The court also ruled the EPA could not force states to “over control” their emissions to help meet and exceed ambient air standards in downwind states, i.e., the CAA’s “good neighbor” provision. In concluding that the “EPA has transgressed statutory boundaries,” the majority said “Congress could well decide to alter the statute to permit or require the EPA’s preferred approach to the good neighbor issue. Unless and until Congress does so, we must apply and enforce the statute as it’s now written.”

The rule, which had been stayed pending appeal, is vacated and the potential January 1, 2013, compliance deadline voided. The decision throws a wrench in the EPA’s plans to shut down coal-based generation since utilities will not be forced, due to the decision, to arbitrarily retire capacity solely on the basis of this rule and will continue to implement the Clean Air Interstate Rule instead.

In a statement to the news media, NMA President and CEO Hal Quinn hailed the ruling as “another unmistakable sign that the EPA is acting outside the explicit bounds of the law. It should not require repeated federal court rulings to restrain the EPA from its regulatory overreach.”