By Dallas Business Journal

Energy Future Holdings Corp. announced Friday a third quarter loss of $710 million.

The Dallas-based company said in a news release that the loss included $402 million in unrealized mark-to-market net losses on interest rate swaps that hedge its variable-rate interest expense, and $321 million in charges related to the Environmental Protection Agencyâ¿¿s Cross State Air Pollution Rule.

The losses were partly offset by $89 million in commodity-related unrealized mark-to-market net gains largely related to positions in its natural gas hedging program.

Luminant, a subsidiary of Energy Future Holdings, has filed a federal lawsuit to stop EPA from implementing its air pollution rule. The company said it hopes the court will consider its motion for a stay in the next couple of months.

The rule takes effect Jan. 1 and sets lower standards for sulfur dioxide and nitrogen oxide emissions.

Luminant has said it would have to close two coal-fired generating units and three lignite coal mines, resulting in about 500 job losses, if the rule takes effect.

The quarterly loss was less than the third quarter 2010 net loss of $2.9 billion.

Copyright 2011 American City Business Journals

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