A federal appeals court affirmed the administration's approach to calculating polluting emissions from aging power plants yesterday, rejecting 13 states' contention that it violates the Clean Air Act.

Although the U.S. Court of Appeals for the District of Columbia Circuit's three-judge panel questioned the Environmental Protection Agency's plan to loosen pollution record-keeping requirements, it held that in determining whether a power plant is complying with the law, utilities can compare the pollution they emit after an upgrade with their highest levels over the previous 10 years.

The case is part of a sprawling legal battle over the administration's interpretation of a program known as New Source Review, which regulates pollution from older coal-fired power plants. Bush administration and industry officials argue that the federal government should not press for expensive new pollution controls because it would cost jobs and raise electricity prices, but environmentalists say this policy puts public health at risk.

"This case illustrates some of the painful consequences of reliance on command-and-control regulation in a world where emission control is typically far more expensive, per unit of pollution, when accomplished by retrofitting old plants than by including state-of-the-art control technology in new ones," wrote Judge Stephen Williams.

Critics of the rule are also challenging the administration's standards for judging plant maintenance and modifications.

On the question of how to establish the base line for determining whether a plant's emissions had increased, the ruling said the challengers failed "to overcome the presumption of validity afforded to EPA regulations." Rather than using the most recent emissions as the baseline, utilities can pick any two consecutive years in the decade leading up to an upgrade.

Edison Electric Institute spokesman Dan Riedinger, whose group represents the country's largest utilities, called the ruling "a remarkable decision. The court upheld most aspects of the rules, representing a major victory for sound environmental policy."

Jeffrey Holmstead, the EPA's assistant administrator for air and radiation, said the agency "is pleased that the court upheld the key provisions of the New Source Review program." He added: "We believe that these provisions will offer facilities greater flexibility to improve and modernize their operations in ways that will reduce energy use and air pollution, provide incentives to install state-of-the-art pollution controls, and would more accurately calculate actual emissions of air pollution."

But environmental advocates claimed victory as well, saying the ruling backed their contention that power plants must install controls when they upgrade and actual emissions increase. It also allows states to continue to sue utilities that fail to comply and struck down two administration-crafted exemptions from federal requirements to install stricter pollution controls.

"This is a victory for clean air and accountability," said New York Attorney General Eliot L. Spitzer, who led the suit against the EPA. "Today's court decision fully upholds the basis of all our enforcement cases against coal-fired power plants -- that plant modifications that increase air pollution must be accompanied by the installation of pollution controls on smokestacks."

The decision comes one week after the Richmond-based U.S. Court of Appeals for the 4th Circuit ruled that utility giant Duke Energy Corp. can upgrade its plants without adopting new pollution controls because it operated for longer hours.