June 24 (Bloomberg) — The U.S. Supreme Court agreed to consider reviving an Environmental Protection Agency rule that would curb emissions from coal-fired power plants, in a clash over the Obama administration’s biggest air-quality effort.

A federal appeals court threw out the cross-state air pollution rule last year, saying the EPA had gone beyond its powers under federal law. That decision was a victory for coal companies and utilities, which called the measure one of the costliest ever issued under the Clean Air Act.

The administration is seeking to reinstate a rule it says would prevent up to 34,000 premature deaths and produce as much as $280 billion a year in economic benefits. The rule, which has never taken effect, caps emissions of sulfur dioxide and nitrogen oxides in 28 states whose pollution blows into neighboring jurisdictions. All are in the eastern two-thirds of the country.

“The court of appeals’ decision will seriously disrupt the EPA’s implementation” of the Clean Air Act, “and it threatens serious harm to the public health,” U.S. Solicitor General Donald Verrilli argued in seeking high-court review.

The justices will hear arguments and rule during the nine-month term that starts in October.

Attorneys general from 14 states, led by Texas, are challenging the rule alongside American Electric Power Co., Entergy Corp., Edison International, Peabody Energy Corp., Southern Co. and the United Mine Workers of America. They urged the court not to hear the case.

Too Strict

The U.S. Court of Appeals for the D.C. Circuit voted 2-1 to strike down the rule, saying it was too strict and that the EPA didn’t give states a chance to put in place their own pollution-reduction plans before imposing a nationwide standard.

EPA’s rule would “impose massive emissions reductions without regard to the limits imposed by the statutory text,” Judge Brett Kavanaugh wrote for the court.

The court ordered the agency to continue to enforce a 2005 measure known as the Clean Air Interstate Rule until a viable replacement to the cross-state regulation can be issued — a process the Obama administration said could take years.

The decision was a reprieve for coal-dependent power generators facing the combined threats of increasing federal regulation and low natural-gas prices.

The EPA rule targets sulfur dioxide, which can lead to acid rain and soot harmful to humans and ecosystems, and nitrogen oxide, a component of ground-level ozone and a main ingredient of smog.

The case is U.S. Environmental Protection Agency v. EME Homer City Generation, 12-1182.

To contact the reporter on this story: Greg Stohr in Washington at gstohr@bloomberg.net.

To contact the editor responsible for this story: Steven Komarow at skomarow1@bloomberg.net.