Judge Gonzales held that the agency's decision not to prepare an environmental impact statement was illegal because there was substantial controversy over the project's impacts on air and water resources, and because the evidence demonstrated that the project could have a significant impact on the Salton Sea by increasing the salinity of that sensitive waterbody.

The Court also ruled that the agency's environmental analysis was inadequate. The agency did not appropriately consider cumulative impacts to air and water, or the impacts of carbon dioxide or ammonia emissions. In addition, the agency failed to evaluate a sufficient range of alternatives to the proposed project. Such alternatives could include permit conditions related to environmental performance.

"This is an important victory for the U.S.-Mexico border region. There is an increasing trend to build power plants in Mexico to supply the United States with energy, and this decision establishes that our federal government must first analyze all potential environmental impacts and consider alternatives with environmental safeguards instead of just issuing permits as requested by the energy corporations," said Bill Powers of Border Power Plant Working Group, the plaintiff in the case.

Operation of the plants would generate substantial air pollution that would cause further deterioration of air quality in California's Salton Sea Air Basin, a region that is already unable to comply with the air quality requirements of the Clean Air Act. (EPA and several state agencies have argued that this non-compliance is due in part to pollution from Mexico.)

The border power plants, owned by US energy interests Sempra and InterGen, would also discharge highly saline wastewater into the New River, which flows north across the US border and into the Salton Sea. Both of these water bodies already fail to meet the water quality standards of the Clean Water Act, and the principal problem associated with the Salton Sea is high salinity. Operation of the proposed border power plants would threaten the Salton Sea Wildlife Refuge, a key habitat for birds in the Imperial Valley.

The Department of Energy did an environmental assessment before issuing the permits to build the transmission lines, but their study ignored the impacts of the power plants even after the EPA advised them to include such consideration

"This decision sends a strong message to the Bush administration that any attempt to expedite permits for the importation of energy to the United States from power plants being constructed just south of the border in Mexico, without first complying fully with US environmental laws, will be rejected." said Julia Olson, attorney with Wild Earth Advocates.

The Court granted the plaintiff's motion for summary judgment on most, but not all, of the grounds raised. The Court held that the agency had performed an adequate human health impact analysis, and that the agency did not act arbitrarily in determining that ozone emissions would have no significant impact.

"This victory establishes a precedent for future border power plants that may be built to provide energy for US markets, both in Mexico and Canada," said Martin Wagner, Earthjustice International program director and co-counsel in the case. "We're all for new, clean, energy supplies, but in this case the court said it is illegal for the Bush administration to help American power producers dodge environmental laws by putting their plants on the Mexican side of the border and then ship the power back to the United States."

The Court has set a schedule for briefing the next phase of the lawsuit, which will determine what the agencies will have to do to comply with US laws.

Related Legal Documents

• Plaintiff's Summary Judgment Brief (200 kb pdf)
• Defendant's Cross-Motion and Opposition (150 kb pdf)
• Plaintiff's Reply Brief (220 kb pdf)
• Court Decision (1.7 mb pdf)