Climate change suit against Xcel, others, rejected by top court

(Bloomberg) — States can't invoke federal law to force utilities to cut their greenhouse-gas emissions, the U.S. Supreme Court ruled, shutting off one avenue for groups that advocate bolder steps against climate change.

The unanimous ruling is a victory for five companies -- American Electric Power Co., Xcel Energy Inc., Duke Energy Corp., Southern Co. and the government-owned Tennessee Valley Authority -- that had been sued by six states, including New York and California.

The justices said the Environmental Protection Agency was better suited than federal judges to assess the costs and benefits of reducing carbon emissions.

"The Clean Air Act entrusts such complex balancing to EPA in the first instance, in combination with state regulators," Justice Ruth Bader Ginsburg said for the court. Justice Sonia Sotomayor didn't take part in the case.

The Obama administration joined the power industry in urging rejection of the suit, along with a related one being pressed by three land trusts.

The ruling is a victory for companies beyond the power industry. Trade groups representing automakers, oil companies, farmers, mining companies, chemical companies and manufacturers all urged the court to dismiss the suits, in some cases saying their members might face similar claims.

The states sued in 2004, invoking both state and federal law. The Supreme Court case focused on the federal law claim, and the justices said they weren't ruling on the state law question.

EPA STEPS

The states said the EPA still hasn't taken action to reduce carbon emissions from the plants that are the subject of the suit. The EPA began regulating greenhouse gases from vehicles and industrial polluters in January. So far its rules affect only new and modified plants, not the existing ones targeted by the states.

The case marked the Supreme Court's second foray into the debate over climate change. In a 2007 case decided 5-4, the court ordered the EPA to consider regulating greenhouse-gas emissions.

The states and land trusts contended that carbon emissions are a "public nuisance," a legal theory more typically used in cases of localized pollution. A federal appeals court in New York had let the suit go forward.

The suits are part of a multifaceted battle over climate change. Opponents -- including businesses, Republicans and some Democrats -- say the EPA's new carbon emission limits will destroy jobs and increase electricity bills without any environmental benefit.

The Obama administration and the companies also argued that the states and land trusts lack the legal right, or standing, to sue. The justices divided 4-4 on that question, leaving intact the appeals court's conclusion that the companies can sue.

The case is American Electric Power v. Connecticut, 10-174.