A federal appeals court is backing a U.S. EPA plan to control emissions at a 2,040-megawatt coal-fired power plant in northwest New Mexico, despite the objections of environmental groups and the plant's owner.

A three-judge panel of the 10th U.S. Circuit Court of Appeals in Denver last week upheld EPA's plan to limit air emissions from the Four Corners Power Plant on Navajo Nation land.

Because the plant is on tribal land, EPA had determined that the New Mexico state pollution-control plan did not apply to the Four Corners facility. EPA issued a federal plan in 2007 to limit specific pollutants.

The Sierra Club, Diné Care, Diné for the C-Aquifer and the San Juan Citizens Alliance argued that EPA's plan was not stringent enough, while Arizona Public Service Co. -- the plant's principal owner and operator -- contended that the federal plan was too restrictive.

In its ruling, the court found EPA had acted appropriately when it adopted the federal plan.

"The EPA identified a regulatory need and enacted a source-specific federal plan to fill this gap," the judges wrote. "The EPA has neither relied on factors which Congress did not intend it to consider nor failed to consider any important aspect of the problem."

Mike Eisenfeld, New Mexico energy coordinator at the San Juan Citizens Alliance, said the judges seemed to indicate in their ruling that the most important thing was to get the federal implementation plan in place after going without one for years.

But the federal emissions plan should go further, Eisenfeld said. "It's obvious that the Four Corners Power Plant has a lot of work to do to improve their environmental standards and implement pollution controls," he said.

Steven Gotfried, a spokesman for Arizona Public Service Co., said the utility was pleased with the ruling. "We will continue to meet or exceed all our environmental regulations," he said.

The court also tossed out a portion of EPA's plan relating to fugitive dust, which escapes from sources other than stacks or vents. Both EPA and Arizona Public Service Co. had asked the court to send EPA's dust provision back to the agency for review. The court denied the environmentalists' request to set a time limit for EPA to reconsider the fugitive dust limit.

Environmental groups have long targeted both existing and planned coal-fired power projects in the Four Corners region, which is home to popular national parks, monuments and forests. Because of its large size, the Four Corners plant is one of the nation's largest industrial emitters of nitrogen oxides, sulfur dioxide, particulate matter and carbon dioxide.

Click here to read the court ruling.