The EPA is gearing up to defend its effort to streamline a federal air pollution permitting program that was included in a proposal to regulate carbon dioxide emissions from power plants.

The agency took the novel approach of combining distinct changes to two power plant regulations—standards for greenhouse gases and permitting requirements for new and expanded plants—into one proposal.

But four days before the proposal’s Aug. 21 release, the agency inserted language that would sever, or legally separate, the...