Supreme Court Rules For New Hearing in Case of Clean Air Initiative Challenge

The Supreme Court gave a boost Monday to a federal clean air initiative aimed at forcing utilities to install pollution control equipment on aging coal-fired power plants.

In a unanimous decision, the justices ruled against Duke Energy Corp. in a lawsuit brought by the Clinton administration, part of a massive enforcement effort targeting more than a dozen utilities.

Most companies settled with the government, but several Clinton-era cases involving more than two dozen power plants in the South and the Midwest are still pending. The remaining suits demand fines for past pollution that if levied in full would run into billions of dollars.

The justices ruled that the 4th U.S. Circuit Court of Appeals in Richmond, Va., overstepped its authority by implicitly invalidating 1980 Environmental Protection Agency regulations, interpreting them in a way that favored Duke. The case now returns to the lower courts.

The appeals court's decision "seems to us too far a stretch," Justice David Souter wrote.

The 1980 regulations "may be no seamless narrative, but they clearly do not define" the law's requirements in the way Duke interprets them, Souter wrote.

The enforcement program is aimed at reducing power plant emissions of nitrogen oxide and sulfur dioxide that contribute to smog and acid rain. Sulfur dioxide is the leading cause of acid rain.

The utility industry has long resisted installing costly pollution controls under the program called New Source Review. It waged vigorous campaigns against the program starting in the 1980s and more recently by battling it out with regulators when sued in federal courts.

The underlying issue is whether emissions increases should be measured on an annual basis, an approach favored by the EPA.

Duke and other utilities argue that the standard for triggering Clean Air Act requirements is an hourly rate increase in emissions. Such an approach enables the companies to run coal-fired plants without having to install additional pollution controls, as long as the hourly emissions rate doesn't rise. Annual pollution would rise, however, when the modernized plants operate longer hours.

"What these provisions are getting at is a measure of actual operations averaged over time, and the regulatory language simply cannot be squared with a regime" that Duke favors, Souter wrote.