DALLAS (AP) — The largest power generator in Texas has lost its federal appeals court challenge of a new federal clean-air rule.

Dallas-based Luminant had threatened to close two units and cut 500 jobs if the rule took effect. It filed the lawsuit seeking to remove Texas from the Environmental Protection Agency’s new Cross-State Air Pollution Rule.

In a 29-page ruling filed Monday, a three-judge panel of the 5th U.S. Circuit Court of Appeals in New Orleans ruled the EPA acted within its powers in partially rejecting the state plan for implementing the rule in Texas.

The rule requiring Texas and 26 other states to reduce power plant emissions was to take effect Jan. 1, but a federal appeals court in Washington, D.C., delayed implementation.

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