# Petition for Writ of Certiorari — Appalachian Power Co. v. Environmental Protection Agency > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386019_1603%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition for Writ of Certiorari - **Published:** January 1, 2001 - **Citation:** 532 U.S. 903 ## Text No. —— i PP othe Supreme Court of the Anited States APPALACHIAN POWER COMPANY, et ai., Petitioners, U.S. ENVIRONMENTAL PROTECTION AGENCY, Respondent. On Petition for a Writ of Certiorari to the United States Court of Appeals for the District of Columbia Circuit PETITION FOR A WRIT OF CERTIORARI DAVID M. FLANNERY KATHY G. BECKETT JACKSON & KELLY ANDREA BEAR FIELD (Counsel of Record) NORMAN W. FICHTHORN 1600 Laidley Tower HUNTON & WILLIAMS 500 Lee Street East 1900 K Street, N.W. P. O. Box 553 Washington, D.C. 20006 Charleston, WV 25301 (202) 955-1500 (304) 340-1017 MEL S. SCHULZE Counsel for Petitioner HUNTON & WILLIAMS Midwest Ozone Group 600 Peachtree Street, N.E. Atlanta, GA 30308 (404) 888-4000 Counsel for Petitioners Appalachian Power Company, et al. WILSON-EPES PRINTING CO., INC. — (202) 789-0096 — WASHINGTON, D. C. 20001 00-445 SEP 20 om Te oie IN THE rat = QUESTIONS PRESENTED’ 1. Whether the D.C. Circuit’s decision affirming the Environmental Protection Agency’s (“EPA” or “the Agency”) consideration of costs, rather than air quality effects, in determining whether one sstate’s emissions contribute “significantly” to nonattainment air quality in another state under the Clean Air Act (“CAA” or “the Act”), conflicts with decisions of this Court and other D.C. Circuit decisions requiring EPA to consider the relevant statutory factor in making regulatory decisions. 2. Whether EPA’s interpretation of the Act to allow selection of a cost-effectiveness cut-off point, which rested on nothing “in the language or function of [CAA] § 110(a)(2)(D)(i)(1)” and involved an exercise of “essentially unbounded” discretion, did not violate the non-delegation doctrine because EPA’s rule only affects “half of the nation” rather than “all American enterprise.” * Both questions presented in this petition — which involve the role of costs in establishing Clean Air Act regulations, and the scope and applicability of the constitutional non-delegation doctrine in Clean Air Act rulemakings — are questions that are currently before the Court, in a different Clean Air Act context, in two related cases, Browner vy. American Trucking Ass'ns, No. 99-1257, and American Trucking Ass'ns v. Browner, No. 99-1426. As a result, the Court may wish to postpone action on this petition until those cases are decided. ll PARTIES TO THE PROCEEDINGS 1. The following Parties were petitioners in_ the consolidated proceeding, the judgment in which review is sought. In No. 98-1497, State of Michigan, Michigan Department of Environmental Quality, and State of West Virginia, Division of Environmental Protection. In No. 98-1588, State of Ohio. In No. 98-1596, Commonwealth of Virginia. In No. 98-1615, State of Alabama, ex. rel. Bill Pryor, Attorney General. In No. 98-1617, State of Indiana and Indiana Department of Environmental Management. In No. 98-1619, State of North Carolina. In No. 98-1621, State of South Carolina. In No. 98-1499, United Mine Workers of America. In No. 98-1500, Appalachian Power Company, ef al., consisting of: Appalachian Power Company; Baltimore Gas and Electric Company (now referred to as Constellation Power Source Generation, Inc.) Carolina Power & Light Company; Central and South West Services, Inc.; Central Power and Light Company; Public Service Company of Oklahoma; Southwestern Electric Power Company; West Texas Utilities Company; Central Illinois Light Company; Central Illinois Public Service Company; CINergy; ' ee eT ae " ill Columbus Southern Power Company; Commonwealth Edison Company; Consumers Energy Company; Dayton Power and Light Company, The; Detroit Edison Company, The; Duke Energy Company; Florida Power Corporation; Illinois Power Company; Indiana Michigan Power Company; Jacksonville Electric Authority; Kentucky Power Company; Kentucky Utilities Company; Louisville Gas and Electric Company; Madison Gas and Electric Company; Minnesota Power Company; Monongahela Power Company, d/b/a Allegheny Power System, Inc.; Northern Indiana Public Service Company; Oglethorpe Power Corporation; Ohio Power Company; Ohio Valley Electric Corporation; Oklahoma Gas & Electric Company; Otter Tail Power Company; PacifiCorp Electric Operations; Plains Electric Generation & Transmission Cooperative, Inc.; Potomac Edison Company, The, d/b/a Allegheny Power System, Inc.; Potomac Electric Power Company; Public Service Company of New Mexico; Salt River Project; South Carolina Electric & Gas Company; iV Southern Company; Alabama Power Company; Georgia Power Company; Gulf Power Company; Mississippi Power Company; Savannah Electric and Power Company; Tampa Electric Power Company; Tucson Electric Company; Union Electric Company; Virginia Power; West Penn Power Company, d/b/a Allegheny Power System, Inc.; Edison Electric Institute; National Rural Electric Cooperative Association; American Public Power Association. In No In No In No In No In No . 98-1500, Duquesne Light Company. . 98-1501, Midwest Ozone Group. . 98-1502, West Virginia Chamber of Commerce. . 98-1504, National Mining Association. . 98-1518, West Virginia Manufacturers Association. In No. 98-1556, City of Springfield, Missouri through the Board of Public Utilities, d/b/a City Utilities of Springfield, Missouri. in No . 98-1567, Kansas City Power & Light Company; St. Joseph Light & Power Company; The Empire District Electric Company; Utilcorp United, Inc.; City of Independence, Missouri; and Associated Electric Cooperative, Inc. In No . 98-1573, Indianapolis Power & Light Company Vv In No. 98-1585, The Alabama Forestry Association, Inc. by and through its section The Alabama Pulp and Paper Counsel. In No. 98-1590, Dairyland Power Cooperative. In No. 98-1598, South Carolina Public Service Authority doing business as Santee Cooper. In No. 98-1601, American Municipal Power-Ohio. In No. 98-1602, Fort James Operating Company; Gilman Paper Company; Rayonier Inc.; Savannah Electric & Power Company; Southeast Paper Manufacturing Company; International Paper Company. In No. 98-1608, PP&L, Inc. In No. 98-1609, Council of Industrial Boiler Owners. In No. 98-1611, Network for Workable Air Policies. In No. 98-1616, Georgia Coalition for Sound Environmental Policy, Inc. In No. 98-1618, Interstate Natural Gas Association of America. In No. 99-1070, Appalachian Power Company, et al. In No. 99-1093, Wisconsin Paper Council; Madison Gas and Electric Company; Northern States Power Company; Wisconsin Public Service Corporation; Wisconsin Manufacturers & Commerce. 2. The following Party was a Respondent in the consolidated proceeding, the judgment in which review is sought. U.S. Environmental Protection Agency. vi 3. The following Parties were Intervenors in the consolidated proceeding, the judgment in which review is sought. Appalachian Power Company, et al. Dairyland Power Cooperative. Virginia Manufacturers Association. South Carolina Public Service Authority d/b/a Santee Cooper. Detroit Public Lighting; Grand Haven Board of Light and Power; Holland Board of Public Works; Lansing Board of Water and Light; Marquette Board of Light and Power; Michigan South Central Power Agency; and City of Wyandotte Department of Municipal Service. GPU Generation, Inc. American Gas Association. Interstate Natural Gas Association of America. Network for Workable Air Policies. Business Council of Alabama. Vii Michigan Manufacturers Association. State of Wisconsin. State of New York; State of Connecticut; State of Maine; State of New Hampshire; Commonwealth of Pennsylvania; State of Rhode Island; State of Vermont; and Commonwealth of Massachusetts. State of Maryland. Consolidated Edison Co. of New York, Inc.; KeySpan Generation LLC; Niagara Mohawk Power Corporation; PECO Energy Company; Public Service Electric and Gas Company; Rochester Gas & Electric Corporation; and PG&E Generating. Natural Gas Supply Association; and Sempra Energy. Associated Industries of Massachusetts; New England Council; and New Jersey State Chamber of Commerce. PP&L, Inc.; Atlantic City Electric Company; and Vill Delmarva Power & Light Company. ‘ Natural Resources Defense Council; Environmental Law & Policy Center of the Midwest; Clean Air Task Force; American Lung Association of Metropolitan Chicago; Appalachian Mountain Club; Citizens Action Coalition of Indiana, Inc.; Clean Air Council; Environmental Defense Fund; Group Against Smog and Pollution; Hoosier Environmental Council; Illinois Environmenta! Council; Izaak Walton League of America; Legal Environmental Assistance Foundation; Michigan Environmental Council; National Environmental Trust; Natural Resources Council of Maine; New York Public Interest Research Group; Ohio Citizen Action; Ohio Environmental Council; U.S. Public Interest Research Group; and Wisconsin’s Environmental Decade Institute. Province of Ontario, Canada; Norman W. Sterling, Minister of the Environment, Province of Ontario; Charles A. Harnick, Attorney General of the Province of Ontario; and Christopher Carl Haromy. ix 4. The following were Amici in the consolidated proceeding, the judgment in which review is sought. Toledo Metropolitan Area Council of Governments. North Carolina Citizens for Business and Industry. South Carolina Chamber of Commerce; Environmental Management Association of South Carolina; and South Carolina Manufacturers Alliance. Government of Canada. DISCLOSURE STATEMENT 1. The following list of petitioners discloses the parent companies of petitioners and any entity, other than the parents, that has a 10% or greater ownership interest in any of the petitioners. Alabama Power Company (parent: Southern Company) Appalachian Power Company (parent: American Electric Po er Company, Inc.) Baltimore Gas and Electric Company (now referred to as Constellation Power Source Generation, Inc.) (parent: Constellation Energy Group, Inc.) Carolina Power & Light Company (10% or greater owner: State Street Bank & Trust Company Boston) . Central and South West Services, Inc. (parent: Central and South West Corporation) Central Illinois Public Service Company (parent: Ameren Corporation) Central Power and Light Company (parent: Central and South West Corporation) Columbus Southern Power Company (parent: American Electric Power Company, Inc.) Consumers Energy Company (parent: CMS Energy Corporation) Dayton Power and Light Company, The (parent: DPL Inc.) Detroit Edison Company, The (parent: DTE Energy Company) Florida Power Corporation (parent: Florida Progress Corporation) xi Georgia Power Company (parent: Southern Company) Gulf Power Company (parent: Southern Company) Illinois Power Company (parent: Dynegy, Inc.) Indiana Michigan Power Company (parent: American Electric Power Company, Inc.) Kentucky Power Company (parent: American Electric Power Company, Inc.) Kentucky Utilities Company (parent: Kentucky Utilities which is a subsidiary of LGE Energy Corporation) Louisville Gas & Electric Company (parent: LGE Energy Corporation) Mississippi Power Company (parent: Southern Company) Monongahela Power Company, dba Allegheny Power System, Inc. (parent: Allegheny Energy, Inc.) Northern Indiana Public Service Company (parent: NiSource Inc.) Ohio Power Company (parent: American Electric Power Company, Inc.) Otter Tail Power Company (10% or greater owner: Otter Tail Power Company ESOP) PacifiCorp Electric Operations (parent: PacifiCorp) Potomac Edison Company, The, dba Allegheny Power System, Inc. (parent: Allegheny Energy Inc.) Xli Public Service Company of Oklahoma (parent: Central and South West Corporation) Savannah Electric and Power Company (parent: Southern Company) South Carolina Electric & Gas Company (parent: SCANA Corporation) Southwestern Electric Power Company (parent: Central and South West Corporation) Tampa Electric Company (parent: TECO Energy, Inc.) Tucson Electric Power Company (parent: UniSource Energy Corporation) Union Electric Company (parent: Ameren Corporation) Virginia Power (parent: Dominion Resources, Inc.) West Penn Power Company, dba Allegheny Power System, Inc. (parent: Allegheny Energy, Inc.) West Texas Utilities Co. (parent: Central and South West Corporation) 2. The following petitioners have no_ parent corporations, and no entity has a 10% or greater ownership in any of these petitioners. CINergy Corporation Duke Energy Corporation Jacksonville Electric Authority Madison Gas and Electric Company Minnesota Power Oglethorpe Power Corp. Ohio Valley Electric Corporation Xlii Plains Electric Generation & Transmission Cooperative, Inc. Potomac Electric Power Company | Public Service Company of New Mexico | - Salt River Project Southern Company : Edison Electric Institute National Rural Electric Cooperative Association American Public Power Association National Mining Association and Midwest Ozone Group Silla di iat Py TABLE OF CONTENTS Page QUESTIONS PRESENTED ........2..0.. so the likely effect of the proposed Statutory interpretation would be that any aggregate cutback would be achieved at considerably higher cost than under EPA’s reading of § 110(a)(2)(D)(i)(I), with absolutely no offsetting environmental benefit to the public. Of course we are able to assume the existence of EPA’s allowance trading program only because no one has challenged its adoption. As the program seems to have no rationale other than cost reduction, see 63 Fed. Reg. at 57,457, it would presumably be invalid under petitioners’ proposed reading of § 110(a)(2)(D)(i)(D, in 7A glance at EPA’s regulations for allowance trading will convince any doubter that transaction costs can safely be expected to be substantial. See 63 Fed. Reg. at 57,457-75. 20a which case the states’ position really is as extreme as it sounds. Returning to the positions of the parties, we find Indus- try/Labor engaging in a migration comparable to that of the states, though in the opposite direction. In its opening and reply brief Industry/Labor argued that “§ 110(a)(2)(D) re- quires consideration of only air quality impacts in determin- ing the significance of any contribution.” However, at oral argument Industry/Labor offered a construction of the statute that seemed to restore to EPA via § 110(k)(5) what it would take away via § 110(a)(2)(D). Industry/Labor claimed that costs could be considered when EPA determines if a SIP is “adequate” under § 110(k)(5). Transcript of Oral Argument at 28. The states actually offered this same reading of § 110(k)(5) in their reply brief (back when they thought EPA could consider costs) but appeared to abandon it at oral argument in favor of a flat prohibition on EPA cost consider- ations. The argument that costs may be considered under § 110(k)(5) seems to concede that the structure of the statu- tory scheme manifests no intention to bar the consideration of costs. And so we are indeed presented with the question whether § 110(a)(2)(D) bars consideration of costs, but it is presented to us with the caveat that costs can be considered later on in the process, and accompanied by a false start by the states, who initially said that EPA could consider costs, just not too much. Against this backdrop, it would be at the very least ironic for us to say there is “clear congressional intent to preclude consideration of cost” under § 110(a)(2)(D). See Natural Resources Defense Council v. EPA, 824 F.2d 1146, 1163 (D.C. Cir. 1987) (en banc). For convenience we repeat the statutory language. Section 110(a)(2)(D)(i)(D provides that SIPs must contain provisions adequately prohibiting 2la any source or other type of emissions activity within the _ State from emitting any air pollutant in amounts which will . . . contribute significantly to nonattainment in, or interfere with maintenance by, any other State with respect to any such national primary or secondary am- bient air quality standard. 42 U.S.C. § 7410(a)(2)(D)(i)() (emphasis added). By its terms the statute is focused on “amounts” of “emissions activity” that “contribute significantly to nonattainment.” The fundamental dispute is over the clarity of the phrase “contribute significantly.” Must EPA simply pick some fiat “amount” of contribution, based exclusively on health con- cerns, such that any excess would put a state in the forbidden zone of “significance”? * Or was it permissible for EPA to consider differences in cutback costs, so that, after reduction of all that could be cost-effectively eliminated, any remaining “contribution” would not be considered “significant”? In deciding on the permissible ceiling, EPA used “significant” in the second way. The term “significant” does not in itself convey a thought that significance should be measured in only one dimen- sion—here, in the petitioners’ view, health alone. Indeed, “significant” is a very odd choice to express unidimen- sionality,; consider the phrase “significant other.” In some contexts, “significant” begs a consideration of costs. In finding a threshold requirement of “significant risk” in § 3(8) of the Occupational Health and Safety Act, 29 U.S.C. § 652(8), a plurality of the Supreme Court understood a “significant” risk as something more than a “mathematical Straitjacket,” and held that “[s]ome risks are plainly acceptable and others are plainly unacceptable.” Industrial Union Dept., AFL-CIO v. American Petroleum Institute * We deal below with a related question: Did EPA act irrationally in setting the level of significance without regard for varying levels of downwind impact? See part I.C.3 below. 22a (“Benzene”), 448 U.S. 607, 655 (1980) (plurality opinion). The plurality withheld judgment on whether the Act required a “reasonable correlation between costs and benefits,” id. at 615, but the upshot of inserting the adjective “significant” was a consideration of which risks are worth the cost of elimination. OSHA _ has since interpreted §3(8) and regulation of “significant risk” to require “cost-effective protective measures” and set standards with an eye toward “the costs of safety standards [being] reasonably related to their benefits.” See International Union v. OSHA (Lockout/Tagout Il), 37 F.3d 665, 668-69 (D.C. Cir. 1994) (quoting OSHA’s final rule). OSHA’s reaction to the term “significant” seems to confirm what some commentators have asked rhetorically: “{C]an an agency sensibly decide whether a risk is ‘significant’ without also examining the cost of eliminating it?” Stephen G. Breyer, Richard B. Stewart, Cass R. Sunstein & Matthew L. Spitzer, ADMINISTRATIVE LAW AND REGULATORY P@QLicy 65 (4th ed. 1999). Petitioners conspicuously fail to describe the intellectual process by which EPA would determine “significance” if it may consider only health. EPA has determined that ozone has some adverse health effects—however slight—at every level. See National Ambient Air Quality Standards for Ozone, 62 Fed. Reg. 38,856 (1997). Without consideration of cost it is hard to see why any ozone-creating emissions should not be regarded as fatally “significant” under § 110(a)(2)(D)(i)(D. Perhaps EPA might (under such a rule) let the upwind states off at the stringency level of the programs imposed on non- attainment areas, but petitioners do not explain how “sig- nificance” can exclude cost but admit equity. Although the ambiguity of the word “significant” and the implications of a health-only reading are potentially fatal flaws in petitioners’ theory (aside from their own inability to discern the “plain language” consistently), the most formida- ble obstacle is the settled law of this circuit. It is only where I ACE al TERIA Se wien ARE B IT EO ethic VMAS P EMAL CEE AIR LGIREE A ELIE AT Hae EEG ce ELE AIOE (EG ESET ATK LCS SEED BA Byes BLUE O ActANt od 23a there is “clear congressional intent to preclude consideration of cost” that we find agencies barred from considering costs. NRDC, 824 F.2d at 1163; see alse George E. Warren Corp. v. EPA, 159 F.3d 616, 622-24 (D.C. Cir. 1998), reh’g granted, 164 F.3d 676 (D.C. Cir. 1999); Grand Canyon Air Tour Coalition v. FAA, 154 F.3d 455, 475 (D.C. Cir. 1998), cert. denied, 119 S. Ct. 2046 (1999); NRDC v. EPA, 937 F.2d 641, 643-46 (D.C. Cir. 1991); cf. International Bhd. of Teamsters v. United States, 735 F.2d 1525, 1528-29 (D.C. Cir. 1984) (construing mandate to adopt “reasonable requirements” for safety as allowing consideration of cost). In NRDC we considered § 112 of the Clean Air Act, requiring EPA to set an air quality standard for hazardous pollutants with an “ample margin of safety” to protect the public health. We held that this phrase did not preclude a consideration of costs. 824 F.2d at 1155, 1163. In George E. Warren Corp. we acknowledged that the statutory scheme for the reformulated gasoline program had the “overall goal” of improving air quality and “reducing air pollution.” 159 F.3d at 622. But because there was nothing “in the text or structure of the statute to indicate that the Congress intended to preclude the EPA from considering the effects a proposed rule might have upon the price and supply of gasoline,” id. at 623, we found no such preclusion even though the provision at issue contained no allusion whatever to such effects. Similarly, in Grand Canyon Air Tour the statute required the FAA to devise a plan for “substantial restoration of the natural quiet” in the Grand Canyon area, but we found nothing impermissible in the FAA’s consideration of costs to the air tourism industry in deciding how “substantial” that restoration must be. 154 F.3d at 475. In NRDC v. EPA we considered whether EPA permissibly used cost-benefit analy- sis in refusing to classify a particular polluting source as “major.” The petitioners argued that cost considerations were precluded, and we stated: “[WJhile the statutory language and legislative history do not bar petitioners’ construction, they 24a provide little support and no necessity for it.” 937 F.2d at 645. We affirmed EPA’s use of cost-benefit analysis. These cases are unexceptional in their general view that preclusion of cost consideration requires a rather express congressional direction. See Edward W. Warren & Gary E. Marchant, “More Good Than Harm”: A First Principle for Environmental Agencies and Reviewing Courts, 20 Ecology L.Q. 379, 421 (1993) (“The need to compare benefits and costs has long played a role in judicial review of agency actions regulating health and safety risks.”’”); Cass R. Sunstein, Interpreting Statutes in the Regulatory State, 103 Harv. L. Rev. 405, 487 (1989) (suggesting an “interpretive principle” drawn from case law, including NRDC v. EPA, 824 F.2d 1146, that reviewing courts will read statutes as authorizing regulations with benefits at least “roughly commensurate with their costs, unless there is a clear legislative statement to the contrary”). Three of the cases, moreover—the two NRDC cases and Grand Canyon—, involve statutory language with just the same structure as here. A mandate directed to some environmental benefit is phrased in general quantitative terms (“ample margin of safety,” “substantial restoration,” and “major’), and contains not a word alluding to non-health trade-offs; in each case we found that in making its judgments of degree the agency was free to consider the costs of demanding higher levels of environmental benefit. So too here. Petitioners point to no evidence of the requisite “clear congressional intent to preclude consideration of cost.” NRDC, 824 F.2d at 1163. The text, we have already seen, works no such preclusion. As for the statutory structure, petitioners willingly concede that costs may be considered under § 110(k)(5) in determining the adequacy of a state plan. Why would a Congress intent on precluding cost consider- ations allow such an escape hatch? The petitioners cite no SALLIE BUSA EAL LA LEENA LI PA LUG Lar bir; RG IIE PLY REP MEN ISOM bet Se a he ot a 25a legislative history suggesting that cost considerations should be barred. In sum, there is nothing in the text, structure, or history of § 110(a)(2)(D) that bars EPA from considering cost in its application. 3. Uniform Controls As we have seen, EPA required that all of the covered jurisdictions, regardless of amount of contribution, reduce their NO, by an amount achievable with “highly cost- effective controls.” Petitioners claim that EPA’s uniform control strategy is irrational in two distinct ways. First, they observe that where two states differ considerably in the amount of their respective NO, contributions to downwind nonattainment, under the EPA rule even the small con- tributors must make reductions equivalent to those achievable by highly cost-effective measures. This of course flows ineluctably from the EPA’s decision to draw the “significant contribution” line on a basis of cost differentials. Our upholding of that decision logically entails upholding this consequence. The second objection is that because of distance and the vagaries of pollutant migration and ozone formation, a mole- cule of NO, emitted in Indiana (for example) may cause far less adverse health impact than a molecule emitted in eastern Pennsylvania. EPA acknowledges that “[s]ources that are closer to the nonattainment area tend to have much larger effects on air quality than sources that are far away.” 63 Fed. Reg. at 25,919. While EPA’s cost-effectiveness standard and emissions trading seem to mean that EPA will secure the resulting aggregate NO, reduction at roughly the lowest possible cost, they do not necessarily mean that it will have secured the resulting aggregate health benefits at the lowest cost. Petitioners ask, in effect, why EPA did not, by one means or another (e.g., in the emissions trading system), pS ee ed thes Peed 26a make reductions from sources near the nonattainment areas (or otherwise more damaging, molecule for molecule) more valuable than ones from distant sources? EPA considered this approach, modeling the efficacy of regional alternatives compared to its uniform strategy. See Final Rule, 63 Fed. Reg. at 57,423. Its researchers found that non-uniform regional approaches by comparison did not “provide either a significant improvement in air quality or a substantial reduction in cost.” /d. The complaining states offer no material critique of EPA’s methodology in reaching this answer, which in fact some independent investigators have confirmed. See “Krupnick & Anderson, A Dilemma Downwind, 137 Resources for the Future 5, 6 (1999) (“[Even with] spatial differences, when viewed across the entire study region, RFF concluded that there was no clear benefit to an exposure-based trading system, compared with simple ton- for-ton NO, trading. Public health benefits would be approx- imately the same, and there would be no significant differ- ence in costs to the utilities.”). We have no basis to upset EPA’s judgment. 4. Nondelegation In their opening brief and more prominently in their reply brief, state petitioners argue that EPA has not determined “significant contribution” based on any intelligible principles. Petitioners rely heavily on our decision in American Truck- ing Ass’ns, Inc. v. EPA, 175 F.3d 1027, reh’g granted in part, den'd in part 195 F.3d 4 (D.C. Cir. 1999), essentially arguing that nothing about EPA’s analysis explains how much of a NO, contribution was too much (i.e., worthy of a SIP call). We must recognize here that EPA’s cost-effectiveness criterion is a radically incomplete line-drawing device. EPA has effectively ruled that each affected state must get down to the NO, emissions levels that would prevail if it removed all NO, emissions costing $2000/ton or less to remove. This 27a Satisfies its “cost-effeciiveness” criterion because (if states also seek to minimize costs subject to the EPA’s constraint) only these relatively low-cost tons will be removed. But while EPA indicates that it rested the $2000/ton figure on “NO, emissions controls that are available and of comparable cost to other recently undertaken or planned NO, measures,” Final Rule, 63 Fed. Reg. at 57,400, it neither rests that bench- mark on anything in the language or function of § 110(a)(2)(D)(i)(D, nor otherwise explains why the resulting cut-off point represents the right degree of “cost- effectiveness” (i.e., why “highly cost-effective” should be at that “height”). Accordingly, we must read EPA as having understood that its selection of the cut-off point was essentially unbounded. But petitioners have ignored a limit to the nondelegation doctrine that we relied on in American Trucking and even more emphatically in its immediate precursor, /nternational Union, UAW v. OSHA (“Lockout/Tagout I” ), 938 F.2d 1310 (D.C. Cir. 1991). There we noted that the scope of the agency’s “claimed power to roam” was “immense, encom- passing all American enterprise.” Jd. at 1317. Quoting verbatim from Synar v. United States, 626 F. Supp. 1374, 1383 (D.D.C. 1986) (three-judge panel), aff'd sub nom. Bowsher v. Synar, 478 U.S. 714 (1986), we said, “When the Scope increases to immense proportions, as in [A.L.A. Schecter Poultry Corp. v. United States, 295 U.S. 495 (1935)], the standards must be correspondingly more precise.” Lockout/Tagout I, 938 F.2d at 1317. We noted that a mass of cases in courts had upheld delegations of effectively standardless discretion, and distinguished them precisely on the ground of the narrower scope within which the agencies could deploy that discretion. Id. American Trucking, perhaps too succinctly for petitioners to notice, incorporated the Lockout/Tagout I discussion of the point. American Trucking, 175 F.3d at 1037. AIMS eR 4 28a Nominally, of course, § 110(a)(2)(D)(i)(I) encompasses “all American enterprise.” But as a practical matter EPA must make a number of threshold determinations that in practice appear to have confined the statute to a modest role. Before assessing “significance,” EPA must find (1) emissions activity within a state; (2) show with modeling or other evidence that such emissions are migrating into other states; and (3) show that the emissions are contributing to nonattainment. We do not mean to minimize the scope of EPA’s action in the present case. Nearly half of the nation is affected and control costs will be substantial. And it may ultimately prove that the dam constituted by these criteria will burst, subjecting “all American industry” to EPA’s § 110(a)(2)(D)(i)(D) discretion. But in practice, so far, these threshold criteria appear to have so limited EPA’s activity under the section as to make the rule in question here the sole example of § 110(a)(2)(D)(i)(D) rulemaking. Accordingly, the grounds on which we remanded in Lockout-Tagout I and American Trucking for confining agency constructions are absent here. II. J/nclusion of Specific States A. Wisconsin Wisconsin industry petitioners separately challenge Wis- consin’s inclusion in the SIP call. The Wisconsin petitioners argue that the emissions from the state do not contribute significantly to nonattainment in any other state. Section 110(a)(2)(D)(i)()_ requires that a state “contribute signif- icantly to nonattainment in . . . any other State” in order to be included in the challenged SIP call. 42 U.S.C. § 7410(a)(2)(D)(i)(D) (emphasis added). As explained below, EPA erroneously included Wisconsin in the SIP call because EPA failed to explain how Wisconsin contributes to nonattainment in any other state. A AREA SRA PAE Rath PNR SRO RMT RR ast SIANID GE YPLYSP MURA CITE ei 2 29a EPA contends that Wisconsin contributes significantly to other states’ nonattainment because the state significantly contributes ozone over the Lake Michigan region. Despite EPA’s Lake Michigan concerns, the agency does not show on the record that Wisconsin’s ozone contribution affects any onshore state nonattainment. At oral argument, counsel for EPA conceded that “[t]he part that’s missing [from the record] is a thorough explanation to support our modeling data and things of that nature between the Lake Michigan receptor area and the onshore states.” Oral Arg. Tr. at 107. When asked for more, counsel could only respond that “the best evidence . . . is simply the narrative statements in the [final rule’s] preambles . . . . There’s nothing else there.” /d. Because EPA conceded at oral argument that it has no record evidence directly linking Wisconsin’s ozone contribution over Lake Michigan to nonattainment in any state and because EPA must “demonstrate[ ] a reasonable connection between the facts on the record and its decision” made pursuant to its statutory authority, Ethyl Corp. v. EPA, 51 F.3d 1053, 1064 (D.C. Cir. 1995), we hold that EPA acted unlawfully by including Wisconsin in a SIP call limited by statute to states contributing significantly to nonattainment in any other state and therefore set aside Wisconsin’s inclusion in the SIP call. See 5 U.S.C. § 706(2)(A), (C) (1994) (“The reviewing court shall . . . hold unlawful and set aside agency action . . . found to be . . . arbitrary, capricious, an abuse of discretion, or otherwise not accordance with law [or] in excess of statutory jurisdiction, authority, or limitations, or short of statutory right.”’). B. Missouri and Georgia Missouri and Georgia were on the geographical perimeter of EPA’s SIP call. No state west of Missouri was included, nor were the two states directly to its north (Iowa and Minnesota) and south (Arkansas). Georgia was a bit more in the thick of things, surrounded on three sides by included Ogg Ta ee a ee ea 30a states—Alabama, Tennessee, North Carolina, and South Car- olina; but the southern portion of Georgia borders the ex- cluded state of Florida. Industrial petitioners within Missouri and Georgia challenge EPA’s decision to calculate NO, budgets for these two states based on the entirety of NO, emissions in each state. Petitioners argue that there is record support only for the proposition that emissions from, roughly speaking, the eastern half of Missouri and the northern two- thirds of Georgia “contribute” to downwind concentrations; accordingly, they say, the NO, budgets for Missouri and Georgia should be based solely on those emissions. We must here explain how EPA calculated NO, budgets. it projected the total amount of NO, emissions that sources in a state would emit in the year 2007, in light of expected growth and other controls required by the CAA. EPA then projected total NO, emissions if “highly cost-effective con- trols” were implemented. The resulting calculation became the state’s NO, budget, with the difference between the base case and the controlled case being the “significant” contribu- tion discussed above. Obviously a state’s NO, budget will vary depending on whether EPA considers all of the NO, emissions in the state, or instead considers only emissions located in a smaller portion of the state (assuming emissions are dispersed throughout the state, which is the case here and without which the issue would be immaterial, as nonexistent emissions need not be controlled). For Missouri and Georgia, as for all other included states, NO, budgets were calculated using all NO, emissions in the state. The challenge basically stems from the character of OTAG’s modeling, and its resulting recommendations to EPA. OTAG’s ozone transport model used grids drawn across most of the eastern half of the United States. The first grid was the most precise, with grid cells of 12 kilometers squared (244 square kilometers)—the “fine grid.” A second grid extended beyond the perimeter of the fine grid and had 3la cells of 36 kilometers squared resolution—the “coarse grid.” For a variety of reasons to be discussed shortly, the fine grid did not track state boundaries, and Missouri and Georgia were among several states that were split between the fine and coarse grids. OTAG then ran modeling for both grids, but in the final analysis did not find emissions from the coarse grid worthy of special concern. OTAG’s executive summary stat- ed: “[T]he focus on ozone air quality impacts in the fine grid raised questions about the need for controls in the coarse grid. The recommendations adopted by the Policy Group recognize that the OTAG analyses demonstrated that transport impacts of the coarse grid areas on the fine grid are minimal and therefore, do not include the coarse grid areas for recom- mended control measures other than those that would be applied nationally.” Petitioners argue that EPA should base NO, budgets for Missouri and Georgia only on portions of these states within the fine grid. EPA offers three reasons for including the entire states of Missouri and Georgia: (1) The division of individual States by OTAG was based, in part, on computational limitations in OTAG’s modeling analyses; (2) the additional upwind emissions from full, as opposed to partial, States would provide additional benefit to downwind nonattainment areas; and, (3) State-wide emissions budgets create fewer administrative difficulties than a partial-State budget. Final Rule, 63 Fed. Reg. at 57,424. We review deferentially, searching for the reasonableness of EPA’s action, Appala- chian Power, 135 F.3d at 802, whether that be EPA’s inter- pretation of the statute, see Chevron, 467 U.S. at 842-43, or EPA’s explanation for its policy choice, see Motor Vehicle Mfrs. Ass'n v. State Farm Mutual Auto. Ins. Co., 463 U.S. 29, 43 (1983). The two inquiries can and do overlap. See Animal Legal Defense Fund v. Glickman, No. 97-5009, slip op. at 9 (D.C. Cir. Feb. 1, 2000). 32a On its face the statute neither mandates nor prohibits an all- or-nothing statewide perspective. It directs EPA to make sure that SIPs (which of course are state plans) adequately prohibit “any source or other type of emissions activity within the State from emitting” in excess of the substantive limit. The critical issue is whether the targeted “source” or “emissions activity” “contribute[s] significantly to nonattainment” in another state. 3 EPA’s first argument is that the fine grid split Missouri and Georgia in part because of computer limitations—every extension of the fine grid modeling was costly in terms of both computer memory and data collection. Document No. II-A-14, Draft OTAG Final Report Regional and Urban Scale Modeling—Chapter 2, 2-7 (undated). But the OTAG model- ers allocated their scarce resources purposefully, by reference to known air quality data, explicitly taking into consideration the “locale of various problem areas (as represented by urban- area modeling domains), and emissions density.” Jd. Thus it was no mere techno-fortuity that the fine grid included enough of Missouri to include the city of St. Louis and enough of Georgia to include Atlanta: both cities are designated nonattainment areas for ozone under the 1-hour NAAQS. See Final Rule, 63 Fed. Reg. at 57,359. Moreover, the fine grid portions of both states are the closest to other nonattainment areas, such as Chicago and Birmingham, and generally higher ozone density. Of course the fine grid modeling of parts of Missouri and Georgia showed emissions in the aggregate meeting the EPA’s threshold “contribution” criteria. Thus fine grid mod- eling of each in its entirety would presumably also have done so. But that is a simple arithmetic necessity (a state is necessarily composed of its parts) and provides no reason for EPA to ignore the very air quality factors that influenced the design of the modeling that did occur. OTAG itself clearly did not think those factors magically lost their force, for it 33a recommended against controlling the rump areas. And EPA itself acknowledged part of the reason this should be so when it observed, “Sources that are closer to the nonattainment area tend to have much larger effects on air quality than sources that are far away.” 63 Fed. Reg. at 25,919. Indeed, even if the line between areas for which there was evidence and ones for which there was none were explained solely by fortuity, EPA would still be required to act upon the evidence that was generated. See Chemical Manufacturers Ass’n v. EPA, 859 F.2d 977, 989 (D.C. Cir. 1988) (holding that EPA must consider “all the evidence—including the industry evi- dence”’). ; This leads us to EPA defenses other than modeling design. The first is that “the larger the geographic area that is controlled, the greater the downwind benefits.” Final Rule, 63 Fed. Reg. at 57,424. This reason can only stand if the emissions at issue contribute significantly to nonattainment in another state. OTAG concluded they did not. Jd. EPA claims that its state-specific modeling, which supplemented OTAG’s more regional modeling, supports including the coarse grid areas. See id. Yet EPA’s explanation and technique make clear that emissions from the fine grid areas may have been the sole source of the finding. Indeed, EPA says as much: “[I]f emissions from part of a State contribute significantly to downwind nonattainment or maintenance problems, emissions from the entire State contribute signif- icantly to downwind nonattainment or maintenance prob- lems.” Jd. This of course is also true as a matter of logic (a State is the sum of its parts), But it is completely consistent with the rump portion being innocent of downwind effect, and thus is scarcely a reason for ruling that significant con- tributions from a border city should rope in the entire state. Aware of this problem, EPA simply throws the burden of persuasion onto the states. “[T]Jhere is no peculiar meteor- ological phenomenon that would indicate that emissions from ‘a re eee Se 34a some portion of [each of the affected states] would not impact downwind nonattainment or maintenance problems.” /d. In addition, “the atmosphere is constantly in motion and has no limitations at geo-political boundaries.” /d. If this is “evi- dence” of contribution, it proves too much. If the simple proposition that the prevailing westerlies carry pollutants eastward were enough, EPA could, on the basis of a plant in Pennsylvania, use § 110(a)(2)(D)(i)(I) to control all NOx emissions east of the Rocky Mountains. While we uphold EPA’s determination that a “significant” contribution is a cost-effectively controllable contribution, EPA must first establish that there is a measurable contribution. Interstate contributions cannot be assumed out of thin air. In the end administrative convenience is EPA’s only real defense for basing NOx budgets on the entirety of a state’s emissions. There seem to be two species of this argument. First, EPA seems to claim that it is just easier to calculate a NO, budget based on all the emissions in the state instead of only a portion of such emissions. EPA provides no explana- tion of why this is so, and it seems dubious. Within a state are counties, air quality control regions, and for some unfor- tunate states, nonattainment areas. EPA also has emissions data on specific sources, some of which may be susceptible of “highly cost-effective controls,” and others of which may not be. See, e.g., Emissions Data For Power Plants, (visited January 26, 2000). Without data from such state subdivisions and specific sources, EPA could never have performed modeling or even set a statewide budget. EPA has not explained how calcula- tion of a budget for sources in only half of the state would be any more onerous than for all sources in the state. Unless it is relying on data that exist only for the state as a whole, calculation seems on its face easier for a half than for a whole. 35a EPA offers a second administrative problem. If the con- cern for not allowing § 110(a)(2)(D)(i)(1) to encompass un- proven areas compels an insistence on proof of contribution from ever smaller geographic subdivisions, any area’s specific contribution may appear insubstantial, even though collectively there are significant contributions. In other words, unlike bologna, which remains bologna no matter how thin you slice it, significant contribution may disappear if emissions activity is sliced too thinly. While this argument was stressed on appeal, it is nowhere to be found in the proposed or final rule, except insofar as it may have lurked behind the vague invocation of “administra- tive difficulties.” See Final Rule, 63 Fed. Reg. at 57,424; Proposed Rule, 62 Fed. Reg. at 60,342. As a result it is quite undeveloped. But it appears to be based on a distortion of the claims of Missouri and Georgia. They are not asserting a right to bologna tactics, to slice down the unit of measurement to a point of insignificance. All they are claiming is that where the data—calculated under EPA’s supervision—inculpate part of a state and not another, EPA should honor the resulting findings. Such a proposition would of course leave EPA free to select states as the unit of measurement. In turn, states (or the areas of states that believed themselves innocent of material contributions, or sources located therein), might respond by offering finer-grained computations. Such a process seems more like a healthy search for truth than the collapse into infinite regress that EPA claims to fear. EPA also points to state flexibility: “Since each State has the flexibility to determine which sources to control in order to meet the budget, a State can structure its control strategy to require fewer reductions in certain portions of the State and greater controls in other areas.” Final Rule, 63 Fed. Reg. at 57,424. This theory presents at least two difficulties. First, it overlooks the fact that state budgeis not only encompass the 36a whole state but are calculated on the basis of hypothesized cutbacks from areas that have not been shown to have made significant contributions. Thus the “flexibility” comes at the cost of a burden that is heavier in the aggregate, where the added weight accomplishes no purpose relevant to § 110(a)(2)(D)(i)(D. Second, a state’s use of flexibility to pursue a purely in-state set of tradeoffs between cost and benefit (and thus unrelated to the goals of §110(a)(2)(D)(i)(D) may actually diminish the cutbacks in areas that are making a contribution to other states’ nonattainment. Thus nowhere has EPA reasonably explained why NO, budgets based on every state source are the best stopping point with respect to states on the perimeter of the ozone problem. Therefore we vacate EPA’s final rule with respect to Missouri and Georgia and remand to the agency for reconsid- eration in light of this opinion. C. South Carolina Petitioner Santee Cooper challenges South Carolina’s inclusion in the SIP call by alleging that the state’s downwind ozone nonattainment impact is “minuscule” and therefore not significant. We will hold unlawful EPA’s decision to include South Carolina in the SIP call if we find EPA’s decision “arbitrary, capricious, an abuse of discretion, or otherwise not accordance with law.” 5 U.S.C. § 706(2)(A). In order for EPA’s decision to include South Carolina in the SIP call to survive review, the agency must “demonstrate[ ] a reasonable connection between the facts on the record and its decision,” Ethyl Corp., 51 F.3d at 1064. We conclude that the record supports EPA’s decision to include the state as a significant contributor to downwind nonattainment. See Proposed Rule, 62 Fed. Reg. at 60,337-339. EPA considered the analyses submitted by the objecting petitioner but disagreed with the 37a petitioner’s conclusions as drawn from the relevant informa- tion. Specifically, EPA conducted additional modeling and interpreted the data in context and found that South Carolina significantly contributed to ‘ozone nonattainment. See id.; Final Rule, 63 Fed. Reg. at 57,394-396. For example, under the 1-hour standard, the UAM-V zero- out modeling results indicated that South Carolina had a high maximum contribution (16 ppb) and a high frequency of contribution (at least 2 ppb.to 15% of the exceedences and at least 10 ppb to 5% of the exceedences) to Atlanta. See OFFICE OF AIR AND RADIATION, U.S. ENVIRONMENTAL PROTECTION AGENCY, Doc. No. VI-B-11, AIR QUALITY MODELING TECHNICAL SUPPORT DOCUMENT FOR THE NO, SIP CALL C-5, H-2 (1998). The CAMx modeling results were comparable (25 ppb maximum contribution and a frequency of at least 2 ppb to 30% of the exceedences). See id. at C-5, G-6. Among the upwind states, only Alabama had a higher maximum contribution. See id. at Apps. G & H. Moreover, South Carolina’s contribution to 1-hour nonattain- ment in Atlanta was no more “insignificant” than many of the other linkages that were found to be significant (e.g., Indiana’s contribution to New York City). See id. at C-13, H-16. In contrast, the petitioner seeks to show that the data, when viewed in isolation, makes South Carolina’s contribution appear insignificant. In the end, we reject the challenge made on behalf of South Carolina because the petitioner attacks, not so much the accuracy of EPA’s data, but rather EPA’s reasonable analysis and application of the data. Ill. Federalism and Regulatory F lexibility Act A. NO, Budgets Building on OTAG’s work, EPA ordered the challenged SIP call under the authority of section 110(k)(5) in order to address significant contribution to 1-hour ozone nonattain- 38a ment as described under section 110(a)(2)(D).” In fashioning the SIP call, EPA focused on OTAG’s determination that “[rjegional NO, emissions reductions are effective in produc- ing ozone benefits.” Proposed Rule, 62 Fed. Reg. 60,318, at 60,320. EPA also took into consideration OTAG’s conclusion that while NO, controls are effective in addressing regional ozone problems, VOC controls are most effective locally and are most advantageous to urban nonattainment areas. See id. Because OTAG concluded that NO, reductions provide the key to addressing regional ozone problems, EPA’s SIP call addresses regional ozone nonattainment through NO, emis- sions “budgets” established by the agency for each covered state. The budgets represent the amount of allowable NO, emissions remaining after a covered state prohibits the NO, amount contributing significantly to downwind nonat- tainment. See Final Rule, 63 Fed. Reg. 57,356, at 57,368. While EPA calculated the budgets using highly cost-effective emission controls, the agency allows the states to choose the control measures necessary to bring their emissions within the budget requirements. See id. at 57,377; id. at 57,400. Under EPA’s budget plan, a state “may choose from a broader menu of cost-effective, reasonable alternatives” including alterna- tives that “may even be more advantageous in light of local concerns.” /d. at 57,369-370. In fact, EPA has stated that the states have “full discretion in selecting the controls, so that [the states] may choose any set of controls that would assure achievement of the budget.” /d. at 57,378. In addition, each state has the option of adopting an interstate trading program that allows it to purchase NO, “allowances” from sources that have elected to over-control. /d. at 57,430. The SIP call also gives the states the option in some circumstances to use “banked” allowances (i.e. allowances from prior years) to comply with emissions limits. See id. > As noted above, we will not address the 8-hour portion of the SIP call. 39a Petitioners assert that EPA’s NO, budget program imper- missibly intrudes on the statutory right of the states to fashion their SIP submissions in the first instance. In support of this position, the petitioners primarily rely on our decision in Virginia v. EPA, 108 F.3d 1397 (D.C. Cir.), modified on other grounds, 116 F.3d 499 (D.C. Cir. 1997), where we held that EPA may not use a section 110(k)(5) SIP call to order states to adopt a particular approach to achieving the SIP require- ments listed in section 110. Under the rule at issue in Virginia, EPA required states to adopt California’s vehicle emission program and in effect set the numerical emissions limitations and mandated the means for the states to achieve the necessary emissions reductions. That case involved an EPA rule that required several states to reduce ozone precursors by a particular program and only allowed states to implement a more stringent program as an alternative or substitute. We held that EPA’s approach exceeded its authority under section 110 because each state retains the authority to determine in the first instance the necessary and appropriate control measures needed to satisfy section 110’s standards. See id. at 1407-09 (citing Train v. NRDC, 421 U.S. 60, 78-79 (1975)). Our holding in Virginia was mandated by the Supreme Court’s decision in Train v. NRDC, 421 U.S. 60 (1975). Train involved a challenge to Georgia’s procedures for revis- ing source-specific emission limits adopted in a SIP. See id. at 68-71. The Train Court held that states have the authority under the CAA to initially propose specific emission limitations. See id. at 79. The Court defined “emission limitations” as “regulations of the composition of substances emitted into the ambient air from such sources as power plants, service stations, and the like. They are the specific rules to which operators of pollution sources are subject, and which if enforced should result in ambient air which meets the national standards.” Jd. at 78 (emphasis added). The Court further held that EPA has only “a secondary role in the 40a process of determining and enforcing the specific, source-by- source emission limitations.” /d. at 79 (emphasis added). The Train decision and subsequent precedent make clear that section 110 left to the states “the power to [initially] deter- mine which sources would be burdened by regulation and to what extent.” Union Elec. Co. v. EPA, 427 U.S. 246, 269 (1976) (emphasis added); cf. Virginia, 108 F.3d at 1399, 1401, 1408 (involving a source-specific program); Riverside Cement Co. v. Thomas, 843 F.2d 1246, 1247-48 (9th Cir. 1988) (citing Train and noting EPA’s secondary role in enforcing source-by-source emissions limitations). As we elaborated in Virginia, “the Supreme Court decided . . . that [section 110] did not confer upon EPA the authority to con- dition approval of [a state’s] implementation plan . . . on the state’s adoption of a specific control measure.” Virginia, 108 F.3d at 1408. For the reasons set forth below, we conclude that the NO, budgets do not fall within the realm of imper- missible SIP call regulation as defined in Virginia and Train. Given the Train and Virginia precedent, the validity of the NO, budget program underlying the SIP call depends in part on whether the program in effect constitutes an EPA-imposed control measure or emission limitation triggering the Train- Virginia federalism bar: in other words, on whether the program constitutes an impermissible source-specific means rather than a permissible end goal. However, the program’s validity also depends on whether EPA’s budgets allow the covered states real choice with regard to the control measure options available to them to meet the budget requirements. Section 110(a)(2)(D) requires SIPs to contain adequate provisions prohibiting emissions from “any source or other type of emissions activity within the State” that “contribute significantly” to NAAQS nonattainment in another state. Here, EPA mandates that 22 states and the District of Columbia implement section 110(a)(2)(D) using its NO, bud- get system. In essence, the NO, budget in question is an EPA 4la mandate prohibiting NO, emissions in the 23 jurisdictions from exceeding a tonnage specific to that jurisdiction. See 63 Fed. Reg. 57,356 at 57,491-493 (1998). Of concern to petitioners, the budget rule prohibits states from seeking compliance, in whole or part, by controlling VOC emissions even though VOCs as well as NO, emissions contribute to ozone problems. See, e.g., id. at 57,359; see also 40 CER. § 52.31(b)(7) (1998) (defining ozone precursors). Yet, the budget plan’s defining aspects do not necessarily Cause the program to conflict with the limiting principles contained in Train and Virginia. Analyzing the budget rule together with the relevant precedent, we hold that based on section 110’s silence, EPA reasonably interpreted section 110 as providing it with the authority to determine a state’s NO, significant contribution level and agree with EPA that the NO, budget plan does no more than project whether states have reduced emissions sufficiently to mitigate interstate transport. See 63 Fed. Reg. at 57,368. Under section 110, EPA must “approve a [SIP] submittal as a whole if it meets all of the applicable requirements of [the Act].” 42 U.S.C. § 7410(k)(3). While the states have considerable latitude in fashioning SIPs, the CAA “nonethe- less subject[s] the States to strict minimum compliance re- quirements” and gives EPA the authority to determine a State’s compliance with the requirements. Union Elec. C 0., 427 U.S. at 256-57 (referring to the requirements contained in the statute). Given EPA’s authority to ensure that submitted SIPs adequately prohibit significantly contributing emissions, EPA permissibly relied on its general rulemaking authority to prospectively inform the states of EPA’s significance determinations. Moreover, EPA does not tell the states how to achieve SIP compliance. Rather, EPA looks to section 110(a)(2)(D) and merely provides the levels to be achieved by state-determined compliance mechanisms. Specifically, EPA set NO, 42a reduction levels based, in part, on assumptions about reductions obtainable through highly cost-effective controls. See Final Rule, 63 Fed. Reg. at 57,426. However, EPA made clear that states do not have to adopt the control scheme that EPA assumed for budget-setting purposes. See id. at 57,369- 370. States can choose from a myriad of reasonably cost- effective options to achieve the assigned reduction levels. See, e.g., id. at 57,438 (noting possibilities with regard to mobile sources); id. at 57,378 (noting possibilities with regard to stationary sources); id. at 57,416. While EPA bases the budgets here on “highly cost-effective” control measures, the states remain free to implement other “cost-effective” or “reasonably cost-effective” measures in place of the ones identified by EPA. See id. at 57,378; 63 Fed. Reg. 60,318 at 60,328 (1997) (noting that “one State may choose to primarily achieve emissions reductions from stationary sources while another State may focus on emissions reductions from the mobile source sector”). More im- portantly, EPA went so far as to give the states “full discretion in selecting . . . controls,” 63 Fed. Reg. at 57,378, thereby allowing states to attain their budgets by imposing even quite unreasonable, very cost-ineffective controls. In Virginia, we did not bar EPA from permitting more costly alternatives but rather alternatives states would consider “unreasonable or impracticable.” Here, EPA accommodates Virginia’s mandate by allowing reasonable control alternatives and allowing states to focus reduction efforts based on local needs or preferences. See 63 Fed. Reg. at 57,369; id. at 57,399-405; 62 Fed. Reg. at 60,328. Thus, real choice exists for the covered states. Regarding EPA’s decision not to rely on VOC reductions, EPA reasonably concluded that long-range ozone transport can only be addressed adequately through NO, reductions. Petitioners’ reliance and emphasis on VOC reductions in lieu of NO, reductions ignores the scientific basis for EPA’s rule. OTAG and EPA concluded that VOC controls would not 43a effectively address interstate ozone transport. Furthermore, States can cure any NO, reduction “disbenefits” with corre- sponding optional VOC controls. See 62 Fed Reg. at 60,344- 345; 63 Fed. Reg. at 57,425. Thus, the SIP call cannot be invalidated merely because EPA reasonably chose not to regulate VOCs. In sum, we conclude that EPA’s NO, budget program reasonably establishes reduction levels and leaves the control measure selection decision to the states. In addition, unlike the rule invalidated in Virginia, states implementing alterna- tive control measures will not be penalized with more strin- gent emissions targets. Since the challenged budget program does not mandate a “specific, source-by-source emission limitation[{ ],” the NO, budget plan does not run afoul of Train or Virginia. B. Regulatory Flexibility Act The Regulatory Flexibility Act (“RFA”), 5 U.S.C. §§ 601- 612, as amended in 1996 by the Small Business Regulatory Enforcement Fairness Act (“SBREFA”), Pub. L. No. 114- 121, Title I, 110 Stat. 847, 857-74, §§ 201-253 (codified at 5 U.S.C. §§ 601-612 (1994 & Supp. II 1996)), requires an agency, when proposing a rule for notice and comment, to “prepare and make available for public comment an initial regulatory flexibility analysis ... . [that] describe[s] the im- pact of the proposed rule on small entities,” 5 U.S.C. § 603(a), including small businesses, small organizations, and small governmental jurisdictions. See id. § 601(6). In ad- dition, when promulgating a final rule, an agency must “prepare a final regulatory flexibility analysis” that describes, among other things, “a summary of the significant issues raised by the public comments in response to the initial regulatory flexibility analysis, a summary of the assessment of the agency of such issues,” and “the Steps the agency has taken to minimize the significant economic impact on small entities.” Jd. § 604(a). — mx & 44a However, these analyses are not required if the agency “certifies that the rule will not, if promulgated, have a signifi- cant economic impact on a substantial number of small enti- ties.” Jd. § 605(b). In the instant case, EPA certified that the proposed and final rule will not have a significant economic impact on a substantial number of small entities and, accordingly, did not perform any regulatory flexibility analy- sis. See Final Rule, 63 Fed. Reg. at. 57,478; Proposed Rule, 62 Fed. Reg. at 60,375. RFA petitioners contend that EPA’s certification was improper and in violation of the RFA. We disagree. The court has consistently held that the RFA imposes “no obligation to conduct a small entity impact analysis of effects on entities which it does not regulate.” Motor & Equip. Mfrs. Ass'n. v. Nichols, 142 F.3d 449, 467 (D.C. Cir. 1998) (quoting United Distribution Cos. v. FERC, 88 F.3d 1105, 1170 (D.C. Cir. 1996)); see also American Trucking, 175 F.3d at 1044. Therefore, the key issue in evaluating EPA’s § 605(b) certification is whether the NO, SIP call “regulates” small entities. EPA based its certification on its view that the NO, SIP call “would not establish requirements applicable to small entities” because “it would require States to develop, adopt, and submit SIP revisions that would achieve the necessary NO, reductions and would leave to the States the task of determining how to obtain those reductions, including which entities to regulate.” Final Rule, 63 Fed. Reg. at 57,478. We agree with EPA’s statement that the SIP call does not directly regulate individual sources of emissions. The instant case is thus analogous to American Trucking, which upheld EPA’s certification under § 605(b) because the revised NAAQS at issue “regulate small entities only indirectly—that is, insofar as they affect the planning decision of the States.” American Trucking, 175 F.3d at 1044. Therefore, we conclude that EPA’s certification under § 605(b) is justified. 45a IV. Remaining Claims A. Definition of “NO, Budget Unit” RFA petitioners also contend that EPA arbitrarily revised the definition of a “NO, budget unit” to bring certain small sources within the scope of the core group of emission- producing sources to which the NO, Budget Trading Rule (“model trading rule”) applies.° This contention is meritless. In the proposed rule, a “NO, budget unit” was defined as a boiler that either serves electricity generators with a Capacity greater than 25 megawatts (“MW”) or does not serve generators but has a design heat capacity of greater than 250 million Btu/hr (“mmBTu/hr”). See Supplemental Notice for the Finding of Significant Contribution and Rulemaking for Certain States in the Ozone Transport Assessment Group Region for Purposes of Reducing Regional Transport of Ozone (“Supplemental Notice of Proposed Rule”), 63 Fed. Reg. 25,902, 25,978 (1998). EPA sought comment on “the appropriateness of including [such] categories . . . , whether the size cut-offs should be higher or lower for these source categories, and the appropriateness of including other source categories in the core group.” /d. at 25,923. In the final rule, EPA discussed and revised the definition to expand the core group by including large boilers—those with design heat capacity of greater than 250 mmBtu/hr—even if they served ° To assist states in meeting their budgets and to facilitate the most cost-effective reductions, the SIP call established a model rule for interstate trading of NO, “allowances.” Each state can choose whether to adopt the model rule, which will be administered by EPA, to adopt its own trading program, or to have no trading program at all. See Final Rule, 63 Fed. Reg. at 57,456-58. The core group definition is used to set the minimum requirements that a State would have to include in its trading rule in order to participate in the EPA-managed multi-state trading program. See id. at 57,461. EPA viewed that setting such requirements was necessary for controlling the administrative costs of managing the trading program. See id. — 46a generators with a capacity less than 25 MW. See Final Rule, 63 Fed. Reg. at 57,518. EPA explained that it was making this change in order to address the concern raised in the com- ments about excluding large boilers with high levels of emis- sion just because they happen to serve small generators. See id. at 57,461. EPA’s revision is reasonable. The only argument that RFA petitioners seem to have against the change is that it contradicts EPA’s statement elsewhere that “small electrical generators less than 25 MW ... will be exempt under the final model rule.” /d. at 57,463. It is unclear why this statement renders EPA’s final action arbitrary. EPA’s defi- nition of a NO, budget unit and the reasons for its change are set forth in the preamble to the final rule, and the most that the RFA petitioners have demonstrated is that EPA made at least one statement that was, as EPA concedes in its brief, “incomplete in that it did not address the case of large boilers with small generators.” Such a minor oversight in the draft- ing of the preamble to the final rule does not render the substantive decision by EPA arbitrary. B. Council of Industrial Boiler Owners 1. Introduction In the rulemaking, EPA distinguished between electricity generating units (“EGUs”) and non-electricity generating units (“non-EGUs”). Council of Industrial Boiler Owners (“CIBO”), a trade association whose membership consists of companies and universities operating industrial boilers and turbines (“industrial boilers”), which constitute one category of non-EGUs, challenges the NO, SIP call for being based on the following arbitrary and capricious actions by EPA: EPA’s failure to determine whether non-EGUs are significant contributors, EPA’s flawed cost assumptions in its deter- mination of cost-effective control measures for non-EGUs, EPA’s erroneous calculation of non-EGU budgets, and EPA’s 47a arbitrary redefinition of the term “EGU.” We agree only that EPA’s redefinition of EGUs was arbitrary and capricious. 2. Significant Contribution of Industrial Boilers CIBO challenges EPA’s decision to include non-EGU boil- ers in the rule without having isolated non-EGU emissions to determine whether they “significantly contribute” to the in- terstate ozone transport problem and whether implementing highly cost-effective emissions reduction measures on indus- trial boilers would ameliorate nonattainment in downwind states. CIBO maintains that non-EGU boilers typically have Significantly shorter stacks than EGUs and that their emis- sions, as a result, fall below the “mixing layer” that promotes long-range NO, transport. Therefore, CIBO contends, indus- trial boilers as a group can have no impact on long-range ozone transport. However, this factual claim fails in view of contrary evidence in the record. OTAG’s Executive Report States as one of its major conclusions that “[bJoth elevated (from tall stacks) and low-level NO, reductions are effective.” Executive Report at 4. EPA reiterated this finding by OTAG in the NPRM, see Proposed Rule, 62 Fed. Reg. at 60,332, it relied on the finding, and it appears that members of CIBO never challenged it during the comment period. Therefore, we cannot say EPA’s inclusion of non-EGUs in the group of significantly contributing sources was arbitrary. 3. Cost-Effectiveness Calculation for Industrial Boilers’ Control Measures CIBO also challenges EPA’s conclusion that industrial boilers could achieve a 60% emissions reduction using highly cost-effective control measures, see Final Rule, 63 Fed. Reg. at 57,418, as based on flawed cost calculations. More specifi- cally, CIBO lists the following alleged problems in EPA’s cost assumptions: —EPA’s assumption of 10 years as the lifetime of all control measures for industrial boilers, except for selective 48a catalytic reduction and selective non-catalytic reduction con- trols, for which 20 years was assumed. —EPA’s use of a 10% discount rate, not 7%, in its cost- effectiveness analysis. —EPA’s failure to take into account the fact that control effectiveness can vary by as much as 10% to 20%. —EPA’s failure to take into account cost and feasibility implications of load variability and firing of multiple fuels. —EPA’s assumption of NO, emission allowance costs of $2,000 per ton, when emission allowances trade for $5,500 to $6,300 per ton. The general problem of these criticisms is that CIBO merely lists several items as problems and labels all of them “irrational” without explaining why its claims should concern the court. Given that almost all of CIBO’s challenges involve technical details on which the court generally defers to the agency’s expertise, CIBO’s failure to explain why the so- called problems it identifies amount to an arbitrary and capricious decisionmaking is fatal to its claims.’ Therefore, we reject CIBO’s claims regarding EPA’s underlying cost assumptions about industrial boilers. ’ For instance, the last item on the list, that it is arbitrary and Capricious for EPA to assume NO, emission allowance costs of $2,000 per ton when emission allowances now trade for $5,500 to $6,300 per ton, is insufficiently explained. Of course, if the firms in the market generating entitlement prices of $5,500 to $6,300 per ton were regulated at the same degree of stringency as EPA contemplates for firms expected to be burdened under the present rule, the market price would be strong evidence that compliance would cost far more than the $2,000 per ton figure that EPA has used. No one would pay $6,000 for an entitlement to emit a ton that he .vuld remove at a cost of $2,000; the price of an entitlement could not exceed the marginal removal cost. But if the prices to which CIBO points arose among firms more stringently regulated, there would be no such contradiction. CIBO has not even endeavored to show equivalent stringency. 49a 4, Determination of Non-EGU Component of State NO, Budgets CIBO contends that EPA’s calculation of the non-EGU component for the State NO, budget lacks adequate support in the record and lists the following as problems: —Non-EGU inventories had errors. ——EPA’s use of Bureau of Economic Analysis growth factor to project 2007 emission levels have “inherent error.” ——EPA employed “crude extrapolations” to identify large non-EGU boilers. —The “default boiler capacity file” is not in the record and the record does not reveal how EPA manipulated the data. —The source of Bureau of Economic Analysis growth factors is not identified in the record, and the record does not show how EPA manipulated the data. —It is unknown whether EPA credited NO, reductions from fluidized-bed combustion technology. Again, CIBO merely presents a list of problems without explaining why these alleged errors render EPA’s rulemaking arbitrary or capricious. In addition, CIBO members had repeated opportunities to provide correct information for some of these items during the rulemaking process. CIBO’s poorly articulated, blanket accusations at this late stage con- tribute little to improve the quality of agency rulemaking; therefore, we reject CIBO’s challenges regarding EPA’s cal- culation of NO, budgets for non-EGUs. 5. Definition of EGU More persuasively, CIBO contends that EPA revised the definition of “EGU” without adequate notice. Throughout the rulemaking, EPA defined an EGU as it did under the acid rain program, which excludes from the category of “utility units” those cogeneration units that sell less than one-third of 50a their potential electrical output capacity or less than 25 MW per year. See 42 U.S.C. § 765la(17)(C). However, two months after the promulgation of the rule, EPA redefined an EGU as a unit that serves a “large” generator (greater than 25 MW) that sells electricity. CIBO contends that EPA did not provide sufficient notice and opportunity to comment on this revision, especially considering that the industrial boilers have relied on the previous definition for a number of years. We agree. EPA maintains that it provided adequate notice in the May 1998 supplemental notice, stating that “deregulation of elec- tric utilities” means that “it is not clear how ownership of the electricity generating facilities will evolve.” Supplemental Notice of Proposed Rule, 63 Fed. Reg. at 25,923. Given that “there is no relevant physical or technological difference between utilities and other power generators,” EPA pro- posed, “all large electricity generating sources, regardless of ownership,” should be treated the same. /d. There are several problems with EPA’s response. First, it is undisputed that EPA was departing from the definition of EGUs as used in prior regulatory contexts, and EPA was not explicit about the departure from the prior practice until two months after the rule was promulgated. Neither the proposed rulemaking in November 1997 nor the final rule in October 1998 introduced the new definition. EPA waited until the December 1998 correction notice to announce that it will “classify as an EGU any boiler . . . that is connected to a generator greater than 25 MWe from which any electricity is sold.” Correction and Clarification to the Finding of Significant Contribution and Rulemaking for Purposes of Reducing Regional Transport of Ozone (“Correction Notice to Final Rule’), 63 Fed. Reg. 71,220, 71,223 (1998). After the December correction notice, EPA reopened the comment period for sixty days for comments on this and other issues. In EPA’s May 1999 response to the comments, EPA, for the first time, discussed why the change was necessary and offered a justification Sla largely based on recent changes in the electric power industry. See Responses to the 2007 Baseline Sub-Inventory Information and Significant Comments for the Final NO, SIP Call 10-12 (May 1999) (“Responses to Final Comments”). As to the statement in the May 1998 supplemental! notice that EPA claims constitutes notice, this statement was given in EPA’s discussion of how the core group of sources for the model trading rule should be defined, and not in the context of a discussion about the general distinction between EGUs and non-EGUs for the purposes of calculating state budgets. Cf. Small Refiner Lead Phase-Down Task Force v. EPA, 705 F.2d 506, 550 (D.C. Cir. 1983). Moreover, EPA also explicitly observed in the same May notice discussion about the model trading rule that “[mJany of the definitions . . . are the same as those used in . . . the Acid Rain Program regulations, in order to maintain consistency among programs.” Supplemental Notice of Proposed Rule, 63 Fed. Reg. at 25,923. Given the vague and conflicting signals that EPA was sending, it is an exaggeration to state that some general “theme” of the regulatory consequences of dereg- ulation of the utility industry throughout rulemaking meant that EPA’s last-minute revision of the definition of EGU should have been anticipated by industrial boilers as a “logical outgrowth” of EPA’s earlier statements. See American Water Works Ass'n. v. EPA, 40 F.3d 1266, 1274-75 (D.C. Cir. 1994), EPA contends that even assuming that CIBO did not have adequate notice and opportunity to comment on the EGU definition, the error has been cured because it reopened the comment period on this issue after its announcement of the revision, See Correction Notice to Final Rule, 63 Fed. Reg. at 71,221-23. This response is to no avail. During the new comment period, some commenters complained that there had not been sufficient notice and opportunity to comment on the EGU redefinition. See Responses to Final Comment, at 12. S2a EPA’s response to this charge primarily relied on the claim that there had been adequate notice prior to the redefinition, see id., and we have already rejected that argument. Therefore, we conclude EPA did not provide sufficient notice and opportunity to comment for its redefinition of EGUs and remand the rulemaking to EPA for further consid- eration in light of this opinion, C. INGAA Interstate Natural Gas Association of America (“INGAA”), a trade association that represents major interstate natural gas transmission companies in the United States, contends that EPA did not provide adequate notice and opportunity to comment on the control level assumed for “large” stationary internal combustion (“IC”) engines in its determination of state NO, budgets. We agree. EPA’s NPRM in November 1997 assumed a 70% control level for large IC engines, see Proposed Rule, 62 Fed. Reg. at 60,354, after considering and rejecting an 80% control level. See id. at 60,348. Then, in the supplemental notice in May 1998, EPA continued to assume the 70% control level. See Supplemental Notice of Proposed Rule, 63 Fed. Reg. at 25,908. EPA stated in the same notice that it “intends to further analyze” control approaches for IC engines and said that “[a]s the above analyses are completed, EPA intends to place them in the docket.” /d. at 25,909. EPA did not present a new analysis until September 4, 1998, when it concluded that a 90% control level was more appropriate for large IC engines. See Technical Support Document for Stationary International Combustion Engines 2 (September 4, 1998). When the rule was finally promulgated in October 1998, EPA stated that it was assuming a 90% control level. See Final Rule, 63 Fed. Reg. at 57,418. INGAA contends that EPA’s switch from 70% to 90% for large IC engines was unanticipated and that EPA should have in S3a allowed comments on the issue. Considering EPA’s repeated affirmation of the 70% assumption throughout rulemaking and rejection of a higher, 80% assumption earlier, a revision in its assumption less than one month before the final rule was promulgated hardly provided adequate notice, especially given the magnitude of the consequences of the proposed change on the regulated bodies. Therefore, we remand for further consideration on this issue.* In addition, INGAA challenges EPA’s definition of large IC engines. EPA, in the final rule, distinguished between large and small sources by defining a “cutoff level.” 63 Fed. Reg. at 57,414. EPA assumed no control for sources below the cutoff level and defined small sources as units with a capacity less than or equal to 250 mmBtu/hr and with emissions less than or equal to one ton per day. See id. at 57,415. EPA added that “EPA is relying on a capacity approach first and a tons per day approach second (where a capacity data is not available or appropriate)” to define small sources, /d. at 57,416. Then, in the December correction notice, EPA largely repeated the same methodology for determining the cutoff level, but added that “[a] stationary internal combustion engine and a cement plant were deter- mined to be ‘large’ if its 1995 average daily ozone season emissions were greater than one ton.” Correction Notice to Final Rule, 63 Fed. Reg. at 71,224. INGAA contends_that EPA did not follow its own standard in the correction notice and singled out IC engines and cement plants without explanation. Although EPA’s various statements on this issue throughout rulemaking have not always been very clear or entirely consistent, EPA went “INGAA further contends that, even putting aside the notice issue, the documents that EPA relies on do not support EPA’s assumption of 90% control level. Because we are remanding on the basis of the conclusion that there was inadequate notice, we do not reach the merits of the issue. S4a through au extensive comment period on this issue, see Final Rule, 63 Fed. Reg. at 57,415-17, and we agree with EPA that the change that INGAA criticizes for being arbitrary is merely a minor clarification that satisfies the reasonableness standard. D. PP&L 1. EPA’s Restrictions on Early Reduction Credits PP&L, an electric utility that owns several generating stations in Pennsylvania, contends that EPA arbitrarily limit- ed the number of “early reduction credits” (“ERCs”). We disagree. Under the SIP call, a source can generate ERCs if it reduces its NO, emissions before May 2003 to a level below that is required by any regulatory scheme. ERCs can then be used to compensate for emitting emissions above required levels in a later time period. See Final Rule, 63 Fed. Reg. at 57,430. EPA limited the amount of available ERCs for each State to the size of each state’s compliance supplement pool (“CSP”). See id. at 57,474. The CSP is an additional allow- ance of emissions that allows states to emit 200,000 tons of NO, in the 2003-2004 ozone seasons over the state emissions budgets. /d. at 57,428. EPA created the CSP in response to the comments that if all utilities had to install pollution control equipment by May 1, 2003, there might be disruptions in electricity supply. See id. If a state chooses to use the CSP, it can either provide ERCs or distribute the allowances to sources that demonstrate a need for the compliance supple- ment. See id. at 57,429-30. PP&L contends that imposing this limit on the number of ERCs is arbitrary and capricious because placing any limit on ERCs is environmentally counterproductive. We do not find this contention persuasive. EPA noted during the comment period that ERCs, although generally beneficial, can be costly in that they allow states to-exceed their budgets. See Re- sponses to Significant Comments on the Proposed Finding of SSa Significant Contribution and Rulemaking for Certain States in the Ozone Transport Assessment Group (OTAG) Region for Purposes of Reducing Regional Transport of Ozone 346 (September 1998) (“Responses to Comments”). EPA noted further that the CSP, by establishing a cap on the number of allowances to be distributed, limited such potential costs. /d. EPA’s decision is thus reasonable. PP&L also contends that EPA has not demonstrated why the “flow control mechanism” is not sufficient to address its concern. Under the flow control mechanism, the use of banked allowances exceeding 10% of the emissions budget for sources in the trading program is either flatly prohibited or discouraged by discounting the value of ERCs used as such, and states can choose between either method. See Final Rule. 63 Fed. Reg. at 57,431-32. This complaint by PP&L overlooks the fact that EPA included the flow control mecha- nism in the regulatory scheme “[a]s a final safeguard limiting the impact of additional allowances eligible for banking in the system.” Responses to Comments, at 346. Therefore, it was a safeguard created in addition to the CSP limitation. It was within EPA’s discretion to devise multiple limitations to con- tain the environmental cost of ERCs. PP&L further contends that, even if it is rational for EPA to place a limit on the amount of ERCs, EPA’s choice of setting the limit at the same amount as the CSP is arbitrary and capricious. This contention fails as well. The record shows that EPA allowed ERCs merely as a mechanism for managing the CSP, not as an independent program with ‘a purpose separate from that of the CSP. See Final Rule, 63 Fed. Reg. at 57,428-33. Therefore, EPA’s decision to limit the amount of ERCs to the size of the CSP was reasonable. 2. Emissions Multiplier for Low Mass Emission Units PP&L also contends that EPA arbitrarily required “low mass emission units” (“LMEUs”) to use a 15% multiplier to calculate their emissions. We disagree. 56a EPA allows LMEUs either to use a generic default NO, or to determine a unit-specific NO, emission rate by conducting a stack test once every five years. Because EPA found that the stack test results can vary by 15% ar more depending on atmospheric conditions, EPA requires an LMEU to calculate its emissions rate by adding 15% to the stack test result. See Final Rule, 63 Fed. Reg. at 57,490. PP&L contends that this is unreasonable because EPA has stated that the testing would likely underestimate emissions during cooler less humid conditions. See id. PP&L reasons that because the SIP call applies only during summer seasons (when ozone forms), that the stack test underestimates emis- sions during the winter cannot justify the 15% multiplier. This contention is to no avail. Because the record contains evidence that NO, rates determined by the stack test can vary widely even during the ozone season, EPA’s decision was reasonable. See Docket A-97-35, Item IV-A-1I at 43-54 (August 26, 1998). Conclusion We vacate EPA’s final rule with respect to Wisconsin, Missouri, and Georgia (see Part II.A-B). These cases are remanded for further consideration in light of this opinion. We hold that EPA failed to provide adequate notice of a change in the definition of an electric generating unit (see Part IV.B.5), and that EPA did not provide adequate notice of a change in the control level assumed for large stationary internal combustion engines (see Part IV.C). These cases are also remanded. In all other respects, the petitions for review are denied. So ordered. Se eee S7a SENTELLE, Circuit Judge, dissenting: Unlike the majority’s journey through this regulatory scheme, mine is neither lengthy nor complex, because | get off at the first stop. In promulgating the regulations at issue, EPA purported to exercise the authority Congress conferred upon it to enforce the requirements of 42 U.S.C. § 7410(a)(2)(D)(i)(D) which empowers the Administrator to police the contents of State Implementation Plans (“SIPs”), specifically to ensure that such plans contain adequate provisions . . . prohibiting . . . any source or other type of emissions activity within the State from emitting any air pollutant in amounts which will . . . contribute significantly to nonattainment in, or interfere with maintenance by, any other State with respect to any such national primary or secondary ambient air quality standard .... 42 U.S.C. § 7410(a)(2)(D)(i)(1) (1994) (emphasis added), EPA is a federal agency—a creature of statute. It has no constitutional or common law existence or authority, but only those authorities conferred upon it by Congress. If there is no statute conferring authority, a federal agency has none. The only statute upon which EPA purports to rely in the current controversy is § 7410(a)(2)(D)(i)\(1). That section provides authority for EPA to require States to act in a certain fashion based upon the presence of sources or activities which emit “pollutants in amounts which will . . . contribute significantly to nonattainment.” It would appear to me that Congress clearly empowered EPA to base its actions on amounts of pollutants, those amounts to be measured in terms of signifi- cance of contribution to downwind nonattainment. Instead, EPA has chosen, doubtless in the pursuit of beneficent ends, to assert authority to require the SIPs to contain provisions based not on the amounts of pollutants, nor even on the relative significance of the contributions of such pollutants to downwind nonattainment, but on the relative cost effective- 58a ness of alleviation. I agree with the State petitioners that it is undeniable that EPA has exceeded its statutory authority. We have before had occasion to remind EPA that its Mission is not a roving Commission to achieve pure air or any other laudable goal. In American Petroleum Institute v. United States EPA, 52 F.3d 1113 (D.C. Cir. 1995), we re- viewed an EPA rule requiring that thirty percent of the oxygen in reformulated gasoline be derived from renewable sources, such as ethanol. The statutory authority under which EPA operated, 42 U.S.C. § 7545(k)(1) empowered EPA to promulgate regulations achieving “the greatest reduction in emissions of ozone forming volatile organic compounds .. 42 U.S.C. § 7545(k)(1). Although EPA advanced commendable goals of economic benefit for its inclusion of the additional goal of ethanol market protection, we struck down the overreaching and reminded EPA that “it is axiomatic that an administrative agency’s power to promul- gate legislative regulations is limited to the authority delegat- ed by Congress.” API, 52 F.3d at 1119 (quoting Bowen v. Georgetown Univ. Hosp., 488 U.S. 204, 208 (1988)). Similarly, in Ethyl Corp. v. EPA, 51 F.3d 1053 (D.C. Cir. 1995), we considered EPA’s denial of a Clean Air Act waiver application based on health considerations. We did not sug- gest that EPA acted in bad faith or that health considerations were not important, but we repaired to the statutory grant of authority in 42 U.S.C. § 7545(f)(4), which based the Administrator’s authority to deny waiver solely on the property of an additive to “cause or contribute to a failure of any emission control device or system... .” 42 U.S.C. § 7545(f)(4). We again granted the petition for review of the Administration’s action, reminding EPA that where “the plain language of a provision makes it clear that . . . decisions are to be based on one criterion, the EPA cannot base its decision on other criteria,” even on a criterion as laudable as the health of the public. Ethyl Corp., 51 F.3d at 1058. 59a For all the majority’s discussion of inconsistent arguments by States and the possibility of taking costs into account elsewhere raised by the Administration and adopted by the majority, I do not see why the present controversy does not fall squarely within the four corners of AP/ and Ethyl Corp. Congress set forth one criterion: the emission of an amount of pollutant sufficient to contribute significantly to downwind nonattainment. EPA adopted a different criterion: the cost effectiveness of alleviation. I would remind the agency once more of the lessons of API and Ethyl Corp., allow the petitions for review, and end the case. The majority makes a fundamental mistake by divorcing the adverb “significantly” from the verb it modifies, “contrib- ute."” The majority compounds its error by divorcing signifi- cantly from the rest of the statutory provision in issue. Maj. Op. at 19-23. By focusing on “significance” or what it means to be “significant,” the majority ignores the fact that the Statute permits EPA to address that which is “contribut[{ed] significantly.” 42 U.S.C. § 7410(a)(2)(D)(i\(1) (emphasis added). And what should EPA look for as being contributed significantly? Congress clearly answered that question for the agency as being an “amount” of an “air pollutant.” /d. Considering that Congress expressly gave EPA authority with regard to “any air pollutant in amounts which will . . . contribute significantly to nonattainment . . . .” id. (emphasis added), I marvel at an interpretation that permits cost effec- tiveness to find a place in a statutory provision addressing amounts of air pollutant contribution. While the contribution must affect nonattainment significantly, no reasonable read- ing of the statutory provision in its entirety allows the term significantly to springboard costs of alleviation into EPA’s statutorily-defined authority. Given § 7410(a)(2)(D)(i)(I)’s mandate as a whole, it becomes clear that EPA and the majority have to contort the statute’s language by isolating the term significantly and ignoring the terms air pollutant, amounts, and contribute in order to work cost considerations 60a into the statute. I just cannot agree with such an unusual exercise in Statutory construction. I see nothing in Chevron U.S.A. Inc. v. NRDC, Inc., 467 U.S. 837 (1984), that either compels or counsels the majority’s result. EPA argues that Congress did not define significant contribution. True, it did not. Neither did it define amount. But neither EPA nor the majority have offered any reasonable interpretation of those words which makes them depend upon or even relate to the cost effectiveness of alleviation.' EPA comes close to arguing: Congress has not expressly forbidden us to use this criterion, therefore we may use it. As we said in Ethyl Corp.: To suggest, as the [EPA] effectively does, that Chevron step two is implicated any time a statute does not expressly negate the existence of a claimed administra- tive power... , is both flatly unfaithful to the principles of administrative law . . . and refuted by precedent. ' Contrary to the suggestion of the majority, neither of the cases cited by the majority bear any implication that the cost of alleviating or otherwise dealing with risk expressed as a noun or a verb has any effect upon the definition of “significant” or “significantly” used as an adjective or adverb modifying that noun or verb. The portion of /ndustrial Union Department v. American Petroleum Institute, 448 U.S. 607, 655 (1980) (plurality opinion) quoted by the majority to the effect “that a ‘significant’ risk . . . is not a mathematical straitjacket,” (Maj. Op. at 20) does not deal in any fashion with the cost of alleviation. Rather, Justice Stevens in that opinion was contrasting the significance of a one-in-a-billion chance of cancer from drinking chlorinated water against the one-in-a-thousand risk that regular inhalation of certain benzene-containing vapors would be fatal. Obviously, the “significance” of the risk deals with its importance, not the cost of its alleviation. Equally off point is /nternational Union, United Auto Workers v. OSHA, 37 F.3d 665, 668-69 (D.C. Cir. 1994), which concerned the cost-effectiveness of alleviating measures directed at risk theretofore determined to have been significant, not with the use of cost-effectiveness in determining the significance of the risk vel non. 61a 51 F.3d at 1060. Because the majority’s deference to EPA’s unreasonable statutory interpretation as couched in the agen- cy’s scurrilous “second-step” cost effectiveness analysis ven- tures off track, as I said, | am getting off at the first stop. Because | would invalidate the regulatory scheme before us at its inception, I will not address the subsidiary issues pursued by my colleagues. 62a {Filed Jun 22, 2000] UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT September Term, 1999 No. 98-1497 STATE OF MICHIGAN, MICHIGAN DEPARTMENT OF ENVIRON- MENTAL QUALITY AND STATE OF WEST VIRGINIA, DIVISION OF ENVIRONMENTAL PROTECTION, Petitioners Vv; ENVIRONMENTAL PROTECTION AGENCY, Respondent NEW ENGLAND COUNCIL, INC.. ef al... Intervenors Consolidated with 98-1499, 98-1500, 98-1501, 98-1502, 98-1504, 98-1518, 98-1556, 98-1567, 98-1573, 98-1585, 98-1588, 98-1590, 98-1596, 98-1598, 98-1601, 98-1602, 98-1608, 98-1609, 98-1611, 98-1615, 98-1616, 98-1617, 98-1618, 98-1619, 98-1621, 99-1070, 99-1093 BEFORE: WILLIAMS, SENTELLE AND ROGERS, Circuit Judges. ORDER - Upon consideration of the petitions for rehearing of the Industry/Labor petitioners and of the petitioning States, filed April 20, 2000, and of the response thereto, it is 63a ORDERED that the petitions be denied. Per Curiam FOR THE COURT: Mark J. Langer, Clerk BY: /s/ Robert A. Bonner ROBERT A. BONNER Deputy Clerk Circuit Judge Sentelle would grant the petition of the Industry/Labor parties and Part I of. the petition of the petitioning States. 64a [Filed Jun 22, 2000] UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT September Term, 1999 No. 98-1497 STATE OF MICHIGAN, MICHIGAN DEPARTMENT OF ENVIRON- MENTAL QUALITY AND STATE OF WEST V...GINIA, DIVISION OF ENVIRONMENTAL PROTECTION, Petitioners ¥. ENVIRONMENTAL PROTECTION AGENCY, Respondent NEW ENGLAND COUNCIL, INC., et al.., Intervenors Consolidated with 98-1499, 98-1500, 98-1501, 98-1502, 98-1504, 98-1518, 98-1556, 98-1567, 98-1573, 98-1585, 98-1588, 98-1590, 98-1596, 98-1598, 98-1601, 98-1602, 98-1608, 98-1609, 98-1611, 98-1615, 98-1616, 98-1617, 98-1618, 98-1619, 98-1621, 99-1070, 99-1093 BEFORE: EDWARDS, Chief Judge; SILBERMAN, WILLIAMS, GINSBURG, SENTELLE, HENDERSON, RANDOLPH, ROGERS, TATEL and GARLAND, Circuit Judges ORDER The petitions for rehearing en banc of the Industry/Labor petitioners, the petitioning States, and the response thereto have been circulated to the full court. The taking of a vote 65a was requested. Thereafter, a majority of the judges of the court in regular active service did not vote in favor of the petition. Upon consideration of the foregoing, it is ORDERED that the petition be denied. Per Curiam FOR THE COURT: Mark J. Langer, Clerk BY: /s/ Robert A. Bonner ROBERT A. BONNER Deputy Clerk Circuit Judge Sentelle would grant the petition of the Industry/Labor petitioners and Part I of the petition of the petitioning States. Circuit Judges Tatel and Garland did not participate in this matter. 66a | Mandate Issued: 9/13/00] /s/ E Brown Deputy Clerk [Filed Mar. 3, 2000] UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT No. 98-1497 STATE OF MICHIGAN, MICHIGAN DEPARTMENT OF ENVIRONMENTAL QUALITY AND STATE OF WEST VIRGINIA, DIVISION OF ENVIRONMENTAL PROTECTION, Petitioners V. U.S. ENVIRONMENTAL PROTECTION AGENCY, Respondent NEW ENGLAND COUNCIL, INC., ef al... Intervenors Consolidated with 98-1499, 98-1500, 98-1501, 98-1502, 98-1504, 98-1518, 98-1556, 98-1567, 98-1573, 98-1585, 98-1588, 98-1590, 98-1596, 98-1598, 98-1601, 98-1602, 98-1608, 98-1609, 98-1611, 98-1615, 98-1616, 98-1617, 98-1618, 98-1619, 98-1621, 99-1070, 99-1093 On Petitions for Review of an Order of the Environmental Protection Agency Before: WILLIAMS, SENTELLE and ROGERS, Circuit Judges. nk re ee EE eT Er CS LL — 67:8 JUDGMENT These causes came on to be heard on the petitions for review of an order of the Environmental Protection Agency and were argued by counsel. On consideration thereof, it is ORDERED and ADJUDGED, by the Court, that the petitions for review in Nos. 98-1567 and 99-1093 are granted, the petitions in Nos. 98-1609 and 98 1618 are granted in part and denied in part, and the remaining petitions are denied, all in accordance with the opinion for the Court filed herein this date. FOR THE COURT: MARK J. LANGER, Clerk By: /s/ Robert A. Bonner ROBERT A. BONNER Deputy/Clerk Date: March 3, 2000 Opinion Per Curiam Dissenting opinion filed by Circuit Judge Sentelle. --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386019_1603%3A1. Public record. Not legal advice.