I believe the way the original law was written back in the early 70's (thank you Tricky Dick), Congress gave the agency pretty much free reign as deemed necessary by the Secretary to regulate pollution under the clean air and clean water acts. The courts have upheld the powers and Congress has pretty much ignored any oversight of the EPA. The kicker of course is that the USSC ruled just a few short years ago that carbon dioxide was a pollutant that could be regulated, ergo, we are screwed.
There have been numerous lawsuits and what is happening is because of a lawsuit. Let me trace it from inception to present.
It starts in 2007 when SCOTUS ruled that CO2 was a pollutant and in the decision SCOTUS told EPA to determine the risk of CO2 and if needed, to regulate CO2 with the Clean Air Act. SCOTUS gave them the authority, they don't need legislation. Since EPA is an Executive agency, the power belongs to the Prez.
But, both Bush and later Obama wanted Congress to preempt EPA/Prez and pass legislation to regulate CO2. In 2008 Congress had the debate and the GOP won the debate with Cap and Trade. The Dems lost with cap and tax. So Congress would enact cap and trade in 2009.
But the House Cap and Trade legislation failed. In 2010 the Senate tried a scaled back version but it also failed. So Obama moved forward, and the lawsuits flew.
Numerous lawsuits with many, many plaintiffs including industry groups, the 20 republican controlled states, and political groups filed in 2010.
But before these lawsuits could be heard in court, in 2011, a second unrelated CO2 lawsuit reached SCOTUS. In this case 7 states and NYC had sued saying that CO2 was a "nuisance" and they should have the authority to regulate CO2. SCOTUS ruled against them saying only the federal govt via EPA had the authority, and that language re-enforced the SCOTUS 2007 decision.
Then in 2012, the numerous lawsuits from 2010 were combined and the DC Court of Appeals ruled entirely for EPA.
In 2013, the plaintiffs appealed the DC Courts decision to SCOTUS, who agreed to hear just a narrow part of it.
SCOTUS hasn't ruled on this. It is due out any day or any week..
It is said that the decision could have some small effect if the decision goes against EPA, but because of the court decisions in 2007, 2011, and 2012, EPA has pretty much everything they need.
But, if the decision does go against EPA, the GOP will use the decision to try to convince you that Obama is defying SCOTUS.