In a 2-1 decision, a panel of the U.S. Court of Appeals for the District of Columbia Circuit said theEnvironmental Protection Agency's cross-state air pollution rule exceeded the agency's statutory authority. The court faulted the EPA for imposing "massive emissions reduction requirements" on upwind states without regard to limits imposed by law.
In adopting the regulation a year ago, the EPA sought to reduce downwind pollution from power plants in more than two-dozen states. The rule was scheduled to go into effect in January, but several large power companies and some states sued to stop it. The appeals court agreed last December to suspend the rule pending its review.
"Our decision today should not be interpreted as a comment on the wisdom or policy merits of" the EPA rule, wrote Judge Brett Kavanaugh, in a decision joined by Judge Thomas Griffith — both appointees of Republican President George W. Bush. "It is not our job to set environmental policy. Our limited but important role is to independently ensure that the agency stays within the boundaries Congress has set. EPA did not do so here."
In a dissent, Judge Judith Rogers, an appointee of Democratic President Bill Clinton, said that the court had disregarded "limits Congress placed on its jurisdiction, the plain text of the Clean Air Act, and this court's settled precedent interpreting the same statutory provisions at issue today. Any one of these obstacles should have given the court pause; none did."
Sulfur dioxide and nitrogen oxide pollution from power plants can be carried long distances and the pollutants react with other substances to form smog and soot, which have been linked to illnesses. The cross-border pollution has prevented many cities from complying with health-based standards set by law.
EPA spokeswoman Alisha Johnson said the agency is reviewing the decision, and will determine what steps to take after the review is complete.
"EPA remains committed to working with states and the power sector to address pollution transport issues as required by the Clean Air Act," she said.
Tuesday's ruling follows a decision June 26 by a different panel of judges in the appeals court upholding the first-ever regulations aimed at reducing the gases blamed for global warming.
The EPA has been at the center of attacks by industry groups for what they view as job-killing and economically destructive regulations.
The new downwind pollution rule was triggered by a federal court throwing out the previous one penned by the Bush administration. The new regulation would have replaced a 2005 Bush administration rule. The new rule would have cost power plant operators $800 million annually in 2014, according to EPA estimates. That's in addition to the $1.6 billion spent per year to comply with the Bush rule that was still in effect until the government drafted the new one.
The EPA said the investments would be far outweighed by the hundreds of billions of dollars in health care savings from cleaner air. The agency said the rule would prevent more than 30,000 premature deaths and hundreds of thousands of illnesses each year.
Tuesday's court decision leaves the 2005 regulation in place.
Scott Segal, director of the Electric Reliability Coordinating Council, a coalition of utilities and energy companies, called the ruling a "stern warning" to EPA.
"The fair and appropriate regulation of electric power production in the United States is no mere academic exercise," he said. "When the EPA takes liberties with its legal authority, the result is higher prices for consumers, businesses, schools and hospitals. At a time of economic recession, the country cannot afford sloppy rulemaking of this sort. The EPA can and should do better."
On the other side, the Clean Air Task Force, an environmental group, said that the ruling "will mean that American lives will continue to be needlessly lost. Long-overdue pollution controls that had been required by the rule on many of the nation's coal-fired power plants, including those in the Midwest, will now be delayed even further."
John Walke, clean air director at the Natural Resources Defense Council, called on the EPA to appeal the ruling.
"This rule would have prevented thousands of premature deaths and saved tens of billions of dollars a year in health costs, but two judges blocked that from happening and forced EPA to further delay long overdue health safeguards for Americans," he said.
The EPA had no immediate comment on the ruling.