A federal appeals court has ruled that most Bush administration changes relaxing emissions controls from power plants and other large industrial sources do not violate the Clean Air Act.

Pennsylvania, a dozen other states and seven environmental organizations had challenged those changes, saying the new rules governing equipment modification and emissions were illegal and harmful to public health.

Yesterday's 73-page decision by a three-judge panel of the U.S. Court of Appeals for the District of Columbia affirmed the changes to the Clean Air Act's "new source review" provision that allow power plants and industrial sources to increase emissions without installing expensive modern pollution controls.

But the states and the environmental groups embraced the ruling as a "mixed bag" that also rolled back some of the more problematic elements of the administration's 2002 rule, strengthening the states' enforcement abilities and preserving their right to adopt standards tougher than the federal rule.

The new source review program, added to the federal clean air law in 1977, required power plants and other large industrial facilities to add pollution controls when they upgraded equipment or substantially increased emissions.

The appeals court panel said it is not clear if the Bush administration changes to the rule will lead to increased pollution emissions.

But the court ruled that the U.S. Environmental Protection Agency erred in promulgating rules that allowed some pollution emissions to increase while others were controlled, and measuring emissions increases based on projections rather than actual emissions.

The court also ruled that the agency acted arbitrarily and capriciously when it allowed companies to stop keeping pollution emissions records if they thought they were in compliance with emissions rules.

The new source review provisions apply to 17,000 major sources of air pollution nationwide, including coal, oil and gas-fired power plants, paper mills, refineries, chemical manufacturing facilities and auto plants. About 800 of those sources are in Pennsylvania.

The court's decision was spun as a victory by both industry and environmental groups, but industry appeared to win bigger.

"The D.C. Circuit has made clear that the vast majority of reforms contained in the first phase of the administration's NSR [new source review] reform efforts are fully consistent with law and precedent," said Scott Segal, director of the Electric Reliability Coordinating Council.

Kurt Knaus, a spokesman for the state Department of Environmental Protection, called the decision "a mixed bag of results with still some significant victories for the states."

Knaus said the best of those was the court's rejection of a rule that would have allowed facilities to stop keeping emissions records, which would have severely hampered enforcement of pollution limits.

"Unfortunately it does appear that some facilities may be able to grow without growing cleaner," Knaus said. "But the decision does recognize that states have the right to adopt more protective air quality standards."

Other states in the lawsuit are New York, New Jersey, Delaware, Illinois, Maine, Massachusetts, New Hampshire, Rhode Island, Vermont, Wisconsin, California and Connecticut.

Knaus said Pennsylvania will consult with the coalition of states before deciding whether to appeal the court ruling.

Elizabeth Rosemeyer, policy and outreach coordinator for the Group Against Smog and Pollution, one of the groups involved in the appeal, said the ruling could be a problem for Allegheny County if it constrains the state's ability to reduce existing emissions that have put the county in non-attainment of federal soot standards.

Arthur Stamoulis, a spokesman for the Clean Air Council, another of the groups that appealed the federal rules, said the most significant part of the ruling was that new source review is applicable when a plant increases its actual emissions, as opposed to beyond a plant's previous capacity to emit pollution, as the industry argued,

"The D.C. District has ruled for a more protective interpretation of new source review than the administration and the industry wanted," Stamoulis said. "That should have a major impact on remaining NSR enforcement cases. This ruling gives the program more legs to stand on than it had yesterday."

Still pending before the court are other appeals by the states involving significant challenges to new rules weakening emissions control requirements at facilities where equipment maintenance, repair, modification or expansion is done.