Utilities say the EPA’s proposed carbon controls for power plants could benefit from clearer guidance to states, but environmentalists say the lack of an explicit emissions reduction goal makes the rule unlawful.

The agency’s Oct. 1 public hearing on its proposed Affordable Clean Energy rule centered on the debate about how significant the agency’s role is in setting carbon emissions standards for power plants.

The Trump administration proposal sets much narrower standards than the Obama-era Clean Power Plan it...