THE NEW Clean Air Act aims to regulate in some nontraditional ways. Among other things, in hopes of reducing acid rain as efficiently as possible, it will create a market in pollution futures. An Indiana utility, PSI EnergyInc., which expects to have the highest bill in the country under the act's acid rain provisions, may be an early investor.

The market provision creates pollution rights that utilities can buy or sell. Each utility in the country is given an annual pollution quota or limit, a right to pollute so much and no more. If it manages to pollute less, it can "save" the difference to support future growth or sell it; a regulatory artifact is made into an asset. The theory is that companies in a position to clean up at low cost will in effect hire out to others whose costs would be higher; the society will get the cleaner air it wants at the lowest possible price.

PSI burns high-sulfur Indiana coal to generate most of its electricity. For local economic and political reasons it wants to continue to do so, even though such coal is a heavy pollutant. The company will therefore have to equip its smokestacks with costly scrubbers. Ultimately the cost of these will be passed on to rate payers.

That's daunting enough, but PSI is contemplating buying and installing even more such technology than it might need under the law. It would "overcomply," provided the state legislature and regulators would allow it to pass along that cost to its customers as well. The idea would be to have excess compliance to sell in the future, when PSI's management senses that cleanup costs -- and the price that another utility will be willing to pay for a unit of compliance -- will be higher than now. PSI would make a profit, which would be returned to its customers in the form of rate reductions. The low-cost power it would thereby be able to offer, still on the strength of local coal, would presumably help both it and the state attract business -- a further inducement to the state in setting regulatory policy.

The market mechanism has given the company an incentive to invest not just in future generating capacity, which utilities do all the time, but future cleanup capacity, of which they have not done enough. That's got to be progress by anyone's standard. Here's a provision of the Clean Air Act that, far from being onerous, is an opportunity.