# Appendix — Alabama Power Co. v. Sierra Club

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URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385011_1488%3A02

## Record

- **Collection:** Supreme Court brief
- **Document type:** Appendix
- **Published:** January 1, 1984
- **Citation:** 467 U.S. 1248

## Text

Office - Supreme
FILED

FEB 28 1964

: No. 83- ALEXANDER L. STEVAS.
— s 2 —__——

83-1499

IN THE

Supreme Court of the United States

OCTOBER TERM, 1983

ALABAMA POWER Co., et ai.,
Petitioners,
V.

SIERRA CLUB, et al.,
Respondents.

APPENDIX TO
PETITION FOR A WRIT OF CERTIORARI TO THE
UNITED STATES COURT OF APPEALS
FOR THE DISTRICT OF COLUMBIA CIRCUIT

HENRY V. NICKEL
(Counsel of Record)

F, WILLIAM BROWNELL

MICHELE POLLAK
HUNTON & WILLIAMS
P.O. Box 19230
2000 Pennsylvania Ave., N.W.
Washington, D.C. 20086
(202/955-1500)

Counsel for Petitioners
Alabama Power Co., et al.

February 1984

— —— ——— —_——__ __. . -

eee _
WILSON - Evrae Printing Co.. Inc. . 769.0096 . WasninaTow,. 0 C. 20001

APPENDIX

TABLE OF CONTENTS

Page
DECISION AND SUBSEQUENT ORDERS
OF THE COURT
Sierra Club v. EPA, 719 F.2d 486 (D.C. Cir.
PR Ne eS RE ne la
Order of December 13, 1983 [denying petition for
rehearing] . saiubadiiediesiiaeaeietemeasundereaencadaats 70a
Order of December 13, 1983 (denying suggestion
for rehearing en banc] .. 72a
Order of December 13, 1983 [denying motion for
clarification] . 74a
Order of January 6, 1984 (delaying issuance of
mandate through January 19, 1984] 76a
Order of February 9, 1984 [delaying issuance of
mandate through February 21, 1984] 200000000000... 78a

AGENCY DECISIONS, FINDINGS OF FACT
AND REGULATIONS

Environmental Protection Agency, Stack Height
Regulations, 47 Fed. Reg. 5864, et seq. (1982)... 80a
Environmental Protection Agency, Use of Supple-
mental Control Systems and Implementation of
porno Standards, 38 Fed. Reg. 25697, et seq.
(1978) .. aiana adigiade 108a

RELATED STATUTES

Clean Air Act §§ 101, 110(a) (1), 110(a) (2) (A)-
(J), 128, 42 U.S.C. §§ 7401, 7410(a) (1), 7410
(a) (2) (A)-(J), 7423 (Supp. V 1981) 20000000... 106a

RECORD MATERIALS

Excerpts from Environmental Research and Tech-
nology, Analysis of EPA Proposed Regulations
on Stack Height Limitation (March 1979) (sub-
mitted as Appendix C to Comments of the Utility
Air Regulatory Group (March 7, 1979) ) ............. 112a
Excerpt from EEA, Inc., Cost and Economic Im-
pact Analysis of the Proposed Stack Heights
Regulation (August 15, 1980) 0000 123a

la

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

No. 82-1384
SrerRA CLUR and NATURAL RESOURCES
DEFENSE COUNCIL, INC., PETITIONERS
Vv.
ENVIRONMENTAL PROTECTION AGENCY, RESPONDENT

ALABAMA POWER COMPANY, et al.,
KENNECOTT MINERALS Co.,
TENNESSEE VALLEY AUTHORITY,
STATES OF NEW YORK, et al.,
STATE OF VERMONT,
AMERICAN PETROLEUM INSTITUTE, et al., INTERVENORS

No. 82-1412
COMMONWEALTH OF PENNSYLVANIA, PETITIONER
v.

U.S. ENVIRONMENTAL PROTECTION AGENCY, and
ANNE M. GORSUCH, ADMINISTRATOR, RESPONDENTS

STATES OF NEW YORK, et al.,
ALABAMA POWER Co., et al.,
STATE OF VERMONT,
AMERICAN PETROLEUM INSTITUTE, et al., INTERVENORS

2a

No. 82-1845

SIERRA CLUB and NATURAL RESOURCES
DEFENSE COUNCIL, INC., PETITIONERS

v.
ENVIRONMENTAL PROTECTION AGENCY, RESPONDENT

ALABAMA POWER COMPANY, et al.,
AMERICAN PETROLEUM INSTITUTE, et al., INTERVENORS

No. 82-1889
COMMONWEALTH OF PENNSYLVANIA, PETITIONER
v.

U.S. ENVIRONMENTAL PROTECTION AGENCY, and
ANNE M. GORSUCH, ADMINISTRATOR, RESPONDENTS

ALABAMA POWER COMPANY, et al.,
AMERICAN PETROLEUM INSTITUTE, et al., INTERVENORS

Petitions for Review of Orders of the
Environmental Protection Agency

Argued April 18, 1988
Decided October 11, 1983
Richard E.. Ayres and Howard I. Fox, for petitioners in

Nos. 82-1384 and 82-1845.

Thomas Y. Au, Assistant Counsel, Commonwealth of
Pennsylvania, was on the brief for petitioners in Nos.
82-1412 and 82-1889.

Catherine A. Cotter, Attorney, Department of Justice,
of the bar of the Supreme Court of California, pro hac
vice by special leave of Court, and Christina Kaneen,

3a

Attorney, Environmental Protection Agency, of the bar of
the Supreme Court of Illinois, pro hac vice by special leave
of Court, with whom Carol E. Dinkins, Assistant Attorney
General, Department of Justice, Robert M. Perry, General
Counsel, and Charles S. Carter, Acting Assistant General
Counsel, Environmental Protection Agency, were on the
brief, for respondents. Barry S. Newman, Attorney, De-
partment of Justice, and Jesse Carrillo, Attorney, En-
vironmental Protection Agency, also entered appearances
for respondents in Nos. 82-1384, 82-1412, 82-1845 and
82-1889.

Henry V. Nickel, with whom F. William Brownell and
Michele Pollak were on the brief, for intervenors, Alabama
Power Co., et al., in Nos. 82-1384, 82-1412, 82-1845, and
82-1889,

Stark Ritchie and David T. Deal were on the brief for
intervenors, American Petroleum Institute, et al., in Nos.
82-1384, 82-1412, 82-1845, and 82-1889.

Alfred V. J. Prather and Kurt E. Blase were on the
brief for intervenor Kennecott Minerals Company in No.
82-1384.

James E., Fox was on the brief for intervenor Tennessee
Valley Authority in No. 82-1384.

Francis X. Bellotti, James R. Gomes, and Stephen M.
Leonard for Commonwealth of Massachusetts, Robert
Abrams and David R. Wooley, for State of New York,
and Dennis J. Robert, II, for State of Rhode Island, were
on the brief for intervenors, State of New York, et al., in
Nos. 82-1884 and 82-1412. Val Washington also entered
an appearance for State of New York in No. 82-1884.

Before EDWARDS, Circuit Judge, MCGOWAN and MAc-
KINNON, Senior Circuit Judges.

Opinion for the Court filed by Senior Circuit Judge
McGowan.

4a

McGowan, Senior Circuit Judge: This case concerns
the amount of credit electric power plants and other ma-
jor sources of air pollution may receive for the height of
their emissions stacks in calculating limitations on their
emission of pollutants.

Under the Clean Air Act as amended (“the Act”) and
its regulations, emissions limitations for each such source
are fixed on the basis of local, ground-level concentrations
of pollutants, which cannot exceed certain national stand-
ards or incremental increase limitations. Since taller
stacks tend to disperse pollutants over a greater area,
a utility or other source can lower the ambient pollution
concentrations not only by reducing the amount of pol-
lutants it emits into the air, but also by raising the height
of its stack. After the basic provisions of the Act were
passed in 1970, many chose the latter route. In 1977
amendments to the Act, Congress declared that such tall
stacks and other dispersion techniques were not to be
taken into account in calculating the limitations on emis-
sions imposed by the Act. 42 U.S.C. §7423 (Supp. V
1981). Rather, pollution standards were to be achieved
by direct limitations on emissions. The present case
brings before us final regulations issued by the Environ-
mental Protection Agency (EPA) to implement this
provision.

The regulations at issue are detailed and somewhat
complex. Generally speaking, under the 1977 amend-
ments credit for stack height in calculating emissions
limitations is limited to the height dictated by “good
engineering practice’ (GEP). Id. § 7428(a)(1). This
height was defined by Congress to be that necessary to
ensure against certain kinds of localized atmospheric dis-
turbance created by the source itself or nearby obstacles,
and resulting in excessive concentrations of pollutants in
the immediate vicinity of the source. Jd. § 7428(c). The
regulations under review define a number of the statu-
tory terms, such as “nearby” and “excessive,” provide

5a

various methods for determining GEP height and 4eter-
mine when each may be used, implement a statutory bar
on credit for use of “dispersion techniques” other than
stack height, define a statutory “grandfather” clause for
pre-1970 stacks, and provide a timetable for implementa-
tion of the regulations by the states, which are the pri-
mary enforcers of the Act.

We have reviewed carefully the specific provisions chal-
lenged here. Among them we find certain aspects of the
regulatory scheme to be contrary to the terms of the
statute and others to be arbitrary and capricious exer-
cises of the discretion conferred on the EPA by the Act.
These provisions must therefore be overturned. We re-
mand certain other provisions for further consideration
by the agency in light of our discussion here. The re-
mainder of the challenged regulations we uphold.

I

The events leading up to the enactment of the section
of the Clean Air Act Amendments of 1977 involved in
this case have been described in our opinion in Alabama
Power Co. v. Costle, 686 F.2d 328, 388-91 (D.C. Cir.
1979) ,' and in the House committee report accompanying
those amendments, H.R. REP. No. 294, 95th Cong.,
1st Sess. 81-92 (1977) [hereinafter cited as HousE RE-
PORT]. Briefly, under the drastic overhaul of the Clean

1 Alabama Power brought before this court regulations im-
plementing the Act’s prevention of significant deterioration
(PSD) program, intended to protect areas still having rela-
tively clean air, 42 U.S.C. §§ 7470-7491 (Supp. V 1981). See
43 Fed. Reg. 26,380, 26,888 (1978). Included was a provision
that in determining a source’s emissions limitations, both the
source and surrounding polluters would have their emissions
modeled as though they were emitted at GEP height. Indus-
trial petitioners urged that only the emissions from the source
itself should be modeled at GEP height; the surrounding fa-
cilities should be modeled with their actual stack heights. We
upheld the regulation. See 636 F.2d at 388-92. The instant
case concerns, inter alia, the method of setting GEP height
for each source.

6a

Air Act undertaken in 1970, EPA was directed to pre-
scribe national ambient air quality standards for various
pollutants. 42 U.S.C. § 1857c-4 (1976). Upon promulga-
tion of an air quality standard, each state was required
to adopt and submit to EPA a state implementation plan
providing for attainment and enforcement of the stand-
ard. Id. § 7410(a).

Initially, EPA approved state plans that authorized,
in place of direct limitations on emissions, the use of tall
stacks to meet air quality standards. EPA also allowed
the use of other dispersion techniques called supplemental
or intermittent control systems, which are programs that
vary the release of pollutants over time depending on
whether meteorological conditions favor dispersion. EPA’s
policy was overturned by the courts, which, led by the
Fifth Circuit, ruled that the Act allowed reliance on dis-
persion techniques only after implementation of “the
maximum degree of emission limitation achievable.”
NRDC v. EPA, 489 F.2d 390, 410 (5th Cir. 1974), rev’d
on other issues sub nom. Train v. NRDC, 421 U.S. 60
(1975) ; see Kennecott Copper Corp. v. Train, 526 F.2d
1149, 1151-60 (9th Cir. 1975), cert. denied, 425 U.S.
935 (1976) ; Big Rivers Electric Corp. v. EPA, 528 F.2d
16, 20-22 (6th Cir. 1975), cert. denied, 425 U.S. 934
(1976). “Informed as well as chastened by these ju-
dicial decisions,” Alabama Power, 636 F.2d at 390, EPA
in 1976 issued guidelines that, while placing primary
emphasis on emissions reductions, allowed the use of tall
stacks to meet ambient standards in two situations: (1)
where the source was already using “the best available
emission control technology,” or (2) where use of such
technology would be “economically unreasonable or tech-
nologically unsound.” Stack Height Increase Guideline,
41 Fed. Reg. 7450, 7451-52 (1976) [hereinafter cited as
1976 Guideline] .*

*The predecessor to this guideline was evidently issued
only after the initiation of a contempt proceeding for failure

7a

Congress emphatically rejected this approach in the
1977 amendment of the Act that is the subject of the
present controversy. In introducing the bill on the Senate
floor, Senator Muskie criticized the 1976 guidelines for
allowing any use of tall stacks whatsoever in meeting
ambient standards: “Far from prohibiting the construc-
tion of tall stacks or the use of intermittent controls, the
guidelines provide that once minimal emission control re-
quirements are met, polluters are encouraged to substi-
tute unlimited stack height for any further control of
emissions.” 128 Conc. REc. 18,027 (1977). The mood
in the House was the same, id. at 16,203 (remarks of Rep.
Waxman, a sponsor of the House bill) (“The committee
has unequivocally rejected the use of tall stacks and inter-
mittent controls as a final means of compliance with the
Clean Air Act’s requirements.”), and in section 123 of the
amended Act Congress banned virtually all reliance on
tall stacks or “any other dispersion technique” in achiev-
ing compliance with ambient air quality standards, 42
U.S.C. § 7423(a) (Supp. V 1981).

Congress did not, however, actually prohibit tall stacks
or limit their height; in fact, section 123 specifically en-
joins the EPA Administrator (“the Administrator’)
from prohibiting any increase in stack height or restrict-
ing the height of any stack in any manner. Id. § 7423(c).
Rather, the law limits the credit that may be obtained
for such stack height in determining whether the plant
will cause ambient air standards to be violated or in-
crease pollution by too large an increment. The credit
system is based on techniques of modeling whereby, via

to comply with the Fifth Circuit’s order in NRDC v. EPA.

See NRDC v. EPA, 529 F.2d 755, 760 (5th Cir. 1976) (“We

deny the [contempt] motions . . ., noting however, that such

motions apparently were necessary to compel the Adminis-

no al ti tet issued more than a year
ore,”).

8a

mathematical or small-scale physical demonstrations, a
plant’s emissions can be assumed to emerge from a cer-
tain stack height and then mapped as they fall to earth
in order to see their effect on ambient pollution. Thus,
section 123 is intended to eliminate any credit a plant
might receive for the dispersive effects of a tall stack
in the calculation of its emissions limitations, although
the stack itself remains in place.

There were essentially three reasons for Congress’s re-
fusal to allow reliance on tall stacks and intermittent con-
trol measures. First, dispersion techniques do not reduce
the amount of pollution in the air, but merely spread it
around, exporting it to other areas where it is too late
to control the problem, and exposing previously pristine
areas to contamination. See, e.g., HOUSE REPORT, supra
p. 5, at 84-85. Second, the long-range transport of cer-
tain pollutants was also linked to the formation of “acid
rain,” which is precipitation containing acidic derivations
of sulfur oxide and nitrogen oxide emissions. Acid rain
was thought responsible for reduced soil and water pro-
ductivity in certain areas, particularly the Northeast
and Canada. See, e.g., id. at 88-84, 85-86; 123 CoNG.
REc. 18,026 (1977) (remarks of Sen. Muskie). Third,
intermittent control systems, which are dependent on syn-
chronizing plant operation with weather conditions, were
thought to be unreliable and virtually impossible to en-
force. See, e.g., id.; HOUSE REPORT, supra p. 5, at 82-
83, 87.

In rejecting the limited permission to use dispersion
techniques contained in the 1976 guidelines, however,
Congress largely adopted the distinction drawn in those
guidelines, and in a 1973 stack height proposal, between
stack heights that would be allowed without question and
those that would be regarded as a dispersion technique.
See id. at 93 (statute “affirm[s]” the standard used by
the Administrator). This distinction is the main battle-
ground of the present litigation. The guidelines had

9a

based the distinction on “good engineering practice,”
wiich the preamble to the 1973 proposal defined as
follows:

[A] stack which conforms to good engineering prac-
tice is sufficiently tall that emissions from the stack
are not significantly affected by the atmospheric
downwash, eddies, or wakes created by the facility
or nearby structures and terrain. Emissions from
stacks which are shorter than required by good engi-
neering practice often can cause excessively high
ground level concentrations and nuisances within,
and in the immediate vicinity of, the facility.

Use of Supplementary Contro! Systems and Implementa-
tion of Secondary Standards, 38 Fed. Reg. 25,697, 25,700
(1973) (proposed rules) [hereinafter cited as 1973
Guidelines]. Congress appears to have taken the main
elements of this statement in its definition of good engi-
neering practice hsight. Section 123 defines that height as

the height necessary to insure that emissions from
the stack do not result in excessive concentrations of
any air pollutant in the immediate vicinity of the
source as a result of atmospheric downwash, eddies
and wakes which may be created by the source itself,
nearby structures or nearby terrain obstacles.

42 U.S.C. § 7423(c) (Supp. V 1981).

As the quoted language from the 1973 proposal sug-
gests, downwash, eddies, and wakes are caused by the
wind hitting structures or other obstacles near the stack.
The turbulence created in the wake of the obstacles tends
to suck a plume of emissions down to the earth before it
has had a chance to disperse, resulting in inordinately
high pollution concentrations near the plant. See also
House REpPoRT, supra p. 5, at 93 (“Without some provi-
sion for stack height, a plume released downwind of such
a structure might become engulfed by turbulent eddys
[sic] within the wake of the structure.”); 122 Cone.
Rec. 34,384 (1976) (remarks of Sen. Muskie) (“This is

10a

necessary in order to allow good plume rise without down-
washing the plume onto the local area.’’).

While the statute generally left the determination of
GEP stack height to regulations to be promulgated by
the EPA Administrator, it set an upper limit of two-and-
one-half times the height of the stack’s source. 42 U.S.C.
§ 7428(c) (Supp. V 1981). This, too, was taken from
the 1973 and 1976 guidelines. See 1976 Guideline, supra
p. 6, at 7451-52; 1973 Guidelines, supra p. 9, at 25,700,
25,701. The formula was seen as codifying “the stack
height-nearby structure relationship that has been looked
to historically as a responsible way of dealing with the
problem of aerodynamic downwash.” HOUSE REPORT,
supra p. 5, at 93. While the guidelines used the two-
and-one-half-times standard as the standard GEP stack
height, however, Congress was clear in its conference
report that the statutory formula was generally intended
to be an upper limit, and that if EPA found that the
problem of downwash, eddies, and wakes could be pre-
vented by stacks of less than two-and-one-half times fa-
cility height, it was to give credit only for the lower
height. 128 Conc. Rec. 27,071 (1977) (Clean Air Con-
ference Report (1977): Statement of Intent; Clarifica-
tion of Select Provisions). Nevertheless, like the guide-
lines, the statute provides that a plant operator can get
credit for a greater-than-formula height by demonstrat-
ing to the satisfaction of the Administrator that a greater
height is needed to prevent the downwash problem de-
scribed in the Act. 42 U.S.C. § 7423(c) (Supp. V 1981).

In barring any credit for tall stacks and other disper-
sion techniques, Congress believed it was merely reaf-
firming a command it had given in the 1970 Clean Air
Act amendments. It “intended to ratify the general
thrust, if not the specific holdings, of the three U.S.
courts of appeals” that had interpreted the earlier Act
to bar primary reliance on such techniques. House RE-
PORT, supra p. 5, at 91. As a result, the section’s grand-

lla

father clause provides an exemption only for stacks “in
existence” or dispersion techniques “implemented” before
the date of the 1970 amendments, and not for those built
between 1970 and the enactment of the 1977 amendments.
42 U.S.C. § 7423(a) (Supp. V 1981) ; see House REPORT,
supra p. 5, at 93.

Section 128 directs EPA to issue regulations imple-
menting these provisions by February 7, 1978, 42 U.S.C.
§ 7423(c) (Supp. V 1980) (“[n]ot later than six months
after August 7, 1977”), and the states are directed to
revise their applicable implementation plans, as neces-
sary, within nine months of the promulgation of EPA’s
regulations, id. § 7401 note (the later of one year after
enactment of the Act or nine months after promulgation
of EPA regulations). Proposed regulations were not is-
sued until January 12, 1979, however. Stack Height Reg-
ulations, 44 Fed. Reg. 2608 (1979). Under a court-
ordered timetable, Sierra Club v. Gorsuch, No. 81-0094
(D.D.C. June 22, 1981, modified Aug. 20, 1981, and
Feb. 17, 1982), EPA then issued a revised set of pro-
posed regulations on October 6, 1981, 46 Fed. Reg. 49,814
(1981), and finally issued final regulations on Febru-
ary 8, 1982, 47 Fed. Reg. 5864 (1982) (to be codified in
40 C.F.R. $$ 51.1, 51.12, 51.18). Petitioners NRDC and
Sierra Club filed motions for reconsideration on various
grounds, all of which were denied. Petitions for review
were then filed in this court under the Act’s sixty-day
review provision. 42 U.S.C. § 7607(b) (Supp. V 1981).

The core of the new regulations is the determination
of GEP stack height. The rules provide three methods;
a source operator may use whichever of the. methods
yields the greatest GEP height. First, a “de minimis
height” of sixty-five meters is permitted for all sources
regardless of the size or location of any structures or
terrain features. .47 Fed. Reg. at 5868 (to be codified at
40 C.F.R. § 51.1(ii) (1)). The Administrator stated that
this height represented “a reasonable estimate of the

12a

height needed to insure that emissions will not be af-
fected by common ground-level meteorological phenomena
which may produce excessive pollutant concentrations.”
Id. at 5865. The de minimis feature is not challenged in
this case.

Second, the regulations provide two mathematical for-
mulas, one to be used by stacks in existence on Janu-
ary 12, 1979, the date of publication of EPA’s original
proposed rules, and the other for stacks whose construc-
tion commenced after that date. The formula to be used
by the earlier stacks is what the Administrator termed
“the traditional engineering formula of two and one-half
times the height of the nearby structure” (hereinafter
called the 2.5 Rule). Jd. The second formula is a refine-
ment of the first that is intended to reflect the reduced
height needed to surmount the less severe downwash
effects produced by tall, thin structures. See 46 Fed. Reg.
at 49,815. The refined formula gives credit for the height
of the nearby structure plus one-and-one-half times the
lesser of the height or width of the structure (hereinafter
called the 1+1.5 Rule). 47 Fed. Reg. at 5868 (to be
codified at 40 C.F.R. § 51.1(ii) (2) (ii)). Under either
formula, only “nearby” structures may be used. “Nearby”
is defined as a distance from the stack of five times the
lesser of the height or width of the structure itself, up
to one-half mile. Jd. at 5869 (to be codified at 40 C.F.R.
§ 61.1(jj)).

The third method for calculating GEP stack height is
by a physical demonstration, either a fluid model or a
field study. This method must be used to obtain credit
for downwash produced by terrain features or by any
obstacle that is not “nearby.” The demonstration must
show that a greater-than-formula height is needed to
ensure that emissions from the stack do not result in
excessive concentrations of any air pollutant. Jd. at 5868-
69 (to be codified at 40 C.F.R. § 51.1(ii) (3)). “Exces-
sive concentrations” is defined as maximum concentra-

18a

tions of a pollutant at least forty percent in excess of the
maximum concentrations of the pollutant in the absence
of the downwash, eddy, or wake effects. 7d. at 5869 (to
be codified at 40 C.F.R. § 51.1(kk)).

We will describe other details of the challenged regula-
tions as needed in dealing with each of petitioners’ objec-
tions to the new rules. We will discuss first those objec-
tions going roughly to the formulation and operation of
the three methods, next those going to when the various
methods are applied, then objections to certain exemp-
tions from the regulations, then the various grandfather
clauses provided by the regulations, and finally an ob-
jection to EPA’s timetable for state implementation of
the regulations.

II

A. Definition of “Nearby”

As noted, the new regulations define “nearby” for
purposes of application of the formulas as five times the
height or width of the structure, up to one-half mile.
There is no specific limit on the distance that structures
and terrain obstacles may be from the stack in order to
be taken into account in a demonstration. NRDC and
Sierra Club argue that Congress intended to limit the
structures and terrain obstacles that may be said to
cause downwash to those within one-quarter mile of the
stack, so that the regulations are contrary to law with
regard to both the formulas and demonstrations.

The source of petitioners’ argument is certain language
in the House Report that they say indicates Congress’s
understanding that “nearby” meant no more than one-
quarter mile away. The Report’s discussion of the term
is as follows:

In affirming the 21 times standard used by the
Administrator, the committee referred to downwash
problems created by both manmade structures and to
terrain features located “nearby” the source. The
committee intends that the term “nearby” be strictly

l4a

construed, in keeping with the general policy of
statutory interpretation favoring strict construction
of exceptions and variances. If this term were con-
strued too broadly (that is, to apply to manmade
structures or terrain features one-fourth to one-half
mile away from the source or more), the result could
be an open invitation to raise stack heights to un-
reasonably high elevations and to defeat the basic
underlying committee intent.

House REPORT, supra p. 5, at 93 (emphasis added).

EPA apparently selected the one-half-mile limitation
solely in response to this expression of congressional in-
tent; it itself believed that downwash effects occur at
greater distances from the obstacles and that the five-
times-height-or-width rule was a better approximation
of the longevity of those effects than is the one-half-mile
limit. See 44 Fed. Reg. at 2610; 46 Fed. Reg. at 49,819.

We agree that the one-half-mile limitation is a suffi-
cient response to the congressional intent. The statute
specifically gives the EPA Administrator discretion to
promulgate regulations to determine GEP height and
the House report clearly indicates that that discretion ex-
tends to defining terms such as “nearby” as necessary,
presumably in light of the Administrator’s expertise. The
report standing alone is arabiguous on whether it was try-
ing to impose a specific limitation on the definition of
“nearby,” but when read in light of the statute’s broad
conferral of discretion it is most readily interpreted as
an attempt only to suggest the scale of magnitude that
the committee had in mind, and not to pick a specific fig-
ure. The one-half-mile limitation that EPA chose is at
or near the outer edge of the range Congress was think-
ing of, but it does not go beyond it. Thus, we find the
Administrator’s choice to be consistent with both the leg-
islative history and the statute.

The refusal to give any content to the statutory term
“nearby” when applied to demonstrations is quite a dif-

lba

ferent matter.’ The rationales offered were that (1) some
obstacles create downwash effects at distances of more
than one-half mile, (2) the fluid modeling methods would
accurately tell precisely when such effects were occurring,
and (3) the boundaries of many terrain features are not
always distinct and thus a specific distance limitation
would be difficult to apply. See 46 Fed. Reg. at 49,819:
sec also id, at 49,821 (accuracy of fluid modeling). Thus,
the Administrator believed that the statute was intended
to allow credit for the height needed to avoid the effects
of ony downwash that could cause excessive concentra-
tions of pollutants.

While such an approach might make a good deal of
sense, we do not think it is the approach commanded by
the statute. The primary support for the Administrator’s
reading is that the language from the House Report
quoted above, which places great emphasis on the word
“nearby” as a carefully imposed limitation on the de-
termination of GEP height, discusses the term only in
connection with the formula method, not the demonstra-
tion technique. The Report disevsses demonstrations in a
different paragraph and does not mention the word
“nearby” there at all. HOUSE REPORT, supra p. 5, at 93.

Moreover, applying the “nearby” limitation only to the
formula method and not to demonstrations would cer-
tainly be rational because, unlike demonstrations, the
formulas do not otherwise select the obstacles to be
taken into account. Without some limitation, the for-

* EPA somewhat lamely suggested that the new regulations
do in fact give some meaning to the word “nearby” as applied
to demonstrations: “Any terrain feature which is close
enough to a source to cause excessive concentrations must be
considered a ‘nearby’ feature.” 46 Fed. Reg. at 49,819. If this
were the statute’s command, it would be no different if the
word “nearby” did not apply to demonstrations. Thus, “near-
by” must effectively be read out of the statute in order to
reach EPA's interpretation.

l6a

mulas could conceivably be used to give credit for the
height of any obstacle upwind of the stack, even though
the turbulence created in the wake of those obstacles
could not possibly disrupt the plume. Demonstrations,
however, do select the obstacles that will be taken into
account, because they more accurately tell which will
actually cause downwash.

Nevertheless, the legislative history is not explicit
enough to refute the clear thrust of the statutory lan-
guage. In describing the demonstrations that are per-
mitted, the statute states that the operator may show
“that a greater height [than two-and-one-half times the
height of the source] is necessary as provided under the
preceding sentence.” 42 U.S.C. § 7423(c) (Supp. V 1981)
(emphasis added). The “preceding sentence’ defines
“good engineering practice” as the height necessary to
ensure that excessive concentrations will not result from
downwash created by the source, “nearby structures or
nearby terrain obstacles.” Jd. (emphasis added). Thus,
the statute explicitly applies the “nearby” limitation to
demonstrations.

If such a reading were utterly nonsensical, we might
be tempted, as a matter of interpretation of likely in-
tent, to strain the statutory language to arrive at a
more rational result. See, e.g., American Tobacco Co. v.
Patterson, 456 U.S. 63, 71 (1982) (“Statutes should be
interpreted to avoid . . . unreasonable results whenever
possible.”); 2A C. SANDS, STATUTES AND STATUTORY
CONSTRUCTION § 45.12 (4th ed. 1978) (same). But such
an approach to interpretation of statnies must be used
with utmost caution, for the line between irrationality
and mere bad policy is a wavering and uncertain one.
Here, sense can be made of a limitation on the stack-
height credit operators may receive in addition to the
requirement that the height be necessary to avoid ex-
cessive concentrations of pollutants in the immediate
vicinity of the plant. When EPA originally proposed

17a

these regulations in 1979, for example, it apparently in-
tended some version of the “nearby” limitation to apply
to demonstrations; it explained that it interpreted “the
Congressional guidance as a criterion to indirectly estab-
lish a reasonable upper limit on GEP stack heights.” 44
Fed. Reg. at 2610; see id. at 2611 (“As in the case of
GEP determinations using the empirical equation, the
definition of ‘nearby’ is integral to determine the extent
to which structures or terrain features may reasonably
influence the fluid modeling or field study based GEP
determination.”). That is, Congress may merely have
wanted to place an absolute cap on the credit a source
could receive for a tall stack, perhaps out of a distrust
of the political and scientific methods by which the
agency's determinations of stack height credit were to be
made.

In addition, as the Administrator’s rationale for elimi-
nating the “nearby” limitation suggests, that limitation
will primarily affect sources located in hilly terrain, since
it is unlikely that a manmade obstacle will be large
enough to create downwash problems at distances of
greater than half a mile. Yet there are strong indica-
tions in the legislative history that Congress specifically
sought to discourage utilities from locating in hilly ter-
rain, because such locations tend to require very tall
stacks, leading to greater dispersion of pollutants. For
example, the House report states that it was “the ex-
pectation of this committee that persons responsible for
siting new facilities will not locate them next to terrain
features which will produce . . . downwash.” HOUSE
REPORT, supra p. 5, at 98. See infra pp. 37-88 (other in-
dications of this intent). Applying the “nearby” limita-
tion to all methods of deriving GEP heights may be fur-
ther evidence of Congress’s lack of solicitude for utilities
located next to mountains (as opposed to those located
next to very local, and presumably smaller, terrain fea-
tures that may be surmounted with less stack height).

18a

Finally, even if there is an element of arbitrariness in
Congress’s applying the “nearby” limitation to demon-
strations, we note that the entire GEP stack height al-
lowance was already regarded as something of a conces-
sion from the strict command that dispersion not be used
to meet air quality standards. Congress may simply have
been unwilling to compromise further the predominant
purpose of reducing emissions in order to take account of
what it may have regarded as fairly attenuated claims
of downwash. There is frequently some arbitrariness
when a lawmaker says, “Thus far and no further,” but
such lines frequently must be drawn.

The statutory language must thus be interpreted to
apply “nearby” to demonstrations as well as to the for-
mulas as a limitation on the amount of downwash that
will be taken into account in giving credit for stack
height. We remand, therefore, for the EPA to include
new regulations that apply the same “nearby” limitation
to demonstrations as is applied to the formulas.

B. Definition of “Excessive Concentrations”

When a source owner seeks to obtain credit for stack
height greater than provided by the formulas, it must
demonstrate that downwash can be expected to cause
“excessive concentrations” of pollutants in the vicinity
of the plant. The regulations define “excessive concen-
trations” as a forty-percent increase over the levels in the
absence of the downwash-creating obstacle. 47 Fed. Reg.
at 5869 (to be codified at 40 C.F.R. § 51.1(kk)).

Petitioners NRDC and Sierra Club argue that such a
definition is arbitrary and capricious because it does not
measure any absolute amount of pollutant that is a
danger to health or welfare, but instead invokes a rela-
tive measure. They state that the forty-percent rule
would permit a source located in a very clean area to
raise its stack height credit, even if the downwash
avoided would only increase pollutant concentrations by

19a

a very small amount that would be of no harm to any-
one. They urge a return to a standard like the one
EPA originally proposed in 1979. Under that standard
a source would have had to show that downwash would
both increase pollutant concentrations by at least forty
percent and cause a violation of a national ambient air
quality standard or, in certain areas, an incremental in-
crease limitation. 44 Fed. Reg. at 2611.

EPA eliminated the second of these criteria—requiring
a violation of an air quality standard—in 1981. It said
that its air quality standards and incremental limitations
are unable to measure the high pollutant concentrations
of extremely short duration that are typical of down-
wash. 46 Fed. Reg. at 49,819. This is because the stand-
ards measure pollutants after they have dispersed in the
air, not in the concentrated doses caused by downwash.
Id, Also, the standards measure average concentrations
over time periods ranging from one hour to one year,
which is too long to measure accurately the peak con-
centrations of downwash pollutant. Jd. (In this court,
EPA states that it is currently reviewing its SO. stand-
ard to determine whether a short-term standard is neces-
sary to protect public health. Brief of Respondents at 35
n.27.)

Thus, only the forty-percent test was left. In this cir-
cumstance, the basis for, and derivation of, that test
become especially important.

The forty-percent figure was derived from a review
of the scientific literature on stack heights, including re-
ports of wind tunnel tests EPA itself conducted during
the rulemaking. EPA discovered a consensus in the liter-
ature that “the well established 2.5 times rule” was the
stack height necessary to avoid “significant effects” for
most buildings. The 1+1.5 Rule was found to be the
consensus for tall, thin buildings. See Guideline for De-
termination of Good Engineering Practice Stack Height
(Technical Support Document for Stack Height Regula-

20a

tions) (July 1981), Joint Appendix (J.A.) at 1086 [here-
inafter cited as Technical Support Doc.].

EPA then looked to the amount by which ground-level
concentrations of pollutant were increased when a 2.5
or 1+1.5 stack was in place. It found that these formulas
did not eliminate all effects of downwash but limited in-
creased concentrations to roughly forty to eighty percent
over the preexisting concentrations, with eighty percent
representing an unusually high amount. See id. at 1096.
EPA reasoned that if under traditional engineering prac-
tice the increase in concentrations was limited to about
forty percent, then increases over forty percent could be
regarded as excessive. See Draft Technical Support Docu-
ment for Determination of Good Engineering Practice
Stack Height (July 31, 1978), J.A. at 42 (Where range
of increases recorded at GEP height was 20% to 40%,
report concluded that “an increase in maximum concen-
trations less than 20% is less than expected for GEP
stack height while an increase in maximum concentra-
tions greater than 40% is excessive.”’).

The forty-percent figure is thus the lesson of history:
it is what the engineering community has regarded as
too much downwash. NRDC and Sierra Club argue that
this approach is all wrong, since Congress’s real concern
in encouraging stack heights high enough to prevent “ex-
cessive concentrations” of downwash was the protection
of human health. Therefore, they say, EPA must exer-
cise its own independent judgment and define the term
to allow enough height to prevent health-threatening
downwash, and no more. Because the forty-percent
standard is based on a relative value that varies with
background concentrations, NRDC and Sierra Club as-
sert, it does not measure the absolute levels of pollutant
that are a danger to health.

Our review of the statute and its legislative history
discloses sharply conflicting signals on whether Congress
intended to legislate the proexisting engineering practice

2la

or only so much stack height as would protect health or
welfare. On the one hand, the primary statutory stand-
ard was “good engineering practice,” suggesting an in-
tent to mandate whatever engineers had been doing.
Moreover, the entire purpose of the statute was to remedy
an abuse that had arisen whereby polluters were building
stacks solely to evade Clean Air Act requirements; Con-
gress may well have wanted to return to whatever en-
gineers would do in the absence of the Act. In addition,
the statute explicitly endorsed the standard—the 2.5 Rule
—that Congress thought was the traditional engineering
practice.

Nevertheless, Congress did not stop there, for it pro-
vided a very precise definition of what it regarded as
“good engineering practice,” suggesting that it did not
intend to leave the question of stack heights entirely to
professional standards. While the statutory term at the
center of that definition, “excessive concentrations,” is
ambiguous—it could be read as either in excess of the
previously recognized standard or in excess of some ab-
solute standard, such as safety—-the legislative history
points strongly in the direction of a meaning turning on
danger to public health. The House committee report
describes why downwash can be a problem in the follow-
ing terms: “When this [downwash] occurs even the
plume from a well-controlled source may cause air
quality standards (or other requirements) to be vio-
lated.” HOUSE REPORT, supra p. 5, at 93. We think it a
strain to refer to the previously recognized standard as a
“requirement”; it seems likely that the committee was
referring to other legal requirements, such as state nui-
sance law or the Clean Air Act’s prevention of significant
deterioration increments.

EPA’s 1973 stack height guidelines, which, as we have
said, appear to have been Congress’s main source for the
statutory language, also strongly suggest that the evil
sought to be avoided by good engineering practice was

22a

tied to some minimum level of Canger or inconvenience
to the community. They provided:

Emissions from stacks which are shorter than re-
quired by good engineering practice often can cause
excessively high ground level concentrations and nui-
sances within, and in the immediate vicinity of, the
facility. . . . The use of stack height up to the level
of good engineering practice is encouraged by EPA
in order to avoid local nuisances.

1973 Guidelines, supra p. 9, at 25,700; see also, e.g.,
Commonwealth v. South Covington & C. St. Ry., 181
Ky. 459, 463, 205 S.W. 581, 583 (1918) (“[A] common
or public nuisance is the doing of or failure to do some-
thing that injuriously affects the safety, health, or morals
of the public, or works some substantial annoyance, in-
convenience, or injury to the public... .”); United
States v. County Board, 487 F. Supp. 187, 148 (E.D.
Va. 1979) (“The term ‘nuisance’. . . includes everything
that endangers life or health, gives offense to the senses,
violates the laws of decency, or obstructs the reasonable
and comfortable use of property.’’).

What seems most likely is that Congress thought tra-
ditional engineering practice and protection of health
were the same thing. If that is the case, however, what
are we to do if it develops, as NRDC and Sierra Club
argue, that traditional engineering practice in fact dic-
tates a height that is in some cases much higher than
necessary to protect human health? We are saved from
the full rigors of this potential conundrum by the confer-
ence committee. Its report states:

[I]f it should be determined that downwash, eddies,
and wakes can be prevented by stacks of less than
21% times facility height, the Administrator’s rule
should give ‘credit’ only for the height needed to
avoid these conditions.

. . . In other words, it was not our purpose to
make a Congressional judgment about what stack

23a

height was needed to prevent downwash. We intend
EPA to make this judgment, subject only to the Con-
gressional prohibition on the excessively high stacks
of over 21% times building height.

123 ConG. Rec. 27,071 (1977).

What this passage suggests is that Congress wanted
the Administrator to determine the height necessary to
avoid excessive concentrations of downwash-caused pollu-
tion. Since Congress believed that the 2.5 Rule was in
fact the good engineering practice rule, see HOUSE RE-
PORT, supra p. 5, at 93 (“A stack height value produced
by reference to this historical relationship is referred to
as ‘good engineering practice’ stack height and has been
used by EPA in its regulations.”), the passage suggests
that the conference committee saw the possibility of a
distinction between its definition of the amount of down-
wash to be avoided and what engineers had been doing.
If that turned out to be the case, the committee was
clear that the statute’s definition would govern. Thus,
development of a standard governing the height of stacks
by refarence solely to what engineers had been doing,
with no regard for some real life values, was contrary to
the intent of Congress.

Reading the House committee report as a whole con-
firms this view. It begins its discussion of the details of
the bill with the observation that downwash is a prob-
lem because it causes air quality standards or other re-
quirements to be violated, and only then discusses the
“historically . . . responsible way of dealing with the
problem.” Jd. This suggests that meeting air quality
standards was primary in its mind and that good engi-
neering practice was merely a way to do so.

Finally, we are considerably bolstered in our view that
Congress was thinking primarily of dangers to health be-
cause that was the position originally taken by the Admin-
istrator. In the 1979 proposed regulations, primary re-

24a

liance was placed on the requirement that the downwash
in question cause a violation of air quality standards.
The forty-percent proviso was merely intended, EPA
wrote, “to establish a reasonable upper bound for credit-
able stack heights.” 44 Fed. Reg. at 2611.

When EPA dropped the air quality standards as one
of its criteria for measuring “excessive,” it did not ad-
dress whether the forty-percent test measured danger to
health or welfare. Neither EPA nor the utilities that
have intervened on its behalf have disputed the conten-
tion of Sierra Club and NRDC that the forty-percent
rule, because it measures relative changes in “pre-
existing concentration,” cannot measure the absolute
levels of pollutant that are a danger to health. See
Brief of Petitioners at 39. We agree that the level of
pollutant that is a danger to health is an absolute value:
the Act clearly envisions that the national ambient air
quality standards that are to protect health and welfare
will be defined in terms of maximum concentrations of
each pollutant, see, ¢.g., 42 U.S.C. § 7409(c) (1976) (re-
quiring promulgation of standard for “NO, concentra-
tions over a period of not more than 3 hours’’), and that
is the way the Administrator has consistently imple-
mented the Act, see, ¢.g., American Petroleum Institute
v. Costle, 665 F.2d 1176 (D.C. Cir. 1981) (approving
ozone standard of 0.12 parts per million), cert. denied,
455 U.S. 1084 (1982).

We disagree, however, with the petitioners’ interpreta-
tion of the present regulation, and thus with their conclu-
sion regarding the relation of the regulation to health.
NRDC and Sierra Club appear to assume that the forty-
percent increase in concentration is to be an increase over
the preexisting levels in the area including background
concentrations of pollutants. We believe, however, that
the increase is to be measured against the amount of the
source’s own plume that falls to the ground even without
downwash, regardless of preexisting or background con-
centrations of pollutant from other sources,

25a

Petitioners’ interpretation is arguably the most natural
reading of the language of the regulation itself, which is
as follows:

“Excessive concentrations” for the purpose of de-
termining good engineering practice stack height in
a fluid model or field study means a maximum con-
centration due to downwash, wakes, or eddy effects
produced by structures or terrain features which is
at least 40 percent in excess of the maximum con-
centration experienced in the absence of such down-
wash, wakes, or eddy effects.

47 Fed. Reg. at 5869 (to be codified at 40 C.F.R.
$51.1(kk)). The regulation does not specify whether
the “maximum concentration experienced in the absence
of such downwash” is to be measured with or without
pollutants generated by other sources. The 1979 proposal
was similarly ambiguous. See 44 Fed. Reg. at 2614
(maximum concentrations “due in part or whole to down-
wash, wakes, or eddy effects’’).

The preamble to the final regulations, however, is ex-
plicit that the forty-percent standard requires the source
to demonstrate that “maximum concentrations caused by
the source’s emissions from its proposed stack height,
without consideration of nearby structures or terrain
obstacles, will increase by at least 40 percent when the
effects of the structures or terrain obstacles are consid-
ered.” 47 Fed. Reg. at 5865 (emphasis added). Even
more important, we see no reason why, as a scientific
matter, one would rationally include background concen-
trations in the calculation.

Although this court’s knowledge of the operation of
downwash is admittedly rudimentary, it seems most likely
that the amount of additional pollutant that is brought
to the earth by means of downwash will somehow relate
to the amount of the original fallout, either because fall-
out is a process similar to downwash and therefore pro-

26a

duces proportionate amounts of grounded pollutants, or
because both relate proportionately to the density of the
plume. Presumably, therefore, the amount of a plume
that falls to earth near the plant even in the absence of
downwash is either an absolute number for all plumes
emitted at a certain height or, more likely, varies with
the density of the plume. Conversely, it seems unlikely
that the amount of downwashed pollutant from a given
stack height should vary with background concentrations
of that pollutant in the area. That would mean that the
eddies and whirlpools that bring the plume down to earth
would operate more effectively the dirtier the surround-
ing air becomes, which, even if possible, seems odd. We
conclude, therefore, that the forty-percent increase refers
to an increase in the amount of pollutants from the plume
that fall to the ground regardless of atmospheric con-
ditions.

We have not had any argument on whether the regula-
tion, so interpreted, in fact estimates dangers to health
and welfare. On the one hand, it seems likely that it was
such dangers to health and welfare that traditional engi-
neering practice, from which the forty-percent figure was
derived, sought to prevent, at least in a very rough way.
On the other hand, EPA has not made this argument,
relying instead on congressional approval of good engi-
neering practice per se. In addition, the EPA scientists
who derived the forty-percent figure did not describe it
as an accurate measure of danger to health or welfare.
It was rather a measure of what scientists conducting
wind tunnel experiments in the past had thought was “a
significant concentration difference” as they observed the
smoke pouring out of their model smokestacks, See Tech-
nical Support Doc., supra p. 20, at 1092. The EPA scien-
tists cautioned:

The visualized . . . studies can be strongly biased by

the observer's eye and are extremely sensitive to the
density of the smoke. The information from concen-

27a

tration profiles is influenced strongly by where the
traverse through the plume is made [to determine
the plume centerline] and the judgment in determin-
ing what constitutes a significant concentration
difference. ...

. . . Although the consensus opinion in the scien-
tific literature strongly supports using [the 1+1.5
Rule] to determine GEP stack height, actual studies
could show the need for a much taller or lower stack
depending on one’s interpretation of what is a sig-
nificant influence and on the effect of possible plume
rise.

Id, at 1089-92 (emphasis added).

Moreover, we note that EPA chose the forty-percent
figure from a range of increased concentrations produced
by a stack 2.5 times the height of the obstacle, and forty
percent was at the low end of that spectrum. The choice
of forty percent as the definition of “excessive” is more
consistent with an attempt to arrive at a reasonable
upper limit on stack height—i.e., to place a floor on the
amount of increased concentration that would justify an
increased stack height—rather than an attempt to dis-
cern the historical concept of safe levels of downwash.
Reliance on the lower figure alone also does not appear
to be consistent with the clearly expressed congressional
expectation that credit for stacks in excess of the 2.5 Rule
would “be highly infrequent and that the latitude given
the Administrator to allow full credit for such stack
height [would] be exercised with circumspection and ut-
most caution in those rare circumstances proven to justify
its use,” HOUSE REPORT, supra p. 5, at 93.

Finally, apart from the intention of EPA in develop-
ing the forty-percent rule, we think it unlikely that even
the reinterpreted present rule will measure an absolute
pollutant concentration that is dangerous to health, rather
than a range of concentration increases varying with the
density of the plume and other factors. Of course, it may

28a

be that, for all stacks large enough to be of concern, that
range of increases will be entirely above the threshold
of danger to health or welfare. EPA has not said so,
however, and our examination of the derivation of the
figure suggests strongly that that is not the case.

We think our best course is to remand the definition of
“excessive concentrations” to the Administrator with in-
structions to develop a standard directly responsive to the
concern for health and welfare that motivated Congress
to establish the downwash exception. We do not condemn
the historical approach EPA has taken to deriving that
standard, but we caution EPA to be aware that it is
writing under substantially different conditions from
those that faced the engineers who first developed the
rules of thumb for stack height. The engineers could be
satisfied with a conservative rule that was absolutely
sure to eliminate health hazards, but only local ones;
EPA must be more stringent, since any extra height will
mean increased emissions and longer transport of pol-
lutants, both of which Congress has instructed the agency
to minimize. Therefore, EPA must satisfy itself in some
way independent of history that the standard it derives in
fact fairly approximates the stack height level needed to
protect local health and welfare; in doing so, moreover,
it should err on the side of reducing stack height, in
keeping with Congress’s command that credit for stack
heights above the 2.5 Rule height be granted with “ut-
most caution.” These two precepts are the heart of our
holding on this issue.

C. Failure to Consider Plume Rise

Plume rise refers to the tendency of exhaust gases to
continue to rise after they leave the stack because of their
momentum and heat. Petitioners NRDC and Sierra Club
assert that in deriving the 1+1.5 and 2.5 Rules EPA has
ignored plume rise. They argue that the failure to con-
sider plume rise is arbitrary and capricious, because it

-will lead to the prediction, of excessive concentrations
where none wi!! occur since the “effective” height of the
stack will be much higher than the physical height. Thus,
they say, the GEP formulas will allow higher GEP height
than needed to ensure against excessive concentrations of
pollutant caused by downwash.

EPA admits that the formula does not take account
of plume rise, but asserts that “[u]nder the very high
wind cenditions that cause downwash, no plume rise
takes place near the source.”” Summary of Comments and
Responses on the October 7, 1981 Proposal of the Stack
Height Regulations (Dec. 1981), J.A. at 1190 [herein-
after cited as 1981 Responses]; accord Technical Sup-
port Doc., supra p. 20, at 1102 (“[T]he critical condi-
tions for determining GEP stack height for most sources
are considered likely to be high winds associated with
neutral atmospheric stability with little plume rise near
the sources.”) ; see also 46 Fed. Reg. at 49,820 (“[T]he
comments correctly pointed out that the technical support
document was based on studies which did not include
plume rise.’’).

NRDC and Sierra Club dispute this factual conclusion,
citing two pieces of evidence. First, they point out that
EPA’s own regulations for running the demonstrations
that operaturs may use to gain above-formula height re-
quire the inclusion of plume rise. See 46 Fed. Reg. at
49,820 (“Fluid models and field studies take into account
gas flow rates and temperature, in addition to stack
height. Accordingly, they will take into account some
plume rise in establishing the GEP stack height.”) ;
Draft Guideline for Use of Fluid Modeling to Determine
Good Engineering Practice Stack Height (June 1979),
J.A. at 677-78, 680 [hereinafter cited as Fluid Modeling
Guideline]. Second, they cite a report submitted by the
Tennessee Valley Authority in this rulemaking that es-
timates the plume rise above the top of the stack during
strong winds to be 99, 84, and 145 meters at 76, 91, and

80a

305 meter stacks, respectively. See An Analysis of
Terrain-Induced Aerodynamic Disturbances Near the
Kingston Steam Plant, Kingston, Tennessee, at 1-1, Rec-
ord at 77 app.

We view this as a factual dispute that we must re-:
view under the substantial evidence standard, see 5
U.S.C. § 706(2)(E) (1976). We side with EPA. Its
conclusion that plume rise is not significant rests pri-
marily on the wind tunnel studies cited in its technical
support document, which did not provide for plume rise,
-yet derived approximately the same formula as appar-
ently had arisen as “a practical formula” from years of
empirical observation, presumably including any plume
rise. Compare Technical Support Doc., supra p. 20, at
1080 (“This rule arose during the early part of this
century as a practical formula. [A 1955 study] report(s]
that the rule had been successfully used by the British
electricity generating industry during the previous 20
years.”) with id. at 1086 (“A review and evaluation of
the current literature . . . reveals a consensus that [the
2.5 Rule is) the stack height necessary to avoid signifi-
cant effects for buildings whose projected width is greater
than its height. . . . [Otherwise, the 1+1.5 Rule is ap-
propriate.]”). Since studies that do not account for
plume rise arrived at the same conclusion that was de-
rived from observations including: plume rise, it seems
fair to infer that at least the usual amount of plume
rise does not have a significant effect on downwash. In
response to concerns about the possibility of artificially
increasing plume rise beyond the normal amount, EPA’s
regulations prohibit as a dispersion technique installa-
tion of fans and heaters intended to enhance plume rise.
See 47 Fed. Reg. at 5868 (to be codified at 40 C.F.R.
§ 51.1(hh)); id. at 5867; 46 Fed. Reg. at 49,820; infra
pp. 50-57.

That EPA has allowed operators to account for plume
rise in demonstrations does not persuade us that the

8la

1+1.5 Rule is unprincipled, because we think it entirely
rational for EPA to be more concerned that even small
amounts of plume rise be accounted for when a source
is seeking greater height than provided by the formulas.
Congress specifically directed that such increased height
be allowed only “with circumspection and utmost caution
in those rare circumstances proven to justify its use.”
HOusE REPORT, supra p. 5, at 93. (The report was re-
ferring to heights in excess of the 2.5 Rule, but we think
it clear that its thinking applies equally to the more ac-
curate 1+1.5 Rule.) The formulas, on the other hand,
are intended to be easy to apply and, of necessity, some-
what rough rules of thumb. We think such a dual ap-
proach was within the contemplation of Congress and is
not a capricious use of EPA’s limited resources.

Petitioners’ citation of the significant plume rise re-
ported in the TVA study does not substantially under-
mine EPA’s assertion that plume rise is fairly insignifi-
cant under downwash conditions. The TVA report does
not contradict EPA’s finding that, particularly as wind
speed increases, plume rise near the stack, where down-
wash occurs, is generally small even though plume rise
further downwind may be significant. Such a phenome-
non is an expected consequence of high wind conditions,
and it is consistent with EPA’s view that plume rise
has little effect on downwash near the stack. See Fluid
Modeling Guideline, supra p. 29, at 666 (“Under such
conditions [high wind speed and neutral stability], plume
rise near the source where its rise is dominated by mo-
mentum flux, will be small while its rise farther down-
wind may be largely due to buoyancy [heat] flux.’).

We affirm the refusal to include plume rise in the
derivation of the formulas.
D. Inclusion of Plume Impaction

Plume impaction occurs when a plume of exhaust gases
emitted from a stack hits a higher hill or mountain down-

82a

wind of the stack. Under stable atmospheric conditions,
the plume can hit the mountain before it has dispersed,
causing high concentrations on the mountainside. See
1981 Responses, supra p. 29, at 1166.

In response to comments received after its 1979 pro-
posed regulations, EPA decided to allow credit for stack
heights needed to avoid violation of national air quality
standards on the elevated terrain. See 46 Fed. Reg. at
49,815-16. The new regulations allow a source to receive
credit for the amount of its stack necessary to ensure
that violations will not occur on the mountain as a result
of the amount of the mountain’s height that is above
GEP height. 47 Fed. Reg. at 5869 (to be codified at 40
C.F.R. § 51.12(1)).* Without plume impaction credit, the

* The operation of the plume impaction credit is difficult to
explain but, ultimately, ingeniously simple in conception.
Three steps are involved. See 47 Fed. Reg. at 5867.

First, the GEP stack height is calculated with regard to
downwash-causing obstacles. If a violation of air quality
standards is predicted by reason of the plume hitting a moun-
tain higher than GEP height, then the source may go to the
second step. If no violation is modeled, then the source can-
not claim impaction credit.

Second, an emission limitation is set by imagining that the
mountain is as tall as the GEP stack height calculated in step
one. Thus, it is assumed that the mountain is short enough
to permit the GEP stack height to throw the plume over the
mountain, and an emissions limitation is set so that no viola-
tion will occur on the truncated mountain.

source would have to reduce its emissions to prevent
modeled violations on the mountainside.

Petitioners NRDC and Sierra Club argue that section
123 does not permit EPA to give credit for stack height
necessary to avoid any phenomena other than “down-
wash, eddies and wakes,” and that plume impaction is
not one of these statutorily specified exemptions. Plume
impaction is caused by obstacles downwind of the stack,
rather than upwind of it, and generally occurs when
there is little wind to disperse the plume, rather than
when the wind is strong.

EPA admits that plume impaction is not the same as
downwash, eddies, or wakes, but argues that they are
sufficiently similar that the same rationale should apply
to it. 47 Fed. Reg. at 5866 (“In all of these events,
structures or terrain features interfere with plume dis-
persion.”); 1981 Responses, supra p. 29, at 1167-68
(“These conditions are similar but independent of each
other since they generally occur under different meteoro-
logical conditions.”). The agency relies on its general
authority under section 301 of the Act to “prescribe such
regulations as are necessary to carry out [its] functions
under [the Act].” 42 U.S.C. § 7601(a)(1) (Supp. V
1981).

EPA’s construction of the statute is condemned by the
general rule that when a statute lists several specific
exceptions to the general purpose, others should not be
implied. See, e.g., A.H. Phillips, Inc. v. Walling, 324
U.S. 490, 498 (1945) (“Any exemption from such hu-
manitarian and remedial legislation must . . . be nar-

emissions to precisely the amount needed to avoid violations

84a

rowly construed ... .”); Colorado Public Interest Re-
search Group, Inc. v. Train, 507 F.2d 748, 747 (10th
Cir. 1974) (“{WJhere the legislature has acted to except
certain categories from the operation of a

law, it is to be presumed that the legislature in its ex-
ceptions intended to go only as far as it did, and that
additional exceptions are not warranted.”).

Had we any doubts that this rule should apply to this
case, they are eliminated by the specific instruction in
the House committee report that the term “nearby”
should be “strictly construed, in keeping with the gen-
eral policy of statutory interpretation favoring strict
construction of exceptions and variances.” HOUSE RE-
PORT, supra p. 5, at 93; see also supra pp. 15-18 (discus-
sion of meaning of “nearby”). Not only the word
“nearby,” but the entire permission to give credit for
“good engineering practice” height constitute exceptions
or variances. Congress sought to prohibit reliance on
stack height to achieve air quality standards except in
certain cases that it very specifically defined.. The speci-
fied cases are where stack height is needed to prevent
excessive concentrations resulting from “downwash, ed-
dies and wakes.” We should be extremely chary of add-
ing any others.

EPA argues, however, that this rule should be softened
when it appears that Congress was not informed of the
problem and therefore did not deliberately omit it. EPA
asserts that this is such a case. See 47 Fed. Reg. at 5866
(“Section 123 does not mention impaction. However,
neither the language of the statute nor the legislative
history show that this omission was deliberate.”). We

35a

several factors, including fuel and fuel additives, that
affect automobile emissions suggests that at least some
members of Congress did not expect statutory term
“fuel” and “fuel additives” to include other potential
causes of pollution, such as motor oil). We conclude, how-
ever, that the obverse rule advanced by EPA—that if
there is no evidence that Congress knew of or considered
the other things, the presumption should be that they are
included in the statutory exception—would be contrary
to the strict construction of exceptions directed by judi-
cial doctrine and by the legislative history of this law.
Cf. Harrison v. PPG Industries, 446 U.S. 578, 592 (1980)
(“{I]t would be a strange canon of statutory construc-
tion that would require Congress to state in committee
reports or elsewhere in its deliberations that which is
obvious on the face of a statute.”).

In any case, there is some evidence in the legislative
history of the 1977 amendments that Congress was in
fact made aware of the problem of plume impaction in
hilly terrain. Representatives of electric utilities ap-
peared before the congressional subcommittees consider-
ing the amendments and discussed the deleterious effects
the new laws would have on utilities. They contended
that several provisions in combination would limit the
availability of plant sites in mountain areas. Among the
provisions raentioned were those that sought to prevent
the deterioration of clean-air areas, called prevention of
significant deterioration (PSD) provisions, and the tall
stacks section. Thus, a representative of the Edison Elec-
tric Institute, the principal national association of

adverse effect of the amendments:

(2) More coal-fired power plants would have to be
built in the mid-west and in eastern coastal plains
and less in the Appalachians and the West because
TPAD] ond tall otcch lito in'eneno ot ity tenet

{PSD} and tall stack limits in areas

36a

Clean Air Act Amendments of 1977: Hearing on S. 251,
S. 252, and S. 253 Before the Subcomm. on Environmen-
tal Pollution of the Senate Comm. on Environment and
Public Works, 95th Cong., Ist Sess. (pt. 2), at 231 (1977)
(written testimony of Donald G. Allen).

Moreover, these limitations on siting were linked spe-
cifically to plume impaction by the testimony of E. Allan
Hunter, president of the Utah Power & Light Co., before
the same subcommittee. Mr. Hunter proposed a variance
procedure for allowing certain plants to exceed the rele-
vant PSD limitations for five percent of the year to
account for those days on which plume impaction might
occur :

Our problem lies in the nature of the topography
out in Utah. Utah consists of narrow valleys, with
mountainous or hilly terrain on either side. The
mountainous terrain models [that] are now being
used to predict pollutant concentrations indicate that
perhaps a few days in the year under stagnant air
conditions the SO, concentration on the adjacent hill-
sides would exceed the allowable limits.

Id. at 37 (oral testimony) ; see also id. at 387 (written
statement of Mr. Hunter) (“What we here urge is an
alternative that would facilitate good plant siting... .”);
id. at 339 (same) (“This material [certain studies] does
indicate that without . . . some relief from the short term
plume impact on high terrain ..., we cannot build suffi-
cient capacity to supply the electric needs of our cus-
tomers in the next twenty years.”). Although these com-
plaints were heard and became part of the congressional
debate on the amendments, see, ¢.g., 122 Conca. REC.
34,405 (1976) (remarks of Sen. Tower, opponent of the

37a

Thus, although no one made explicit the link advanced
in the regulations between taller stacks and plume impac-
tion, these excerpts suggest that at least some members
of Congress were aware that (1) requiring short stacks
would somehow tend to preclude certain potential sites
for power plants in hilly terrain, and (2) plume impac-
tion was one reason that fewer such power plant sites
would be available. It may be too much of a leap to say
that Congress understood that taller stacks might help
to reduce the effect of plume impaction, and rejected such
an approach. But we think we may infer at least that
the problems created by plume impaction and by requir-
ing short stacks in hilly terrain were brought to Con-
gress’s attention, and Congress chose not to focus on,
and resolve, them. This suggests a relative indifference
to the problem of nearby mountains causing very strin-
gent emissions limitations, an indifference that is at odds
with the willingness to avoid the strict limitations that
would be required because of downwash, eddies, and
wakes, were it not for section 123.

Little more need be said to refute the argument raised
in this court by a number of utility intervenors that ex-
cluding plume impaction from the calculation of emission
limitations would result in much stricter limitations for
utilities located in mountainous terrain than for ones
located in the flatlands. Since this would mean a decline
in jobs and industrial activity in mountain regions, the
utilities argue, EPA has properly construed section 123
in light of the purpose stated in section 101 of the Act
“to protect and enhance the quality of the Nation’s air
resources so as to promote the public health and welfare
and the productive capacity of its population.” 42 U.S.C.
§ 7401(b) (1) (1976) (emphasis added).

88a

tain areas. Thus, the House committee report noted the
committee’s “expectation” that “persons responsible for
citing new facilities will not locate them next to terrain
features which will produce .. . downwash.” House Re-
PORT, supra p. 5, at 938. Moreover, it quotes EPA Ad-
ministrator Douglas Costle’s statement that the Adminis-
tration thought it “ ‘clearly preferable to require tighter
controls or more careful siting to solve our air quality
problems rather than disperse pollutants over greater
distances.’” Jd. at 92 (emphasis added). In his testi-
mony, Mr. Costle went on to state, “If we later learn that
tall stacks are essential for siting certain types of facili-
ties, we would consider asking Congress for authority to
allow tall stacks for such facilities in cases where public
health would not be affected.” Clean Air Act Amend-
ments of 1977: Hearings on H.R. 4151 & H.R. 4758 Be-
fore the Subcomm. on Health & the Environment of the
House Comm. on Interstate & Foreign Commerce, 95th
Cong., Ist Sess. (pt. 2), at 1679 (1977).

Thus, we do not think section 123 permits EPA to take
plume impaction into account in setting the degree of
emission limitation required for sources in hilly areas.
EPA’s reliance on its general authority to make rules
necessary to carry out its “functions” does not avail it,
because, as we pointed out in Lubrizol Corp. v. EPA, 562
F.2d 807, 815 n.20 (D.C. Cir. 1977), a specific statutory
directive “defines the relevant ‘functions’ of EPA,” so
that section 123 is the sole source of statutory authority.

We admit that there is much to commend EPA’s ac-
tion from a policy perspective. Without EPA’s plume
impaction provisions, the law discriminates harshly
against utilities located in mountainous terrain, for it
will require them to emit far less than their flatland
counterparts. The only cost of allowing EPA to mitigate
that discrimination by bringing flatland and mountain
emissions limitations closer together would be that moun-

89a

tain utilities would have to disperse their pollutants more
widely. See supra note 4.

We note, however, that Congress viewed tall stacks as
a problem not only because they did not decrease the
loading of emissions into the air, but also, and independ-
ently, because they served to disperse pollutants more
widely. Wide dispersion had been linked to the formation
of acid rain, tended to export pollution to previously pris-
tine areas, and made enforcement more difficult because
of the difficulty of tracing dispersed pollutants back to
their source. See House REPORT, supra p. 5, at 83-87;
see also An Assessment of the Potential Effect of Stack
Height on Sulfate Formation and Sulfur Deposition (De-
cember 1979), J.A. at 791 (“Tall stacks allow more sul-
fate formation and less [sulfur] removal than an equiv-
alent release at lower heights... .”). Of course, such
wider dispersion is permitted anyway by the Act, see 42
U.S.C. § 7428(c) (1976) (EPA may not restrict in any
manner the actual stack height of any source), but the
plume ‘impaction rules would encourage or, effectively,
require it. It is conceivable that Congress would decline
to encourage the very tall stacks no doubt needed to over-
come plume impaction in mountainous terrain. Thus, the
construction we place on the statute is harsh, but not
utterly irrational, and therefore we are constrained to
give the statutory exception the strict interpretation that
Congress specifically intended.

EPA's attempt to reduce efnissions limitations by s0

40a

provided by the formulas. Petitioners Sierra Club and
NRDC assert that it was an abuse of discretion for EPA
not to require demonstrations in two other cases: (1)
whenever local or federal pollution authorities believed
the formulas overestimated the height needed to prevent
excessive concentrations of downwash-caused pollution,
and (2) whenever a facility sought to raise an existing
stack. The latter argument is based on the theory that
stacks have historically been built to avoid downwash, so
that there is a presumption that existing height is suffi-
cient.

The first of these provisions was included in the 1979
proposed regulations, and the second—regarding existing
stacks—was mentioned then as a specific case in which
demonstrations might be required in particular instances.
44 Fed. Reg. at 2614; see id. at 2610. In 1980, in con-
nection with a request for approval of credit for stack
height increases at two existing power plants in Ohio,
EPA decided to require demonstrations in all cases where
a source sought to raise an existing stack height. 45 Fed.
Reg. 42,279, 42,281-82 (1980). The agency explained
that it had become increasingly concerned that current
emissions levels were “resulting in significant regional
air pollution problems, particularly acid rain.” Jd. at
42,281.

Since publication of EPA’s [1979] proposal, several
sources have requested relaxations of SO, emission
limitations in connection with stack height increases
up to the height permitted by the GEP formula. EPA
is concerned that allowing sources automatic credit

for GEP formula is roperly encouraging
emission limit relaxa and SO, emission increases

4la

pending consideration of the final rules. 46 Fed. Reg.
28,650 (1981).

Neither the 1981 reproposed regulations nor the final
regulations under review contain either provision. EPA
gave three reasons for the changes. First, it expressed
great faith in the formula as an accurate measure of
GEP height. In the 1981 reproposal, for example, EPA
stated, {W]e have established that the formula is the
best determination of good engineering practice stack
height based on nearby structures.” 46 Fed. Reg. at
49,820; see also 1981 Responses, supra p. 29, at 1172
(“(A)fter reviewing the facts and information available,
EPA believes that the formula provides a very good esti-
mate of the stack height necessary to avoid excessive
concentrations caused by downwash.’’).

Second, evidently as to the proposal that local authori-
ties be allowed to require demonstrations for below-
formula stack heights, EPA asserted that “inconsisten-
cies could result.” 46 Fed. Reg. at 49,820. This comment
is cryptic, but we suspect that it must refer to incon-
sistencies between lax and zealous state environmental
protection agencies, resulting in different requirements
for similarly situated plants in different states.

Third, EPA cited a passage from the House committee
report that it says indicates an intent to allow automatic
credit up to forraula height. 1981 Responses, supra p. 29,
at 1173. The passage is from the report’s discussion of
the PSD provisions, in which the committee argues that
those provisions will allow sufficient industrial develop-
ment in all but the cleanest areas. House REPORT, supra
p. 5, at 159-64. The report adds:

42a

stack heights up to 214 times, or more in some cases
under the bill.)

Id. at 162 (emphasis added) *

This last reason is easily neutralized. We agree that
the House committee, and perhaps the Congress generally,

"EPA also suggested that the 1980 decision to require
demonstrations for all increases of existing stacks was in-
tended as a response to a temporary problem, rather than a
permanent solution. It explained the decision as follows: “In
June 1980, faced with the requirement to approve or dis-
approve State Implementation Plan revisions for two Ohio
power plants and still in the process of evaluating its policy
on increase [sic] stack heights at existing facilities, EPA
established as stringent a policy as possible to handle the
issue.” 1981 Responses, supra p. 29, at 1172.

We note that EPA has at times attributed a good deal
more permanence to its 1980 decision than it now does. See
46 Fed. Reg. 28,650, 28,650 (1981) (withdrawing the policy)

proposal.”) (emphasis added). Nevertheless, we realize that
EPA issued the new policy without public comment and
hurriedly, in order to comply with a commitment it had made

43a

probably had in mind a system of determining GEP stack
height involving a generalized formula applicable to all
sources except those seeking greater height. This appears
to have been the general conception of the 1973 guidelines
upon which Congress drew in drafting section 123, see
1973 Guidelines, supra p. 9, at 25,700 (2.5 Rule produces
proper height in “fairly level terrain,” but “[(f]or more
complex situations, . . . detailed engineering and meteor-
ological investigations . . . should be conducted to deter-
mine the appropriate stack height”), and the House re-
port’s discussion of section 123 itself seems to make the
same assumption, see HOUSE REPORT, supra p. 5, at 93
(“affirming the 214 times standard” but recognizing need
to approve greater height when “aerodynamics of a
source” require it).

Nevertheless, the statute itself is carefully designed to
commit the determination of GEP height to “regulations
promulgated by the Administrator” and speaks of the 2.5
Rule only as an upper limit. The conference committee’s
report even more clearly evinces an intent to leave the
entire question of what method to use to determine GEP
height to the discretion of the Administrator (subject to
the requirement of demonstrations for any height above
21%, times the height of the source). The conference com-
mittee explicitly stated that the Administrator’s rule
“should give ‘credit’ only for the height needed to avoid”
the downwash problem, and suggested that that rule
might differentiate among various kinds of sources if it
was found that the height needed to avoid downwash so
varied. The report concluded, “In other words, it was
not our purpose to make a Congressional judgment about
what stack height was needed to prevent downwash. We
intend EPA to make this judgment ....” 123 Cone.
Rec. 27,071 (1977). The report does not depart from the
expectation that GEP height will usually be determined
by a formula, but it does make clear that the formula

up to the Administrator. Implicit in that discre-
power to decide when the formula must be

ay
z

44a

used. Therefore, our review here is not of an interpreta-
tion of specific congressional intent, but rather of the
agency’s exercise of its discretion.

In evaluating whether EPA acted arbitrarily and
capriciously in rejecting the two additional uses of dem-
onstrations it initially proposed, we are left, then, with
two explanations: an expressed belief in the accuracy
of the formulas, and a fear of inconsistent enforcement.
See generally SEC v. Chenery Corp., 382 U.S. 194, 196
(1947) (agency action must be judged solely on the
grounds invoked by the agency). Of the two explana-
tions, the central reason must be EPA’s confidence that
the formulas provide “a very good estimate of the stack
height necessary to avoid excessive concentrations caused
by downwash,” 1981 Responses, swpra p. 29, at 1172, for
if EPA had less confidence in the formulas, its view of
how much inconsistency in state enforcement it could
tolerate would surely change.

EPA’s confidence in the formulas developed under the
agency’s apparent view that “excessive” meant an amount
over the amount permitted by traditional engineering
practice. We have found this to be an inadequate defini-
tion of the term, however, because Congress intended the
agency to arrive at an independent conclusion regarding
the stack height needed to prevent dangers to health and
welfare resulting from downwash. See supra pp. 18-28.
The words “excessive concentrations,” from which we

45a

trations). We must remand for the agency to consider
how well the formulas protect against excessive concen-
trations and thus whether they are so accurate that dem-
onstrations need not be used to justify raising stack
heights in the two circumstances noted at the outset.

The Administrator’s second justification for the present
rule is also deficient, and we therefore caution him that
should he again propose the disparate use of demonstra-
tions, he must rely on something other than bald asser-
tions about inconsistency of enforcement. We are not in
a position to say whether a well-grounded fear of incon-
sistent state enforcement might conceivably justify not
providing states with discretion to require demonstrations.
We are certain, however, that it will not do for EPA
merely to assert that “inconsistencies could result.” In-
consistencies will always result from a regulatory scheme
that relies on some measure of state enforcement, but the
Act clearly envisions state implementation of generalized
directives from EPA. See, e.g., 42 U.S.C. § 7407(a)
(Supp. V 1981) (“Each State shall have the primary
responsibility for assuring air quality within the entire
geographic area comprising such State... .”); see also
Train v. NRDC, 421 U.S. 60, 68-70 (1975) (discussing
various states’ approaches to implementing 1970 amend-
ments to Act). At the least, EPA must specify why it
is that such “inconsistency” is especially likely and harm-
ful in this case, and that inconsistency must be weighed
against the harms to flow from allowing widespread over-
estimation of stack heights to go uncorrected.

We note two other considerations that were clearly
absent from EPA’s initial determination of the amount
to which demonstrations were to be used and that should
be considered pursuant to our remand. First, there is
virtually no evidence in the record supporting a conclusion
that the formulas err only in one direction. Although a
number of commentators suggested that the 2.5 Rule was
regarded as yielding a minimum height necessary to avoid

46a

downwash, see J.A. at 142-43 (comments of Rohm & Haas
Co.) ; id. at 389 (comments of The Southern Co.), the
data discussed by EPA scientists in their review of the
literature suggest no such bias. Some of the data in fact
suggest that the formulas overestimate the necessary
stack height in some circumstances, while virtually no
data indicates that they underestimate it. See Technical
Support Doc., supra p. 20, at 1087 (“The extent of sig-
nificant effects for rounded structures are likely not as
great as those for sharp-edged structures, although there
is very little information available.”) ; see also id. at 1083
(downwash less at rounded-edged than at sharp-edged
structures). The conclusion of EPA was that while there
was a consensus around the 1+1.5 Rule, “actual studies
could show the need for a much taller or lower stack de-
pending on one’s interpretation of what is a significant
influence and on the effect of possible plume rise.” Jd. at
1092.

In this light, EPA cannot use the inaccuracy in the
formulas to allow demonstrations to obtain credit for
height above that provided by the formulas but not to
limit credit below it. Rationality demands that if the
inaccuracy is neutral, the corrective device must be neu-
tral. The statute does not command otherwise. The pro-
vision for demonstrations for above-formula height does
not require the Administrator to provide for such demon-
strations if he believes they are unnecessary. That provi-
sion is part of the definition of good engineering practice
height, 42 U.S.C. § 7423(c) (Supp. V 1981), the deter-
mination of which the statute leaves to the Administra-
tor’s discretion, see id. § 7423(a) (1). The House com-
mittee report leaves no doubt that the provision for
demonstrations was a discretionary power, not a com-
mand. House REPORT, supra p. 5, at 93 (“In such in-
stances, the Administrator has been given discretion to
approve a State implementation plan which provides for
stack height greater than the 214 times standard.”).

47a

Second, EPA appears to have radically undervalued
the presumption raised by the fact that an existing stack
was built to less-than-formula height. The House com-
mittee recognized that “for many years, good air quality
management has meant building a stack sufficiently tall
to offset aerodynamic downwash created by structures in
the immediate vicinity of the stack.” House REPORT,
supra p. 5, at 93. It seems fair and logical to assume
that, particularly in the large plants governed by the Act,
good air quality management has been followed and that
dangers to health and welfare have not been tolerated.
There is, moreover, some data to support this assump-
tion, in that EPA, after its initial review of the several
applications for increased stack height credits for exist-
ing stacks that were filed after the 1979 proposed regula-
tions were issued, became convinced that some or all of
the increases were unjustified. See 45 Fed. Reg. at
42,281.

In the absence of a strong showing that this presump-
tion is mistaken, it may be rebutted in individual cases
only by a reliable indicator of the height needed to prevent
dangers to health or welfare caused by downwash. In the
present final regulations, EPA has severely undermined
its claim that the formulas are such an indicator by al-
lowing demonstrations to increase stack height above the
formula height without any special indication that that
was a class of sources for which the formulas were not
likely to yield the right result. Such inconsistency is the
hallmark of arbitrary action.

We remand for the EPA to reconsider whether, in light
of its new understanding of “excessive concentrations,”
demonstrations are necessary before stack heights may be
raised, even if the final height will not exceed formula

height.
F. Definition of “Stack” to Exclude Flares

A flare is a pipe used in the oil, natural gas, and chemi-
cal industries to vent combustible gases by burning them

48a

at the top. In its 1979 proposed regulations, EPA explic-
itly included “flare[s]” in its definition of the statutory
term “stack.” 44 Fed. Reg. at 2613. The affected indus-
tries, two government agencies, and the American Society
of Mechanical Engineers submitted comments arguing
that flares are different from stacks because flare height
is intended not to disperse pollutants but to allow for the
safe combustion of dangerous gases produced during mal-
functions in the industrial process. For this reason and
because it believed flare emissions were difficult to meas-
ure, EPA excluded flares from the definition of “stacks”
in its reproposed and final regulations. See 47 Fed. Reg.
at 5868 (to be codified at 40 C.F.R. § 51.1(ff)) (“ ‘Stack’
means any point in a source designed to emit solids, liq-
uids, or gases into the air, including a pipe or duct but
not including flares.”); 1d. at 5867; 46 Fed. Reg. at
49,817, 49,820. NRDC and Sierra Club argue that “flare
stacks” are essentially no different from stacks in that
they vent emissions into the atmosphere, and that their
height can be used to evade emissions limitations. There-
fore, they say, EPA’s exclusion of flares from the defini-
tion of “stack” is contrary to law.

We find that EPA’s definition of the term “stack” is a
reasonable interpretation of a more or less technical term
by the agency charged with implementation of the statute,
and therefore affirm its exclusion of flares. See generally
Zenith Radio Corp. v. United States, 487 U.S. 448, 450
(1978) (agency’s definition need not be the only reason-
able one, but must be “ ‘sufficiently reasonable’ to be ac-
cepted by a reviewing court”) (quoting Train v. NRDC,
421 U.S. 60, 75 (1975)); Lead Industries Ass’n v. EPA,
647 F.2d 1130, 1147 (D.C. Cir.) (“Where different inter-
pretations of the statute are plausible, so long as EPA’s
construction of the statute is reasonable we may not sub-
stitute our own interpretation for the Agency’s.”), cert.
denied, 449 U.S. 1042 (1980).

The record supports the conclusion that the engineering
community defines “stacks” to exclude flares, and that

49a

flare height is intended, under standard engineering prac-
tice, primarily to safeguard personnel and structures from
the heat, flames, and unburned toxic gases that emanate
during flaring, rather than to disperse the resulting con-
centrations of pollutants. See, e.g., J.A. at 200 (comments
of American Society of Mechanical Engineers); id. at
195-96 (comments of Monsanto Co.); id. at 203 (com-
ments of Shell Oil Co.) ; id. at 353-54 (comments of Chev-
ron U.S.A., Inc.). Some flares, if the release is small
enough or remote enough, burn the gases at ground level.
Id. at 358 (distinguishing “elevated flares” from “pit
flares” and “ground flares”). Moreover, in part because
of this primary purpose, flares are generally erected in
isolated areas where, unless there is a nearby terrain
obstacle, downwash is generally not a problem. Therefore,
the height demanded by safety might not be justifiable if
the sole aim were to prevent downwash. This seems un-
likely to have been Congress’s intent. Finally, there is no
mention of flares in the legislative history. We affirm
EPA’s definition of stack to exclude flares.

* Nevertheless, the pollutants produced by the combustion
that takes place at the top of flares are regulated under the
Clean Air Act just as the similar pollutants produced by the
combustion that occurs at the base of the stacks are. See, e.g.,
id, at 846-47 (comments of Michigan Dept. of Natural Re-
sources) (describing PSD limitations placed on ground level
sulfur dioxide impact of burning hydrogen sulfide derived
from natural gas). Therefore, there is presumably an incen-
tive for a source to raise its flare above the height dictated
by safety in order to be able to increase the dispersion of the
pollutants produced. See id, (80-meter limit on flare height
would reduce permissible SO, emissions from over 8000 to
about 2000 pounds per day). This is precisely the kind of dis-
persion usage that Congress sought to forbid.

While it may be impracticable to prevent this abuse via the
“good engineering practice” formulation developed by Con-
gress to deal with stack heights, excessive flare height still
might be a “dispersion technique” for which credit is barred
under section 128(a) (2), 42 U.S.C. § 7423(a) (2) (Supp. V
1981). We do not think it plain, as intervenor American

50a
G. Definition of “Dispersion Techniques”

Section 123 bars giving emission credit for tall stacks
and “other dispersion techniques.” EPA’s final definition
of “dispersion technique” includes, in addition to the tall
stacks and intermittent or supplemental control systems
mentioned in the statute, the “addition of a fan or re-
heater to obtain a less stringent emission limitation.” Ex-
pressly excluded from the definition are reheating the gas
stream to its original temperature after the use of a pollu-
tion control system, certain agricultural and silvicultural
uses of smoke, and “combining the exhaust gases from
several stacks into one stack.” 47 Fed. Reg. at 5868 (to
be codified at 40 C.F.R. § 51.1(hh)).

Sierra Club and NRDC object that the definition does
not include a number of dispersion techniques that should

Petroleum Institute asserts, that the term “any other disper--
sion technique” is directed at dispersion stratagems other than
height. The statute commands that the degree of emission
limitation required for “any air pollutant under an applicable
implementation plan” shall not be affected by either stack
height or any other dispersion technique. Since emissions of
flares are regulated by the applicable implementation plans,
and excess flare height is not excess “stack height,” it may
well be one of the “other dispersion techniques” regulated
under section 128(a) (2).

We make no ruling on this question. While NRDC and
Sierra Club have advanced the argument before this court, it
was apparently not put before the agency, and we do not
have its response. See J.A. at 911 (Sierra Club comments);
id, at 1217 (petition for rehearing); cf. United States v. L.A.
Tucker Truck Lines, 344 U.S. 33, 87 (1952) (“Simple fairness
to those who are engaged in the tasks of administration, and
to litigants, requires as a general rule that courts should not
topple over administrative decisions unless the administrative
body not only has erred but has erred against objection made
at the time appropriate under its practice.”). Moreover,
there is no suggestion that flare height above that required
for safety has ever been used as a dispersion technique or
that the problem is anything more than a theoretical one.
See generally infra p. 56.

5la

be barred: (1) the use of fans and reheaters to avoid a
more stringent emission limitation, rather than merely to
gain a less stringent one, (2) the addition of nozzles and
other devices to increase plume rise, (3) combining sev-
eral stacks into one for the purpose of increasing plume
rise, and (4) other such techniques polluters may devise
in the future.

EPA’s original proposal defined “dispersion technique”
far more broadly than its final rule, so that it included
“the manipulation of source process parameters, exhaust
gas parameters, stack parameters other than height, or
other selective handling of exhaust gas streams so as to
increase the exhaust gas plume rise.” 44 Fed. Reg. at
2613-14. It narrowed the definition in response to com-
ments that persuaded the agency that “many changes in
stack dimensions and exhaust gas characteristics are made
to improve the efficiency of the facility rather than to
enhance dispersion.” Response to Petitiors for Reconsid-
eration of the Stack Height Rules (May 1982), J.A. at
1225 [hereinafter cited as Reconsideration Decision]. In
its reproposed regulations, the agency added an explicit
test of a purpose to increase plume rise and provided that
combining stacks would not be deemed a dispersion tech-
nique unless there was manipulation of flow rates or tem-
perature for the purpose of enhancing plume rise. 46 Fed.
Reg. at 49,817; see id. at 49,816 (preamble says “for the
sole purpose of enhancing plume rise”). It commented
that “[tjhe significance of other dispersion techniques is
not well documented and the Agency intends to give fur-
ther consideration to the need for restrictions of this type
prior to promulgation.” Jd. at 49,816.

In its final regulations, as noted, EPA abandoned the
generic definition of “dispersion techniques” and limited
the term to specific equipment—fans and reheaters—in-
stalled for the purpose of obtaining a less stringent limi-
tation. It eliminated any test of intent in the permission
to combine several stacks into one. The agency explained

52a

that the change would “prevent only the installation of
equipment clearly intended to enchance [sic] plume rise.”
47 Fed. Reg. at 5867. It declined to prohibit other tech-
niques that were accompanied by such an intent because
such a test “would involve the Agency in subjective judg-
ments that could be difficult to support.” Reconsideration
Decision, supra p. 51, at 1225; accord id. at 1226 (“Such
subjective judgments would be difficult to make and to
enforce.”). “A test based on the installation of specific
equipment accompanied by a request for a relaxed emis-
sion limit was deemed to be more workable.” Jd. at 1225.
EPA did not dispute that all the techniques cited by peti-
tioners could be used in order to increase plume rise and
disperse pollutants so as to lower emissions limitations.

While somewhat less than ideally clear, EPA’s explana-
tions may be read to suggest that it weighed two factors
in deciding which of these techniques it would even at-
tempt to regulate: the likelihood that they would be used
as dispersion techniques, rather than as bona fide engi-
neering improvements (i.e., the “significance” of these
techniques), and the burden, both on enforcement agen-
cies and on industry, of attempting to differentiate legiti-
mate from illegitimate uses. EPA did not argue that use
of these techniques in order to increase plume rise would
not be a “dispersion technique” within the meaning of the
statute. Rather, it became convinced that few would use
such techniques and that the effort of catching those who
did would be great. In so doing, however, we think EPA
has created an exemption from the statute based upon its
perceptions of the costs and benefits of enforcing the law.
We find no source for such a power. See Alabama Power
Co. v. Costle, 686 F.2d 3238, 357 (D.C. Cir. 1979)
(“[T]here exists no general administrative power to cre-
ate exemptions to statutory requirements based upon the
agency’s perceptions of costs and benefits.”’).

' Although EPA has not argued to the contrary, we first
ascertain for ourselves that the techniques cited by peti-

58a

tioners are within the intended meaning of the statutory
term “dispersion techniques.” The language of the Act is
categorical—the amount of emission limitation “shall not
be affected in any manner by... any... dispersion
technique”—and a broad construction is appropriate to
achieve the remedial purpose intended. There is no help-
ful legislative history to shed light on the meaning of the
term. We think the words themselves, however, sweep
broadly enough to encompass at least the meaning urged
by petitioners: the use of devices, alterations to the stack,
or other techniques when they are significantly motivated
by an intent to gain emissions credit for greater disper-
sion. Were such techniques not included, they could be
used to enhance plume rise to such an extent as to make
the limitations on stack height illusory.

Since the regulations do not regulate all the techniques
contained in this definition, the regulations effectively cre-
ate an exemption not indicated in the statute itself. Such
categorical exemptions are generally not favored, Ala-
bama Power, 636 F.2d at 358, but there are two situa-
tioris in which they are allowed: cases of administrative
necessity and de minimis situations, id. at 358-61. EPA
has vaguely invoked both of these justifications. However,
both must be shown with greater rigor than EPA has
brought to bear here. See id. at 359 (agency bears “a
heavy burden to demonstrate the existence of an impossi-
bility”) ; id. at 360 (“Determination of when matters are
truly de minimis naturally will turn on the assessment
of particular circumstances, and the agency will bear the
burden of making the required showing.”’).

Apparently the only evidence concerning whether pro-
hibiting these techniques would yield a gain of trivial or
no value (in the sense of furthering the goals of the stat-
ute) consists of EPA’s finding that “many changes in
stack dimensions and exhaust gas characteristics are
made to improve the efficiency of the facility rather than
to enhance dispersion.” Reconsideration Decision, supra

54a

p. 51, at 1225, and like comments submitted by industry,
e.g., J.A. at 1029 (comments of Utility Air Regulatory
Group) (“Recombination of exhaust streams is typically
done for sound economic and engineering reasons, totally
apart from any environmental plume rise that might oc-
cur.”’) ; id. at 101-02 (comments of Stearns-Roger Inc.)
(listing engineering reasons for manipulating exhaust gas
velocity, temperature, etc.). Even these few, unspecific,
unquantified estimates do not attempt to establish that
use of these techniques in order to disperse pollutants
more widely would only trivially undermine the Act’s
command that emissions limitations be met by direct con-
trols. Neither the comments nor EPA’s responses suggest,
for example, that there is in fact no or little incentive to
implement these techniques because the potential reduc-
tion in emissions limitations would not be worth the cost.
Clearly, more is required to show that a technical viola-
tion is truly de minimis.

There is more evidence to support EPA’s claim of ad-
ministrative necessity, and that is where it has placed its
primary reliance. One local agency asserted that enforce-
ment of the original broad definition of dispersion techni-
ques would require scrutiny of “every possible aspect of
source construction, process flows, plant configuration and
siting,” which, it said, was beyond its capabilities. Jd. at
814 (comments of Allegheny Co. Bureau of Air Pollution
Control). Several states expressed less vehement concerns
about their ability to draw the lines required by the vari-
ous proposals. See id. at 965 (comments of Conn. Dept.
of Environmental Protection) (inquiring how a state
could establish with any certainty that enhanced plume
rise “was an intentional or an incidental result” of
changes to stack flow characteristics) ; id. at 236 (com-
ments of S.C. Dept. of Health & Environmental Control)
(seeking list of stack parameters for various source cate-
gories to be used in comparing changes proposed . by
sources). EPA found that discerning the subjective moti-

vation for stack and flow parameter changes, as required

55a

by its 1981 reproposal, would be “difficult.” Reconsidera-
tion Decision, supra p. 51, at 1225, 1226.

We do not see anything in the language, history, or
purpose of section 123 that “authorizes approaches that
deviate from the legislative mandate in response to con-
cerns about feasibility,” Alabama Power, 686 F.2d at 360.
The House committee report sternly cautions the Admin-
istrator to construe narrowly exceptions and permitted
variances from the bar on reliance on dispersion tech-
niques. See HOUSE REPORT, supra p. 5, at 93-94. Other
legislative history, ¢.g., 128 Conc. Rec. 18,027 (1977)
(remarks of Sen. Muskie) (quoted supra p. 7), as well
as the detailed cabining of the Administrator’s discretion
in the statute itself, suggest some distrust of the agency’s
prior flexibility towards industry.

In the absence of an authorization to take feasibility
into account in administering a particular statute, the
agency may avoid implementing a statute only by show-
ing that attainment of the statutory objectives is impos-
sible. See Alabama Power, 686 F.2d at 859 (“the agency
[bears] a heuvy burden to demonstrate the existence of
an impossibility” (footnote omitted)); NRDC v. Train,
510 F.2d 692, 718 (D.C. Cir. 1975) (“The sound discre-
tion of an equity court does not embrace enforcement
through contempt of a party’s duty to comply with an
order that calls him ‘to do an impossibility.’” (footnote
omitted) ). Especially in light of the fact that the ad-

forts at enforcement, see Alabama Power, 686 F.2d at
359 (“The agency's burden of justification in such a case
is especially heavy.”), the showing here falls far short.

Moreover, even if separately determining the intent of

56a

of plant improvements that are clearly legitimate or
clearly illegitimate. See id. at 358 (“Courts frequently
uphold streamlined agency approaches or procedures where
the conventional course, typically case-by-case determina-
tions, would, as a practical matter, prevent the agency
from carrying out the mission assigned to it by Con-
gress.”) ; see also J.A. at 236 (comments of S.C. Dept. of
Health & Environmental Control) (suggesting “list of
stack parameters for various source categories that can
be used in the comparative analysis”). It might be able
to quantify the amount of plume rise that could be pre-
sumed to have an engineering, rather than a dispersion,
rationale, in the manner that one commenter suggested.
Id. at 978-79 (comments of ASARCO Inc.) (proposing
to permit exit velocities of 1.5 times the 95th percentile of
local windspeeds raised to the fifth power). EPA might
also be able to select large classes of improvements that
may be exempted from regulation because their use as
dispersion techniques is no more than a theoretical possi-
bility or their impact on the goals of the Act is otherwise
trivial. By thus focusing enforcement resources narrowly
on the plant improvements likely to be undertaken for
the purposes of increasing dispersion, EPA should be able
to reduce substantially the number of cases in which a
full-scale examination of the motivation for the change
will be required.”

We see no evidence that EPA has adequately explored
these regulatory alternatives. Rather, when it appeared
that the definition of “dispersion techniques” would de-
pend on a question of intent, the agency simply cave. in
and allowed full credit for any plume enhancement tech-

57a

nique not involving fans or heaters. We overturn the
narrow definition of “dispersion techniques” and direct
EPA to develop rules disallowing credit for all “disper-
sion techniques” as that term is used in section 123, un-
less the agency can justify its failure under the standards
discussed in this opinion and in the opinion of this court
in Alabama Power, 686 F.2d at 857-61.

H. Definition of “Stack Height in Existence”

Section 123(a) contains a grandfather clause intended
to exempt pre-1971 stacks from the limitation on emis-
sion credit contained in the “good engineering practice”
provision. Other dispersion techniques implemented be-
fore the enactment of the Clean Air Amendments of 1970
are also exempted from emission credit limits. The clause
reads, “The preceding sentence shall not apply with re-
‘spect to stack heights in existence before December 31,
1970, or dispersion techniques implemented before such
date.” 42 U.S.C. § 7423(a) (Supp. V 1981).

EPA’s final regulations define a stack “in existence” to
mean that the owner or operator of the source had, by
December 31, 1970,

(1) begun, or caused to begin, a continuous program
of physical on-site construction of the stack or (2)
entered into binding agreements or contractual obli-
gations, which could not be cancelled or modified
without substantial loss to the owner or operator, to
undertake a program of construction of the stack to
be completed in a reasonable time.

47 Fed. Reg. at 5868 (to be codified at 40 C.F.R.
§ 51.1(gg)). Sierra Club and NRDC object that this def-
inition is contrary to the plain English meaning of the
statutory language, as well as to the legislative history.
They urge a definition like that contained in the 1979
proposed regulations: “ ‘In existence’ . . .. means that
stack heicht (of a stack) which has been constructed.” 44
Fed. Reg. at 2613. EPA adverts to the legislative history

58a

and clear purpose of the provision to grandfather sources
that before the 1970 amendments made good faith com-
mitments to use certain stack heights. In 1981 Responses,
supra p. 29, at 1164. An EPA study of the impact of the
stack height regulations stated that the change in the def-
inition of “in existence” would exempt stacks at four to
eight power plants from the requirements of section 128.
Impact Assessment Report for the Final Stack Heights
Regulations (Dec. 1981), J.A. at 1054, 1059 [hereinafter
cited as Impact Assessment Report].

The weightiest evidence in favor of the narrower 1979
definition is the fact that the 1977 amendments elsewhere
explicitly refer to facilities as to which construction con-
tracts had been awarded as of a certain date, suggesting
that “in existence” means some stage beyond the signing
of the contract. Section 128 itself in effect exempts the
stacks at a single power plant in Tennessee, known as the
Kingston Station, see 128 Conc. Rec. 18,480-81 (1977)
(remarks of Sen. Baker), in part by referring to stacks
“for which a construction contract was awarded before
February 8, 1974.” 42 U.S.C. § 7428(a) (Supp. V 1981) ;
see also id. §§ 7475(a), 7479(2) (PSD program applies
to facilities “on which construction is commenced after
August 7, 1977”; “commenced” defined to mean that the
operator has obtained all necessary permits and has be-
gun continuous program of construction or has entered
into binding agreements to do so, which cannot be modi-
fied without substantial loss). The distinction between
these provisions and the grandfather clause under review
was the primary basis for EPA’s original proposal that
“fin existence” be defined as physically constructed. See
44 Fed. Reg. at 2611 (“Since Congress in 1977 defined
‘commenced construction’ to include the acquisition of
permits, the beginning of actual construction or the enter-
ing into binding contracts, EPA believes the term ‘in ex-
istence’ must mean something more.”’).

NRDC and Sierra Club also cite language in the House
committee report that “sources which raised their stacks

59a

or constructed tall stacks after the date of enactment
should [not] be eligible for any credit,” House REPoRT,
supra p. 5, at 98, which they say indicates an intent to
include stacks under construction in section 123.

Nevertheless, we find EPA’s final definition of the
term to be a reasonable one and affirm it. See supra pp.
48-49. EPA’s interpretation is necessary to make the
clause equitable, which was undoubtedly Congress’s pur-
pose. Thus, the House committee report explained that the
committee “believe[d] that sources which in good faith
raised their stacks before the 1970 act limited dispersion
methods should not be penalized.” House REPORT, supra
p. 5, at 98. Clearly, a source that irrevocably and in
good faith contracted for a tall stack prior to the 1970
act may be penalized by application of the provision in
the same way that one that had completed construction
of the stack would be. Our emphasis on the words “in
good faith” and “penalized” in the language from the
House report is not contradicted by the passage cited by
petitioners. Petitioners emphasize in their passage the
words “raised their stacks or constructed tall stacks after
the date of enactment,” which they say means that any
stack that was not completed prior to the date of enact-
ment should be included in the statute. The two passages
appear close together and were evidently meant to refer
to the same distinction between stacks that were to be
included in section 123 and those that were not. Yet one
uses both the words “raised” and “constructed” and the
other uses just “raised,” which suggests that the words
were not written with the special emphasis petitioners
ascribe to them. In any case, there is no reason why the
terms “raised” and “constructed” should not be read to
mean the entire process of raising or constructing stack
height, from beginning to end.

Also, a similar grandfather clause in EPA’s 1976
stack height guidelines, which we have said were, along
with their 1973 predecessors, the source for much of the

6%a

detail in section 128, drew the line at commencement of
construction. 1976 Guideline, supra p. 6, at 7451 (“a
State may not take into account the dispersive effects of
an increased stack height for which construction com-
menced after January 31, 1972”). Moreover, the 1976
guidelines set out this grandfather clause in a section
headed, “Sources in Existence Prior to January $1, 1972,”
which might have been the origin of the statutory lan-
guage. Under the guidelines, a source that was under
construction in 1972 would be exempt from the stack
height limits, and thus “in existence,” if construction
of its stack height had commenced. Thus, the term “in
existence” in the guidelines could in some instances mean
“under construction,” the definition urged by EPA.

Further evidence that Congress did not mean the term
“in existence” to exclude stack heights contracted for or
under construction is that the use of that term in an-
other section of the 1977 amendments must be so read
to achieve Congress’s purpose. A section of the PSD
provisions requires certain sources “in existence on Au-
gust 7, 1977,” to install the best available retrofit tech-
nology to reduce visibility impairment produced by the
source’s emissions. 42 U.S.C. §7491(b)(2)(A) (Supp.
V 1981). The general permit provisions for new facili-
ties require more stringent protection of visibility for all
facilities ‘on which construction is commenced after Au-
gust 7, 1977.” Id. § 7475(a); see also id. § 7479(2) (A)
(definition of “commenced” to include “entered into bind-
ing agreements”). Thus, in order to provide some regula-
tion of visibility for sources under construction or con-
tracted for on August 7, 1977, “in existence” must be
read to mean “on which construction has commenced.”
EPA urges a parallel construction here. See Alabama
Power Co. v. Costle, 686 F.2d 328, 396 (D.C. Cir. 1979)
(“[Wle must assume that the meaning of a particular
term is to be consistent throughout the Act.’’).

The legislative history of the “Kingston exemption”
diminishes any inferences that may be drawn from the

6la

fact that it uses the phrase “for which a construction
contract was awarded” to mean essentially what EPA
urges as the definition of “in existence.” This provision
was added to the bill on the floor of the Senate at the
instance of Senator Howard Baker in order to exempt a
particular plant in his home state of Tennessee. See 123
Conc. REc. 18,480-81 (1977). It was thus drafted by a
different author, added late in the process when it was
too late to check it for consistency with other sections
of the Act, and debated without the benefit of a committee
report and with attention focused only on its purpose as
opposed to its details. Senator Baker may have seen
some ambiguity in the term “in existence” and used
more specific language to ensure that his purpose was
achieved. We do not think the possibility that one sen-
ator thought the statute’s grandfather clause was am-
biguous rebuts the other persuasive evidence of the rea-
sonableness of EPA’s interpretation of congressional
intent.

We affirm EPA’s definition of “in existence.”

Sierra Club and NRDC argue that the grandfather
clause is subject to abuse unless EPA bars sources from
receiving emission credit for emissions from new facili-
ties tied into their grandfathered tall stacks. Such a pro-
vision was included in the preamble to the 1979 proposed
regulations, 44 Fed. Reg. at 2612 (“credit only for emis-
sions from facilities that before December 31, 1970 were
committed to tie into a stack in existence as defined in
this Regulation”) but was deleted without explanation
in the 1982 final regulations. EPA admits that it: neg-
lected to respond to Sierra Club’s comment that the
provision be included in the final regulations themselves,
but argues that the failure was at most harmless error.
Since the failure to respond leaves us “to guess as to the
agency’s findings or reasons,” Greater Boston Television
Corp. v. FCC, 444 F.2d 841, 851 (D.C. Cir. 1970), cert.
denied, 403 U.S. 928 (1971), and we may not uphold

x

agency action on the basis of arguments advanced not
by the agency itself, but only by counsel during litiga-
tion, FPC v. Texaco Inc., 417 U.S. 380, 397 (1974), we
remand this issue to allow the agency to explain why it
refused to prohibit tying new sources into pre-1971 stack
heights.

I. Prospective Application of 1+1.5 Rule

As noted, EPA’s regulations provide two formulas for
the determination of GEP height: the 2.5 Rule for use by
stacks in existence (as defined in the regulations) on
January 12, 1979, and the 1+1.5 Rule for all other
stacks. 47 Fed. Reg. at 5868 (to be codified at 40 C.F.R.
§ 51.1(ii) (2)). The dividing date is the day on which
the agency published its 1979 proposed regulations, in
which it first proposed the 1+1.5 Rule. Retroactive ap-
plication of the new formula was eschewed because it
was thought to be unfair to sources that “in good faith
had constructed stacks in accordance with” the previously
accepted 2.5 Rule. Jd, at 5866.

Sierra Club and NRDC argue that the two-formula
approach is contrary to the Act, which allows credit
only for good engineering practice height, as determined
by the Administrator. Once EPA determines that the
relevant amount of downwash can be prevented by a
certain height, it must give credit only for that height.
Allowing application of the 2.5 Rule, the argument goes,
gives credit for stack height in excess Of GEP height.
In addition, petitioners cite the conference committee’s
report, which states the committee’s intention that “if
it should be determined that downwash, eddies, and wakes
can be prevented by stacks of less than 2% times facility
height, the Administrator’s rule should give ‘credit’ only
for the height needed to avoid these conditions,” 123
Conc. Rec. 27,071 (1977).

We hold that the statute does not prevent EPA from
allowing its past rule to be applied to stacks built be-

63a

fore its new formula was proposed, but that the agency
has erred in allowing sources that did not rely on the
old formula to use it. Congress was moved to enact
section 128 by evidence that during the 1970’s many
sources had built tall stacks far above the heights dic-
tated by sound engineering practice. To allow such
sources to claim credit for heights up to the 2.5 Rule
would be a windfall for them, unjustifiable under either
the statute or the equitable considerations that govern
retroactivity.

Although the conference committee directed that the
Administrator’s rule give credit only for whatever height
he determined was needed to prevent downwash, it did
not speak to whether that rule should be applied retro-
actively or only prospectively. The courts have addressed
the limits of an agency’s implied power to apply a rule
retroactively and have discerned a set of considerations
that limit that power. We think that these considerations
are a

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385011_1488%3A02. Public record. Not legal advice.