San Francisco (Platts)--10Mar2009

The US Department of Energy on Monday defended standards it adopted for
electricity transformers, saying the rules were not politically motivated, but
were the result of a complex cost analysis.

Earthjustice and other environmental groups asserted in a December 2007
lawsuit that weak standards adopted under the Bush administration would result
in wasteful energy consumption and increased greenhouse gas emissions. The
California Attorney General filed a similar suit.

DOE, which adopted the standards in October 2007, rejected a proposal by
the Edison Electric Institute, the American Public Power Association,
environmental groups and others calling for two sets of standards: one
effective in 2009, and another with more stringent standards in 2013.

This two-tiered approach could yield economic benefits totaling close to
$10 billion, Earthjustice attorney Tim Ballo said in Monday oral arguments
before the 9th US Circuit Court of Appeals.

The rule adopted by DOE is "not the product of any political agenda,"
instead DOE determined that the joint proposal is not economically justified,
said H. Thomas Byron, an attorney representing DOE. Congress dictated that the
agency should have broad discretion in devising the rules, Byron added.

Asked by judge Jay Bybee whether DOE was prohibited from adopting
standards that could make economic sense in the future, Byron said DOE's
rulemaking did not address that question.

Ballo said Earthjustice believes a decision will be likely issued within
the next few months. "All we want is for the court to send this back to DOE
for further analysis," Ballo said.
--Lisa Weinzimer, lisa_weinzimer@platts.com