A group of 29 states and local governments on Tuesday filed suit against the Trump administration's move to replace Obama-era climate rules for power plants with a more modest alternative.

Why it matters: The litigation, led by New York Attorney General Letitia James, sets the stage for a new federal court battle over the scope of regulators' authority and duty to regulate greenhouse gas emissions under the Clean Air Act.

It's a dispute that could affect how aggressively a future president can impose emissions-cutting rules on power plants, and perhaps other facilities like oil refineries.

The big picture: In June, the EPA announced final rules that require states to make coal-fired units more efficient over time, but the rules lack binding CO2-cutting targets.

Trump's rules replaced a wider 2015 regulation that sought to drive more sweeping power sector changes by enabling states to meet carbon-cutting mandates by moving to lower-emitting and zero-carbon sources.

That Obama-era mandate never took effect because it was stayed by the Supreme Court.

"My office, and this groundbreaking coalition of states and cities from across the nation, will fight back against this unlawful, do-nothing rule in order to protect our future from catastrophic climate change," James said in a statement.

Why you'll hear about this again: The disputes over the Obama administration rule and the Trump EPA's replacement center in part on whether the EPA, under the Clean Air Act, can promote broad changes to the electricity system that go beyond emissions from specific plants.

Trump administration officials, when rolling out their "Affordable Clean Energy" rule in June, argued that Obama's EPA went beyond its Clean Air Act authority.

The new litigation was filed in the U.S. Court of Appeals for the D.C. Circuit. The EPA told Axios in a statement: "EPA does not comment on pending litigation. In regards to ACE, EPA worked diligently to ensure we produced a solid rule, that we believe will be upheld in the courts, unlike the previous Administration’s Clean Power Plan."

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