Court Sides With States, Deals Blow to EPA Over Clean Air Act

In a stinging setback for the Bush administration, a federal appeals court sided with 14 states Friday and blocked the Environmental Protection Agency from easing clean air rules on aging power plants, refineries and factories.

Industry representatives had lobbied hard for the rule changes, arguing the existing requirements hinder expansion and economic growth. A change in the regulations had been among the top environmental priorities of the White House.

But environmentalists, along with officials from 14 states and several cities said the changes would allow more pollution into the air and make it harder to meet federal clean air standards.

The new rules would have allowed older power plants, refineries and factories to major modifications without having to install the most advanced pollution controls, even if the changes produces more smokestack emissions.

The U.S. Court of Appeals in Washington ruled that the EPA's changes violated Clean Air Act, and that any such change can be authorized only by Congress.

Fourteen states and a number of cities, including New York, San Francisco and Washington, D.C., sued to block the change in 2003.

"This is an enormous victory for clean air and for the enforcement of the law and an overwhelming rejection of the Bush administration's efforts to gut the law," said New York Attorney General Eliot Spitzer, who led the suit for the states. "It is a rejection of a flawed policy."

Peter Lehner, Spitzer's top environmental lawyer, said the decision applies to about 800 power plants and up to 17,000 factories nationwide.

Under the Clean Air Act, operators who do anything more than routine maintenance are required to add more pollution-cutting devices. Under the proposed change, industrial facilities could have avoided paying for expensive emissions-cutting devices if they spent less than 20 percent of the plant's value, Lehner said.

The three-judge panel said the EPA's reading of the Clean Air Act was "a Humpty Dumpty world" interpretation and that Congress had made clear it wanted any modifications in an older facility that produces more pollution to also have additional pollution controls.

The EPA had argued the rule change would not increase pollution.

Bill Becker, executive director of the organization that represents state and local pollution control agencies in Washington, applauded the court decision.

He said the rule change would have "severely undermined" the ability of states to achieve clean air standards.

As an example, he said, a 1,000-megawatt power plant could have spent $250 million over five years for changes that would have produced more power, but also more pollution, without installing new pollution controls.

The rule had been blocked from going into effect since December 2003, when the same court issued a stay, as it examined the merits of the case .

"We are disappointed that the court did not find in favor of the United States," said EPA spokesman John Millett. "We are reviewing and analyzing the opinion and cannot comment further at this time."

Industry groups have contended that the Clean Air Act, as now written, discourages plant operators from modernizing their equipment. They said Friday's decision would do little to help air quality.

"The decision is a step backward in the protection of air quality in the United States," said Scott Segal, director of the Electric Reliability Coordinating Council, a Washington-based group representing several power-generating companies. "What is it the environmental community thinks they've won? They've won the ability to place roadblocks in front of energy efficiency projects. This is terrible news."

The lawsuit was filed by New York, California, Connecticut, Illinois, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New Mexico, Pennsylvania, Rhode Island, Vermont and Wisconsin.