updated 4/30/2007 5:55:48 PM ET 2007-04-30T21:55:48

The Supreme Court on Monday dealt the utility industry its second setback this month on a program designed to clean up pollution at aging, coal-fired power plants.

The justices refused to review Bush administration standards favored by the companies and blocked a year ago by some state and local regulators and environmental groups.

The court's action, however, is undercut by a new Bush administration regulatory proposal that would relax clean air standards at coal-fired plants. Environmental groups say the rule, if adopted, would give the industry what it could not win in the courts.

The court's action Monday leaves in place a March 2006 court decision that went against both the Bush administration and the utility industry. The U.S. Circuit Court of Appeals for the District of Columbia declared Environmental Protection Agency regulations were so lenient that they violated the Clean Air Act.

The 2003 EPA rules on a program called New Source Review would allow older coal-fired facilities to undergo extensive changes without having to install pollution controls.

The office of then-New York Attorney General Eliot Spitzer led the fight against the 2003 regulations in the lower courts, saying the Bush administration was trying to "gut" federal clean air law.

Last week, the Bush administration issued its latest proposal. It would undercut an April 2 Supreme Court decision and the court's decision Monday not to consider the 2003 EPA rules.

In the April 2 decision, the court ruled against Duke Energy Corp., which has been resisting regulators' demands to install pollution controls in units in North and South Carolina. The Duke ruling impacts other pending Clinton-era enforcement cases against several utilities.

The cases are EPA v. New York, 06-736, and Utility Air Regulatory Group v. New York, 06-750.

Copyright 2007 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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