From: Bloomberg Businessweek
By Matthew Philips
The Supreme Court on Tuesday affirmed the Environmental Protection Agency’s authority to regulate air pollution from coal-burning power plants. The 6-to-2 decision written by Justice Ruth Bader Ginsburg hands the Obama administration what is arguably its biggest environmental victory in its effort to use the Clean Air Act as a tool to fight global warming and reduce carbon emissions.
At issue was whether the EPA could use what are known as good-neighbor rules to regulate emissions that cross state borders. In short, the Supreme Court ruled that a power plant in Ohio whose emissions blow east into New York is liable for the damage caused there, even if it’s hundreds of miles away from the source.
In geographic terms, this is a win for the Northeast and a blow to Midwestern and Appalachian states. But it’s extra bad news for utilities with big coal portfolios such as American Electric Power (AEP), Duke Energy (DUK), Southern (SO), and Xcel (XEL)—all of which had down days in the stock market on Tuesday. Now, even more than before, these utilities must weigh the high costs of cleaning up their coal operations against simply shutting them down.
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