ALBANY - Officials in nine Northeastern state have reached a preliminary agreement on an initiative led by New York Gov. George Pataki to freeze power plant emissions at current levels and reduce them by 10 percent by 2020, a newspaper reported Wednesday.

The New York Times cited a confidential draft proposal in its report.

Pataki and Massachusetts Gov. Mitt Romney cautioned there was still work to be done before the deal could be finished.

"We have made a tremendous amount of progress on this new regional proposal," said Pataki. "I look forward to continuing to work with the other states so that we can reach a final agreement."

"Over the last year, energy and environmental regulators have been working on a regional plan to reduce carbon emissions while minimizing the impact on electricity rates," said Romney spokesman Julie Teer. "A great deal of progress has been made on this front, but the plan has not been finalized by regulators in the nine states, nor formally presented to the governors of those states."

Pataki aides did not dispute details cited in the Times report, but said not every state had signed off on every element yet.

Such an agreement would be the first of its kind in the nation and comes after the Bush administration decided not to regulate the greenhouse gases that contribute to global warming and rejected joining more than 150 other nations on the Kyoto anti-emissions treaty.

Pataki, a Republican who is eyeing a 2008 presidential run, has opposed the Bush administration's actions and said states should go their own way to reduce greenhouse gas emissions if the federal government would not act.

Once a final agreement is reached by negotiators, it would be subject to approval by the legislatures of the nine states.

Connecticut Attorney General Richard Blumenthal called word of the possible agreement "a powerfully positive step that will enhance our battle against global warming."

The Business Council of New York State, however, warned such an agreement "would impose major new costs on consumers, both business and residential."

The Times said the emission controls could result in higher energy prices, possibly offset by subsidies and support for the development of new technology that would be paid for with the proceeds from the sale of emission allowances to the utility companies.

The regional initiative would create a market-driven system to control carbon dioxide emissions from more than 600 electric generators in the nine states. Utilities that came in under their targets for emission reductions could sell their excess emissions capacity credits to other utilities.

The New York-led effort is part of an initiative that proponents hope will spread to other states and regions, eventually forcing action by the federal government on a national emissions-control law.

California, Washington and Oregon have begun exploring a regional agreement of their own.

The nine states in the Northeastern coalition, begun in 2003, are Connecticut, Delaware, Maine, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island and Vermont.

Andrew Rush, a Pataki spokesman, wouldn't comment on the draft, but told the Times "a tremendous amount of progress has been made and we look forward to continuing to work with the other states so that we can reach a final agreement."

Samuel Wolfe, assistant commissioner for the New Jersey Department of Environmental Protection, told the Times "we have very high hopes of getting a resolution through to all the states by the end of September."

The states have been trying to reduce power plant emissions in their own region and elsewhere for more than a decade. Several have sued coal-fired power plants in the Midwest over sulfur dioxide and nitrogen oxide emissions that have been linked to acid rain to the east.

As outlined in the draft, the regional carbon dioxide control plan would set specific caps on emissions that would drop over time, according to the Times report. Emissions would be capped at 150 million tons of carbon dioxide a year, a figure about equal to the average emissions in the highest three years between 2000 and 2004. Each of the nine states would have its own cap. New York's, at 65.6 million tons, would be the largest. Vermont's would be the smallest, with 1.35 million tons, the Times said.

The limits would be enforced starting in 2009. The 150 million-ton cap would be maintained through 2015, when reductions would be required, reaching 10 percent in 2020.