# Appendix — Ohio Power Co. v. Thomas > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385019_2013%3A2 ## Record - **Collection:** Supreme Court brief - **Document type:** Appendix - **Published:** January 1, 1988 - **Citation:** 488 U.S. 901 ## Text ‘> Supreme Court, U.S, 8 g 6 FILED 0 JUL 12 1988 No. 87- | JOSEPH F. SPANIOL, UR, i IN THE Supreme Court of the United States OCTOBER TERM, 1988 OHIO POWER COMPANY AND ORMET CORPORATION, V. Petitioners, LEE M. THOMAS, et al., Respondents. APPENDIX TO PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT DONALD C. WINSON RICHARD S. WIEDMAN ECKERT, SEAMANS, CHERIN & MELLOTT 42nd Floor, 600 Grant Street Pittsburgh, PA 15219 (412) 566-6000 Counsel for Petitioner Ormet Corporation July 1988 HENRY V. NICKEL (Counsel of Record) F. WILLIAM BROWNELL MEL S. SCHULZE HUNTON & WILLIAMS 2000 Pennsylvania Ave., N.W. Suite 9000 Washington, D.C. 20006 (202) 955-1500 A. JOSEPH DOWD JEFFREY P. WHITE AMERICAN ELECTRIC POWER SERVICE CORPORATION One Riverside Plaza P.O. Box 16631 Columbus, Ohio 43216 (614) 223-1636 Counsel for Petitioner Ohio Power Company WILSON - EPES PRINTING Co., INc. - 789-0096 - WASHINGTON, D.C. 20001 a “oy _ E APPENDIX TABLE OF CONTENTS DECISION AND SUBSEQUENT ORDERS OF THE COURT Natura! Resources Defense Council v. Thomas, Re Be EE OR Oe) ) a Order of April 13, 1988 [denying petitions for a SEE ae Oe aR jai ntapatasatddacnaihoon Order of April 13, 1988 [denying suggestions for I I rao hcccentvecancnantianvenpecnscenracasee Order of May 5, 1988 [delaying issuance of man- I ee su Ga somaasiaeeianann AGENCY DECISIONS, FINDINGS OF FACT AND REGULATIONS Environmental Protection Agency, Final Stack Height Regulations, 50 Fed. Reg. 27892, et seq. I aati rans acest sk seetadmneindecinsnaiennnncnineiicanlensleclaenbie Environmental! Protection Agency, Proposed Stack Height Regulations, 49 Fed. Reg. 44878, et seq. “tT na, DE Ree PLO RE LNS RON REL Ree RELATED STATUTES Clean Air Act §§ 110(a) (1)-(a) (2) (k), 123, 42 U.S.C. §§ 7410(a) (1)-(a) (2) (k), 7423 (1982).. Administrative Procedure Act §§4, 10(e), 5 pis Fee GF Re teen eer es Page la 65a 67a 69a Tla 134a 172a la UNITED STATES COURT OF APPEALS DISTRICT OF COLUMBIA CIRCUIT Nos. 85-1488 and 86-1331 NATURAL RESOURCES DEFENSE COUNCIL, INC., et al., Petitioners, Vv. LEE M. THOMAS, Administrator, United States Environmental Protection Agency, Respondent, ALABAMA POWER COMPANY, et al., AMERICAN PAPER IN- STITUTE and the NATIONAL FOREST PRODUCTS ASSOCIA- TION, NATIONAL COAL ASSOCIATION, KENNECOTT, NAT- URAL RESOURCES DEFENSE COUNCIL, INC., and SIERRA CLUB, STATE OF OHIO, Intervenors OHIO POWER COMPANY, Petitioner, V. LEE M. THOMAS, Administrator, United States Environmental Protection Agency, et al., Respondents, NATURAL RESOURCES DEFENSE COUNCIL, INC., and SIERRA CLUB, Intervenors. Argued Sept. 25, 1987 Decided Jan. 22, 1988 2a Petition for Review of an Order of the U.S. Environmental Protection Agency David G. Hawkins, with whom Richard E. Ayers and Howard I. Fox, Washington, D.C., for the Natural Re- sources Defense Council, Inc., et al., James M. Shannon, Atty. Gen. and Janet G. McCabe, Asst. Atty. Gen., the Commonwealth of Massachusetts, Boston, Mass., James E. Tierney, Atty. Gen. for the State of Maine, Augusta Me., and Robert Abrams, Atty. Gen. for the State of New York, Albany, N.Y., were on the brief for petitioners. Robert Whitehead and Kenneth N. Tedford, Asst. Atty. Gen., State of Conn., Hartford, Conn., and Greg Sample, Asst. Atty. Gen., State of Maine, Augusta, Me., also en- tered an appearance for Natural Resources Defense Coun- cil, Inc., et al. Henry V. Nickel, with whom F. William Brownell and Mel S. Schulze, Washington, D.C., for Alabama Power Co., et al., Donald C. Winson and Richard S. Wiedman, Pittsburgh, Pa., for Ormet Corp.; Robert F. Stauffer, Washington, D.C. and David C. Branand, Cleveland, Ohio for National Coal Ass’n, and Michael H. Holland and Earl R. Pfeffer, Washington, D.C., for United Mine Workers of America were on the joint brief for peti- tioners Alabama Power Co., et al. John W. Ublinger, Jr., also entered an appearance for petitioner Ormet Corp. Lawrence A. Demase, Pittsburgh, Pa., and J. Daniel Hull, Washington, D.C., were on the brief for petitioners Monongahela Power Co. and Potomac Edison Co. Ann G. Daniels, San Francisco, Cal., entered an ap- pearance for petitioner Environmental Defense Fund, Inc. Paul H. Schneider, Asst. Atty. Gen., State of New Jersey, Trenton, entered an appearance for petitioner, State of New Jersey. 3a Charles Carter, Asst. Gen. Counsel, EPA and Lisa F. Ryan, Atty., U.S. Dept. of Justice, with whom Scott Slaughter, Atty., Dept. of Justice, Alan Eckert, Associate General Counsel, EPA and Patricia Embrey, Atty., EPA, Washington, D.C., were on the brief for respondents. Michael W. Steinberg, Atty., U.S. Dept. of Justice and Gaylene Vasaturo, Atty., EPA, Washington, D.C., also entered an appearance for respondents. Alfred V.J. Prather and Kurt E. Blase, Washington, D.C., were on the brief for intervenor Kennecott. Dale T. Vitale, Asst. Atty. Gen., Columbus, Ohio for the State of Ohio, was on the brief for intervenor- respondent the State of Ohio. Henry V. Nickel, W. William Brownell and Mel S. Schulze, Washington, D.C. for Alabama Power Co., et al., Michael K. Glenn, Washington, D.C., for American Paper Institute, et al., and David C. Branand, Washington, D.C., for National Coal Ass’n., were on the brief for in- tervenors Alabama Power Co., et al. Richard S. Wasser- strom, Washington, D.C., also entered an appearance for American Paper Institute, et al. Robert F. Stauffer, Washington, D.C., also entered an appearance for Na- tional Coal Ass’n. Edwin Lloyd Pittman, Atty. Gen. State of Mississippi and Robert Franklin Spencer, Asst. Atty. Gen., State of Mississippi, Jackson, Miss., were on the brief for amici curiae the State of Mississippi, et al. urging affirmance. Before RUTH B. GINSBURG and WILLIAMS, Cir- cuit Judges, and AUBREY E. ROBINSON, Jr., Chief Judge, U.S. District Court for the District of Columbia.* Opinion for the Court filed by Circuit Judge WIL- LIAMS. * Sitting by designation pursuant to 28 U.S.C. § 292(a). I. Il. ITI. 4 BACKGROUND ............................ eaibiidbesnall See STACK HEIGHT VALIDATION: EMISSIONS RATE ASSUMPTIONS IN DEMONSTRATIONS . A. B. The Control-First Dispute .... Demonstrations Supporting Stack Height I In- creases Within the Formula . 1. Attacks on the formula 2. Attacks on the demonstration procedures.. . The NSPS Presumption for Above-Formula Stacks ............ 1. Substantive objections . 2. Procedural challenges .. STACK GRANDFATHERING ISSUES Sheltering pre-October 1, 1983 Within- A. Formula Stack Increases from the Demon- stration Requirement ........... :, B. Automatic Credit to Formula Height for pre- January 12, 1979 Stacks .................. 1. Credit up to 2.5H for pre-1979 sources GING ID... ccrciecnaitncdacceeee 2. Credit up to H+1.5L for pre-1979 sources not showing reliance .................................. C. EPA’s Definition of “Stack Height i in Exist- GUD” - sncscirincthensintnieeiictiaiaiaee eae D. Application of New Demonstration Require- ments to Sources that Have Completed a at Pit a) | BF eat SEEN SR Sal me, Pea A. Original ilies and Construction as One Stack ......... RAND RE 5s in Os ON : B. General Rule for Merged Stacks _......... C. Partial Grandfathering of Stacks Merged ORNS GUN GSS sicntemumesenaet ee a 1233 1233 1239 1239 1239 1240 1241 1242 We I iii ceili alisha adie ... 1256 Ss <<. ¥ —— sso 1256 B. Definition of “Nearby” as Used in Demon- ATE a a eee WoO Se SERED Spe RINT OueR i. Sout 1256 C. Modeling Adjustments for Complex Terrain... 1257 8 IRE NT Oe a 1257 WILLIAMS, Circuit Judge: Under the Clean Air Act as amended in 1970, 42 U.S.C. $§ 7401 et seg. (1982), the Environmental Protection Agency sets national ambient air quality standards (“NAAQS”) for various pollutants. /d. § 7409. Once they are set, each state must adopt and submit to the EPA a state implementation plan (“SIP”) providing for achievement of the standards in each air quality control region. Jd. § 7410(a)(1).' Such plans obviously must distribute the necessary pollution cutbacks among the various pollution sources. From 1970 to this day a dis- pute has raged over the extent to which pollution sources may make their required contribution toward these localized clean air goals by dispersing pollution rather than by reducing their emissions. Dispersion may be either through space or time. A source may disperse its pollution through space by such devices as “tall stacks,” which carry the pollutants away from the region and from the ground levels at which satisfaction of the NAAQS is measured. It may disperse pollution over time by intermittent controls systems (“ICS”), which vary the time of discharges so as to take advantage of changes in weather conditions. 1 Under 42 U.S.C. § 7407, the country is subdivided into inter- state as well as intra-state regions. As of 1981 there were 236 such regions. B. ACKERMAN & W. HASSLER, CLEAN COAL/DIRTY AIR 65 (1981). 6a Dispersion techniques vary from emission reductions in two fundamental ways. They are, at least up to a point, considerably cheaper than emissions reductions. This makes them attractive to industry and often to the states of origin. (The attraction may be particularly great where the state of origin produces high-sulphur coal.) On the other hand, reliance cn such techniques in- creases the aggregate amounts of pollution dumped into the atmosphere. This makes them unattractive to en- vironmentalists and to the citizens of downwind states,” to which the pollution will be swept and where acid rain may result. First the courts and then Congress intervened to pre- vent states from allowing pollution sources to satisfy their obligations by means of dispersion. As a result, reduc- tions in local ground-level pollution do not “count” toward satisfaction of the NAAQS to the extent that they rely on those dispersion techniques that are disapproved. While these limitations obviously relate to important goals, the system has a certain eccentricity. The ambient air quality standards are ones to be fulfilled in more than 236 specific /ocal areas. The anxiety over dispersion stems primarily from dispersion’s impact outside the region of origin. But the means of allaying that anxiety is to disregard, for purposes of measuring contribution to local clean air, conduct which indisputably helps clean local air. Yet none of the constraints on dispersion, whether devised by courts, EPA or Congress, has forged 2 Of course individuals may also benefit from restrictions on dispersion as residents of the states where the stacks exist, for (as will appear) denial of credit for pollution control through dispersion will result in local sources reducing their pollution by more than the amount required for achievement of the NAAQS. However, as the NAAQS are set at levels found by EPA as “requisite to protect” the public health and welfare, 42 U.S.C. § 7409(b), many local residents may feel that the decrease in pollution is not worth the increment in electricity costs. ———_™™ Ta an operating link between those constraints and the in- juries inflicted by dispersion. Thus, although the parties adduce some figures as to changes over time in total atmospheric “loadings” of sulphur dioxide, these are not related to any statutory goal or to any scheme for attain- ing specific cutbacks. This incongruity may account for some of the logical difficulties encountered in trying to apply the statute and controlling precedents. This battle has proceeded in the agency, the courts and Congress. The latter tried to resolve the matter in 1977 by adding a new provision to the Act, § 123, 42 U.S.C. § 7423 (1982), which has not proved at all free of am- biguity. This court reviewed the EPA’s 1982 “stack height” regulations in Sierra Club v. Environmental Pro- tection Agency, 719 F.2d 436 (D.C.Cir.1983), cert. denied, 468 U.S. 1204, 104 §.Ct. 3571, 82 L.Ed.2d 870 (1984) (“Sierra Club”). We affirmed many aspects of those regulations, invalidated two provisions, and directed the agency to reconsider other provisions on remand. In 1985 the agency promulgated a new set of regulations attempting to respond to Sierra Club.’ In these consoli- dated cases, environmental petitioners led by the Natural Resources Defense Council (and supported by an array of northeastern states)‘ and industry petitioners( sup- * The 1985 Final Stack Height Regulations at issue here appear at 50 Fed.Reg. 27,892 (1985). After their publication, Title 40 of the C.F.R. was reorganized, and these regulations are now codified at 40 C.F.R. Part 100. This opinion, however, will refer to the C.F.R. cites as they appear in the 1985 Federal Register notice. * Petitioners attacking the regulations as insufficiently protective of the environment include NRDC, the Environmental Defense Fund (“EDF”), the Sierra Club, and the states of Connecticut, Maine, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island and Vermont. These parties submitted one consoli- dated brief, and will be referred to collectively as “NRDC” or the “environmental petitioners.” 8a ported by an array of middle western states)° chailenge the amended regulations. We regret to say that we can- not find them in full compliance with § 123 as construed in Sierra Club.® I. BACKGROUND This court described the statutory provisions at issue in this case, together with their legislative and adminis- trative history, in Sierra Club, 719 F.2d at 439-43, and in our earlier opinion in Alabama Power Co. v. Costle, 636 F.2d 328, 388-91 (D.C.Cir.1979). Here we confine ourselves to a brief summary. Section 110 of the Act directed the EPA Administrator to approve a SIP if it complied with the applicable pro- 5 Parties petitioning on the ground that the regulations are too stringent, and intervening in support of the agency against the NRDC challenges, include Alabama Power Co., the American Paper Institute, the National Forest Products Association, United Mine Workers of America, Monongahela Power Co., the National Coal Association, Ohio Power Co., Ormet Corp., and the State of Ohio. These parties have been aided by an amici curiae brief submitted by the states of Indiana, Mississippi and Georgia. These parties will be referred to generally as “industry petitioners.” Kennecott is an Intervenor in support of the agency’s approval of the multipoint roll-back system, an emissions control system challenged by the environmental petitioners. 6 Prior to oral argument, petitioner NRDC filed a motion for enlargement of time to submit a supplemental appendix. Soon there- after it submitted a motion to correct the certified index to the record and file its supplemental appendix. These motions were opposed by both the agency and the industry petitioners/intervenors. The industry petitioners in turn filed a motion requesting the oppor- tunity to tender supplemental briefs should we grant NRDC’s mo- tions. NRDC’s motion for enlargement of time is, at this point, moot. We have reviewed its supplemental appendix and conclude that nothing contained therein affects our disposition of the case. It is therefore unnecessary for us to consider the merits of NRDC’s motion or those tendered in opposition. We deny both the motion to correct the certified index and file the supplemental appendix and the industry petitioners’ subsequent motion for supplemental briefing. 9a cedural requirements and included (among other things) “emissions limitations . . . and such other measures as may be necessary to insure attainment” of the NAAQS. 42 U.S.C. § 7410(a) (2) (B). The agency initially ap- proved state plans that authorized the use of “‘tall stacks” and ICS compliance measures. Several courts found this approach illegal, reading § 110 to establish a hierarchy among control techniques. Under the hierarchial view, “other measures” qualified as “necessary” only to the extent that the SIP had exhausted the “emissions limita- tions’ approach, 7.e., only where further compliance through such limitations was “unavailable or infeasible.” 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, 95 $.Ct. 1470, 43 L.Ed.2d 731 (1975); Big Rivers Elec- tric Corp. v. EPA, 523 F.2d 16, 21-22 (6th Cir.1975) (involving ICS), cert. denied, 425 U.S. 934, 96 S.Ct. 1663, 48 L.Ed.2d 175 (1976); Kennecott Copper Corp. v. Train, 526 F.2d 1149, 1153-54 (9th Cir.1975) (involving ICS and tall stacks), cert. denied, 425 U.S. 935, 96 S.Ct. 1665, 48 L.Ed.2d 176 (1976). (We refer to these cases collectively as the “NRDC triolgy.”) Round I to the environmentalists. In 1976 EPA issued guidelines seeking to implement the Fifth Circuit’s view of §110. 41 Fed.Reg. 7450 (February 11, 1976) (‘1976 Guidelines’). The guide- lines employed a variety of distinctions that continue to haunt the area. First, they focused on the control credit that a source could receive for pollution control through stack height. Thus they did not purport to restrict a source’s actual employment of a tall stack, but simply limited the extent to which the actual reduction in ground-level pollution achieved by such a stack would count towards compliance with the NAAQS. Id. at 7451. Second, they drew a distinction between stacks that were equal to or less than 21 times the height of the 10a facility (the “2.5H” formula) and stacks that were tal- ler, favoring within-formula stacks. Jd.’ Third, they looked relatively askance at increases in stack height as opposed to stack heights attained in original construction, presumably because the former were more likely than the latter to reflect a purpose to avoid emission reduction costs rather than adherence to conventional engineering practice. Id. Fourth, they employed “grandfathering” concepts both with respect to increases and original construction stacks. For example, they treated the stacks of sources that re- ceived construction permits before the Fifth Circuit’s decision more favorably than those of sources initiating construction later. Jd. This is not the place to describe the rather complex pattern that emerged from all these elements. We will return to aspects of the 1976 Guidelines as we go along. For the moment, we note that credit for control through stacks was to be unlimited if the source applied “the best available control technology” (“BACT’’), even for the least favored vintage of stack and for stacks of increased height. Jd. at 7451-52. Stacks initiated before the Fifth Circuit’s NRDC decision were grandfathered, up to what- ever figure the 2.5H formula might produce. Jd. In 1977 Congress stepped in with § 123, moved at lease in part by concern that the 1976 Guidelines were 7In 1981, the agency began defining H as the “height of nearby structure(s).” 46 Fed.Reg. 49,817/1 (Oct. 7, 1981). This minor alteration has no bearing on the current action. 5 Section 123, 42 U.S.C. § 7423, reads as follows: (a) The degree of emission limitation required for control of any air pollutant under an applicable implementation plan under this subchapter shall not be affected in any manner by— (1) so much of the stack height of any source as exceeds good engineering practice (as determined under regulations promul- gated by the Administrator), or (2) any other dispersion technique. The preceding sentence shall not apply with respect lla too lax. See Sierra Club, 719 F.2d at 440. The section in essence elaborates on §110’s references to “other methods,” and, to a degree, subordinates the use of tall stacks and other dispersion techniques to emission con- trols. It creates a new concept, “good engineering prac- tice” (“GEP”), with a complex definition. The methods and distinctions used in the 1976 guidelines reappear, with important variations. Like the earlier guidelines, § 123 addresses only the issue of credit for pollution reduction through dispersion techniques, explicitly stating that the Administrator is not to prohibit increases or restrict stack height. § 123 (ec), 42 U.S.C. § 7423(c). Further, it builds in at least some significance for the 2.5H formula,” specifying that to stack heights in existence before December 31, 1970, or dis- prsion techniques implemented before such date .... (b) For the purpose of this section, the term ‘dispersion technique” includes any intermittent or supplemental control of air pollutants varying with atmospheric conditions. (c) Not later than six months after August 7, 1977, the Administrator, [sic] shall[,] after notice and opportunity for public hearing, promulgate regulations to carry out this section. For purposes of this section, good engineering practice means, with respect to stack heights, the height necessary to insure that emissions from the stack do not result in excessive con- centrations 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 struc- tures or nearby terrain obstacles (as determined by the Ad- ministrator). For purposes of this section such height shall not exceed two and a half times the height of such source unless the owner or operator of the source demonstrates, after notice and opportunity for public hearing, to the satisfaction of the Administrator, that a greater height is necessary as provided under the preceding sentence. In no event may the Adminis- trator prohibit any increase in any stack height or restrict in any manner the stack height of any source. ® The agency carried the 2.5H formula over from the 1976 Guide- lines in its initial effort to give meaning to the GEP concept. 42 12a GEP height must not exceed that formula unless the source owner demonstrates to the Administrator that such greater height is “necessary” as that term is used in the GEP definition. Third, it employs grandfathering, but in a more limited sense than did the 1976 guidelines, protecting only stacks “in existence” or dispersion tech- niques “implemented” before the 1970 amendments (De- cember 31, 1970). § 123(a), 42 U.S.C. § 7423(a). § 123’s structure differs from that of the 1976 Guidelines in that it draws no explicit distinction between increases in stack height and original construction. Although § 123(c) directed the EPA to issue regula- tions implementing its provisions by February 7, 1978, they did not emerge in final form until February 8, 1982. 47 Fed.Reg. 5864. The Sierra Club and the Na- tural Resources Defense Council chalienged the regula- tions in this court under 42 U.S.C. § 7607(b) and pre- vailed in part. We will not here summarize the hold- ings of Sierra Club, as a summary would be unneces- sary for the cognoscenti, meaningless for others. The im- portant aspects of the decision appear throughout this opinion as we address the many current issues. The upshot was a remand to the agency, with direc- tions to promulgate new final regulations “within six months from the date of issuance of [the] court’s man- date,” 719 F.2d at 470. The mandate issued on July 18, 1984, after the denial of certiorari by the Supreme Court, Fed.Reg. 57,459 (Nov. 3, 1977). It refined this formula in its 1979 proposed regulations, defining GEP stack height as the height of a nearby structure plus one and a half times the lesser of the height or the width of the nearby structure, or H + 1.5L. 46 Fed.Reg. 2608, 2610 (Jan. 12, 1979). The current regulations except from the H + 1.5L formula those pre-1979 sources that relied on 2.5H. 50 Fed.Reg. 27,906/3 (1985), 40 C.F.R. § 51.1(ii) (2) (i). When we use the term “formula height,” we are referring to that height dictated by the stack height formula applicable to the source in question. 13a 468 U.S. 1204, 104 S.Ct. 3571, 82 L.Ed.2d 870. The agency later secured a postponement from the court, and promulgated the final regulations on June 27, 1985. 50 Fed.Reg. 27,892 (1985). Environmental and industry petitioners challenge the revised regulations in this court under 42 U.S.C. § 7607(b) (1), which directs review here for “nationally applicable regulations.” Thus, 17 years after the 1970 amendments and 10 years after the enact- ment of § 123, we again address the permissible scope of reliance on dispersion techniques. II. STACK HEIGHT VALIDATION: EMISSIONS RATE ASSUMPTIONS IN DEMONSTRATIONS A. The Control-First Dispute The 1982 Regulations allowed sources to build stacks to formula height and to increase existing stacks to for- mula height at will. But a source seeking credit for above-formula stacks was required to demonstrate (by fluid modeling or field studies) that the extra height was “necessary” within the meaning of § 123’s definition of GEP (“height necessary to insure that emissions . . . do not result in excessive [downwash-induced] concentra- tions of any air pollutant... .”). 47 Fed.Reg. 5865/2 (1982). The agency defined “excessive concentrations” in terms of a “relativist” test: downwash-induced pol- lutant concentrations were excessive if they exceeded maximum non-downwash concentrations by 40 percent or more Id. at 5869/1. Though the 40 percent figure is not in itself at issue, a word of explanation is in order. In preparing the 1982 regulations EPA found that downwash increased ground- level pollution concentration levels by about 40 percent where a source’s stack was at formula height (7.e., 2.5H). Sierra Club, 719 F.2d at 446. As Congress had recognized the 2.5H formula as indicative of traditional engineering practice and therefore presumptively sound, 14a the agency reasoned that any downwash-induced pollu- tion increase exceeding what a formula-height stack would normally produce should be regarded as excessive. Id. In Sierra Club, environmenal petitioners attacked the relativist test and prevailed. They argued that Congress was content to give credit to stacks only to the extent that their height was necessary to protect human health, so that a downwash-induced concentration could be “ex- cessive” only if it were health-threatening. 719 F.2d at 447. The 40 percent realtivist test of course had no direct connection with any health threat. The relativist-absolute dispute appeared to the court in Sierra Club to dissolve into the question whether Congress meant in § 123 to codify a traditional engineering formula or to create a health-and-welfare based stack height standard. The court found that the statute and its legislative history ‘“disclose[d] sharply conflicting sig- nals,” and concluded, after reviewing the question in detail, that “Congress [probably] thought traditional en- gineering practice and protection of health were the same thing.” Jd. at 448. But the court also found evi- dence in the legislative history that Congress recognized that a choice between the two standards would be neces- sary if traditional engineering practice dictated a height greater than that necessary to protect human health. Jd. The court concluded that “meeting air quality standards was primary in [Congress’s] mind and that good engi- neering practice was merely a way to do so.” Jd. Finding it unlikely that the 40 percent standard would identify “an absolute pollutant concentration that is dangerous to health,” the court remanded to the agency with instruc- tions to “develop a standard directly responsive to the concern for health and welfare that motivated Congress to establish the downwash exception.” 7d. at 450. The mandate to develop an absolute test revealed an issue that did not exist under the relativist one. Ground- 15a level concentrations are obviously a function not only of stack height and other elements mentioned in § 123’s GEP definition, but also of the emissions emerging at the top of the stack. Once “excessive” concentrations are de- fined in absolute terms, the stack height “necessary” to avoid those concentrations on the ground will obviously vary with a source’s actual emissions. Thus Sierra Club opened a gap in § 123’s GEP definition, the gap expressed in the bracketed and emphasized clause below: “height necessary [given a specified emissions level] to insure that emissions from the stack do not result in excessive concentrations... .” Although the parties disagree as to how much the assumed emissions rate affects any computation of credit- worthy stack height, they agree on the direction of the impact; high assumed emissions rates entail relatively generous stack credits (and thus relatively high permis- sible emissions rates), low assumptions the opposite. EPA’s choice of a baseline emissions rate in the 1985 regulations has varied with the particular contexts pre- sented by the rule-making. The critical decisions have related to the “demonstrations” (consiting of field studies or fluid modeling demonstrations) that the regulations require of sources in some circumstances. First, sources seeking credit for any stack height increase after criginal construction must (unless the stack is grandfathered) demonstrate compliance with § 123’s GEP definition, even though the height for which credit is sought in within EPA’s formula.” 40 C.F.R. § 51.1(kk) (2). Here, EPA has specified that the baseline must be “the emission rate 10 These increases account for a substantial share of the pollution dispersed rather than controlled by the utility industry, but the data before us do not indicate precisely how much. NRDC directs our attention to data suggesting that 168 pre-1970 sources have “doubled” their ability to disperse pollution, NRDC Brief at 9-11, but its data combine the effects of stack height increases with those of merged stacks (a practice discussed in part IV, infra). Id. 16a specified by any applicable State implementation plan (or, in the absence of such a limit, the actual emissions rate).” Id. NRDC argues that instead the baseline must be that emissions rate which would result from the source’s using all “available methods.” NRDC Brief at 22 (emphasis added). The parties have dubbed NRDC’s contention the “control-first”’ approach. EPA also requires a demonstration for any stack height above that resulting from its formula (unless the stack is grandfathered). 40 C.F.R. § 51.1(kk) (1). Here it uses as the baseline the rate provided in the “new source performance standards” (“NSPS”) promulgated for new power plants under § 111 of the Act, 42 U.S.C. $ 7411, unless the source can show that the NSPS rate is unfeasible. This conditional NSPS standard is, of course, a variant of control-first; it is vigorously attacked by industry." Finally, the baseline emissions rate is relevant to EPA’s validation of its formula, a matter that is indirectly at issue here. That validation was based in part on studies from various power plants, the cleanest having an emis- sions rate of 4.65 pounds of sulphur dioxide per million British thermal units (Btu). J.A. 834. This compares with an NSPS emissions limit of 1.2 pounds per million Btu for plants built between 1971 and 1978, 40 C.F.R. § 60.43 (a) (2), and thus obviously does not fit the control- first model. In this part we address the general question whether $ 123 requires use of control-first and conclude that it 11 Under the new regulations, sources are also required to under- take GEP stack height demonstrations when a federal, state, or local authority believes that the formula has overestimated their necessary stack height. 40 C.F.R. § 51.1(kk)(3). For purposes of these demonstrations, EPA chose to retain its old relativistic defi- nition of excessive concentrations, and thus had no need to define an applicable emissions rate. 17a does not. Later sections face the baseline emissions rate problem in the specific contexts already mentioned. We first address EPA’s contention that NRDC’s control- first claims are barred by res judicata, as it failed to raise the argument in Sierra Club. Of course where res judicata (claim preclusion) applies, it bars relitigation not only as to all matters which were determined in the previous litigation, but also as to all matters that might have been determined. Tutt v. Doby, 459 F.2d 1195, 1197 (D.C.Cir.1972). Moreover, enforcement of the 60-day time limits imposed by the statute providing for review, 42 U.S.C. § 7607(b) (1), requires that issues raised by an initial set of rules be raised within that time limit, not saved for use against the rules that may emerge from a remand. Neither of these barriers applies here. The issue of the proper baseline emissions rate became ripe only after the Sierra Club court remanded for application of an abso- lute test. While the environmentalists’ briefs in Sierra Club might have mentioned the issue, they could hardly have induced this court to pass on it before EPA had a chance to do so. They are not, therefore, precluded from raising the matter in the present litigation. On the merits, we start by noting the scope of our review. If, using “traditional tools of statutory construc- tion,’ we can discern Congress’s intentions in regard to baseline emissions rates, obviously we must give effect to Congress’s will. NLRB v. United Food & Commercial Workers Union, Local 23, USS. ' , 108 S.Ct. 413, 421, 98 L.Ed.2d 429 (1987) (citations omitted) ; Chevron U.S.A., Inc. v. NRDC, 467 U.S. 837, 842-43, 104 S.Ct. 2778, 2781-82, 81 L.Ed.2d 694 (1984). If we find that “the statute is silent or ambiguous” on the issue, however, we must defer to the EPA’s interpretation if it is based upon a “permissible” statutory construction. NLRB, U.S. at , 108 S.Ct. at 421, quoting Chevron, 467 U.S. at 843, 844, 104 S.Ct. at 2782, 2783. 18a Before evaluating the various appeals to the dictionary and to legislative history, we think it suitable to note that the view which NRDC says Congress adopted carries drastic implications. Control-first would require each source to assume, for purposes of its stack height credit demonstration, the lowest achievable emissions rate, de- termined on either a generic or an individualized basis. Although the record does not allow us to infer exactly the impact of the baseline emissions rate on the emissions rate that would emerge (after the stack height credit were calculated and then used to determine the permissi- ble emissions), all parties agree that that impact is sub- stantial. Indeed, that is what the fight is all about. If Congress in § 123 prescribed the use of such a baseline emissions rate, with all its implications for ultimate emissions ceilings, it did so in a remarkably cryptic way. In the Clean Air Act Congress has formulated stand- ards for development of emissions limits in a variety of contexts. For example, it provided for generic emis- sions limits for new sources in § 111, 42 U.S.C. § 7411 (1982), spelling out at length the criteria for calculation of the limits. In a variety of other contexts, it has pro- vided—at length—for determination of the lowest feasible emissions level on a source-by-source basis. See, e.g., 42 U.S.C. $$ 7475(a) (4), 7479(3) (mandating use of the “best available control technology” (“BACT”) for new sources in attainment areas, and defining the parameters of the standard); 42 U.S.C. §§ 7502(b) (2), 7501(3) (requiring “lowest achievable emissions rate” (“LAER”) for new sources in nonattainment areas, and defining LAER); 42 U.S.C. § 7502(b) (3) (requiring “reasonably available control technology (“RACT”) for existing sources in nonattainment areas); 42 U.S.C. § 7491(g) (requiring “best available retrofit technology” (“BART’’) for pre-1971 sources impairing visibility in national parks and certain other clean areas). NRDC in essence con- tends that in § 123 Congress mandated agency pursuit LL 19a of a similar strategy, but without providing a word of guidance. All NRDC’s arguments must be assessed in light of one’s estimate of the plausibility of any such scenario. We think it quite unlikely. NRDC argues that its control-first interpretation is consistent with the plain meaning of the statutory lan- guage and is clearly supported by relevant legislative history. It argues further that even if the statute were ambiguous, EPA’s interpretation is internally inconsistent and therefore invalid. NRDC contends that the control-first approach follows inexorably from the plain meaning of the word “neces- sary.” Webster’s Third New World Dictionary defines “necessary” to mean essential or “indispensable.” /d. at 1511. It argues that this definition compels a finding that stack height cannot be “necessary” to control ground level pollution unless the source has employed all feasible emission-control alternatives for reaching the desired levels under downwash conditions. NRDC Brief at 22. But courts have frequently interpreted the word “neces- sary” to mean less than absolutely essential, FTC v. Rockefeller, 591 F.2d 182, 188 (2d Cir.1979); 9 to 5 Organization for Women Office Workers v. Board of Gov- ernors, 721 F.2d 1, 10 (1st Cir.1983), and have explicitly found that a measure may be “necessary” even though acceptable alternatives have not been exhausted. In FTC v. Rockefeller, supra, for example, the court said that “the word ‘necessary’ is not always used in its most rigid sense.” 591 F.2d at 188. Specifically, it found that a subpoena could be “necessary” to an FTC investigation even though the Commission had not pursued “reasonably available alternatives.” IJd.; cf. Chrisner v. Complete Auto Transit, Inc., 645 F.2d 1251, 1261-62 (6th Cir. 1981) (statutory term “reasonably necessary” is not ab- solute and does not require complete absence of alterna- tives). As these courts have recognized, meaning varies 20a with context; Webster’s definition by no means tells us that Congress intended that the baseline emissions rate— an issue that surfaced only after this court’s Sierra Club decision—must be premised on the source’s having em- ployed all available emissions controls. NRDC asserts that the legislative history clearly dem- onstrates Congress’s intent to adopt a control-first posture. The House Committee which drafted § 123 stated that it was “intended to ratify the general thrust, if not the specific holdings, of the three U.S. courts of appeals which have considered the issue of the permissibility of use of intermitten controls, tall stacks, and other dis- persion enhancement techniques.” House Report at 91- 92. The cases cited by the House Report are, of course, the familiar ones of the NRDC trilogy, and each found that “other measures” for complying with the NAAQS are “necessary,” for purposes of § 110(a) (2) (B) review, only when further limits on emissions were infeasible. We do not believe, however, that legislative history en- dorsing the “general thrust” of the NRDC triolgy demon- strates that Congress in § 123 itself clearly resolved the exact degree of hierarchy appropriate in ranking control above dispersion. Just as the Sierra Club court did not anticipate the present issue, we see no evidence that the courts involved in the NRDC trilogy anticipated it. Once one recognizes —as Congress indisputably recognized in § 123—-that dis- persion through stacks can play a quite legitimate role in protecting health and welfare from downwash, it is not by any means obvious that in calculating the appropri- ate role of stacks one must assume that reduction efforts have been pushed to the point of infeasibility. Section 123’s concept of GEP stack height not only acknowledges a legitimate role for stacks, but endorses engineering practices developed at a time when emissions were largely unregulated. In fact, Congress gave those 2la practices a specific endorsement in authorizing the EPA to rely on the 2.5H formula in granting credit. See § 123 ic) (Administrator is only obligated to conduct demon- strations for above-formula stacks). It is true that this court decided in Sierra Club that in any potential clash between defining GEP as that height necessary to avoid downwash-induced effects on human health and welfare, and defining it as 2.5H, the former must prevail. 719 F.2d at 448. But that decision did not undermine the statutory assumption that sources might legitimately rely on stacks aimed at protecting health and welfare from emissions rates such as have prevailed on plants built before Congress’s vigorous 1970 intervention into clean air regulation. Thus it appears to us that the cases of the NRDC trilogy simply do not speak to the issue of calculating GEP height, because those courts never even considered the possibility that sources could rely on stacks except when driven to do so by the infeasibility of all alterna- tives. Legislative history endorsing their “general thrust” therefore cannot answer new questions posed by $123 itself: “Necessary” as used in the GEP definition of § 123 cannot be answered by reference to the trilogy’s construc- tion of the word in § 110(a) (2) (B). NRDC further points to legislative history that in its view suggests that Congress believed credit should be given only for stack heights needed by “well controlled” sources. In discussing its reasons for granting source’s credit for GEP stack height, the House Committee ex- plained that for many years, good air quality management has meant building a stack sufficiently tall to offset aero- dynamic downwash created by structures in the im- mediate vicinity of the stack. Without some provision for stack height, a plume released downwind of such structure might become engulfed by turbulent eddys 22a [sic] within the wake of the structure. When this occurs even the plume from a well-controlled source may cause air quality standards (or other require- ments) to be violated. House Report at 98, U.S.Code Cong. & Admin.News 1977, p. 1171 (emphasis added). We find NRDC’s reading strained. It seems clear to us that the Committee was merely justifying its decision to grant credit up to GEP stack height with the observa- tion that even well controlled sources may need to rely on the dispersion engendered by a GEP height stack to avoid excessive local ground-level pollution concentration. Finally, NRDC points to a number of references ex- pressing disapproval of the use of the dispersion effects of “tall stacks” to meet the NAAQS. See, e.g., House Re- port at 93 (“the courts have determined that the 1970 act prohibited tall stacks as a final compliance method’’) ; Conference Report, H.R.Rep. No. 564, 95th Cong., 1st Sess. 144 (1977), U.S.Code Cong. & Admin.News, pp. 1077, 1171, 1524 (“Tall stacks are not a means of emis- sion limitation under the Clean Air Act of 1970.”). But we noted in Alabama Power v. Costle that “tall stack” is “a term that really covers a too-tall stack. 636 F.2d 323, 389 (D.C.Cir.1979) (emphasis added). Thus the refer- ences merely reiterate the Congress’s intent to deny stack height credit beyond the hight dictated by GEP; they do not reflect any legislative decisions on how to calculate GEP. Far from finding a clear Congressional intent to adopt NRDC’s control-first strategy, we find the statute’s use of the term “necessary” to be completely ambiguous. We find no evidence in the statute or the legislative history that Congress ever thought through the question of how to determine GEP or formulated any view on the “control- first” approach. In view of Congress’s endorsement of the historic practice of using stacks to protect health from 23a downwash-induced pollution, we think the agency, in adopting existing or SIP-required emissions rates as the baseline for demonstrations to support within-formula height increases, gave the statute a quite reasonable interpretation. NRDC asserts that even if we find the statute to be silent as to the appropriate emission level assumption, we should reject the agency’s approach as internally in- consistent and therefore arbitrary and capricious. See 5 U.S.C. § 706(2) (A). As noted above, while EPA au- thorizes use of existing or S1P-required emissions as the baseline for justifying within-formula increases, 40 C.F.R. § 51.1 (kk) (2), it requires an assumption of NSPS emis- sions for demonstrations needed to justify above-formula stack heights, 40 C.F.R. § 51.1(kk) (1). NRDC claims that as NSPS is defined in terms of technological and economic feasibility, the latter provision reflects the agency’s partial acceptance of the control-first approach. The agency’s treatment of within-formula increases, it says, is hopelessly inconsistent with its view of above- formula stacks. NRDC Brief at 28-29. The EPA explained in the rulemaking that it rejected use of existing emissions in the above-formula context for fear of impermissible circularity—‘“to the extent that [a source’s preexisting emissions] limit relied on greater than formula hight, it would amount to using a tall stack to justify itself.” See 50 Fed.Reg. 27,898/2. But we think that §123 left the agency free to regard this circularity as permissible in the within-formula context, impermissible in the above-formula context. EPA ex- plained that its use of NSPS (the stringent standard applicable to new sources) for above-formula stacks con- formed to Congress’s expectation that the “credit for stacks above formula height .. . be granted only in rare cases.” 50 Fed.Reg.27,898/1. NRDC is certainly correct when it notes that the circularity problem that attends the use of existing emis- 24a sions levels for above-formula demonstration purposes also applies to within-formula demonstrations. Where the formula has overstated the stack height necessary to avoid excessive ground level concentrations, the SIP or existing emissions levels may reflect the benefit of the erroneous assumption, so that its use in a within-formula stack height demonstration will inflate the “necessary” stack height. The problem, however, is plainly less severe than in the above-formula height context. The initial stack height credit was by definition within-formula, thus limiting the source’s existing emissions rate, and thus the extent to which the laxity of the process may inflict potential damage. The reliance on the formula in the initial computation establishes an outer bound on the degree of error. This is quite different from the risks entailed by use of existing rates in the above-formula context, precisely where both this court and Congress itself have warned the agency to extend credit only with “utmost caution,” Sierra Club, 719 F.2d at 450. Accordingly, we reject NRDC’s contentions that § 123 prohibits use of existing emissions rates in within-for- mula demonstrations andj that the discrepancy between the baseline assumptions for above- and within-formula demonstrations renders the latter arbitrary and capri- cious. B. Demonstrations Supporting Stack Height Increases Within the Formula. 1. Attacks on the formula. In the Sierra Club litiga- tion the environmental petitioners did not directly chal- lenge the accuracy of the stack height formula. (By then the 2.5H formula had evolved into H + 1.5L, where L refers to the lesser of the height or width of any struc- ture near the stack. Some references are to formulas in the plural because the old 2.5H persisted as to some grandfathered stacks.) They did, however, attack the agency’s failure to require demonstrations to justify — 25a stack height credit in either of two special cases: (1) when a source raised a preexisting stack, and (2) when federal, state or local authorities believed the formula had overstated the necessary stack height. The EPA in turn defended the omission of such demonstration re- quirements largely on the ground of the formula’s ac- curacy. 719 F.2d at 456. The court found this faith unsupported by the record, as it was explicitly based on the agency’s erroneous relativistic conception of ‘“‘exces- sive concentrations.” ?* Jd. at 458. The court therefore held that the agency had not considered whether the for- mulas were an accurate enough measure, in light of the construction of “excessive” concentrations as related to health and welfare, to justify dispensing with a demon- stration requirement in the two special cases. It remanded for that reconsideration. Jd. Thus, despite the absence of direct attack, the Sierra Club decision invited reconsid- eration of the formula, by suggesting to EPA that supe- rior validation of the formula was an alternative to adopting demonstration requirements in the areas spe- cifically found to be vulnerable. On remand, the agency provided demonstration re- quirements not only for the two circumstances specifically disputed in the preceding litigation, 40 C.F.R. § 51.1 (kk) (2) (stack height increase demonstrated), 51.1(kk) (3) (governmental authority instigated demonstration), but also for sources with porous structures or buildings whose shapes are areodynamically smoother than the simple structures on which the formulae were based. 50 Fed. Reg. 27,900/2 (explaining the reach of 40 C.F.R. § 51.1 12 The agency had derived its concept of “excessive” from the formula itself, defining excessive emissions as ones exceeding the percentage increase in ground level concentrations normally occur- ring with formula height stacks during periods of downwash. 50 Fed.Reg. at 27,893/3; and see pp. 1233-1234 supra. Its subsequent finding that the formula predicted the minimum stack height neces- sary to avoid excessive concentrations was as unsurprising as it was circular. 26a (kk) (3)). Given these demonstration requirements, nothing in our Sierra Club opinion required EPA to re- evaluate the accurac, of its formula. Accordingly, con- sideration of deficiencies in the formula is barred by res judicata (and by the time limits of 42 U.S.C. § 7607(b) (1)), unless we find that the demonstration procedures chosen by EPA are insufficient to fulfill the statutory purposes. We now turn to that issue. 2. Attacks on the demonstration procedures. In Sierra Club this court found it proper to assume that large plants of the sort at issue here would have been built in accordance with “good air quality management” prac- tices, or, effectively, GEP as the term is used in § 123. 719 F.2d at 459. The corollary of this was an assump- tion that post-construction stack increases were not jus- tified by any need to correct downwash-induced dangers to health and welfare. The court said that this assump- tion could be rebutted in individual cases “only by a re- liable indicator” of the height needed for that purpose. Id. EPA responded by imposing demonstration require- ments. Under the 1985 regulations, sources seeking credit for height increases must show, through fluid modeling or wind tunnel demonstrations, that the increase is neces- sary to avoid downwash that would otherwise exceed at least one of several health- or welfare-related criteria (applicable NAAQS, “prevention of significant deteriora- tion” standards covering areas in full attainment of the NAAQS under § 7475(a) (4), or levels amounting to a lceal nuisance). 40 C.F.R. § 51.1(kk)2). As noted above, a source is to assume for the purposes of the demonstra- tion an emission level equivalent to the applicable SIP, or, if no SIP applies, to its actual emissions rate. 7d. NRDC argues that these emissions rate assumptions undermine the demonstrations, denying them the relia- bility demanded by Sierra Club. As we have noted, an 27a assumption of existing or SIP-required emissions rates plainly gives the demonstrations a certain circularity: the now existing or required emissions rate will have been based on a given stack height, which will then be used to justify a stack height. NRDC Brief at 29.* NRDC argues that instead EPA was required to as- sume the best achievable emissions rate. Id. at 22. We have already rejected NRDC’s claims that failure to employ control-first assumptions directly violates § 123 or is arbitrary and capricious in light of EPA’s own con- demnation of circularity and partial adoption of control- first for above-formula demonstrations. The sole question currently before us, then, is whether EPA’s use of ex- isting rates in this context is so defective as to fail short of Sierra Club’s reliability requirement. We note at this point that the agency’s failure to es- tablish perfect logic in support of its emissions baseline decision may well stem from the nature of § 123 itself. While its goal is the reduction of overall pollution load- ings, at least in part with a view to protect against acid rain in regions distant from the sources, it operates solely on the means by which sources meet national goals for local health and welfare. It would be startling if im- plementation of this process’ did not involve a few logical imperfections. There appears, in fact, to be no completely logical basis on which to select a baseline rate for any demonstration. If EPA were to use NSPS for all demonstrations, for example, demonstrations would in a sense underpredict the appropriate stack height for sources with higher 13 NRDC does not suggest that under EPA’s regulations a source could inerease its emissions and raise its stack, justifying the stack height (and thus the increased emissions) by demonstrations em- ploying the latter rate. We do not read the reference in 40 C F.R. § 51.1(ff) (2) to “the actual emission rate” to encompass such a scenario. 28a emissions rates. Assumption of a single high emissions rate, conversely, would overpredict the appropriate stack height for cleaner piants. But selecting each plant’s ex- isting permitted rate is subject to the circularity objec- tion. In this world of imperfections, we think EPA’s choice reasonable. This is particularly so in light of Congress’s having obviously contemplated reliance on a historic notion of “‘good engineering practice,” a notion developed during an era of relatively primitive emissions controls. We do not find EPA’s methodology for the conduct of within-formula demonstrations arbitrary or capricious. C. The NSPS Presumption for Above-Formula Stacks. In developing a baseline emissions rate for demonstra- tions to justify above-formula stacks, EPA initially pro- posed that sources assume “either (1) the existing, ap- proved emission limit; (2) any applicable technology- based emission limit, such as the new source performance standards (NSPS); or (3) the emission limit that would result from the use of GEP formula stack height, which- ever is applicable to the source being modeled.” 49 Fed. Reg. 44,882/1. The last phrase clearly indicates that NSPS would be used only for plants to which it applied by virtue of $111. The final rule was dramatically different. It required each source to assume NSPS emis- sion levels, or, if it could show those to be infeasible, the lowest achievable levels. 40 C.F.R. § 51.1(kk) (1). Industry petitioners strenuously object to this conditional- NSPS assumption on both substantive and procedural grounds." 14 NRDC does not directly challenge the agency’s above-formula stack height demonstration provisions, which mandate a NSPS emissions level assumption, subject to feasibility constraints. But it does object to EPA’s proposals for gauging feasibility, set forth in certain ‘“guidance memoranda.” NRDC Brief 28 n.54. This court has previously held that the memoranda at issue do not represent 29a 1. Substantive objections. Petitioners raise three dis- tinct challenges to the agency’s decision to adopt the NSPS presumption.” First, they argue that because Con- gress did not prescribe the use of a techonolgy-based emis- sions limit for GEP fluid modeling demonstrations, the Administrator lacks the authority to mandate its use. Alabama Power Brief at 19. As we have already noted in our discussion of NRDC’s control-first argument, Con- gress imposed technology-based emission limitations— NSPS, BACT, LAER, RACT and BART—in a variety of situations. Two of these, BART and RACT, govern pre-1971 sources. 42 U.S.C. $$ 7502 (b), 7491 (b) (2) (A). Industry petitioners would have us infer from the con- trast between those express conferrals of authority, and the absence of any such reference here, that Congress denied EPA the authority to assume such an emissions rate. We find the attempt of industry to bar control-first here is not stronger than NRDC’s effort to require it in the within-formula context. As we noted in discussing NRDC’s theory, the record raised considerable doubt whether anyone in Congress even recognized the issue. The silence alone seems to support neither a requirement nor a prohibition. What Congress did in § 123 was to grant broad discretion to the agency, requiring owners of above-2.5H stacks to demonstrate the necessity for the higher stacks “to the satisfaction of the Administrator.” 42. U.S.C. $ 7423(¢c). In Sierra Club we read the section to mean above-2.5H credit should be granted only with final agency action subject to review. NRDC v. Thomas, No. &5- 1834 (D.C. Cir. Aug. 3, 1986) (Order dismissing petition for re- view). 15 Besides the three is a frivolous effort to prove that EPA mis- takenly read Sierra Club as mandating the use of NSPS. This is patched together from arguments in EPA’s brief explaining how its efforts to meet the Sierra Club remand, coupled with defects in alternative emissions baselines, led it to choose NSPS. 30a the “utmost caution,” 719 F.2d at 447, which the selection of the NSPS baseline seems to reflect. Second, industry petitioners assert that the use of the NSPS presumption only for above-formula stack height demonstrations will unfairly prejudice sources located in mountainous terrain, since it is in such areas that above- formula stacks are most likely to be found. Industry petitioners argue that this contravenes the will of Con- gress. Alabama Power Brief at 34. In Sierra Club, how- ever, we found a congressional recognition “that the tall stacks provision would have a disproportionately heavy impact on polluters in mountain areas.” 719 F.2d at 455. In fact, the court found an affirmative intent to “dis- courage utilities from locating in hilly terrain, because such locations tend to require very tall stacks, leading to a greater dispersion of pollutants.” Jd. at 445. The court adopted that construction in the context of rejecting EPA’s claim that it could consider “plume impaction” in computing excessive concentrations. Id. at 452-56. As that decision applied even to plants contsructed before the adoption of § 123, whose owners were obviously not free to respond to its “discourag[ing]” influence, Sierra Club’s interpretation of congressional non-solicitude for plants in hilly terrain was a strong one. Any disad- vantages inflicted on such plants by EPA’s choice of the NSPS baseline fit readily within our prior reading of the law. Finally, the industry petitioners assert that in order to use the NSPS presumption, EPA must be able to point to substantial evidence that it is attainable by most of the affected sources. But as EPA allows any source to use a higher emissions rate when NSPS is infeasible, there is no need for any sort of generic demonstration that it is normally so. Nor was it improper for EPA to place the burden of showing infeasibility on the source owner, rather than assuming the burden of showing feasibility. Congress appears to have intended that above- 3la formula stack height be approved only in “rare circum- stances.” House Report at 93, U.S.Code Cong. & Admin. News 1977, p. 1171. Cf. Sierra Club, 719 F.2d at 450 (“utmost caution” to be exercised in granting above- formula credit). EPA’s location of the burden is thus rationally related to the purposes of the statute and well within the Administrator’s discretion. 2. Procedural challenges. As described above, EPA initially outlined a scheme through which each source would assume its “applicable” emissions rate for purposes of above-formula demonstrations: (1) sources subject to technology-based emission limits would assume those rates; (2) sources not subject to such limits would assume their existing, approved SIP limits; and (3) sources not sub- ject to either of the above would assume the limit that would result if they were to operate with the stack height credit that the formula would produce. 49 Fed. Reg. 44,882/1. Less than two weeks before promulgating the final regulations, the agency informed industry repre- sentatives of its decision to adopt instead a uniform (but conditional) NSPS presumption. Because time was short, industry representatives were only able to respond with two short letters strongly urging reconsideration of the new rule. J.A. 1483, 1491 (letters from the Utility Air Regulatory Group (“UARG”) and American Electric Power Company). Industry petitioners now assert that this abrupt shift denied them the opportunity to comment afforded by § 4 of the Administrative Procedure Act, 5 U.S.C. § 533. In the preamble to its Final Rule, the agency sought to undermine this claim by characterizing its 1984 proposal as presenting three distinct alternatives, rather than a coherent three-part scheme. 50 Fed.Reg. 27,898/2. This is quite disingenuous. Nothing in the initial formulation suggested that EPA intended to adopt one of the three rates for universal use. And where EPA was offering alternatives from which it intended to make a choice in 32a its final rule, it said so. See, e.g., 49 Fed.Reg. 44,881/1 (proposing and soliciting comments on two alternatives for the definition of “excessive concentrations”) ; 44,884 /1 (proposing and soliciting comments upon three approaches for modeling “nearby” terrain features). The EPA can obviously promulgate a final regulation that differs in some respects from its proposed regulation. We recognized in /nternational Harvester Co. v. Ruckles- haus, 478 F.2d 615, 632 n. 51 (D.C.Cir.1973), that “a contrary rule would lead to the absurdity that .. . the agency can learn from the comments on its proposals only at the peril of starting a new procedural round of com- mentary.” Thus, this court has held under both the APA and the Clean Air Act that the agency’s final rule must only be a “logical outgrowth” of its proposed rule. Small Refiner Lead Phase-Down Task Force v. EPA, 705 F.2d 506, 547 (D.C.Cir.1983) (citing circuit precedent on this matter). We think the agency’s ultimate choice qualifies—if barely—as a logical outgrowth of the original proposal. Obviously the germ of NSPS was there, as one of the possibly-applicable technology-based limits. Moreover, the primary concern that drove EPA away from allowing sources to use existing SIP limits ‘and thus towards NSPS) was obvious at an early stage: NRDC’s con- stantly asserted control-first theme. See 51 Fed.Reg. 27,898/2 (agency rejects use of existing SIP emissions limits because “to the extent that |a source’s limit] relied on greater than formula height, it would be using a tall stack to justify itself”). To be sure, EPA never explained in the administrative proceeding why it rejected use of the emissions rate that would flow from use of the formula. In fact, in its Re- sponse to Comments the agency defended this option against environmentalist charges that it was incurably circular. J.A. 314-15. Here the agency’s lawyer explained ee oe er os ee ees 33a that the formula emissions level assumption was inap- propriately strict. EPA Brief in Ohio Power, Nos. 86- 1331, 86-1362, at 28-29. However valid this critique may be, it is little help in showing the agency’s intellectual path to the NSPS choice. However, as neither the in- dustry petitioners nor anyone else in this litigation advo- cates that choice, it can hardly have been so attractive that its disappearance came as a shock. Further, the public comments raised the possibility of adopting a single, technology-based limit. The New York State Attorney General’s Office suggested an NSPS as- sumption for all demonstrations. J.A. 434. This gave industry participants a clear opportunity to shoot the idea down. NRDC attacked each of the three limits set forth in the 1984 proposal, J.A. 829-33, and advocated use of the rate that would result from use of “the maxi- mum degree of control available to the source.” /d. at 832 n. 6. Though the target raised by this contention was broader than NSPS, it certainly gave industry critics an opportunity both to shore up the non-NSPS components of the original proposal and to attack any form of control- first. Nor was industry free to discount these proposals merely because they came from parties favoring a control- first reading of the statute, see Alabama Power Reply Brief at 15; there was a clearly foreseeable risk that EPA would reject the environmentalists’ reading of the law but proceed to adopt control-first as a matter of choice. This, in essence, is what it did in a limited sphere. Finally, EPA’s warning of the NSPS threat, communi- cated two weeks before promulgation, gave industry peti- tioners at least a limited opportunity to focus a direct attack on NSPS. Though severely pressed, they managed to file objections 7-10 days before the final regulations were signed. J.A. 1483, 1491. Although this case stretches the concept of “logical out- growth” to its limits, we think it does not reach the breaking point. The NSPS assumption appears to have 34a emerged from the agency’s notice and comment process, as the agency responded to others’ comments by stripping away the components of the original proposal that it con- cluded were more vulnerable. Of course, our affirmance of EPA on this point does not require it permanently to resist useful suggestions or critiques that may emerge. III. StTAcK GRANDFATHERING ISSUES The agency has in several cases grandfathered stacks and in one instance rejected an industry request for grandfathering treatement. NRDC attacks several ele- ments of the grandfathering as too generous; several firms (including one heavy buyer of electricity) attack the rejection of their claim. The decisions at issue are as follows: 1. EPA limited its demonstration requirement for within-formula stack height increases to “sources seeking credit after October 1, 1983 [10 days before our decision in Sierra Club].” 40 C.F.R. § 51.1(kk) (2). (The pre- amble makes clear that the date refers to the time owners raised the stack, not the time they “sought” credit. 50. Fed. Reg. 27,899 /2.) 2. EPA affords credit up to 2.5H, free of any demon- stration requirements (including such as might be im- posed by state or local] air pollution authorities), for any stack in existence on January 12, 1979, the date when EPA first proposed the more sophisticated formula, H-+- 1.5L. Pursuant to our remand in Sierra Club, this is limited to cases where the owner or operator produces evidence of having relied on the 2.5H formula in estab- lishing its emission limitation. 40 C.F.R. §$ 51.1(ii) (2) (i). EPA also affords credit up to H+1.5L or any stack in existence on January 12, 1979, regardles of reliance. Id. at § 51.1 (ii) (2) (ii). 3. For purposes of the grandfathering explicitly af- forded by § 123, for stacks “in existence” before Decem- 35a ber 31, 1970, EPA in the 1982 regulations defined “in existence” in terms of the start of continuous construction or entering into certain types of contracts. 40 C.F.R. § 51.1(gg). We upheld this in Sierra Club, 719 F.2d at 464-66. NRDC claims that EPA should have revised this definition in the light of later discoveries about the num- ber of plants advantaged by the grandfathering. 4. EPA has refused to provide any grandfathering for plants that prior to the Final Rule conducted demonstra- tions to justify above-formula stacks, even though the demonstrations conformed entirely to the then-applicable rules. J.A. 64-65. Some general principles are applicable to all these issues. First, none of them is governed by the rule adopted in Georgetown University Hospital v. Bowen, 821 F.2d 750, 756-58, 760 (D.C.Cir.1987), generally in- validating retroactive rules. The rules there at issue would have limited reimbursements for past transactions. All that is at stake here are restrictions on plants’ future emissions. Retroactivity is involved here simply because enforcement of the demonstration requirement might im- pinge unfairly on source owners that made investments or other commitments in reasonable reliance on prior under- standings. Second, our decision in Sierra Club observed that some of the considerations governing an agency’s duty to apply a rule retroactively were (1) whether the new rule represents an abrupt de- parture from well established practice or merely attempts to fill a void in an unsettled area of law, (2) the extent to which the party against whom the new rule is applied relied on the formed [sic] rule, (3) the degree of the burden which a retroactive order imposes on a party, and (4) the statutory interest in applying a new rule despite the reliance of a party on the old standard. 36a 719 F.2d at 467 (quoting Retail, Wholesale & Depart- ment Store Union v. NLRB, 466 F.2d 380, 390 (D.C. Cir.1972) ). Clearly the issue entails a balancing of the interest in prompt and complete fulfillment of statutory goals against the inequity of enforcing a new rule against persons that justifiably made investment decisions in re- liance on a past rule or practice. Cf. Retail, Wholesale & Department Store Union v. NLRB, 466 F.2d at 390; Associated Gas Distributors v. FERC, 824 F.2d 981, 1040 (D.C.Cir.1987). We now turn to the specific complaints. | EE PEPE res ee A. Sheltering pre-October 1, 1983 Within-Formula Stack Increases from the Demonstration Requirement At the outset, EPA invites us to discard NRDC’s ob- jection by means of an argument that to us is quite obscure: that the Sierra Club court did not insist on a retroactive demonstration requirement, or indeed on any demonstration requirement at all. EPA Brief at 34. The | premise seems to be that because EPA’s adoption of a demonstration requirement was voluntary, it need not explain its decision not to impose the requirement on pre- | 1983 increases. The argument does not add up. First, | EPA’s adoption of a demonstration requirement for in- | creases could be viewed as wholly voluntary only if EPA had set out thoroughly to validate its H+1.5L formula. | This it did not really purport to do, although its preamble contains some favorable—and hotly disputed—observa- tions on the subject."® 16 The agency asserts that “[s!tacks below formula height are associated with downwash-related violations of the [38-hour SO,, NAAQS] where emission rates significantly exceed the level specifi- fied by NSPS.” 50 Fed. Reg. 27,987/3. To back up this assertion EPA relies primarily upon its evaluation of five fluid modeling studies which, it claims, demonstrate significant exceedances of the NAAQS. /d. at 27,897/1. NRDC argues that because these studies measured only ten-to-fifteen minute concentrations, they cannot be ‘ ' a ' 37a In any event, the agency found, in light of this court’s reading of $123 in Sierra Club, that a demonstration requirement was suitable. That being so, exemption of a large class of increased stacks is an important de- cision subject to attack as possibly arbitrary and ¢a- pricious. It would fail that test if it is inconsistent with the retroactivity analysis set forth in Sierra Club. taken to demonstrate NAAQS exceedances. NRDC Brief at 37-38. As wind speed and direction are highly variable in the real world, one cannot simply extrapolate ten-to-fifteen minute averages to estimate pollution averages for longer periods. Thus, the normal practice is to apply a conversion factor to short-term wind tunnel results. See e.g., “Eastlake 1980” study at B4-B6, J.A. 111-12; EPA Brief at 23. Environmental petitioners contend that if the agency had applied a standard conversion factor to the EPA studies, the results would demonstrate conclusively that even the comparatively dirty plants tested did not need formula height stacks to avoid NAAQS exceedances. NRDC Brief at 38. In response EPA asserts only that its analysis of meteorological data for each plant convinced it that use of a conversion factor was not warranted. In addition to its NAAQS exceedances rationale, the agency asserts that the formula is necessary to prevent short-term emis- sions peaks that “raise a real prospect of local health or welfare impacts.” 50 Fed. Reg. 27,987/3-98/1. We have no doubt that the agency is permitted to consider hazardous short-term conditions as within the sphere of “excessive concentrations.” Cf. Sierra Club, 719 F.2d at 447 (state nuisance law may provide a proxy for ex- cessive concentrations). However, the agency provides no support for its assertion that the current formula predicts the stack height necessary to avoid such short-term hazards. EPA has stated that it did not rely upon industry data to sup- port its short-term peaks rationale, Response to Comments at 40, J.A. 308, and has specifically disavowed reliance upon the only other study cited in its preamble that supports its short-term peak con- clusions (Huber & Pooler, “Comments on Peak Ground-Level Con- centrations Due to Building Downwash Relative to Peak Concentra- tions Under Atmospheric Dispersion Processes” (June 10, 1985), J.A. 129). See EPA Brief at 27. And while the agency points out that the ten-to-fifteen minute concentrations measured in the fluid modeling studies exceeded the 1300 microgram per cubic meter level specified in the three hour NAAQS, it does not demonstrate that short-term exposures at that level are hazardous. 38a Invoking the first factor identified by Sierra Club, NRDC argues that here there simply is no “well-estab- lished practice.” A fluctuating rather than well-estab- lished practice presumably counts against grandfather- ing, as it undermines the actor’s claim that its reliance was legitimate. In fact, the record indicates consider- able waffling by EPA. There appear to have been new policy moves in 1973, 1976, 1979, 1980, and 1981 and 1982. In its 1973 Guidelines, it actively encouraged sources with short stacks to increase to GEP formula height. 38 Fed.Reg. at 25,701/2 (1973) (“The increase of stack height up to a height consistent with good en- gineering practice is acceptable without qualification. ... For fairly level terrain, good engineering practice is nor- mally taken to be a stack height 21. times the height of the facility or nearby structure.”). In 1976 it responded to the circuit courts’ disparaging treatment of its 1973 effort with considerable severity: putting aside stack increases started before the Fifth Circuit’s NRDC de- cision, the 1976 guidelines gave credit only for increases by sources that applied BACT (“best available control technology”). 41 Fed.Reg. at 7451/2-3 (1976). In-1979, after Congress’s adoption of § 123, the agency proposed regulations considerably less stringent, allowing sources that raised existing stacks automatic credit up .9 H + 1.5L, with the proviso that the EPA or a state or local control agency could order the source to justify use of the formula height by demonstrating, through fluid modeling, the existence of “an air quality problem, at- tributable to downwash.” 44 Fed.Reg. at 2614/1 (Jan. 12, 1979). In a 1980 “policy change,” sparked by a heightened concern “that use of its GEP formula for stack height increases [was] increasing pollutant load- ings and acid rain,” the agency tightened again, an- nouncing its intention to require fluid modeling demon- strations for all future stack height increases. 45 Fed. Reg. 42,282/1 (June 24, 1980). Eleven months later, the EPA drew back, leaving in place the scheme adopted —————— 39a in its 1979 proposed rules. 46 Fed.Reg. 28,650 (May 28, 1981). The agency’s 1982 Final Regulations moved further in the direction of leniency, granting automatic credit up to formula height for sources raising existing stacks, with no provision for support through demon- strations. 47 Fed.Reg. 5868/3 (1982). Of course it was this rule that the Sierra Club court remanded for recon- sideration. 719 F.2d at 458-59. Clearly the legitimacy of increasing stack height in reliance on regulatory policy has varied radically from period to period. The equities for a firm increasing its stack in the 1976-79 era are slight compared to ones that increased under the 1973, 1979 or 1981 policies. Besides, the policies represent a scatter rather than a clear line, reducing the equities for reliance even on the moments of lax policy. Finally, equitable claims have some tendency to degrade over time; a 15-year 1973 contract for the purchase of high-sulphur coal may have loomed large in 1976 but hardly amounts to anything in 1987. EPA’s defense of its grandfathering decision failed to focus on any of these difficulties. See 50 Fed.Reg. at 27,899 /3-900/1. Indeed, EPA’s policy imposed no re- quirement of reliance at all, even though it was precisely that omission that persuaded this court to remand the grandfathering issue raised in Sierra Club. 719 F.2d at 468. Against the seemingly weak claims for grandfathering is the possible frustration of the statutory goal. This looks significant. The vulnerability of the formula per- suaded EPA to require demonstrations. These demon- strations are impaired by the circularity problem that EPA has recognized. Yet EPA’s grandfathering rule allows most of the affected sources to escape even this modest check. 40a Administrative problems may partly explain EPA’s generous grandfathering. An immediate run of demon- strations for all sources that have increased stack height since 1970 would evidently tax the capacity of the facili- ties for running such demonstrations. EPA Brief at 18. But this alone appears a weak justification, as EPA has the alternative of adopting a formula clearly valid enough to dispense with demonstrations altogether. Thus we find it necessary to remand. We do not say there is no room for grandfathering on these facts, but the case for it seems unusually weak. Any grandfather- ing chosen should fit, to a reasonable degree, the varia- tions in regulatory history and degrees of reliance. We recognize, of course, that administrative necessity or de minimis principles will prevent a perfect fit; EPA could not be expected to match the six layers of regulatory policy with a six-layer grandfathering scheme. But fi- delity to the congressional purpose requires a far more careful effort to address the problem than the agency has yet made. B. Automatic Credit to Formula Height for pre-January 12, 1979 Stacks The regulations provide credit for heights up to for- mula levels for sources originally built or subsequently raised before January 12, 1979. 40 C.F.R. §§ 51-1(ii) (2) (i) and (ii). As now written, the rule shelters such sources not only from the requirement of demonstrations initiated by state or local authorities, 40 C.F.R. § 51.1 (kk) (3), but also from the demonstration requirements for stack increases. For purpose of our present discus- sion, we assume that on remand EPA will look to our analysis in part III.A in deciding to what extent (if any) it will shelter older within-formula increases from the new demonstration requirements. Acccordingiy we limit our consideration here to the 1979 grandfathering provision only insofar as it shelters stacks from state- 4la initiated demonstration requirements and only insofar as it applies to credit for stacks at or within their origi- nal heights. The rules have this effect for (1) credit up to 2.5H for pre-1979 stacks of sources whose owners re- lied on the 2.5H formula and (2) credit up to H + 1.5L for all pre-1979 stacks regardless of reliance. At the outset, and applicable to both types of grand- fathering, is the question whether freedom from the ne- cessity for supplying demonstrations, at the behest of government authorities, is of any great importance to the realization of the goals of the Clean Air Act. We can- not detect much importance. As a practical matter, it seems likely that virtually all such requirements would originate with a state, or with a local entity acting with the authority of the state. But 42 U.S.C. § 7410 leaves states completely free to establish more stringent pollu- tion controls than EPA. See Indiana & Michigan Elec- tric Co. v. EPA, 509 F.2d 839, 844 (7th Cir.1975); Ap- palachian Power Co. v. EPA, 477 F.2d 495, 498 (4th Cir.1973). Thus no EPA rules on demonstrations could bar a state from insisting on the most onerous demon- stration imaginable. The failure to provide for such a demonstration for pre-1979 sources seeking credit within the formulae thus has little practical effect; the statutory interest in retroactive application is modest. On the other hand, the agency must supply some reason for treating pre-1979 sources more leniently than later ones. We now turn to that problem in the 2.5H and H + 1 51, contexts. 1. Credit up to 2.5H for pre-1979 sources showing re- liance. In Sierra Club, we made clear that the agency was to either justify its faith in the accuracy of the formula or provide a mechanism through which local au- thorities could force sources within their jurisdiction to prove their need for formula height stacks. As noted in part III.A above, the agency failed to properly vali- date its formula. It chose instead to promulgate a state- 42a initiated demonstration provision, 40 C.F.R. § 51.1(kk) (3), subject to the grandfathering here at issue. | We have no difficulty upholding this limited shelter. | We found in Sierra Club that calculation of GEP through use of the 2.5H formula was, until 1979, an established | practice and that protection of sources relying on such a practice in their original construction would not “main- | tain a situation that Congress sought to end.” 719 F.2d at 468. Moreover, the states’ alternative route to control, noted above, further dilutes the interests supporting ret- roactivity. NRDC first contends that EPA’s failure to advance a full substantiation of even the H + 1.5L formula utterly prevents it from allowing automatic credit for stacks originally constructed in reliance on the 2.5H formula. But the environmental petitioners in Sierra Club did not attack the formula at all and attacked the want of dem- onstrations only for stack height increases and instances where local authorities were concerned that the formula | might over-predict GEP. Thus, once the state option to | be more severe is recognized, Sierra Club left EPA quite free so far as concerns within-formula original-construc- | tion stacks. The sole constraint was that, in grandfather- | ing the difference (for original-construction stacks) be- tween the height yielded by the 2.5H formula and that | yielded by the newer H + 1.5L, EPA must afford the benefit only to firms actually relying on the 2.5H figure. 719 F.2d at 468. The agency responded to that aspect of the remand by explicitly conditioning grandfather treatment under the new regulations on such a showing of reliance. 40 C.F.R. § 51.1 (ii) (2) (i). NRDC’s second objection relates to the exact terms of the reliance requirement. The grandfathering is avail- able where the source owner establishes its reliance on the formula “in establishing an emission limitatien,” 40 C.F.R. § 51.1(ii) (2) (ii), meaning, all agree, that the 43a agency looks to the source’s emission rate rather than its actual stack height. See also 50 Fed.Reg. 27,901/2. Thus, if a source built a stack taller than 2.5H, but set its emission limits assuming 2.5H credit, the agency will concede that ‘a convincing demonstration has been made that the source properly relied on the formula.” Id. at 27,901/3. Conversely, if such source based its emission limits ‘fon some other stack height credit, such as 2.8H, 3.5H or some other number,” the agency would infer that it had not relied on the formula. /d. Here NRDC’s objection flows from its reading of our decision in Sierra Club. It believes that case to preclude grandfather treatment for sources with stacks taller than 2.5H, relying heavily on the following paragraph, es- pecially its last sentence: We hold that the statute does not prevent EPA from allowing its past rule to be applied to stacks built before 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 123 by evidence that during the 1970’s many sources had built tall stacks far above the heights dictated 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. 719 F.2d at 467. The paragraph taken as a whole simply states that allowing sources with above-formula height stacks to claim 2.5H credit without a demonstration of reliance on the 2.5H formula would be unlawful. That it does not require EPA to deny credit for the dispersion effects of the part of a tall stack fitting within the 2.5H formula is reinforced by the court’s discussion of the burden of retroactivity. The court observed that such a burden 44a might take the form of expensive retrofitting of control equipment or renegotiation of coal contracts. Jd. at 468. As these consequences derive from the need to change emission limitations, and not from the height of the stack itself, it is clear that the court believed that a source could demonstrate the requisite reliance by demonstrating that it had set its emission limits by reference to the 2.5H formula. As the statute does not regulate actual stack height (and in fact specifically forbids the Ad- ministrator from doing so, § 123(c), 42 U.S.C. § 7423(c)), but rather regulates stack height credit, it would be perverse to make grandfathering depend on actual stack height rather than upon emission limitation decisions driven by expectations of allowable credit. 2. Credit up to H + 1.5L for pre-1979 sources not showing reliance. As noted above, the states’ complete freedom to impose demonstration requirements appears to sap this particular grandfathering of any great signifi- cance. Nonetheless, in drawing a distinction between pre- 1979 and later stacks, the agency must supply some reason. In this context we cannot identify one. Before EPA introduced the H + 1.5L formula in its 1979 proposal, the 2.5H formula was the only formula sanctioned by the agency. Thus, not only does the agency not impose a reliance requirement in this context, but we cannot understand how a pre-1979 source could have relied on H + 1.5L. Even when the statutory interest in apply- ing a rule retroactively is slight, an agency must articu- late some equitable rationale for grandfathering. Al- though we cannot say that there is none, we cannot upheld the decision in the absence of any explanation. C. EPA’s Definition of “Stack Height in Existence” In Sierra Club petitioners contended that EPA’s defini- tion of stack “in existence on Decernber 31, 1970,” as used in § 123(a), impermissibly extended protection to stacks merely under construction. The court accepted EPA’s 45a view. 719 F.2d at 464-65. At the time, the record before the court indicated that only four to eight piants would be affected by the dispute, and the court mentioned this fact. Id. at 465. NRDC now contends that the broader definition will encompass 32-to-98 utility sources, NRDC Brief at 74, and challenges EPA’s refusal to reconsider the issue in light of this reassessment of its probable impact. Although the Sierra Club court indisputably mentioned the limited number of plants thought to be affected, its acceptance of EPA’s interpretation rested on the view that it was “necessary to make the clause equitable, which was undoubtedly Congress’s purpose,” 719 F.2d at 465, not on the number of plants affected. We recognize that under the balancing test by which retroactivity is evaluated, frustration of the statutory purpose is a key element militating against non-retroactive application. The new discoveries of affected plants up the ante. But the “in existence” definition did not represent a de novo retroactivity decision by EPA, merely an implementation of Congress’s decision. NRDC points us to nothing in the prior rulemaking suggesting that the number of plants affected influenced EPA’s choice of the broader definition. Compare 46 Fed.Reg. at 49,816/1 (Oct. 7, 1981) (ex- pressing decision to broaden definition without a word as to the number of plants). Accordingly, we are not 2on- fronted with a case where “a significant factual predicate of a prior decision” has been removed, which may some- times trigger a duty to revisit the issue. See WWHT, Inc. v. FCC, 656 F.2d 807, 819 (D.C.Cir.1981) ; Geller v. FCC, 610 F.2d 973, 980 n. 59 (D.C.Cir.1979). EPA’s adherence to its prior position is lawful. We would be reluctant in any event to start undermining a six-year- old provision governing the scope of Congress’s 10-year- old choice tu protect decisions actually made more than 17 years ago. 46a D. Application of New Demonstration Requirements to Sources that Have Completed Demonstrations Industry petitioners urged the agency to exempt from its new demonstration requirements sources that had already made demonstrations supporting above-formula stacks but employing prior more lenient tests. Response to Comments 333-34, J.A. 65-66. Thevagency refused, ex- plaining that “[t}he fluid modeling demonstration has no significance apart from showing whether the source quali- fied for credit under the stack height guidelines then in effect.” Id. at 334, J.A. 66 (emphasis added). Three power companies (Ohio Power, Monongahela Power and Potomac Edison), and an aluminum manufacturer that is a major buyer from Ohio Power, challenge this re- jection. These petitioners challenge the validity of the final regulations in NRDC v. Thomas, No. 85-1488, and challenge the agency’s denial of their petition for re- consideration of these regulations in Ohio Power v. Thomas, Nos. 86-1331, 86-1362. A preliminary issue raised by petitioners is whether this court or the Fourth Circuit properly has jurisdiction over their claims. § 307(b) (1) of the Act provides for review here of “nationally applicable regulations.” 42 U.S.C. § 7607(b) (1). It then states that a petition for review of final action which is “locally or regionally ap- plicable may be filed only in the United States Court of Appeals for the appropriate circuit.” 7d. Conceivably one might characterize the present grand- fathering issue as regional, as its impact evidently falls only on sources in limited geographic areas. Whatever the distribution uf affected plants, however, we think the clearly nationwide scope of the regulation is controlling. The section calls for review in local courts of appeals for regulations that are “locally or regionally applicable.” If the jurisdictional provision turns on the de facto scope of the regulation, choice of the correct forum might 47a raise complex factual and line-drawing problems. Such a complication of the jurisdictional test would waste time and serve little purpose. See Sharp v. Weinberger, 798 F.2d 1521, 1524 (D.C.Cir.1986) (Scalia, J.). We believe the clause governing “nationally applicable regulations” provides jurisdiction over both the direct challenge to the regulations and the petition for reconsideration. A second preliminary issue is whether the regulations, which say nothing explicit on the subject, actually in- validate the prior approvals. We believe they do. First, nothing in the regulations expresses any affirmative in- tent to grandfather such sources. The statute precludes emission credit for stack height beyond GEP. The reg- ulations in turn state the rules for determination of GEP. The fact that a source’s stack has been found to comply with a former definition of GEP clearly does not suggest that the stack qualifies under the current, more stringent standard. Moreover, the agency has in many places expressly stated its provision of grandfather treat- ment, discussed in prior parts of this section of this opin- ion. It has included none in its articulation of criteria for above-formula demonstrations. Finally, EPA in the preamble to the Final Regulations explicitly denied any intention to exempt post-1970 sources from the above- formula demonstration provisions, 50 Fed.Reg. 27,899/1, and in its response to industry comments explicitly de- nied any intention to grandfather previously approved plants, J.A. 334. Thus, we conclude that the agency has in fact made a final decision not to exempt these sources. Petitioners make two distinct challenges to the agency’s decision. First, they argue that the failure to honor the stack height credit they received pursuant to valid notice and comment proceedings violates the doctrine of “re- pose.” Ohio Power Company Brief at 20-26. The cases cited for the doctrine all involve agencies’ attempts to revoke, in adjudicatory proceedings, previously issued licenses, exemptions, or rights-of-way. See, e.g., Hirschey 48a v. FERC, 701 F.2d 215 (D.C.Cir.1983) ; Greater Boston Television Corporation v. FCC, 463 F.2d 268 (D.C.Cir.), cert. denied, 406 U.S. 950, 92 S.Ct. 2042, 32 L.Ed.2d 338 (1971); Chapman v. El Paso Natural Gas Co., 204 F.2d 46, 52-54 (D.C.Cir.1953). In Greater Boston, the court described the doctrine as binding an agency “to respect the governance of a final administrative decision for the particular matter there determined.” Greater Boston, 463 F.2d at 291. The doctrine is not an absolute even where clearly applicable. /d. (the finality interests em- bodied in the doctrine of repose are “dominant but not absolute”). Clearly one can make a linguistic argument, as the EPA does, that the matters determined in the earlier demonstrations were only the applicants’ entitlements to above-formula credit under the rules then prevailing. This is so, but one could construct similarly narrow defi- nitions of the first decision in each of the above cases. More to the point, it seems that in the context of adjudi- catory revocations of adjudicatory grants, special scrutiny is needed to protect legitimate reliance interests from un- justifiable agency shifts in direction. Here, a new set of duly promulgated rules has substi- tuted more stringent criteria for those prevailing when petitioners made their demonstrations. The risk of ca- pricious agency action is far less severe, as the shift from one set of regulations to another was applicable to a broad range of parties. Cf. Bi-Metallic Investment Co. v. State Board of Equalization, 239 U.S. 441, 36 S.Ct. 141, 60 L.Ed. 372 (1915); Upjohn Co. v. FDA, 811 F.2d 1583 (D.C.Cir.1987); American Airlines, Inc. v. CAB, 359 F.2d 624 (D.C.Cir.), cert. denied, 385 U.S. 843, 87 S.Ct. 73, 17 L.Ecd.2d 75 (1966). Accordingly, we think the EPA’s authvrity to apply the new criteria to peti- tioners is not governed by the relatively restrictive bounds of the doctrine of repose, but by the looser ones 49a already employed in the earlier retroactivity analyses of this section. Petitioners’ second claim is in fact based on the retro- activity criteria set forth in Sierra Club and applied in this section of this opinion. They object that the agency failed to spell out any application of those criteria, ren- dering its decision arbitrary and capricious. Monanga- hela Power Company Brief at 15-16. The agency’s spare disposition of the subject seems to us to fall, barely, on the “tolerably terse” side of the line, as distinct from the “intolerably mute.” Greater Boston Television Corp. v. FCC, 444 F.2d 841, 852 (D.C.Cir.1970), cert. denied, 403 U.S. 923, 91 S.Ct. 2229, 29 L.Ed.2d 701 (1971). First, it stressed the importance of the statutory goal. In the preamble to the Final Regulations, it rested its decision to apply the new demonstration requirements to all post-1970 sources on its view that Congress in § 123 did “affirmatively ‘intend to alter’” industry reliance upon above-formula height stacks. 50 Fed. Reg. 27,899/1. On the other side of the retroactivity balance fall the sources’ reliance interests. Sources that underwent pre- vious above-formula stack height demonstrations obviously relied on previous EPA guidance in doing so, and the new absolute test, coupled with the NSPS presumption as to emissions, indisputably represents a significant de- parture from the past requirements. (But EPA noted that regulatory pronouncements since 1970 had consis- tently placed a higher burden on credits for above- formula stacks. Jd.) If the new regulations forced the petitioners to renegotiate longterm coal contracts or ren- dered obsolete major investments in emission control equipment, petitioners might in some circumstances have a strong equitable argument for grandfathering. (Ohio Power makes claims of such commitments; Monangahela, which has not constructed its proposed stack, relies solely on the funds expended in the earlier demonstration it- self.) But as the NSPS presumption can be rebutted by 50a a showing of infeasibility, each source owner will have an opportunity to identify these costs and secure such relief as their size may justify. 50 Fed.Reg. 27,898/2. Thus, the petitioners have not demonstrated that retro- active application of the new demonstration requirement will force them to shoulder a heavy burden. In fact, the only sunk cost that is directly wasted by the new regulations is the cost of the demonstrations themselves. In the case of one facility that cost was $500,000, in the other $200,000. These figures are hardly negligible, but we should think it a rare case where the costs of securing data could alone entitle a party to grandfathering. We think the agency did not here abuse its discretion. IV. PLUME RISE Dispersion of pollutants is greater when a lot of ex- haust is combined in a single stack rather than ejected through several. Thus one key indicator of dispersive effect is “plume rise,” the distance the exhaust is carried above the top of the stack. We deal here with EPA reg- ulation of such stack combinations. The phenomenon oc- curs both as (1) a stack originally constructed combining exhaust that might have been handled with several stacks and as (2) a stack built to replace several separate stacks. Section 123(a) bars credit not only for “too tall” stacks but also for “any other dispersion technique.” In its 1982 Regulations, EPA expressed a narrow definition of the practices to be denied credit under this language, and expressly excluded several, including “combining the exhause gases from several stacks into one stack.” 47 Fed.Reg. 5868/3 (1982). The Sierra Club court read EPA’s explanation of the definition as in essence a weigh- ing of “the likelihood that [the various practices] would be used as dispersion techniques . . . and the burden, both on enforcement agencies and on industry, of at- 5la tempting to differentiate legitimate from illegitimate uses.” 719 F.2d at 462. The environmental petitioners challenged the definition’s exclusion of certain practices, including stack combination. They advocated a defini- tion depending on intent: if a source adopted a practice in order to obtain a less stringent emission level or to avoid imposition of a harsher one, the practice would be regarded as a “dispersion technique.” Sierra Club Brief (Sierra Club litigation) at 36. The court agreed with Sierra Club that the agency’s conception of “dispersion technique” was unduly re- stricted, and held that “the words . . . sweep broadly enough to encompass at least the meaning urged by pe- titioners; 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.” Sierra Club, 719 F.2d at 462. The court acknowl- edged the agency’s authority to exempt entire categories of practices on either of two grounds—administrative necessity or the de minimis character of the effects. But it concluded that the agency had “fallfen] far short” of demonstrating either. 7d. at 463. In its remand to the agency, however, the court left open the possibility that the, agency could ”develop classes of plant improvements a are clearly legitimate or clearly illegitimate” so as “reduce substantially the number of cases in which a ® fall scale examination of the motivation for the change will be required.” Id. at 463-64. The agency responded to the court’s remand by amend- ing its definition of “dispersion technique” to include any technique which attempts to affect the concen- tration of a pollutant in the ambient air by .. . (iii) Increasing final exhaust gas plume rise by manipulating source process parameters, exhaust gas parameter, stack parameters, or combining exhaust gases from several existing stacks into one stack; 52a or other selective handling of exhaust gas streams so as to increase the exhaust gas plume rise. 40 C.F.R. §51.1(hh)(1) (emphasis added). NRDC challenges the agency’s new intent-based test, arguing that Congress intended to cover all features having dis- persive effects, at least to the extent they may exceed “normal” dispersion. See NRDC Brief at 62 n. 121. NRDC urged this court four years ago to adopt a defi- nition of “dispersion technique” based on a source’s mo- tivation. This court accepted NRDC’s view. The envir- onmental petitioners could then have made their current argument in favor of an effects test. Since res judicata (claim preclusion) bars relitigation not only of matters determined in a previous litigation but also ones that a party could have raised, Tutt v. Doby, 459 F.2d 1195, 1197 (D.C.Cir.1972), NRDC is barred. To accept NRDC’s invitation to reopen the issue would be to ignore the concern for finality that underlies res judicata and create incentives for future strategic gamesmanship. We decline. Nor does the presence of other parties on the brief open up reconsideration of the matter. 42 U.S.C. § 7607 (b) (1) (1982) requires that any petition for review of such regulations as these be filed within 60 days after their appearance in the Federal Register. Contentions in favor of an effects test over one of intent were obvi- ously ripe at the time of initial promulgation in 1982. No party offers the slightest excuse for failure to raise these contentions in the challenges to that set of rules. While we have recently suggested a number of implicit qualifications to apparently iron time limits on challenges to agency rules, National Labor Relations Board Union v. FLRA, 834 F.2d 191, 195-197 (D.C.Cir.1987), noth- ing in that case suggests that a party, fully on notice as to the potential impact of rules upon its interests, is free to sit back while the matter is subject to prolonged 53a and complex litigation, and then challenge remanded rules on the basis that the court’s first ruling did not go far enough. Any such interpretation would make a trav- esty of Congress’s efforts to bring litigation of agency rules to a timely conclusion and to protect the likely reliance of affected parties. Thus the only issue properly before us is whether the agency properly responded to our remand in Sierra Club. It endeavored to do so by creating bright line rules with which to discern whether a source’s decision to use a single stack was significantly motivated by a desire to achieve a higher degree of pollution dispersal. These are expressed in the subparts of 40 C.F.R. § 51.1 (hh) (2) (ii). Subpart (A) exempts stacks “originally designed and constructed” with combined gas streams, and sub- part (B) exempts stack mergers occurring as part of a change in operations comprising an installation of pollu- tion controls and a net reduction in allowable emissions of a pollutant. Subpart (C) provides a laxer test, based on grandfathering precepts, for stack mergers occurring before July 8, 1985 (the date of the rules’ appearance in the Federal Register). For them, exemption applies if the merger occurred either as part of a change in opera- tions that included installation of emissions control equip- ment or was carried out for “sound economic or engineer- ing reasons.”” NRDC objects to each of these classes of exemptions. We address them in turn. A. Original Design and Construction as One Stack A person with only the notoriously risky “little knowl- edge” of our air pollution control laws might suppose that the pollution effects of this exclusion must be de minimis. After all, we are talking only of post-1970 stacks, and original-design post-1970 stacks should be at- tached to post-1970 plants, which in turn should be sub- ject to NSPS emissions rates. If SIPs are unlikely to 54a impose stricter controls than NSPS, then nothing would be at stake. NRDC asserts, however, that as many as 56 post-1970 plants are not covered by NSPS, and it appears that of these 25 have a combined stack as part of their original design. ICF Inc., Final Analysis of the Proposed Stack Height Regulations, June 1985, Appendix D, reprinted in NRDC Brief, Addendum B. EPA appears not to con- test the point, and indeed has not invoked the de minimis concept to justify its decision. Accordingly, we plunge ahead on the premise that something of moment is at issue. The agency provides three arguments in support of this exemption. Each of them appears to us, for one rea- son or another, to misfire. While we do not by any means find that the EPA’s conclusion is in violation of statu- tory authority, we are unable to conclude that it rests upon “reasoned decisionmaking.” See SEC v. Chenery Corp., 332 U.S. 194, 196, 67 S.Ct. 1575, 1577, 91 L.Ed. 1995 (1947) (‘We may not supply a reasoned basis for the agency’s action that the agency itself has not given.”) ; Greater Boston Television Corp. v. FCC, 444 F.2d 841, 851 (D.C. Cir. 1970), cert. denied, 403 U.S. 923, 91 S.Ct. 2229, 29 L.Ed.2d 701 (1971) (the court must intervene if the agency “has not genuinely engaged in reasoned decisionmaking”’). First, EPA rests on the text of our opinion in Sierra Club and on concepts of ordinary language. It notes that original design characteristics do not increase plume rise, so that, it says, they cannot be dispersion techniques. 50 Fed. Reg. at 27,903. It cites Sierra Club’s references to dispersion techniques as “alterations to the stack,” “changes in stack dimensions,” and “improvements” in support of this reading of the statutory language. EPA Brief at 60, citing 719 F.2d at 462-64. We think the observations of Sierra Club on the sub- ject are highly inconclusive. The passages cited by the 55a EPA appear to have been merely mentioning examples, not attempting an exhaustive list. Elsewhere the court used potentially more inclusive language. See 719 F.2d at 462 (noting that the statutory term would reach “the use of devices .. . when they are significantly motivated by an intent to gain emissions credit for greater dis- persion”). So far as ordinary language is concerned, clearly noth- ing inherently prevents the term “dispersion technique” from encompassing a practice adopted during the facility design phase. Moreover, the statute itself does not use the term “increase,” with its connotation of change from the levels produced by an existing condition. That term appears only in the EPA’s definition of dispersion tech- nique. 40 C.F.R. § 51.1(hh) (1) (iii) (“any technique which attempts to affect the concentration of a pollutant in the ambient air by... [i]ncreasing final exhaust gas plume rise by . . . selective handling of exhaust gas streams”). Second, the EPA argues that treatment of original design stacks as dispersion techniques raises insuperable administrative difficulties, namely determining what stack configuration a firm would have adopted in lieu of a uni- fied stack. Indeed, EPA could not necessarily assume that the size of the plant’s units would have been the same. Cf. Sierra Club, 719 F.2d at 462 (endorsing ex- emption of a class of practices if the agency could dem- onstrate that “attainment of the statutory goals is im- possible”). As ariculated by EPA, however, these diffi- culties do not seem enough standing alone. NRDC has suggested one plausible solution, that of using average plume rise as of 1970 as a proxy for normal plume rise. NRDC Brief at 62 n.121. Indeed, the agency’s August 1984 draft of the current regulations would have estab- lished assumptions as to normal plume rise for source categories through a comparative analysis of stack pa- rameters. Rebuttal Comments 61, J.A. 865. EPA’s re jection of both these alternatives is unexplained, leaving Sy eee aN et oa 56a the claim of undue enforcement difficulty inadequately supported. Finally, the agency asserts that stacks are often merged pursuant to original facility design for legiti- mate economic or engineering reasons. It points out, for instance, that it is less expensive to build one large stack than three smaller stacks, and also less costly to fit one stack with pollution control equipment than to install such equipment in multiple stacks. 50 Fed. Reg. at 27,903. EPA suggests that because there are legitimate nondispersion-related reasons for merging gas streams, and mergers for the purpose of increasing plume rise are “only a theoretical possibility,” its decision to exempt all originally designed merged streams is justified. The difficulty with this argument is that, given other data in the record, it appears not to satisfy EPA’s own test of “intent” to obtain dispersion benefits. NRDC points to evidence indicating that power plants have long realized that merged gas streams can significantly in- crease plume rise, and that firms have purposefully de- signed plants to take advantage of this increased dis- persion since the early 1960s. A.J. Clarke, ‘The Applica- tion of Air Pollution Research to Power Station De- sign,” Phil. Transportations (Roy. Soc. London), Nov. 18, 1969, at 265, 269-72, J.A. 862 n.25. Thus the record, viewing it most favorably to the EPA position, appears to suggest dual purposes, each alone sufficient to explain sources’ selection of the single-stack option. Conceivably EPA might rest on the view that the ex- istence of a sufficient non-dispersion motive exonerates a practice, 7.e., establishes its failure to meet the Sierra Club intent test. Although the language of Sierra Club is ambiguous, and the matter was not at issue, the court appears likely to have contemplated a different view— that the presence of dispersion intent as a sufficient mo- tive, or as a motive crucial (in combination with others) to tilt the decision in favor of a single stack, would ren- der the device a dispersion technique. See 719 F.2d at 57a 463 (suggesting that the EPA could not find a lack of dispersion intent for an entire class of techniques unless it could demonstrate that “there is in fact no or little incentive to implement these techniques because the poten- ial reduction in emissions limitations would not be worth the cost”). But in fact the EPA appears to have re- jected the narrower test. See 50 Fed. Reg. 27,902/3 (“a pure ‘but for’ test runs the risk of creating exclusions that effectively swallow the rule itself’). Thus, so far as we can grasp it, the EPA believes a source charac- teristic should be presumed a dispersion technique if dis- persion purposes alone provide a sufficient motivation, re- gardless of the strength of other purposes. If so, EPA’s findings of legitimate nondispersionary purposes are not enough, by its standards, to exonerate an original-con- struction single stack. To sum up: EPA relies on (1) a notion of “increase” that it never tries to substantiate; (2) administrative difficulties that it asserts without negating the solutions proposed by others and itself; and (3) the existence of a sufficient alternative purpose, which (assuming it is substantiated) is not enough under its own apparent view of the law. The total is three flawed reasons. While in some cases they might form a tenuous sort of tripod, here they seem to us to fail. According to NRDC’s un- disputed claim this issue accounts for a large fraction of the dispersed emissions at stake. It is fair to demand more, loath as we are to prolong the agony of this proc- ess, Obviously we owe the agency deference if it affords a reasoned explanation, consistent with what Congress has “clearly” required or (in the absence of a clear man- date) with a “reasonable” interpretation of the statute. Chevron U.S.A. Inc. v. NRDC, 467 U.S. 837, 842-44, 104 S.Ct. 2778, 2781-83, 81 L.Ed.2d 694 (1984). The present record, however, does not appear to bring us to that point. 58a B. General Rule for Merged Stacks As noted, this rule exempts stack mergers effected as part of a change in operation that includes the installa- tion of pollution controls and is accompanied by a net reduction in the allowable emissions of a pollutant. This exclusion only applies to the emission limitation for the pollutant affected by the change in operations. 40 C.F.R. § 51.1 (hh) (2) (ii) (B). NRDC argues that this exemp- tion is potentially too lenient by noting the hypothetical possibility that a source could use merger credit for ‘‘in- crement expansion” purposes under the prevention of significant deterioration (PSD) program, 42 U.S.C. § 7470 et seq., thus enabling the source to meet PSD re- quirements at reduced expense. NRDC does not spell out the objection in any detail. Mere allusion to such a hypo- thetical is not enough to persuade us that the exemption represents an abuse of the Administrator’s discretion. C. Partial Grandfathering of Stacks Merged Before July 8, 1985 Such mergers qualify for exemption if a source can demonstrate that its merger was accomplished as part of a change in operation to install pollution control equip- ment or for good economic or engineering reasons. 40 C.F.R. § 51.1 (ii) (2) (i) (C). The rule creates a pre- sumption of intent to gain emissions credit in two cases: (1) where there was an increase in the emission limita- tion after the merger; or (2) where there was no emis- sion limitation in existence before the merging but the quantity of pollutants actually emitted increased in com- parison to the pre-merger levels. Jd. NRDC attacks EPA’s retroactivity analysis, claiming that the agency has not supported its decision to apply a more lenient rule to pre-1985 mergers than to post- 1985 mergers. First, it maintains that before 1985 there was no “well established practice” of allowing credit for 59a dispersion resulting from stack merger. NRDC finds evi- dence of a more severe approach in EPA’s 1976 Guide- lines and the 1979 proposed regulations. It substantiates the former solely with one letter from a regional EPA administrator disapproving credit for a particular merger, and the latter with quotation of the proposal’s vague language (“other selective handling of exhaust gas streams so as to increase the exhaust gas plume rise’). NRDC Brief at 60, 61 n.119. The agency asserts the existence of a uniformly permissive rule, pointing to three 1980 guidance documents which “uniformly took the view that merging of separate stacks into a single stack ‘is generally not considered a dispersion technique’ absent other factors.” 50 Fed. Reg. 27,903/2. We find the evidence in this regard to be somewhat inconclusive. Second, NRDC argues that the agency erred in not requiring a demonstration of reliance. The agency re- sponds that it is infeasible to require a demonstration of “actual reliance” when the reliance in question is upon general agency guidance rather than a specific formula or rule. EPA Brief at 66. The point is well taken. Thus, for us, the question comes down to whether the agency’s rule for pre-1985 sources is sufficiently protective of the statutory purpose. NRDC asserts that the regulations provide large loop- heles for mergers that were significantly motivated by an intent to gain increased dispersion credit. As to mergers accompanying installation of poliution control equipment, it suggests that a source might intentionally install equipment for one pollutant in order to secure the right to increase emissions of another. On the facts, this seems most improbable. The rule applies only to pre- 1985 mergers, and we doubt many source owners had the foresight to anticipate EPA’s exemption and slip through its supposed loophele before its promulgation. Further protection is added by EPA’s presumption of a signifi- cant dispersion motive where the merger was accompa- 60a nied by a relaxation of emissions limits or an increase in emissions. As to the exemption for mergers made for “sound economic or engineering reasons,” NRDC objects not on the basis of that language itself but by reference to lan- guage in a “Guidance” document later published by EPA, “Implementation of Stack Height Regulations— Exceptions From Restrictions on Credit for Merged Stacks” at 3 (October 28, 1985). In a separate suit brought by NRDC before this court we declined substan- tive review of that document on the ground that the guidelines “represent tentative agency positions that may be modified in subsequent agency proceedings,” and “do not represent final agency action subject to judicial re- view under 42 U.S.C. § 7607(b) (1982).” NRDC v. Thomas, No. 85-1488 and consolidated cases (D.C. Cir. Aug. 3, 1986). NRDC has brought nothing to our atten- tion that would increase their finality. Acordingly, the substantive review now appropriate re- veals no illegality in EPA’s rules for pre-1985 stack mergers. V. MISCELLANY A. Multi-Point Rollback NRDC argued in a footnote in its opening brief that a system of calculating emissions limitations known as multi-point rollback (“MPR”) is a form of intermittent control system (“ICS”), and is therefore unlawful under the statute. §123(b) states that dispersion techniques include “any intermittent . . . contro! of air pollutants varying with atmospheric conditions.” MPR in fact involves calculating emission limits in light of the fact that a certain proportion of days will involve relatively high dispersion; it allows the source to emit more on an equivalent proportion of days. But the days of higher emission need not correspond with the ac- tual days of higher dispersion. We think that under 6la Chevron U.S.A. Inc. v. NRDC, 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984), EPA was entitled to read the statutory language as referring only to control sys- tems that varied output with the time of actual weather changes. We join the Ninth Circuit in upholding the agency’s reading. See Kamp v. Hernandez, 752 F.2d 1444, 1451-52 (9th Cir.1985). B. Definition of “Nearby” as Used in Demonstrations Section 123(c) defines GEP stack height as that height necessary to insure that emissions from the stack will not cause excessive pollution concentrations as a result of downwash created by “the source itself, nearby structures or nearby terrain obstacles.” 42 U.S.C. § 7423(¢c) (em- phasis added.) In its 1982 Regulations, the agency’s ar- ticulation of its formula considered structures only if lo- cated within one-half mile of the source. Its provision for demonstrations provided no similar limit on the struc- tures or terrain features to be taken into account. In Sierra Club, this court upheld the one-half mile defini- tion of “nearby” used in the formula as consistent with the statute and legislative history, 719 F.2d at 444, but criticized the agency for not applying the same restric- tion in its rules for demonstrations. The court remanded for EPA to “include new regulations that apply the same ‘nearby’ limitation to demonstrations as is applied to the formulas.” Jd. at 445-46. The agency proceeded to do so [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385019_2013%3A2. Public record. Not legal advice.