The case stems from lawsuits pressed by the Clinton-era Environmental Protection Agency (EPA) to force the TVA and eight other large utilities to install anti-pollution devices as part of the now-controversial "new source review" requirements of the Clean Air Act.The law requires utilities to add pollution control equipment when they upgrade or significantly modify their power plants.
After hearing oral argument on the case earlier this year, the Atlanta-based 11th U.S. Circuit Court of Appeals ordered a 60-day mediation procedure.
"This case is hereby held in abeyance for a period of 60 days," the court said in an order signed by three judges.
TVA, the nation's largest public power producer, is challenging tighter emission control rules ordered by the EPA.
At issue is how far a U.S. utility can go in enlarging or upgrading old plants before they must invest in expensive new air pollution technology to control smog, acid rain and soot.
The TVA case is seen as a bellwether for the utility industry's willingness to cut emissions from coal-burning plants, after the Bush administration earlier this month relaxed rules for utilities to expand or upgrade their plants.