 26 (Reuters) - Bill Wehrum, the U.S. Environmental Protection Agency official in charge of revising power plant rules and revamping vehicle emission standards who came under scrutiny for ethics allegations, will step down in days, he said on Wednesday.

Wehrum, the head for air and radiation at the agency and one of its top officials, told staff in an email he will resign on Sunday. He said he was proud of the administration's efforts "due in part to the clear direction provided by the president and the dedication of Administrator (Andrew) Wheeler to accomplishing the agencys mission."

Wheeler said while he knew Wehrum would eventually step down, the departure date "has still come too soon." But he applauded Wehrum for finalizing last week the Affordable Clean Energy (ACE) regulation, a replacement for the Obama administration's signature climate regulation that targeted carbon emissions from power plants. The change, part of the Trump administration policy to slash regulations and raise production of fossil fuels, was a boost to coal-fired plants.

Wehrum and the National Highway Traffic Safety Administration have been working to finalize a massive rewrite of vehicle emissions standards to freeze fuel-efficiency requirements at 2020 levels. Wehrum said after testifying at a U.S. House of Representatives hearing last week that he expected it would be weeks before the proposal was submitted to the White House Office of Management and Budget for final review.

INVESTIGATIONS

Ethics allegations have dogged Wehrum, a former lobbyist for energy interests. Democrats in Congress had asked the EPA's inspector general to review whether Wehrum and other officials helped to reverse the agency's position in a major enforcement action they say favored DTE Energy, a client of his former law firm, Hunton & Williams, now known as Hunton Andrews Kurth.

Jeff Lagda, a spokesman for the EPA Office of Inspector General, said the office is still reviewing requests to review the allegations.

An EPA spokesman said on Wednesday Wehrum had provided "general regulatory advice but consistent with his ethical obligations did not participate in particular matters where DTE is a party."

Democratic lawmakers also had launched an investigation about the Utility Air Regulatory Group (UARG), an organization of power companies with coal-fired plants that sought to loosen emissions rules that Wehrum had previously represented.

That group dissolved in May due to heightened scrutiny.

"Much like UARG suddenly dissolving in the face of scrutiny, Wehrum is now suddenly leaving amidst investigations into his potential ethical misconduct investigations that should, and will, continue," Representative Frank Pallone, a Democrat, said in a release on Wednesday.

The EPA did not immediately respond to a request for comment about the ethics allegations and Wehrum's office referred questions to the agency's press office.

Mandy Gunasekara, who had worked as Wehrum's deputy until February, told Reuters that while Wehrum was frustrated with the investigations of his industry links, he told her he had only planned to stay at EPA for about a year.

She said he wanted to leave after completing the ACE power plant rule and several permitting reforms, and that other rules that are in progress, such as the vehicle emission rewrite, "are in a really good position."

"They have gotten through the biggest decision points. What remains is applying the methodology they agreed to and the overarching legal arguments," Gunasekara said, adding that revamped methane regulations also would be ready this summer.

Chris Grundler, who currently serves as director of the Office of Transportation and Air Quality, will become director of the Office of Atmospheric Programs, which oversees the agencys climate change programs and other functions. He will be switching jobs with Sarah Dunham, who has held that role since 2011.

Grundler has overseen the office working to address excess diesel emissions in vehicles, including the EPAs review of Volkswagen AG and Fiat Chrysler polluting vehicles.

Anne Idsal, the principal deputy administrator, will replace Wehrum on an acting basis, Wheeler said in a statement. (Reporting by Valerie Volcovici, Timothy Gardner and David Shepardson in Washington Editing by Matthew Lewis and Bill Trott)