The nation's electric power industry has won an apparent court victory in a dispute over federal water pollution regulations.

"We're reasonably well satisfied," said Turner T. Smith Jr., a lawyer representing the utilities. The decision, issued Monday, was made public in Richmond yesterday by the 4th Circuit U.S. Court of Appeals.

An Environmental Protection Agency official, who asked not to be identified, said the ruling appeared to be a setback for federal water cleanup efforts. The official noted, however, that EPA hadn't yet received a copy of the opinion or decided whether further legal action is warranted.

The Natural Resources Defense Council also appeared to have been handed a defeat in its efforts to obtain tighter curbs on discharges of toxic chemicals into waterways. J. Taylor Banks, senior staff attorney for the enviromental group, refused to comment on the court ruling.

At issue were regulations established by EPA for carrying out provisions of the Clean Water Act of 1972. Rules governing pollution by the electric power industry were challenged in the Richmond appeals court by about 70 utilities, including Virginia Electric and Power Co. and Potomac Electric Power Co.

Monday's decision was an outgrowth of a continuing court battle, now only partly resolved. The focus of the ruling was the grounds on which a utility may seek a variance from federal water pollution regulations.

The three-judge appellate panel didn't clearly reject EPA's rules for granting variances. Rather, the court upheld the recently revised EPA regulations but interpreted them more leniently on the industry than the federal agency had intended, according to lawyers familiar with the ruling.

Smith, one of several lawyers representing the industry in the court challenge, said the court's ruling was "consistent with our interpretation" of the regulations.

One key issue was whether a utility may seek a variance from water pollution regulations by arguing that a waterway is so dirty, so clean or so vast that a pollutant would have a neglibible effect on water quality. EPA officials contend this issue should be irrelevant in weighing requests for variances.

The appeals court largely rejected EPA's arguments on this point, according to lawyers familiar with the ruling. The court held that water quality may be considered -- along with other factors -- in reviewing requests for variances, the lawyers said.No text of the court's opinion was available in Washington yesterday.

According to lawyers familiar with the decision, the court also rejected the Natural Resource Defense Council's contention that variances should be prohibited for discharges of toxic chemicals.