This morning, the U.S. Supreme Court released its long-awaited decision in 
Whitman (formerly, Browner) v. American Trucking Associations, the case 
involving EPA's new rules setting standards for ozone and particulate matter 
(PM).   As you may recall, the U.S. Circuit Court of Appeals, D.C. Circuit 
had ruled that EPA exceeded its constitutionally-delegated authority from 
Congress in crafting the new ozone/PM rules, and also ruled that explicit 
cost considerations could not be used in standard setting.   The Supreme 
Court considered arguments on both the delegation and the cost question.  
Industry petitioners had strongly argued that the federal government must 
consider cost and not just health benefits in setting national air pollution 
standards.  

The Supreme Court's ruling held the following:

1)  Reversed the Circuit Court's ruling on delegation, holding that the EPA's 
ozone/PM rules did not represent an unconstitutional delegation of 
legislative power.

2)  Upheld the Circuit Court's ruling on cost considerations, holding that  
the Clean Air Act "unambiguously bars cost considerations" from the process 
of setting air-quality standards."

3)  Remanded the ozone/PM rules to EPA, holding that EPA's implementation of 
the rules was unlawful and EPA must develop a reasonable interpretation of 
the ozone standards.   

In general, industry is not very happy with the result -- they lost arguments 
1) and 2).   The remand in 3) will lead to some changes in the way the new 
standards are applied (and give the Bush Administration the chance to make 
some cosmetic changes), and may lead to some delays in implementation of the 
rules, but the bottom line is, the new EPA ozone/PM standards will move 
forward.  Among other things, the new rules set an 8-hour standard for 
determining attainment status for ozone and PM.  

We are in the process of analyzing the court's ruling in more detail, and 
will circulate further analysis shortly.  Please contact me with any 
questions.

PLEASE FORWARD TO OTHERS WHO MIGHT FIND THIS INFORMATION USEFUL

Thanks,

Jeffrey Keeler
Director, Environmental Strategies
Enron
Washington DC office - (202) 466-9157
Cell Phone (203) 464-1541
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