In a big win for environmentalists, a federal appeals court on Friday struck down a Bush administration rule that would have made it easier for coal-burning power plants to make equipment changes without installing controls to fight the pollution that would result.

The court shot down an Environmental Protection Agency rule that said power plant owners would only have to install modern pollution fighting controls if equipment changes cost more than 20 percent of the replacement cost of the plant.

Environmental groups and several states sued, arguing the rule would gut the new source review enforcement provisions of the Clean Air Act and allow the oldest, dirtiest coal-fired power plants to expand output without cutting polluting emissions.

The court agreed, saying the agency rule was "contrary to the plain language" of the Clean Air Act that says the new source review provisions would kick in if a power plant is modified to cause "any physical change" that increases the amount of air pollutants.

The court said the EPA's rule that has the 20 percent replacement cost trigger would require that Congress's definition of modification in the Clean Air Act include a phrase such as "regardless of size, cost, frequency, effect" or other distinguishing characteristic.

"Only in a Humpty Dumpy world would Congress be required to use superfluous words while an agency could ignore an expansive word that Congress did use. We decline to adopt such a world-view," the court said in its ruling.

Scott Segal, director of the Electric Reliability Coordinating Council that is made up of power-generating companies, said he was disappointed by the court's ruling and that it will create a roadblock for companies to install pollution control equipment.

"To place the decision in context, we believe it is a step backwards for the protection of air quality in the United States. It may be St. Patrick's day, but this decision is far from good luck for the environment or consumers," he said.

However, environmentalists welcomed the decision against the EPA rule that they said had been pushed by Vice President Dick Cheney's energy task force to help the energy industry.

The court's decision closed "a loophole big enough to drive a coal-hauling truck through," said Frank O'Donnell, executive director of Clean Air Watch. "The court ruled that the Bush administration can't just ignore a law it dislikes."

"This is a victory for public health," said Howard Fox, an attorney at Earthjustice. "It makes no sense to allow huge multi-multimillion dollar projects that drastically increase air pollution without installing up-to-date pollution controls or even notifying nearby residents."

Former EPA Administrator Christie Whitman was against the final rule to relax the new source review provisions. "I must say that I'm glad they weren't able to finish the work until after I was home in New Jersey," she wrote in her book, "It's My Party, Too," after she left the Bush administration.

© 2006 Reuters Ltd

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