On March 17, the Washington D.C. Circuit Court of Appeals struck down the Environmental Protection Agency's Equipment Replacement Provision (ERP) by ruling that this interpretation of the Clean Air Act violates the New Source Review (NSR) regulations. The ruling heartened environmentalists while frustrating industry advocates.

"New Source Review can trigger an endless review process for power plants and other stationary sources of air emissions that merely want to repair or upgrade existing facilities," said John Engler, President of National Association of Manufacturers.

On a case-to-case basis, the ERP would issue permits that would circumvent the potentially expensive NSR regulations for industries looking to replace equipment that would cost less than 20 percent of value of the entire plant. Industry advocates for ERP said that this would help companies update facilities and increase efficiency while keeping energy prices under control.

New York and 14 other states petitioned the court to throw out new EPA regulations that would have allowed, according to the New York Attorney General's office, "aging power plants and other industrial polluters to make major modifications to their plants without improving their pollution controls."

"This decision is a major victory for clean air and public health," said New York Attorney General Eliot Spitzer, who led the lawsuit against the EPA, in a statement released after the ruling.

The court had harsh words for the EPA and its broad interpretation of the language used in the NSR. In a unanimous ruling 3-0, it ruled on the side of the intent of the Clean Air Act and NSR: "Only in a Humpty Dumpty world would Congress be required to use superfluous words while an agency could ignore an expansive word the Congress did use. We decline to adopt such a world-view....Although EPA might prefer market-based methods of controlling pollution, Congress has chosen a different course with NSR."

It is still unclear whether the EPA will appeal the ruling. In a statement, EPA spokesman John Millet voiced his disappointment that the court did not find in favor of the EPA. The EPA is reviewing and analyzing the opinion and could not comment further about its future plans regarding the ERP.