"This is a huge win for clean air," said Fred Krupp, president of Environmental Defense, a nonprofit group that asked the justices to hear the case. "The Court ruled unanimously that companies have to use the latest cost effective technology to reduce pollution when they upgrade their plants."

But representatives of the electric power industry said the court issued a narrow ruling in a case involving Duke Energy Corp. that leaves the most important questions for lower courts to decide and doesn't undermine the industry's legal position. The utility company is based in Charlotte, N.C.

The case stems from efforts by the Environmental Protection Agency to force utilities to update their pollution controls when renovating coal-burning power plants. The EPA argued that the companies are required under the Clean Air Act to update aging power plants with stronger emissions controls when they make improvements that increase power generation.

While many utilities settled the suits, several have battled the federal government in the courts, including Duke Energy, the Southern Co., and American Electric Power Co. Inc.

One issue in the Duke case is the proper standard for measuring whether pollution control upgrades are required. Duke argued that an increase in the hourly rate of pollution emissions is necessary, while the EPA and environmental groups maintain an increase in annual emissions is the proper standard. Annual emissions can increase if modernized plants operate longer hours even at lower hourly emission rates.

The Justices sided with the environmental groups and EPA Monday, ruling that requiring the use of an hourly emissions rate would essentially invalidate EPA rules dating to 1980.

John Walke, director of the clean air program at the Natural Resources Defense Council, said the ruling "is a stinging repudiation" of the utility companies' legal arguments and will force the companies to reach "favorable settlements" with the federal government.

Previous agreements between the EPA and electric utilities include a 2003 settlement with Dominion Resources Inc., which agreed to pay $1.2 billion for upgrades to its coal-fired plants, and a $1.4 billion settlement with Cinergy Corp. in 2000. Duke acquired Cinergy in April 2006.

But industry representatives said that such celebrations are premature. They argue that the court's decision doesn't address two key outstanding questions: whether Duke Energy's renovations constitute the "major modifications" that require pollution control upgrades, and whether the EPA changed its interpretation of the rules when it began its enforcement activities in 1999.

"Utilities still can argue that the activities at issue...did not cause total annual emissions to increase," said Dan Riedinger, a spokesman at the Edison Electric Institute, which represents Duke, Southern Co., and other publicly-held power companies.

In addition, the EPA's rules exclude "projects that constitute routine maintenance, repair and replacement activities," Riedinger said. "This exclusion was not addressed by the court, and it remains a valid defense for the industry."

Duke Energy also argued that the EPA has been inconsistent in its application of the rules and that its enforcement actions in 1999 and 2000 represented a "retroactive targeting" of practices that were accepted for 20 years.

Justice David Souter, writing for the court, said Duke could continue to press that claim in lower courts, industry representatives noted.

Duke Energy, meanwhile, said it would continue to defend itself in lower federal courts.

"We continue to believe we have solid defenses against the government's claims and will show ... that our power plant projects" did not trigger required pollution control upgrades, the company said in a release.

Hugh Wynne, a senior research analyst at Sanford C. Bernstein, said increased pollution control costs for regulated utilities such as Duke aren't all bad, since such companies can usually pass additional investment costs onto their customers. Wynne said he owns shares in Duke and Sanford Bernstein's parent company, AllianceBernstein Holding LP, owns more than 1 percent of American Electric Power.

Shares of Duke Energy rose 42 cents, or 2.1 percent, to $20.71 on Monday, while Southern Co. shares rose 43 cents to $37.08 and American Electric shares rose $1.06, or 2.2 percent, to $49.81, all on the New York Stock Exchange.