Opinion for the Court filed PER CURIAM.
PER CURIAM
This case revisits Title IV of the Clean Air Act ("the Act"), which, inter alia, directs the
I. BACKGROUND
Among the 1990 amendments to the Clean Air Act, 42 U.S.C. § 7401 et seq. (1994), was Title IV, which was designed to reduce the adverse effects of acid deposition (more commonly known as "acid rain") from the atmosphere by limiting the allowable emissions of sulfur dioxide (SO
One method of reducing NO
As we noted in Alabama Power, Congress intended in enacting Title IV "to tie the obligation of utilities to meet the NO
On March 22, 1994, well past its statutory deadline, EPA promulgated the Group 1, Phase I emission limits. See Acid Rain Program; Nitrogen Oxides Emission Reduction Program, 59 Fed.Reg. 13,538 (1994). The final rule defined "low NO
The rule at issue here, issued on December 19, 1996, promulgates the next set of emission limits under the statutory scheme: the revised NO
Appalachian Power and petitioner Arizona Public Service Company now seek review of these portions of the final rule, claiming that EPA's actions both exceeded its statutory authority and were arbitrary and capricious.
II. DISCUSSION
A. The Group 1, Phase II Emission Limits
Appalachian Power's first challenge is to EPA's statutory authority to revise the Group 1 emission limits, which is bounded by the requirement that the agency must determine that "more effective low NO
Because resolution of this question turns on the interpretation of the statutory phrase "more effective low NO
Chevron's first step does not take us very far. There is nothing in the statutory section at issue or in the legislative history to suggest what Congress meant by "more effective low NO
The legislative history also provides few clues as to the breadth of the phrase. Although the 1990 amendments to the Act were ultimately the product of a conference committee, the language in section 407(b)(2) was derived largely from the Senate bill. During debate on the bill, several senators referred to "low NO
We addressed a similar issue with respect to the Clean Air Act in International Harvester Co. v. Ruckelshaus, 478 F.2d 615 (D.C.Cir.1973). At issue was a provision of the Act that authorized a one-year exemption from an emission-level requirement if, inter alia, "the applicant has established that effective control technology, processes, operating methods, or other alternatives are not available." Id. at 624 (quoting 42 U.S.C. § 1857f-1(b)(5)(D)(iii) (1970)). We rejected the petitioners' argument that EPA's determination of whether technology was "available" must be based solely on "technology in being as of the time of the application." Rather, we held that EPA was justified in determining what technology would be considered "available" based on predicted improvements in existing technology, "subject to the restraints of reasonableness." Id. at 628-29. See also Portland Cement Ass'n v. Ruckelshaus, 486 F.2d 375, 391-92 (D.C.Cir. 1973) (in determining "achievable" emission limits, EPA may make reasonable projection based on existing technology). We can find no significant difference between a determination that "available" technology includes predicted improvements in existing technology and a determination that "more effective" technology includes actual improved performance in existing technology. We thus think it reasonable, as a preliminary matter, for EPA to find that "more effective low NO
Appalachian Power next argues that even if "more effective low NO
Statistical analysis is perhaps the prime example of those areas of technical wilderness into which judicial expeditions are best limited to ascertaining the lay of the land. Although computer models are "a useful and often essential tool for performing the Herculean labors Congress imposed on EPA in the Clean Air Act," Sierra Club, 657 F.2d at 332, their scientific nature does not easily lend itself to judicial review. Our consideration of EPA's use of a regression analysis in this case must therefore comport with the deference traditionally given to an agency when reviewing a scientific analysis within its area of expertise without abdicating our duty to ensure that the application of this model was not arbitrary. As we have noted, it is only when the model bears no rational relationship to the characteristics of the data to which it is applied that we will hold that the use of the model was arbitrary and capricious. See American Iron & Steel Inst. v. EPA, 115 F.3d 979, 1005 (D.C.Cir. 1997); Chemical Mfrs. Ass'n v. EPA, 28 F.3d 1259, 1265 (D.C.Cir.1994). Therefore, while we will examine each step of EPA's analysis to satisfy ourselves that the agency has not departed from a rational course, we will not take it upon ourselves, as nonstatisticians, to perform our own statistical analysis — a job more properly left to the agency to which it was delegated.
EPA's determination of the revised Group 1 emission rates involved four steps: (1) the construction of a database consisting of Group 1, Phase I boilers already employing low NO
1. Construction of the Database
EPA began its determination of whether the Group 1 limits should be revised by constructing a computerized database consisting of all known boilers that had installed only low NO
As part of its procedural challenge to the rule, Appalachian Power argues that EPA violated the rulemaking requirements of the Act by not disclosing the DQOs until the final rule, apparently invoking the Act's requirement that EPA's notice of proposed rulemaking ("NPRM") include, inter alia, "the methodology used in obtaining the data." 42 U.S.C. § 7607(d)(3)(B) (1994). We disagree. While it is true that the DQOs did not appear in the NPRM in precisely the same form or to the same extent as they did in the final rule, it is not the case that any significant DQO appeared for the first time in the final rule. In the NPRM, EPA listed two criteria that governed selection of boilers for the database: (1) whether units had installed only low NO
Moreover, we can find no apparent defects in the database itself. In constructing the database for the final rule, EPA applied the DQOs not only to those boilers used in the proposed rule analysis but also to those boilers that commenters requested that EPA consider as well as to additional boilers identified by EPA as using low NO
2. Construction of the Equations
Using the database, EPA constructed two linear regression equations, one for wall-fired boilers and one for tangentially fired boilers, that captured the percent reduction in emissions with low NO
It is commonly understood that the more variables that are included in a regression analysis, the more likely it is that the model describes accurately the phenomenon it is being used to explain.
3. Application of the Equations to the Uncontrolled Emission Rates of Phase II Boilers
The next step of EPA's analysis was to calculate, through the application of the regression equations developed to the uncontrolled rates of the Phase II boilers,
Although Appalachian Power's assertion that the results are subject to some uncertainty is correct, we do not believe its complaint constitutes a telling critique of EPA's analysis. In any regression analysis, the line described by the regression equation represents the best possible fit to the data; some points will necessarily be plotted above the line and some will fall below the line (except in the rare circumstance in which the line is a perfect fit to the data). While each data point will be associated with some residual (the difference between actual and fitted values), so long as this residual is within acceptable statistical limits, the fact that some data points necessarily fall below the line does not render the regression analysis invalid. As we have noted in similar circumstances, "[t]hat the model does not fit every application perfectly is no criticism; a model is meant to simplify reality in order to make it tractable." Chemical Mfrs., 28 F.3d at 1264. To invalidate a model simply because it does not perfectly fit every data point "would be to defeat the purpose of using a model." Id. at 1265. Appalachian Power does not suggest in its argument before us that the uncertainty surrounding the data points is statistically unacceptable, only that it exists.
This is not, certainly, like the case in Sierra Club, in which we rejected a 92 percent sulfur removal rate that was based solely on evidence that "only one commercial scale plant and one small pilot unit can almost but not quite meet the standard." 657 F.2d at 363. In this case, 23 of 39 wall-fired boilers and 9 of 14 tangentially fired boilers in Group 1, Phase I can currently meet the revised limits. 61 Fed.Reg. at 67,123-24 (Tables 4 and 5). Because the statute requires only a determination that more effective low NO
4. Determination of the Limitation
Finally, EPA used the rates resulting from the regression equations to determine "reasonably achievable emission limitation[s]"
Again, we find this challenge insufficient to vacate the rule. The first reason that this is so is a statutory one: The Act permits EPA to revise the emissions limitations upon a finding that "more effective low NO
Ethyl Corp., relied on by Appalachian Power, is not to the contrary. In Ethyl Corp., we considered a statute that provided that EPA, "`upon application of any manufacturer of any fuel or fuel additive, may waive'" a prohibition against introducing certain fuel additives into commerce upon a finding that "the fuel additive does not cause or contribute to a failure of vehicles to meet emission standards." 51 F.3d at 1055, 1058 (quoting 42 U.S.C. § 7545f(4) (1988 & Supp. V 1993)). The statute also provided that if EPA did not act either to grant or to deny a waiver application within 180 days, the waiver would be treated as granted. See id. at 1059 (quoting 42 U.S.C. § 7545(f)(4)) ("If the Administrator has not acted to grant or deny an application under this paragraph within one hundred and eighty days of receipt of such application, the waiver authorized by this paragraph shall be treated as granted."). EPA found that Ethyl had established the factual finding but denied its waiver application for public health reasons. We held that in the context of the entire statute, the statutory language stating that EPA "may waive" the prohibition after making the requisite factual determination referred to EPA's discretion "to either act affirmatively, granting or denying a waiver, or not to act, and instead, to let the 180-day limit run." Id. As a result, we held that once the factual standard was met, EPA's discretion extended only to the decision as to whether the waiver would occur through EPA's action or EPA's inaction. Here, by contrast, there is no statutory language that provides a more limited definition of the phrase "may revise." There is not, as in Ethyl Corp., a provision that once the requisite factual finding is made, the Group 1 limits will be revised even if EPA chooses not to act affirmatively to do so. Section 407(b)(2) states simply that EPA "may revise" the Group 1 emission limits downward if it determines that more effective low NO
In any event, it is clear, contrary to Appalachian Power's argument, that EPA has sufficiently justified its decision to revise the Group 1 emission limits apart from environmental concerns. Appalachian Power is correct that the burden is on EPA to justify the change from the 1995 emission limits, which the agency agreed were "aggressive," see 60 Fed.Reg. at 18,758-59, "[b]ut that justification need not consist of affirmative demonstration that the status quo is wrong; it may also consist of demonstration, on the basis of careful study, that there is no cause to believe that the status quo is right, so that the existing rule has no rational basis to support it." Center for Auto Safety v. Peck, 751 F.2d 1336, 1349 (D.C.Cir.1985). As EPA has noted, the 1995 emission limits were based on data from periods only until 1992, while the current limits incorporated additional data from as recently as 1996. See 61 Fed.Reg. at 67,120; EPA Response to Comments at 27-28. This increase in available data, and the more stringent limits that analysis of that data generated, were sufficient for EPA to conclude that "there is no cause to believe that the status quo [i.e., the 1995 emission limits] is right." Because we find nothing irrational in that determination, we uphold the revised Group 1 NO
B. The Group 2 Emission Limits
By contrast to the boilers in Group 1, the boilers in Group 2 are not necessarily amenable to retrofitting with low NO
42 U.S.C. § 7651f(b)(2). Appalachian Power challenges EPA's interpretation of this statutory language, an interpretation that informed the methodology the agency used to set the Group 2 emission limits. In addition, even assuming the validity of that interpretation, Appalachian Power challenges the reasonableness of the methodology EPA employed. We reject both challenges.
1. Statutory Interpretation of Section 407(b)(2)
EPA believes that the statutory provision is ambiguous, both in its specific words and in their grammatical arrangement. Although ambiguous, EPA concludes that the best reading of the key statutory phrase, "comparable to the costs of," directs it to conduct a comparison of the cost-effectiveness of those control technologies available for Group 2 boilers with the cost-effectiveness of the NO
Appalachian Power, by contrast, argues that the language of the statutory provision is unambiguous. It contends that the language requires a comparison of the costs of producing electrical output using control technologies that can be used in Group 2 boilers with the costs of producing electrical output using low NO
Once again, Chevron's first step does not take us very far. The statute does not define the phrase "comparable to the costs of." As discussed below, we agree with EPA that the words in the phrase are ambiguous, see 61 Fed.Reg. at 67,138, and that the provision as a whole is grammatically awkward, see id. at 67,139. And although the legislative history does not definitively address the meaning of the phrase, we also agree with EPA that that history is supportive of the agency's interpretation.
To begin, both sides agree that the meaning of the word "cost" is the "price paid for a thing." App. Pwr. Br. at 33; EPA Br. at 34. Moreover, both agree that, depending upon the context, that "thing" could be either the amount of pollution removed ($/ton-removed) or the amount of electricity produced ($/kw or $/kwh). Indeed, the word "costs" is used in two places in section 407(b)(2), and perhaps the best evidence of the essential ambiguity of the word is that each side adopts the other's definition for one of the two uses. Appalachian Power argues that $/ton-removed is the appropriate way to define "costs" when they are "tak[en] into account" in determining "the best system of continuous emission reduction." App. Pwr. Br. at 32. It insists, however, that only $/kw and $/kwh will do for the key phrase, "comparable to the costs of nitrogen oxides controls." Id. at 33; App. Pwr. Reply Br. at 8. EPA would use the two definitions in precisely the opposite places. See EPA Br. at 35.
Turning to the grammatical structure of the statutory provision, Appalachian Power argues that its definition for the key phrase is "plainly" required because of the context in which the phrase is used. It contends that the antecedent of the word "which," in the phrase "which is comparable to the costs of nitrogen oxides controls," is the phrase "the best system of continuous emission reduction." On this reading, it argues that EPA's job is to base emission limits on "the best system of continuous emission reduction ... which is comparable to the costs of nitrogen oxide controls." When comparing the costs of one system of controls to those of another, it argues, the appropriate comparison is the cost of producing electrical power.
Even if we were to adopt this view of the provision's grammar, it would be hard to conclude that Appalachian Power's definition is "plain." The syntax for which Appalachian Power argues simply does not resolve the question of "costs for what?" Although one certainly could compare the "costs" of two systems by comparing their costs for producing electrical output, one could also reasonably compare their costs for removing tons of pollution.
Moreover, we cannot agree that Appalachian Power's view of the provision's grammar is the only reasonable one. As EPA notes, to read the phrase "best system" as the antecedent of the word "which" would require deletion of both the semicolon and
EPA Br. at 6 (emphases added). The only way to determine the degree of NO
EPA's grammatical construction is plausible. But it is no more plausible than that of Appalachian Power because it, too, requires editing of the congressional text. This time, rather than make a deletion, we would need to make an addition. As noted in italics above, we would need to add the word "which," so that it appears twice rather than only once, in order to create a parallel construction that makes "the degree of reduction" the antecedent of both of the numbered phrases. The need to make that addition, however, only highlights its absence in the actual text and confirms the essential ambiguity of section 407(b)(2)'s key phrase.
Finding nothing dispositive in the statute's language or grammar, we look next to the legislative history for guidance. Appalachian Power argues that EPA's construction is inconsistent with the purpose of section 407(b)(2), which, Appalachian Power contends, was to ensure that the dollar "cost of controls" to owners of Group 2 boilers would not exceed the dollar "cost of controls" imposed on owners of Group 1 boilers — i.e., not exceed the cost of low NO
Appalachian Power correctly notes that the language of section 407(b)(2) that directs EPA to set Group 2 emission limits, including the key phrase "comparable to the costs of," comes from the Senate bill. Compare 42 U.S.C. § 7651f(b)(2), with Clean Air Act Amendments of 1990, S. 1630, 101st Cong. § 407(b)(2) (1990) (Senate bill), reprinted in COMMITTEE ON ENV'T & PUB. WORKS, U.S. SENATE, A LEGISLATIVE HISTORY OF THE CLEAN AIR ACT AMENDMENTS OF 1990, at 4641 (1993) [hereinafter "LEGISLATIVE HISTORY"]. By contrast, the House version of the bill prevented EPA from regulating certain Group 2 boilers unless EPA, inter alia, found methods "available for reducing emissions from such boilers that are as cost effective as the application of low nitrogen oxides burner technology in the case of [Group 1] boilers." Clean Air Act Amendments of 1990, S. 1630, 101st Cong. § 506(a)(c) (1990) (House bill) (emphasis added), reprinted in LEGISLATIVE HISTORY, at 2277. Appalachian Power contends that the conference committee's adoption of the Senate version — which did not use the phrase "cost effective" found in the House version — was tantamount to a rejection of the concept of cost-effectiveness. We disagree.
As a general matter, courts often have noted the difficulty of determining the significance of Congress's unexplained modification of language in earlier drafts of legislation, and have found that such modification does not necessarily indicate Congress's rejection of the substance of the earlier language. See, e.g., Seatrain Shipbuilding Corp. v. Shell Oil Co., 444 U.S. 572, 594-95, 100 S.Ct. 800, 812-13, 63 L.Ed.2d 36 (1980); Edison Elec. Inst. v. EPA, 2 F.3d 438, 451 (D.C.Cir.1993). The two phrases at issue here — "comparable to the costs of" and "cost effective" — are not incompatible. It is possible that Congress regarded the two as synonymous,
Elements of the legislative history of the enacted version support this reading. Perhaps most persuasive is Congress's direction, in the conference report on the final bill, that EPA should base emission limits for Group 2 boilers on "methods that are available for reducing emissions from such boilers that are as cost effective as the application of low nitrogen oxide burner technology to [Group 1] boilers." H.R. CONF. REP. No. 101-952, at 344 (emphasis added). Moreover, the conference report incorporates a section of the Senate report on an earlier Senate bill. That report equated the phrase "cost-effectiveness" — as measured by $/ton-removed — with the phrase "comparable to the cost of":
S.REP. No. 101-228, at 332-33 (1989) (emphases added). The Senate report also noted that with the NO
Appalachian Power's general point, that Congress was concerned that the "costs" for Group 2 boilers be comparable to the "costs" for Group 1 boilers, is plainly correct. But there is no support for Appalachian Power's contention that Congress intended $/kwh to define the word in the second part of section 407(b)(2), while expecting $/ton-removed to define it in the first. Congress simply did not make the fine distinctions that the parties make here between different methods of measuring "costs." Indeed, when introducing the amendment that led directly to section 407(b)(2), various Senators referred interchangeably to the terms "cost-effectiveness," "low cost," and "not unreasonably expensive." See e.g., 136 CONG. REC. 5045 (1990) (statement of Sen. Chafee); 136 CONG. REC. 5045-46 (1990) (statement of Sen. Baucus); 136 CONG. REC. 5046 (1990) (statement of Sen. Lott). And during the floor debates on the conference report, Senator Burdick — conferee and Chair of the Senate Committee on Environment and Public Works — again equated "cost" and "cost-effective," stating that the Group 2 limits were to be set
136 CONG. REC. 36,029 (1990) (statement of Sen. Burdick).
In sum, we draw the same conclusion regarding the phrase "comparable to the costs of" in the 1990 amendments as the Supreme Court drew regarding the term "stationary source" in the 1977 amendments to the Act: neither the statutory language nor the legislative history is dispositive of the meaning of the term. See Chevron, 467 U.S. at 861-62, 104 S.Ct. at 2790-91.
Moving then to Chevron's second step, we must consider whether EPA's decision
2. Challenges to EPA's Methodology for Determining Emission Limits33
Having concluded that it would base Group 2 emission limits on the capabilities of those Group 2 control technologies comparable in cost-effectiveness to low NO
First, EPA excluded the cost-effectiveness figures for boilers in the top and bottom 10 percent of cost-effectiveness, so that neither the lowest nor the highest cost projects would skew the comparison. See id. at 67,143 (Table 13); see also EPA Response to Comments at 91-92 (Joint Appendix ("J.A.") 216-17).
Using this cost-comparison test and further calculations, EPA selected appropriate control technologies and an emission limit for each of the four statutory categories of Group 2 boilers, see 42 U.S.C. § 7651f(b)(2)(A)-(D) (wet bottom wall-fired boilers; cyclones; units applying cell burner technology; and "all other types of utility boilers"). It concluded that it could not set emission limits at all for two types of boilers in the catch-all fourth category because no control technology met the comparability test. See id. at 67,114. And it concluded that one kind of control technology was not cost-effective for two types of boilers, and so
Appalachian Power does not propose an alternative to the methodology EPA employed for setting the Group 2 emission limits. Instead, it and intervenor NMA charge that various elements of EPA's methodology are arbitrary and capricious, are unsupported by the record, or were used without following the Act's procedural requirements, and that we therefore must overturn the emission limits generated by EPA's methodology. Although we have considered and find all of petitioners' and intervenor's myriad arguments in this area lacking in merit, we discuss below only the more important of them.
a. Significance of Cost as a Factor in Selection of Controls. "Even assuming that Congress required EPA to compare the cost-of-tons reduced," Appalachian Power argues, EPA's comparison "is unlawful because it does not make cost a significant, much less a determinative factor." App. Pwr. Br. at 37. Appalachian Power contends that this is the result of EPA's choice of methodology, because when one uses a fraction that divides costs by tons-removed, the fraction is "driven" by the denominator. Id. at 37-38. The proof that this is so assertedly is in the results that EPA's comparison test produces: the "costs" of the controls EPA has selected for Group 2, Appalachian Power claims, are "three to seven times higher than the costs of [low-NO
On its face, this is a difficult argument to understand. The key is to recognize that the argument actually mischaracterizes itself: it does not assume, as it claims, that the relevant "costs" are $/ton-removed, but rather assumes they are $/kwh. When Appalachian Power says the "costs" of the Group 2 controls are three to seven times the costs of Group 1 low NO
b. Weight Given to Smaller Boilers. Appalachian Power contends that EPA manipulated its methodology to give unfair weight in Group 1 to smaller, underutilized boilers that are not cost-effective to retrofit with any controls, while giving more weight in Group 2 to larger, higher-utilized, and therefore more cost-effective boilers. This unfair comparison was made, Appalachian Power asserts, in order to ensure that high $/ton-removed Group 2 technologies would still be comparable to Group 1 controls.
We see no evidence of this manipulation. Instead, as we have noted, EPA made a number of statistical adjustments, and in particular excluded figures for boilers in the top and bottom 10th percentiles, precisely to ensure that neither the lowest nor the highest cost projects skewed the comparison. See EPA Response to Comments at 91-92 (J.A. 216-17). The agency's decisions not to impose limits on two types of Group 2 boilers because those boilers did not pass its cost-comparability test, and to exclude from consideration one kind of Group 2 control technology because it was too costly for two types of Group 2 boilers, are further evidence that EPA did not intentionally manipulate its methodology in order to ensure that expensive Group 2 controls would appear cost-effective.
c. Calculation of Cost-Effectiveness of Low-NO
We have carefully considered the record with respect to these charges, but find little with which to work. Some of Appalachian Power's arguments appear to be incorrect factually. The allocation of costs between low NO
d. Calculation of the Cost-Effectiveness of Gas Reburn. On the other side of the equation, Appalachian Power argues that EPA artificially depressed the cost of one particular Group 2 control technology — gas reburn — by using national rather than regional projections of an important element of its cost, namely the price of natural gas. It also contends that gas reburn is not truly an "available" technology, because it has been used only in two small boilers in the United States. Hence, Appalachian Power contends, EPA's predictions of the cost of this Group 2 technology are arbitrary. The statute bars us from considering the first argument because it was not raised with the agency during the rulemaking. See 42 U.S.C. § 7607(d)(7)(B); EPA Br. at 50-51. The second argument is answered adequately by EPA's reliance on experience with gas reburn in boilers outside the United States, see EPA Response to Comments at 206-07 (J.A. 330-31); J.A.1904-06. Nothing in the statute bars EPA from considering such data.
e. Calculation of Cost-Effectiveness of Selective Catalytic Reduction. Appalachian Power also launches an attack on the methodology used to determine the cost-effectiveness of another Group 2 technology, selective catalytic reduction ("SCR"). In order to assess the cost-effectiveness of SCR, EPA had to determine the predicted use of boilers in the year 2000. To do this, it employed a statistical model known as the Integrated Planning Model ("IPM") and conducted a number of runs of the model using varying assumptions. As we have noted in Part II.A above, our consideration of EPA's use of computer models proceeds with considerable deference to the agency's expertise. See American Iron & Steel Inst., 115 F.3d at 1005; Chemical Mfrs. Ass'n, 28 F.3d at 1264-65.
Appalachian Power contends that EPA did not give sufficiently early notice of the assumptions it would use in the IPM, nor of the results of a June 1996 run of the model in which SCR proved less cost-effective than in the April run that was used in developing the final rule. The IPM's predictions for boiler utilization in the year 2000, as well as the final assumptions of the model and the results of the contested June 1996 modeling run, were not placed in the rulemaking docket until November 22, 1996 — two and a half weeks before EPA signed the final rule on December 10, 1996.
In its January 1996 proposed rule, EPA initially announced that it would use a model called the Coal and Electric Utilities Model ("CEUM") to predict boiler utilization in the year 2000. However, commenters, including some of the utilities petitioning here, submitted criticisms of the CEUM while noting advantages of the IPM. See J.A. 1409, 1416-17; 61 Fed.Reg. at 67,143; EPA Response to Comments at 94-100, 354-58 (J.A. 219-25, 477-81). EPA concluded that it should use the IPM instead because it had been used by numerous major utilities, again including some petitioning here, for their own planning purposes, see EPA Response to Comments at 95 (J.A. 220). In April 1996, at a public forum on a related regulatory initiative, EPA provided documentation of how the model was used and of actual model runs, and requested comments. Again, commenters, including some petitioning here, made submissions and the agency made further adjustments to the model's assumptions. In April, the agency conducted a run of the model incorporating these changes and then used it to formulate the final rule at issue here. Subsequently, EPA made additional changes in the model's assumptions, and then reran the model in June. See id. at 95-96, 354 (J.A. 220-21, 477). In September, EPA met again on the related initiative with some of the petitioners here, and further explained the IPM. See id. at 354 (J.A. 477). And on November 22, the IPM's final assumptions and predictions, as well as the results of the contested June 1996 modeling run, were placed in the rulemaking docket.
Viewed in this context, as part of a series of refinements in the agency's model in response to the suggestions of commenters, we conclude that the relatively short period available for further submissions at the end of the rulemaking was reasonable. The agency's use of the IPM in these circumstances constituted a "logical outgrowth" of its original proposal. See Fertilizer Inst., 935 F.2d at 1311. Hence, we find no procedural violation.
Moreover, as we have previously noted, even if the late filing of the final IPM materials had constituted procedural error, we may invalidate a Clean Air Act rule for procedural errors "only if the errors were so serious and related to matters of such central relevance to the rule that there is a substantial likelihood that the rule would have been significantly changed if such errors had not been made." 42 U.S.C. § 7607(d)(8). Yet, Appalachian Power does not even expressly make this assertion. We interpret its point about the June 1996 run as implying that if Appalachian Power had known about it earlier, it would have called it to EPA's attention, and that as a consequence EPA would not have used SCR in determining the Group 2 rates. The flaw in this argument is that EPA did not need Appalachian Power's help to learn of the results of its own modeling run. Nor did EPA ignore those results. EPA conducted a sensitivity analysis of the differences between the April and June runs, in order to determine whether the differences were sufficiently significant to affect the final rule. See EPA Response to Comments 354-55 (J.A. 477-78). Based on that analysis, EPA concluded that the April run provided a reasonable basis for establishing the limits in the final rule, and that using the June run would not significantly change those limits. See id. at 357 (J.A. 480). Although EPA set out its sensitivity analysis in detail in its final Response to Comments, see id. at 355-360 (J.A. 478-83), Appalachian Power has not attempted to identify any defect in that analysis, and hence cannot establish that earlier docketing of the June run would have led to a significant change in the final rule.
In addition to attacking the IPM, Appalachian Power also challenges what it characterizes as "other assumptions" relating to SCR. Again, Appalachian Power gives us little with which to work. It lists a number of asserted flaws in EPA's methodology which, it says, are merely "examples" of the agency's bias in favor of this technology. But EPA adequately responded to each of these challenges during the rulemaking,
Finally, Appalachian Power contends that EPA did not select SCR or gas reburn as a basis for the emission limit for wet bottom boilers until the announcement of the final rule. Although Appalachian Power is correct that SCR and gas reburn were not specifically proposed for wet bottom boilers, the agency's proposed rule did solicit comments regarding the use of both technologies in such boilers. See 61 Fed.Reg. at 1464, 1474 (gas reburn); id. at 1457 (SCR). Commenters clearly understood that these technologies were under consideration, as the agency received comments on them from several sources, see J.A. 905-09, 1063-81; 61 Fed.Reg. at 67,150-51; EPA Response to Comments at 232-36, 360 (J.A. 356-60, 483), including some of the utilities petitioning here, see J.A. 989-91, 1004-116, 1169-72. As we have noted, this kind of agency modification of a proposed rule, in response to the comments it solicited and received on alternative possibilities, complies with the requirements of administrative law. See Natural Resources Defense Council, 838 F.2d at 1242; Small Refiner Lead Phase-Down Task Force v. EPA, 705 F.2d 506, 547 (D.C.Cir. 1983).
f. Subcategorization of Boiler Types. Appalachian Power challenges EPA's failure to adopt a proposal to regulate as separate subcategories, or to exclude from regulation altogether, those Group 1 and 2 boilers where retrofitting allegedly could damage the units or only be accomplished at high cost. As EPA notes, however, the statute establishes specific categories of boilers (two Group 1 categories and four Group 2 categories, see supra notes 4-5), and does not contemplate further subcategorization or boiler-by-boiler treatment. EPA states that it has no evidence to support the claim that boilers in Appalachian Power's proposed subcategories cannot in general achieve the same emission rates as other boilers in the statutory categories, see EPA Response to Comments at 67 (J.A. 192), and Appalachian Power has offered nothing to justify disturbing this agency conclusion. EPA further notes that its statistical methodology took account of the range of cost-effectiveness of boilers within categories, and that the remedy for the owner of an individual unit that cannot achieve category limits is to request an alternative emission limit under 42 U.S.C. § 7651f(d), or to seek permission to average emissions from several units under 42 U.S.C. § 7651f(e). See EPA Response to Comments 67, 254 (J.A. 192, 378). EPA's response to this proposal is reasonable, and its rejection of the proposal is neither arbitrary nor capricious.
g. Consideration of Environmental Impacts in Setting Limits. Finally, intervenor NMA argues that EPA improperly relied on an irrelevant factor — the environmental impacts of the rule — when setting the NO
In sum, finding none of petitioners' challenges to the Group 2 emission limits persuasive, we uphold the limits EPA established for boilers in that Group.
C. The Compliance Deadline
Appalachian Power also challenges EPA's assertion that, pursuant to section 407(a), the new emission limits must be met by January 1, 2000. Section 407(a) provides:
42 U.S.C. § 7651f(a). Because a Phase I "affected unit" (defined as "a unit that is subject to emission reduction requirements or limitations under this subchapter," 42 U.S.C. § 7651a(2) (1994)) must come into compliance with sulfur dioxide emissions limits by January 1, 1995, and because a Phase II affected unit must comply by January 1, 2000, EPA stated in the final rule that the deadline for compliance with the new NO
Before reaching the merits of this argument, we must first dispose of a procedural issue. Appalachian Power's comment on the compliance deadline during the notice-and-comment period argued that, unlike other statutory sections, section 407(b)(2) contains no date after which "it shall be unlawful" to exceed the emission limitations set under the section. Appalachian Power's current argument points out the anomaly of construing the "plain language" of the statute as establishing a compliance date for Group 2, Phase I boilers given that these boilers become "affected units" in 1995, while the Group 2 limits are not required to be promulgated until 1997. EPA seizes on the difference between these two challenges to argue that because Appalachian Power failed to raise its current argument before EPA during the notice-and-comment period, its challenge should be considered waived. We disagree. It is true that under the Act, only an objection to a rule or procedure that was raised with "reasonable specificity" during the comment period may be raised during judicial review. 42 U.S.C. § 7607(d)(7)(B). But the word "reasonable" cannot be read out of the statute in favor of a hair-splitting approach. In other words, the Act does not
EPA's reliance on Ohio v. EPA, 997 F.2d 1520 (D.C.Cir.1993), is therefore unavailing. In that case, we rejected the petitioners' contention that a comment challenging EPA's definition of "onsite" as limited to contiguous areas was sufficient to raise a challenge to EPA's proposed treatment of noncontiguous but reasonably related facilities as a single site, noting that "this minimal reference to the contiguity issue is so tangential to the principal thrust of the comment that it cannot fairly be said to have been presented to EPA for resolution." Id. at 1550. This case is distinguishable from Ohio, in which two distinct actions were challenged: EPA's treatment of contiguous areas as "onsite" and EPA's treatment of reasonably related noncontiguous areas as a single site. Here, both challenges were directed at a single claim: that EPA had no discretion in setting the compliance date.
Even if Appalachian Power could be deemed not to have raised this argument before the agency, we have noted that EPA "retains a duty to examine key assumptions as part of its affirmative `burden of promulgating and explaining a nonarbitrary, noncapricious rule'" and therefore that "EPA must justify that assumption even if no one objects to it during the comment period." Small Ref. Lead Phase-Down Task Force, 705 F.2d at 534-35 (quoting National Lime, 627 F.2d at 433). Because the compliance date for a particular rule would almost certainly be included with these "key assumptions," we are not prohibited from considering Appalachian Power's argument.
Given that the issue is properly before us, we go on to decide whether EPA's conclusion that the statute requires a January 1, 2000, compliance date is valid. EPA argues that because Phase II units must meet the SO
We are presented with a question of statutory interpretation, so once again we conduct a Chevron analysis to determine, first, whether Congress has spoken on the issue of the compliance deadline for Group 1, Phase II units and Group 2 units, and, second, if Congress has not so spoken, whether EPA's selection of a January 1, 2000, deadline was a reasonable interpretation of the statutory scheme.
A careful reading of section 407 leads us to the conclusion that Congress did not include a specific compliance date for NO
Because our reading of the statute reveals a gap to be filled by EPA, we next determine, under the second step of the Chevron analysis, whether EPA's resolution — designating January 1, 2000, as the compliance date for both Group 1, Phase II boilers and all Group 2 boilers — is reasonable.
D. The Classification of Retrofitted Cell Burner Boilers
In this part we consider the proper classification of one kind of dry bottom wall-fired boiler (hereinafter, "wall-fired boiler"), known as a "cell burner." In such a boiler, two or three closely-spaced burners are clustered in "cells," which are placed on opposing walls. Under section 407(b), a wall-fired boiler is classified as Group 1, unless it is a unit "applying cell burner technology," in which case it is classified as Group 2. Compare 42 U.S.C. § 7651f(b)(1)(B), with 42 U.S.C. § 7651f(b)(2)(C). The classification is important to the boiler's owner, because the Group 1 emission limit for wall-fired boilers is stricter than the Group 2 limit for cell burners.
As a consequence of EPA's classification decision, petitioner Arizona Public Service Company ("APS") has two identical boilers, one retrofitted in 1989 (Unit 4) and one retrofitted in 1991 (Unit 5), that are subject to very different emission limits. APS charges that the classification of a retrofitted cell burner—and particularly its Unit 4 — as a wall-fired boiler is arbitrary and capricious. It also contends that the distinction EPA made between retrofitted cell burners, based on the date of their retrofitting, is arbitrary and capricious.
We agree that on the present record EPA has not justified its classification of retrofitted cell burners as wall-fired boilers, and hence vacate and remand the issue to the agency for further consideration. Because we conclude that EPA has not justified the classification of any retrofitted cell burner as a wall-fired boiler, we do not consider whether EPA's effort to distinguish between retrofits based on the date of retrofitting was also arbitrary.
The question whether a retrofitted cell burner can properly be classified as a wall-fired boiler turns upon whether a retrofitted unit is still a unit "applying cell burner technology." 42 U.S.C. § 7651f(b)(1)(B). Neither party contends that this question can be resolved under Chevron's step one. We agree that neither the statutory language nor the statute's structure unambiguously decides the issue. There also is no indication in the legislative history that Congress considered the question of the effect of a retrofit on the appropriate classification of a cell burner. This is a case in which Congress "has not directly addressed the precise question at issue," Chevron, 467 U.S. at 843, 104 S.Ct. at 2782, and we therefore proceed to Chevron's step two.
Under step two, the question is whether the agency's interpretation of the statute is reasonable when measured against the statute's language, legislative history and purpose. EPA argues that its classification of a retrofitted cell burner as no longer "applying cell burner technology" is reasonable. In a "non-plug-in" retrofit, portions of the wall that held the clustered burners are removed, and more widely spaced burners are installed. EPA argues that once this is accomplished, the salient feature of a cell burner— the clustering of burners in cells — has disappeared, and that thereafter the boiler is wall-fired for all intents and purposes.
APS contends, and we agree, that the interpretive question is not simply what the retrofitted boiler looks like ("cellular" or not), but whether it retains the attributes that Congress relied upon in placing cell burners in Group 2. APS argues that Congress placed in Group 2 those boilers whose NO
Moreover, APS argued, the proof that retrofitted cell burners are not the functional equivalent of wall-fired boilers is in their performance. Retrofitted cell burners have much higher emission rates than wall-fired boilers. In fact, APS contended, of the four retrofitted cell burners in the country, only two can achieve the Group 1 emission limit for wall-fired burners. And those two should not be considered, APS further argued, because they achieve the Group 1 limit only by using overfire air as well as low NO
In the rulemaking, EPA's only response to APS's contention about the salience of small boiler size and its relationship to BZRRs was to say that APS did "not provide[] any information supporting [this] claim." EPA Response to Comments at 129 (J.A. 253). This assertion is contradicted by the rulemaking record. See APS Comments at 15-17 (J.A. 1038-40).
On appeal, EPA counsel contends that the fact that few if any retrofitted cell burners can meet the wall-fired limit does not mean the limit is invalid. That, EPA argues, simply puts them in the same category as the 12 percent of all wall-fired boilers that cannot achieve the standard. As we have agreed above, the statute does not require that EPA set limits so that all boilers in a category can achieve them. One problem with EPA's argument here, however, is that it is an impermissible post hoc rationalization of appellate counsel. See, e.g., Unbelievable, Inc. v. NLRB, 118 F.3d 795, 809 n. 3 (D.C.Cir.1997). The larger problem is that it assumes the point that is at issue, i.e., that the retrofitted cell burners are wall-fired boilers. If they are, then EPA is correct that any individual unit's inability to meet the Group 1 limit does not invalidate the standard as a whole. But APS points to these units' inability to achieve the Group 1 limit not as part of an attack on
Because EPA has not adequately justified its treatment of retrofitted cell burners as wall-fired boilers, we vacate and remand the issue to the agency for reconsideration or a more adequate justification.
III. CONCLUSION
For the foregoing reasons, we uphold EPA's NO
It is so ordered.
FootNotes
Appalachian Power's challenge to the rule's NO
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