The EPA's Cross-State Air Pollution Rule was struck down by federal court on Aug. 21, 2012.

A federal court rebuffed an EPA rule aimed at cutting pollution from coal-fired power plants by setting strict limits on SO₂ and NO_x emissions – pollutants that cause acid rain and smog.

The U.S. Court of Appeals for the D.C. Circuit sent the rule back to the agency for revision and told it to administer its existing Clean Air Interstate Rule in the interim.

The Cross-State Air Pollution Rule (CSAPR) was designed to reduce SO₂ emissions by 73 percent and NO_x by 54 percent at coal-fired power plants from 2005 levels, according to the EPA.

The case is EME Homer City Generation LP v. U.S. Environmental Protection Agency, 11-1302, U.S. Court of Appeals for the District of Columbia (Washington).

The court, in a 2-1 ruling, said the rule “exceeds the agency’s statutory authority” (see page 7 of the ruling).

The court sided with power companies and mining groups challenging to the measure, which caps emissions in more than two dozen states. The rule had been put on hold by the court in December while it considered the regulation’s legality.

“We conclude that EPA has transgressed statutory boundaries,” Circuit Judge Brett Kavanaugh wrote in the 60-page opinion (see page 8). The judge explained that Congress could change the EPA’s role in this issue, but until such is done, the courts “must apply and enforce the statute as it’s now written.”

“Our decision today should not be interpreted as a comment on the wisdom or policy merits of EPA’s Transport Rule,” Judge Kavanaugh continues. “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.”

Among the power companies challenging the rule were Southern Co. (SO), EME Homer City Generation LP, a unit of Edison International (EIX) and Energy Future Holdings Corp. units in Texas. They argued that the Jan. 1 implementation date was too soon and allowed too little time to design and install pollution control equipment needed to comply.

The state of Texas, along with the National Mining Association and the International Brotherhood of Electrical Workers, also challenged the EPA. They said the rule caused undue financial burden on power producers and could make the power market less reliable by forcing companies to shut some older plants.

The EPA argued in court papers that the rule would improve the health of more than 200 million people, saying it had “reasonably projected” which areas of the country should be covered by the regulation.

Rejecting CSAPR “is an unsettling of the consistent precedent of this court strictly enforcing jurisdictional limits,” wrote Circuit Judge Judith Rogers in the dissenting opinion. She further said it is “a redesign of Congress’s vision of cooperative federalism” and was “based on the court’s own notions of absurdity and logic that are unsupported by a factual record, and a trampling on this court’s precedent on which the [EPA] was entitled to rely in developing the Transport Rule rather than be blindsided by arguments raised for the first time in this court” (see page 61).

She said the majority’s opinion resulted in “the endorsement of a ‘maximum delay’ strategy for regulated entities, rewarding states and industry for cloaking their objections throughout years of administrative rulemaking procedures.”