Power plants' challenge to cross-state ozone rules tossed by appeals court

(Reuters) - A federal appeals court on Friday rejected a challenge to a Biden administration regulation requiring reductions in pollution that blows across state lines by power companies that allege the new rule will cost them hundreds of millions of dollars.

A unanimous three-judge panel of the U.S. Court of Appeals for the D.C. Circuit tossed the power companies' petition, after finding the technical analysis used by the U.S. Environmental Protection Agency to finalize the 2021 rule was sound.

The EPA declined to comment and counsel for the power companies did not immediately respond to a request for comment.

The agency's rule requires coal power plants in 12 mostly Midwestern and Northeastern states that have previously failed to meet emissions reductions standards to install costly emission controls. The requirements aim to reduce pollution including ground level ozone, also known as smog, that can travel downwind across state lines and degrade air quality.

It is part of what are known as the “good neighbor” provisions of the federal Clean Air Act's National Ambient Air Quality Standards, which set thresholds for pollution and potential monetary penalties for failure to meet those goals.

The Midwest Ozone Group, a trade organization that represents power companies, challenged the rule shortly after it was issued in 2021, arguing the EPA rushed its analysis to meet court-crafted deadlines. The D.C. Circuit, in prior litigation, had sent an earlier version of the rule back to the EPA for a better explanation of its analysis in 2019.

The 2021 rule, drafted in response to that court decision, requires emissions controls at power plants in Illinois, Indiana, Kentucky, Louisiana, Maryland, Michigan, New Jersey, New York, Ohio, Pennsylvania, Virginia and West Virginia, which the EPA said were all significantly contributing to downwind pollution concerns in other states.

The D.C. Circuit said Friday that the EPA was justified when it used existing modeling data to formulate its rule instead of starting from scratch, and said the challengers hadn't demonstrated that their preferred approach would have yielded different results. The court also said it was reasonable for the agency to move quickly in light of an impending deadline later in 2021.

The case is Midwest Ozone Group v. Environmental Protection Agency, U.S. Circuit Court of Appeals for the D.C. Circuit, No. 21-1146.

For the EPA: Chloe Kolman of the U.S. Department of Justice

For the power companies: David Flannery, Edward Kropp and Kathy Beckett of Steptoe & Johnson

For environmental intervenors: Kathleen Riley and Sean Helle of Earthjustice; and Hayden Hashimoto of the Clean Air Task Force

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