F OR P UBLICATION



### UNIT E D ST AT E S CO URT O F APPE AL S FO R T H E NINT H CIRCUIT

N A T I O N A L P A R K S C O N S E R

V A T I O N A S S O C I A T I O N ; M O N T A N A E N V I R O N M E N T A L I N F O R M A T I O N C E N T E R ; S I E R

R A C L U B , Petitioners
,

v

.

U.S. E N V I R O N M E N T A L P R

O T E C T I O N A G E N C Y and L I S A P. J A C K S O N , Administrator, United States Environmental Protection Ag ency ,

Respondents

,

PPL M O N T A

N A , L L C, Respondent-Intervenor

. N o. 12-73710N A T ’ L P A R K S C O N S E R

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PPL M O N T A

N A L L C, P etitioner
,

N A T I O N A L P A R K S C O N S E R

V A T I O N A S S O C I A T I O N , M O N T A N A E N V I R O N M E N T A L I N F O R M A T I O N C E N T E R , A N D S I E R R A C L U B , Intervenors
,

v

.

U.S. E N V I R O N M E N T A L P R

O T E C T I O N A G E N C Y and L I S A P. J A C K S O N ,

Respondents

. N o. 12-73757

EPA No.EPA-R08-OAR2011-0851

OPI NI ON

O n Petition for Review of an Order of the Environmental Protection Ag ency

Arg ued and Submitted May 16, 2014—Seattle, W ashing ton

F iled J une 9, 2015

B efore: Diarmuid F . O’Scannlain, Marsha S. B e rz o n,

a nd Richard C. Tallman, Circuit J udg es.

O pinion by

J udg e O’Scannlain; Concurrence by

J udg e B erz onN A T ’ L P A R K S C O N S E R

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SUMMARY *

Environm ental Law

The panel g ranted in part and denied in part petitions for review b roug ht by e nvironmental org a niz ations and PPL Montana, L L C, the operator a nd partial o wner o f hy droelectric power plants in Montana, challeng ing the Environmental Pro t e c t i o n A g ency ’s reg ional haz e reg ulations for the State o f Montana, which prescribe emission limits at certain power plants.

The Clean Air Act r equires that all implementation plans require installation of the “best available retrofit technolog y ” (B ART) to r educe e missions from c ertain emission sources that w ere operational between 1962 and 1977. PPL Montana operates and partially owns coal-fired and h y d r oelectric
power pl a n t s in Montana, including the Colstrip Steam Electri c G enerating Station and the J .E. Corette Steam Electric Station.

Concerning the Colstrip station, the panel held that E PA’s B ART d etermination for Nitrog en Ox ide emissions at Colstrip Units 1 and 2 was arbitrary and capricious. The panel also held that EPA ’ s d e t e r mination of B ART to control sulphur diox ide emissions at Colst r i p U nits 1 and 2 was

a r b itrary and capricious. The panel held that the seem i n g inconsistency in EPA’s B ART determinations at Colstrip Units 1 and 2 and Corette, absent ex planation, was arbitrary

a n d c a pricious. The panel further held that EPA did no t

* T h is su m m ary co n stitu

tes n o part o f th e o p in io n o f th e co u rt. It h as b een p rep ared b y

co u rt staf

f f o r th e co n v en i en ce o f

th e read er.N A T ’ L P A R K S C O N S E R

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meaning fully address PPL Montana’s comment concerning the EPA’s u se of the CAL PUF F visibil ity model in determining B ART at Colstrip Units 1 and 2.

Concerning the Corette station, the panel held that E PA’s determination – that in s t allation o f a dditional technolog y to control emissions from the Corette st ation was not cost effective – suff

e red the same f

ailure o f ex planation as its B ART determinations at Colstrip. The panel noted t hat the F inal Rule t i gh t ened the emissions limits identified for Corette in the Proposed Rule. The panel held that after EPA found Corette already had B A RT technolog y in place, it was authoriz ed b y the Reg ional Haz e Rule to skip the remaining analy ses in the section. T h e pan e l further held that PPL Montana’s contention that E PA w as nevertheless required to proceed with the remaining B ART analy sis was a challeng e to the provision of the Reg ional H az e Rule itself, and was not properly asserted in the challeng e to t he Montana F inal I mplementation Plan. T h e panel also held that EPA properly
set emissions limits for Corette on a 30-day ro l l i ng averag e

. The panel rejected the environmental g roups’ contention that E P A ’ s d e c i s i o n n o t t o r e q u i r e a n y a d d i t i o n a l emission-reducing technolog y at Col s t r ip Units 3 and 4 was arbitrary and capricious because it failed to satisfy the Clean Air Act’s reasonable prog r e ss requirements.

The pan e l v a c a ted the portions of the F inal Rule setting emissions limit s at Colstrip Units 1 and 2 and Corette, a nd remanded to EPA for further proceeding s.

Concurring

, J udg e B erz o n wrote separately to emphasiz e her understanding that the lead opinion is not impug ning the E PA’s use of the CAL PUF F model g enerally

, but o n l y requiring a sufficiently r easoned response to a particularN A T ’ L P A R K S C O N S E R

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comment reg arding CAL PUF F ’s usefulness in these specific circumstances.

COUNSEL

L isa S. B latt, Arnold & Porter L L P, W ashing ton, DC, a rg u ed
t h e c a use and filed the b riefs for petitioner PPL Montana

. W ith her on the b riefs were J onathan S. Mart e l a n d Chri s t o p her A. J aros, Arnold & Porter, L L P, Washing ton, DC.

J enny K. H arbine, EARTHJ USTI CE, B oz eman, MT, a rg u ed the c au s e a n d filed the briefs for NPCA. W ither her on the briefs was J anette K

. B ri m m e r , EARTHJ USTI CE, Seattle, W A

.

D a n i e l P i n k s t o n , E n v i r o n m e n t a l D e f e n s e S e c t i o n , Environment and Natural Resources Division, United States D e p a rtment of J ustice, Denver, CO, arg ued the cause a n d filed the brief for respondents. W ith h im o n t h e b r i ef were I g nacia S. Moreno, A ssistant Attorney General, Environment and Natural Resources D ivision, United States Department o f J u s t i c e , D e n v e r , C O
, a n d E l i z a b e t h B. Da w s o n , Environmental Defense Section, Environment and Natural Resources D i v i s ion, United States Department of J ustice, Denver, CO.

Michael G. J enkins, A ssistant General Counsel, PacifiCo r p Energ y , Salt L ake City

, UT and E. Blaine Rawson, Ray Quinney & Nebeker, P.C., Salt L ake City

, UT, filed the brief for Amicus Curiae PacifiCorp.N A T ’ L P A R K S C O N S E R

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OP INION

O’SCANNL AI

N, Circuit J udg e:

W e must decide whether the Environmental Prot ec t ion Ag ency ’s reg ional haz e r eg ulations f or the State of Montana lawfully prescribe emission limits at certain power plants.

I

Petitioner PPL Montana operates a nd partially owns coalfired and hy droelectric power plants in Montan a , i ncluding the Colstrip Steam Electric G enerating Station (“Colstrip”) and the J .E. Corette Ste am Electric Station (“Corette”). Petitioners N ational Parks Conservation Association, Montana E nvironmental I nformation Center, and Sierra Club ( c o l l e c t i v e l y , “N P C A ” ) a r e n o n p r o f i t c o n s e r v a t i o n org aniz ations whose me mbers enjoy wilderness areas impacted by EPA’s reg ional haz e r eg ulations for the State o f Montana. Bo th petitioners are dissatisfied with such
reg ulations. PPL Montana a rg u e s, in e s s ence, that they a re too string ent; NPCA arg u es, to the contrary , that they do not do enoug h to remedy visibility impairment caused by reg ional haz e in various relevant wilderness areas.

A

Reg ional h a z e is “ visibility impairment caused b y geog raphically dispersed sources e mitting fine particles a n d their p recursors into the ai r

. ” A m. Corn Growers Ass’n v

. EPA
, 291 F .3d 1, 3 ( D

. C

. C i r. 2002) (per curiam) (citing R e gional Haz e Reg ulations, 64 F ed. Reg

. 35,714 (J uly 1
, 1999) (codified at 40 C.F .R. Pt. 5 1)). Cong ress enacted §§ 169A a n d 1 6 9B o f the Clean Air Act (the “CAA” o r theN A T ’ L P A R K S C O N S E R

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“Act”) to a ddress t h e p r o blem of reg ional h a z e. Id. at 3–4;

see Clean A ir A ct Amendments of 1977, Pub. L

. No. 95–95, § 1 28, 91 Stat. 685, 742 (current v ersion a t 4 2 U

. S.C. § 7 491); Clean Air Act A mendments, Pub L

. No. 101– 5 4 9
, § 816, 1 04 Stat. 2695 (1990) (current version at 4 2 U

. S

. C

. § 7492). These provis i o n s establish as a national g oal the “prevention of any f

uture, and the remedy

ing of any ex isting

, impairment of visibility in mandatory Class I areas which impairment results from manmade air pollution.” 1 42 U .S.C. § 7491(a)(1).

The Act imposes several requirements on Stat e s a nd on EPA relevant to this case. F irst, the Act re q uires EPA to p r o m ulg ate reg ulations to “assure

. . . reasonable prog re s s toward meeting the national g o a l” of reg ional haz e reduction. 42 U.S.C. § 7491(a)(4). Second, the Act invites each State to submit to EPA a “State I mplementation Plan” ( “SI P”) setting forth emission limits and other measures n e c e s sary to make reasonable p rog ress toward the national visibility g o al

. See 42 U.S.C. §§ 7 410(a), 7491(b)(2). I f, lik e M o ntana, a State chooses n o t to submit such a p lan, th e Ac t r equires EPA to produce a “F ederal I mplementation Plan” (“F I P”) f o r that State. See 42 U.S.C. § 7410(c)(1)(A).

The Act further provides that all i m plementation plans
must require installation of the “best availa b l e retrofit

1 Class I areas i n clu d e, in ter a l ia
, n atio n al w ild ern ess area s e x c e e d i ng 5 ,0 0 0 acres in size an d n a t i o n a l p ark s i n ex i sten ce o n A u g u st 7
, 1 9 7 7

ex ceed in g 6 ,0 00 acres in size. S ee 42 U .S.C. § 7 47 2 ( a )

. T h e term

“ m an d ato ry clas s I f

ed eral areas” d escrib es t h o se th at “ m ay n o t b e d esig n ated as o th er th an class I.” I d

. § 7 4 9 1 (g )(5 ). Relev an t h ere, Yello w st o n e Natio n al P ark

, Glacier Natio n al Park

, U L B en d Natio n al W ild life Ref

u g e, an d Med icin e L ak e W ild ern ess A rea h av e b een d esig n ated

m an dato ry

Class I areas. S

ee 4 0 C.F.R. § § 8 1 .4 0 0 , 8 1 .4 1 7

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t e c hnolog y ” (“B ART”) to reduce emissions from certa i n emission sou r c e s that were operational between 1 962 a nd 1977 (“B ART-elig ible s o u r ce s ” )

. S e e 42 U .S.C. § 7491(b)(2), (g ). F ive statutory factors determine wh i ch ty pe of emissions-reducing technolog y constitutes B A RT for such sources:

(a) the costs of compliance;

(b) the e nerg y a

nd non-air quality environmental impacts of compliance;

(c) any ex isting p ollution control technolog y at a source;

(d) the remaining useful life of the emission source; and

(e) the deg ree of visibility improvement anticipated[ .]

42 U.S.C. § 7491(g )(2).

Pursuant to the Act, E PA promulg a ted its Reg ional Haz e Reg ulations (the “Reg ulations”), which asked certain States, including Montana, to analy z e sources of e m i s s i ons within the State and to develop a p lan to eliminat e all man-made

v isibility impacts by 2064. S ee 6 4 F ed. Reg

. at 35,714; 40 C.F .R. § 5 1

. 3 0 8

. The Reg ulations require any implementation plan to incl u d e (1) “reasonable prog ress g o a l s ” ; (2) a calculation o f baseline and natural visibility conditions; (3) a long

- term strateg y for achieving “reasonable
prog r ess g o a ls”; and ( 4) a dditional monitoring of emission

sources in C l ass I federal areas. See 40 C.F .R. § 51.308(d)(1)–(4). After the D.C. Circuit v acated t h e p r o v i s i o n s o f t h e R e g u l a t i o n s r el a t i n g t o BA R T determinations, see Am. Corn G r o w ers , 291 F .3d at 6, EPAN A T ’ L P A R K S C O N S E R

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p romulg a ted n ew B ART reg ulations in its Reg ional Ha z e Reg ulations and Guidelines for B est Available Retrofit T e c h n o l o g y ( B A R T ) D e t e r m i n a t i o n s ( t h e “ 2 0 0 5 Re gu l ations”), which revised the tex t of the earlier Reg ulations. See 70 F ed. Reg . 39,104 (J uly 6, 2005).

EPA also publishe d its Guidelines f or B ART Determinations Under the Reg ional Haz e Rule (the “Guidelin es ” )

, 40 C.F .R. Pt. 51, App. Y (Sept. 6, 2005), prescribing f

ive steps for appli c ation of the five statutory B ART factors:

(Step 1) I d e n t i f

y a l l a v a i l a b l e r e t r o f i t c o n t r o l technolog ies;

(Step 2) Eliminate technically infeasible options;

(Step 3) E v a l u a t e t h e c o n t r o l e f f e c t i v e n e s s o f remaining control technolog ies;

(Step 4) Evaluat e impacts (identified in § 7491(g )(2),

see 40 C.F .R. Pt. 51
, A p p

. Y, § I V.D.4, 70 F ed. Reg

. at 39,166) and document the results;

(Step 5) E v a l u a t e v i s i b i l i t y i m p a c t s ( m e a s u r e d i n

“deciviews,” see 40 C.F .R. § 51.301). 2

Id. App. Y § I V.D.

2 “ Deciv iew m ean s a m easu rem en t o f v isib ility im p airm en t.” 4 0 C .F.R. § 5 1 .3 0 1

. “ Each d eciv iew ch an g e is an eq u al in crem en tal ch an g e in

v isib ility p erceiv ed b y t

h e h u m an ey e. Mo st p eo p le can d etect a ch an g e in v isib ility at o n e d eciv iew .” P ro p o sed Ru le, 7 7 Fed . Reg . at 2 3 ,9 9 2

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B

I n 2006
, the Montana Department of Environmental Qu a l i t y n otified EPA that it did not intend to produce a SI P trig g ering EPA’s oblig ation to produce a F I P for the State o f Montana. See 42 U.S.C. § 7410(c)(1)(A). EPA published a proposed F I P for Montana on April 20, 2 012 (the “Proposed Rule”)

. See Approval and Promulg ation of I mplementation Plans; State of Montana, 77 F ed. Reg

. 23,988 (Apr. 20, 2012).

The Proposed Rule required p e t i tioner PPL Montana to take v arious actions to reduce e missions of two compounds—nitrog en ox ide (“NO X ”) and sulfur diox ide (“SO 2 ”)—at two power plants it p artially owns and operates, Colstrip and Corette. F irst, PPL Montana was r equired to implement several new technolog ies at Unit s 1 and 2 o f the four-unit Colstrip station. T o reduce NO X emissions to a 30- day rolling averag e of 0.15 lb/mmB tu, the Proposed Rule

r e q u i r e d P P L M o n t a n a t o i n s t a l l t w o n e w technolog ies—separated overfire a ir (“SOF A ”) and selective non-cataly

tic reduction (“SNCR”) at Colstrip Units 1 and 2. Id. at 24,027, 24,035. To reduce S O 2 e m i ssions to a 30-day rolling averag e of 0.08 lb/mmB tu, the Proposed Rule r equired PPL Montana to implement two additional new technolog ies
at C o l s t rip Units 1 and 2—lime injection and a fourth “scrubber.” Id. at 24,028, 24,035. The Proposed Rule did not require PPL Montana to implement n ew technolog i es at Colstrip Units 3 and 4.

Second, the Proposed Rule required PPL Montana to limit NO X and SO 2 emissions at the Corette station. The Proposed Rule imposed 30-day averag e rolling emission limits of 0.40 lb / mmB tu for NO X a

nd 0 .70 lb/mmB tu for SO 2 . See id. at 24,042, 24,046. I t required P PL Montana to achieve suchN A T ’ L P A R K S C O N S E R

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emissions using current technolog y ; unlike at Colstrip Units 1 and 2, the Proposed Rule does no t r e q u ire installation o f new technolog y

at Corette. Id. at 24,043, 24,047.

Both PPL Montana and N PCA commented on t h e Proposed Rule. At the conclusion of the notice and comment period, EPA issued its fin a l F I P f or Montana on September 18, 2 012. S

ee Approval and Promulg ation of I mplementation Plans; State of Montana (the “ Fi n a l Rule” or the “Rule”), 77 F e d. Re g. 5 7
, 864 (Sept. 18, 2012) (codified at 40 C.F .R. § 52.1396). The F inal Rule implemented the Proposed Rule in almost all respects relevant to this appeal. 3

C

PPL Montana and N PCA both file d p etitions for r eview of EPA’s B ART determinations at Cols t r ip and Corette, which petitions were consolidated for p urposes of this appeal. PPL Montana contends that the e missions li m i t s set f orth in the Rule for NO X and SO 2 at Colstrip Units 1 and 2—as w ell

as the B ART determi n a tions underly ing such limits—are essentially too string ent. I t arg ues that EPA failed reasonably
to e x p l ain the Rule’s B A RT selections and that E PA’s visibility model does not reasonab l y anticipate visibility i m provement as a result o f the Rule’s requirements. PPL Montana also challenges the emissions set forth in the Rule for Corette.

3 A lth o u g h th e F in al Ru le d id n o t alter EP A ’ s B A RT determ in atio n s f or eith er Co lstrip o r Co rette, it d id lo w er th e P ro p osed Ru le’ s em issio n lim its f o r NO X a n d S O 2 at Co rette f ro m 0 .4 0 lb /m

m B t u to 0 .3 5 lb /m

m B tu an d f ro m 0 .7 0 l b /m

m B tu to 0.5 7 lb / m m B t u , resp ectiv ely

. S ee Fin al Ru le, 7 7 Fed . Reg . at 5 7,9 1 1

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NPCA also challeng es t h e R ule’s emissions limits a nd B ART determinations a t Colstrip Units 1 and 2 and Corette, contending essentially that such limits are not string ent enoug h. According to NPCA, EPA’s decision not to require installation of more adva n c ed technolog y at these locations

was u nex pl a i n ed, arbitrary

, and capricious. Moreover, according to NPCA, EPA’s d ecision n o t to require installation of any n ew technolog ies at Co l s trip Units 3 a nd 4 fails to satisf

y the requirement that the Rule make reasonable prog

ress toward visibility

improvement.

D

EPA’s implementat i on of the reg ional haz e plan is
g overned by Section 307(d) of the Act, 42 U .S.C. § 7607(d). The statute requires that EPA ex plain the basis for its decisions, including underly ing f a c t u a l bases, methods o f analy sis, a nd leg al and policy considerations. Id. § 7607(d)(6)(A). EPA must also r espond t o t he comments, criticism, and new data submitted during the comment period. Id.

W h en we review an ag e ncy action “ involv[ ing ] p rimarily issues of fact,” and where “analy sis o f the relevant documents ‘requires a h ig h level of technical ex p ertise,’ w e must defer
to ‘the informed discretion of the respons i ble federal
ag encies.’” M

arsh v. Oregon Natural Res. Council

, 490 U.S. 360, 377 (1 9 8 9 ) (quoting Kleppe v. Sierra Club

, 427 U.S. 390. 412 ( 1976)). However, we do not defer to E PA actions that are “a rbitrary

, capricious, an abuse of discretion, o r otherwise not in accordance with law,” or that ex ceed E PA’s statutory jurisdiction. 42 U.S.C. § § 7607(D)(9)(A)

, ( C ). EPA’s actions must be r easoned; EPA acts in an arbitrary a nd capricious manner if it f

ails to consider an important aspectN A T ’ L P A R K S C O N S E R

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of a decision or i f i ts ex planation contradicts the evidence before it. M

o t o r Ve h icle Mfrs. Ass’n of U.S., Inc. v. State Farm Mut. Auto. Ins. Co.
, 463 U .S. 29, 43 (1983 )

. E P A ’s actions must also be consistent; an internally inconsistent analy sis is arbitrary a

n d capricious. Gen. Chem. Cor p

. v

. United States
, 8 17 F .2d 844, 857 (D.C. Cir. 1987) (per curiam).

I I

PPL Montana and NPCA each contest the Rule’s B ART determinations a

nd prescribed limits for N O X and SO 2 emissions a t Colstrip Units 1 and 2—and, for similar reasons, Corette.

A

The heart of the dispute about EPA’s B ART selection at Colstrip Units 1 and 2 is its determination that use o f SNCR in a d d ition to SOF A is c ost-effective, and that use of selective

c a t a l y t i c r e d u c t i o n ( “ S C R ” )

— a m o r e a g g r e s s i v e technolog y

—in addition to SOF A is not. Bo t h parties urg e that EPA’s cost-effectiven e s s a n aly sis fails appropriately to consider the costs of compliance and deg r ee of visibility impairme n t , a s r equired by the Act, see 42 U .S.C. § 74 9 1 ( g )(2), at Step Three of EPA’s B ART analy sis under the Guidelines, see 40 C.F .R. Pt. 51, App. Y § I V.D.

The Rule requires PPL Montana to reduce NO X emissions
at Colstrip Unit s 1 a

nd 2 to 0 .15 lb/mmB tu over a 30-day rol l i n g a verag e. S

ee 40 C.F .R. § 52.1396(c)(1). EPA concluded that such reduction could be achieved by installing both SOF A and SNCR technolog ies. S ee F inal Rule, 7 7 F ed. Reg

. at 57,866. NPCA contends that EPA offered insufficientN A T ’ L P A R K S C O N S E R

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j u s t i f i c ation f or its rejection of SCR as B ART in favor o f SOF A a n d S NCR tog ether, and a rg u es that PPL Montana should b e required to i n s t a l l SCR instead of SNCR, and in

a d d ition to SOF A
, at all four Colstrip units. PPL Mon t a n a makes a related point, but on the other side of the arg ument, contending that EPA offered insufficient justification for requiring SOF A and SNCR as BA R T instead of SOF A alone— a r emedy PPL Montana does not oppose. EPA responds that the B ART deter m i n a t ion is discretionary a nd that it considered all of the relevant factors in reaching its conclusions.

The parties also challeng e several more minor aspects o f EPA’s cost-effectiveness analy sis. PPL Montana arg ues that EPA’s use of the dollar-per-ton metric for balancing cost a nd visibility benefit was improper. NPCA, f or its part, maintains that EPA underestimated the emissions bas e line at Colstrip U n i t s 1 and 2, and that it miscalculated the cost of implementing SCR at these units.

1

EPA identified the costs of the various technolog ie s f o r NO X reduction at Colstrip Units 1 and 2 as follows:N A T ’ L P A R K S C O N S E R

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Technology Capital

C ost Annualized

Cost Tons

per Year Cost

per Ton

COLSTRIP UNIT 1

SOFA $4.508

m m $1.090m m 1,432 $761

SOFA + SNCR $13.381

m m $3.279m m 2,097 $1,564

SOFA + SCR $82.772

m m $10.942m m 3,425 $3,195

C OLSTRI P UNI T 2

SOFA $4.508

m m $1.090m m 1,420 $768

SOFA + SNCR $13.381

m m $3.256m m 2,072 $1,571

SOFA + SCR $82.771

m m $10.920m m 3,376 $3,235

See Proposed Rule, Tables 6 6

– 74, 89–97, 77 F e d. Reg

. at 24,024–27, 24,032–34.

The Rule offers essentially no r e a soning behind E PA’s selection of SOF A and SNCR tog ether, as opposed either to SOF A alone or SOF A and SCR tog ether, as B ART to reduce NO X emissions at Colstrip Units 1 and 2. W ith respect to the decision to require SNCR in a ddition to SOF A, EPA asserted in the Proposed Rule o n ly that the cost o f SOF A and SNCR tog ether “is justified when the visibility improvement is considered.” See Proposed Rule, 77 F ed. Reg

. at 24,027. I nN A T ’ L P A R K S C O N S E R

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r e sponse to PPL Montana’s comment requesting that E P A

ex p lain this assertion, EPA n oted that the Proposed Rule discloses the cost for both SOF A alone and SOF A combined with SNCR, and that it “selected SNCR as B ART in

c o n s i d eration of these costs, all of which were presented t o the public in our proposed r ule.” F inal Rule, 77 F ed. Reg

. at 57,886. B ut PPL Montana’s objection is not that EPA failed
to disclose the cost differential between implementing SOF A alone and SOF A along with SNCR. I t contends instead that EPA failed to ex plain the r e a s o ns why the improvement achieved throug h SOF A alone w as ins u fficient, but the improvement achieved throug h SOF A and SNCR tog ether was deemed both sufficient and cost-effective.

W ith respect to SCR, EPA simply asserted that the cost o f SOF A and SCR tog ether ($3,195/ton at Colstrip Unit 1 ) was “not justified b y the visibility improvem e n t of .404 deciviews,” but that “[ t] he lower cost of SOFA + S N CR ($1,564/ton) is justified w hen the visibility improvement [ o f .264 d e civiews] is considered.” Proposed Rule, 77 F ed. Reg

. at 24,027. EPA maintains that it did no t use a set costeffectiveness or improvement threshold to d i squalify SCR, and we do not sug g est that it must do so. Bu t absent any

ex p lanation at all of h ow EPA d etermines cost-effectiveness, it is impossible for the Rule’s reader to determine why EPA ruled SOF A and SNCR in and ruled SCR out.

EPA acknowledg ed that the Reg ional Haz e Rule does not prevent it from implementing what it called a “ brig ht line”

ru le for cost-effectiveness, but contends that its reg ulations do

n ot require it to do so. S ee F inal Rule, 77 F ed. R eg. at 5 7 ,872. To be sure, the Act and the Reg u lations do n o t specifically require that EPA ex plain its cost-effectiveness d e c i sions throug h use of a “ b r ig ht line” rule. B ut the l a wN A T ’ L P A R K S C O N S E R

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d oes require E PA to “cog e ntly e x plain why it has ex ercise d its discreti on in a g iven manner.” See State Farm
, 463 U.S.
at 48; Greater Y

e l l o w s tone Coalition, Inc. v. Servheen

, 665 F .3d 1015, 1030 (9th Cir. 2011) ( requiring “a rati o nal connection between the data b e fore [the ag ency ] and its conclusion ” ) ; Nw. E

nvtl. Def. Ctr. v. Bonneville P ower A d m in.
, 477 F .3d 668, 691 (9th Cir. 2007). E P A ’s

unex p lained assertions that the combinatio n o f SOF A a nd SNCR is cost-effective, but that SOF A alone is insufficient, and that the combination o f SOF A and SCR is not costeffective, are unsupported b y any ex plained reasoning

. These assertions leave the Rule’s r eader wondering what metric, if
any , EPA used to determine B ART, or if EPA employ ed no metric, why

not. Therefore, we conclude that EPA’s B ART determination for N O X emissions at Colstrip Units 1 and 2 is arbitrary and capricious.

2

EPA’s responses to petitioners’ more minor challeng es to its cost-effectiveness analy sis make clear that it is capable o f the required rational ex

planation.

First
, NPCA c halleng es EPA’s selection of the y ears 2008–2010 as the emissions baseli n e p eriod f or calculating B ART at Colstrip Units 1 and 2. I t contends that EPA underestimated the potential be n e f i t of using SCR b y first underestimating the ex isting emi s s i ons baseline. E PA’s B ART Guidelines require it to choose a r e p r esentative baseline p eriod that supplies “ a realistic d e p iction o f anticipated annual emissio n s f o r the source.” B ART G u idelines, 70 F ed. Reg

. at 39,167. E PA chose the p er i o d 2008–2010 on the reasoning that Colstrip had installed additional combustio n controls in 2 007, r educing itsN A T ’ L P A R K S C O N S E R

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e m i s s i o ns. See id. NPCA arg ues that EPA should ha v e chosen earlier periods because PPL Montana is n ot required
t o maintain the rate of emissions achieved betw e e n 2008–2010, describing the c hang es at Colstrip a s

“ u n enforceable.” B u t EPA offered a reasoned response t o NPCA’s comment about its cho i c e

— that Colstrip h ad achieved reduced e missions using technolog y it has no plans
to deactivate—and N PCA has sug g ested no reason to believe that PPL Montana w ould chang e course and remove the additional combustion controls it had a lready installed. EPA
g ave a reasoned, rational response to this ar gu m ent, a response to which a reviewing court defers. See Latino Issues Forum v. EPA , 558 F .3d 936, 941 (9th Cir. 2009).

Second

, PPL Montana objects that EPA’s reliance on a dollars-per-ton metric to calculate cost effectiveness is inappropriate because it does not a c t u ally measure the improvement achieved in visibility

. B ut EPA responded that it has previously defined “cost e ffecti v e ness” as “tons o f
p o llutant emissions removed” c ompared with “annualiz ed control costs.” 2005 Reg ulations, 70 F ed. Reg

. a t 39,167. I ndeed, PPL Montana essentially abandoned this arg u ment in reply a fter EPA pointed to its r eg ulation in its r esponse brief.

Third

, NPCA objects that EPA improperly calculated the
cost of installing SCR a t Colstrip U nits 1 and 2, leading it to reject SCR as B ART. I t challeng es EPA’s calculation of the capital c ost, its c hoice of interest r a t e , and the lifespan a nd maintenance costs a s sumed in E PA’s calculation. EPA provided a reasoned r esponse to N PCA’s comments on these questions. See F inal Rule, 77 F ed. Reg

. a t 57,888–89. NPCA

m a i ntains that EPA should have looked to different d a t a

s o u rc e s t o determine these costs. B ut it offers a reason tha t EPA should look to different underly ing cost data in only o neN A T ’ L P A R K S C O N S E R

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ex a mple case. I t c ontends EP A should have chosen a 5% interest rate instead of a 7% interest rate in calculating these
costs to c omport with the r equi re m ents set forth in the EPA Air Pollution Cost Manual

. B ut that manual instructs ind u s t r y actors that they may w ish to u se a different interest
rate for their own calculations. As EPA ex plained, see F inal R u le, 77 F ed. Reg

. at 57,888–89, EPA’s Manual clearl y contemplates that EPA w ill use the interest rate set by the OMB
, as it properly did here, i n p u r s uing its o wn calculations. See id.

3

B o th petitioners dispute the rationality of EPA’s selection of a f o urth scrubber as B ART for S O 2 emissions control at Co l s t ri p Units 1 and 2 for essentially the same r easons they dispute EPA’s NO X B ART determinations. E PA determined the costs of the v arious technolog ies fo r r e ducing SO 2 emissions at Colstrip as follows:N A T ’ L P A R K S C O N S E R

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Technology Capital

C ost Annualized

Cost Tons

per Year Cost

per Ton

COLSTRIP I

L i m e i nj e c t i o n $3.00m m $1.883m m 3,557 $529

L i m e i nj e c t i o n + Ne w

s c r ubbe r $28.00

m m $4.100m m 4,486 $912

COLSTRI P I I

L i m e i nj e c t i o n $3.00m m $1.883m m 3,212 $586

L i m e i nj e c t i o n + Ne w

s c r ubbe r $28.00

m m $4.093m m 4,129 $991

See Proposed Rule, T ables 78–87, 102–111, 77 F ed. Reg

. at 24,028–29, 24,036–37.

PPL Montana c ontends that EPA underestimated the cost of installing a fourth scrubber at Colstrip U n i t s 1 and 2 a nd failed s u f

f i ci e n t l y t o e x p l a i n i t s c o s t

- e f f e c tiveness d e t ermination for this r equirement. NPCA, to the contr a ry , c ontends that EPA should h ave required installati o n o f

r e p l acement advanced scrubbers at Colstrip, not just the introduction of an additional scrubber. E PA responds that it
app r o p r iately ex plained its calculation o f the costs involved in addi n g a n additional scrubber and that it appropriatelyN A T ’ L P A R K S C O N S E R

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decided not to require an entirely new sy stem of scrubbers, a s opposed only

to adding one additional scrubber.

EPA’s c ost-effectiveness a n aly sis with respect to SO 2 emissions at Colstrip Units 1 and 2 suffers the same defect a s its cost-effectiveness with respect to NO X emissions. E PA’s SO 2 ana l y s is is an improvement in one respect: EPA acknowledg ed the incrementa l co s t of adding an additional scrubber vessel ($2,410/ton at Colstrip Unit 2, see F inal Rule, 77 F ed. Reg

. at 57,892), a nd n o ted that adding a scrubber vessel would in c rementally improve visibility from 0.225 decivie w (using lime injection alone) to 0.280 deciview (using lime injection and an additional scrubber vessel). See id. B ut EPA then concluded t h a t it “continue[ s] to find that the cos t i s reasonable g iven the visibility benefits[ .] ” Id. Althoug h in this case E PA acknowledg ed the comment

c o n c e r n i n g i n c remental cost-effectiveness, it nev e r t h e l e s s s t i l l failed to e x plain what makes a c ost reas o n a b l e in lig ht o f potential visibility

benefits.

T h e Rule’s SO 2 emission limits for Colstrip Units 1 a n d 2 force PPL Montana to spend an additiona l $25,000,000 in capital costs and an additional $2,210,000 annually to achieve

a visibility improvement of 0.055 d e civiews at the sampled lo c ation. S

ee id. This improvement very well may be
necessary a n d ultimately c ost-effective. B ut EPA has supplie d n o reasons justify ing that determination. B ased on its ex planation, the Rule’s reader is left to w o n d e r what rationale EP A u s e d to determine c ost-effectiveness. Ag ain, the law requires a reasoned answer to that question. See State Farm
, 463 U.S. at 48; Servheen

, 665 F .3d at 1028; Nw. Envtl. Def. Ctr. , 477 F .3d at 691.N A T ’ L P A R K S C O N S E R

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B y contrast, EPA thoroug hly and rationally ex plained its
response to NPCA’s objection on this point. NPCA contends
t h at EPA should have considered requiring c ompl e t e replacement of the ex isting control sy stems for SO 2 emissions
at Colstrip U nits 1 and 2. EPA ex plained its decision not to do so: its B ART Guidelines recom m e n d c onstructing a new sy stem when a current control sy stem achieves “less than 50 percent r emoval e f

f i ciencies.” F inal Rule, 77 F ed. Reg

. at 57,892 (quoting 2005 Reg ulat i o n s , 70 F ed. Reg

. at 3 9,171) (internal quotat i o n marks omitted). The c urrent SO 2 emissio n s c ontrol sy stem a t Colstrip Units 1 and 2 achieves removal e f

f iciencies ex ceeding 5 0 percent, see Proposed Rule, 7 7 Fe d

. Reg

. a t 2 4,028, and therefore EPA is not required to consider r eplacement technolog y

. See F inal Rule, 77 F ed. Reg . at 57,892.

This kind of ex planation—not elaborate, but rational, a nd thus adequate—is missing from EPA’s c o n clusion that PPL Montana must install a fourth scrubber at Colstrip U n its 1 a nd 2. EPA’s determination of B ART to control S O 2 emissions suffers the same failure of rational ex p lanation as its B ART determination for NO X emissions. B ecause the rule offers no reasoned ex planation to suppor t i t s requirement of a fourth scrubber a t Colstrip Units 1 and 2
, we conc l u d e t hat such requirement is arbitrary

and capricious.

B

PPL Montana also, relatedly

, contends that EPA’s B ART determinations at Colstrip U n i ts 1 and 2 are arbitrary a nd capricious because they

are inconsistent with EPA’s Corette analy sis, which does not require a dditiona l controls at that station, see F inal Rule, 77 F ed. Reg

. a t 57,893. PPL Montana points out that E PA rejected implementation o f S O FA atN A T ’ L P A R K S C O N S E R

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Corette, b ut found similar co s t s f or SOF A installation justified at Colstrip U n i t s 1 and 2. See supra § I I .A.1. NPCA, on the other hand, arg ues that EPA’s conclusion that additional c ontrols at Corette were not cost-effective was arbitrary and capricious.

The entirety of EPA’s cost-effectiven e ss reasoning with respect to Corette follows: “W e have weig hed costs against the anticipat e d v i sibility impacts for Corette. Any of the control op t i o n s would have a positive impact on visibility ; however, the cost of controls is not justified by the visibility improvement.” Proposed Rule, 77 F e d. Reg

. a t 2 4 ,043. Ag ain, this reasoning fails to r ev ea l to a reader how EPA determined that the cost o f co ntrols were not justified. Moreover, PPL Montana is correct that this r easoning appears in c o n s istent with EPA’s analy sis for Colstrip Units 1 and 2. At those units, EPA concluded that a cost-per-ton rate o f
approx imat e ly $1,500 f or NO X emissions controls was justified. See supra § I I

. A.1. Yet at Corette, EPA concluded that a cost-per-ton rate of $1,487 did not justify the potential emissions reductions. See Proposed Rule

, 77 F e d. Reg

. at 24,040–43. Corette, moreover, is closer to Class I areas than Colstrip, and emissions c o n trols th e r e could have improved visibility a t least as much as they were set to control visibility
at Colstrip. See id. The seeming inconsist e ncy in E PA’s B ART determinations at Colstrip Units 1 and 2 a n d Corette is, absent ex plana t i on, “ the hallmark o f arbitrary action.” Sierra Club v. EPA
, 719 F .2d 4 36, 459 (D.C. Cir. 1 983); see also Gen. Chem. Corp. v. United States
, 817 F .2d 8 44, 846 (D.C. Cir. 1987) (per curiam) (finding analy sis arbitrary a

nd capricious because it w a s “internally inconsistent a nd inadequately

ex plained”).N A T ’ L P A R K S C O N S E R

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C

F inally

, PPL Montana objects, on two g rounds, to E PA’s

use o f the CAL PUF F 4 visibility model in determining B ART
at Colstrip U nits 1 and 2. PPL Montana first objects that the

max imum potential incremental visibility benefit of SNCR is below the rang e of p erceptibility and falls within the model’s
marg in o f error, meaning such imp r o v e m ent cannot be “reasonably

. . . anticipated” as required b y the Act. See 42 U.S.C. § 7491(g )(2). I t a lso c halleng es the applicati o n o f CAL PUF F to the emissions sources at issue because of their distance from Class I areas, contending the model is inaccurate at such g

reat distances.

EPA responds that, because the CAL PUF F mode l was approved in the Guidelines, EPA nee d not d efend its every application. See F inal Rule, 77 F ed. Reg. at 57,867. EPA also r esponds that the Reg ional H az e Rule itself ant i c i pated and rejected PPL Montan a ’ s arg ument, reasoning that “[ f] ailing to consider less-than-perceptible contributions to visibility impairment would ig nore the CAA’s intent to have B ART requirements apply to sources that c o n t ribute to, a s well as c ause, such impairment.” F inal Rule, 77 F ed. Reg

. at 57,883 (quoting 2005 Reg ulations, 7 0 Fed. Reg

. at 39,129). EPA further responds that it “has a cknowledg ed that there is uncertainty in the CAL PUF F model predicted visibility impacts,” and “the CAL PUF F model can both underpr edict

an d overpredict visibility impacts,” but that “CAL PUF F

. . . is a reasonable application to determ i ne w hether such a facility [ with a n i m p act e x ceeding 2 or 3 deciviews] can reasonably be anticipated to cause or contribut e to any

4 CA L P UFF is a m o d e l u s e d t o estim ate an em issio n s so u rce’ s im p act

o n v isib ility

. S

ee 4 0 C.F.R. P t. 5 1 A

p p . Y § III.A .3

.N A T ’ L P A R K S C O N S E R

V A T I O N A S S ’ N V

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impairment o f visibility

. ” F inal Rule, 77 F ed. Reg

. at 57,868 (quoting 2005 Reg ulations, 77 F ed. Reg . 39,123).

EPA fails to understand P P L Montana’s first arg ument. PPL Montana does not object wholesale to EPA’s use of the CAL PUF F mo d e l for visibility measurement. I nstead, it
arg ues that the results the model predicts in this case are too insig nificant for the model to measure, a n d therefore cannot be reasonably anticipated as the A ct requires. Du r i n g the notice and comment period, PPL Montana a rg ued that the

max imum incremental visibility benefit to be g ained b y installing SNCR at Colstrip Units 1 a nd 2 would be 0.085 d eciviews, a

n incremental improvement PPL Montana contends falls within the CAL PUF F model’s marg in of error. EPA responded by ex pla i n i ng that its reg ulation permits visibility improvements to be required even when vi s ibility impacts fall below t h e threshold o f perceptibility

. S ee F inal Rule, 77 F e d. Reg

. at 57,867. EPA further responded that its 2005 Reg ulations direct u se of the CAL PUF F model to estimate the 9 8th percentile of v isibility impa i rment, rather than the hig hest data collected, to minimiz e uncertainty in its calculations. See id

. a t 57,868. B u t P PL Montana does not ask EPA to discontinue application of CAL PUF F below the one-deciview perceptibility thresh o l d

, or to run the model using different data points than the ones selected; it asks h ow CAL PUF F ex plains EPA’s co nclusion that additional

measures w ill lead to reasonable a nticipation of visibility improvement in t

h is case, when, PPL asserts, an improvement of 0.085 deciview is “bey ond the CAL PUF F model’s ability to predict with any

confidence.”

E P A ’ s r e s p o n se d oes not meanin gf u l l y a d d r e s s P P L M o n tana’s c omment, as it must. S e e Columbia F

a l l s Aluminum Co. v. EPA
, 139 F .3 d 9 1 4
, 9 2 3 (D.C. Cir. 1 998);N A T ’ L P A R K S C O N S E R

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Eagle-Picher I

ndus., Inc. v. EPA
, 759 F .2d 905, 922 (D.C. Cir. 1985) (“[ I ] f

. . . the model is challeng ed, the ag ency must provide a full analy

tical d efense.”). 5 I t is no answer to respond, as E PA did, that low levels of visibility impairment
must be addressed even thoug h they are not perceptible to the human e y e, or that measures have b een taken to minimiz e the
marg in of error. The issue is n ot the perceptibility of the proposed improvements, but the model’s ability to anticipate improvements at a level alleg edly within its marg in of error, whether perc e p t ible or not to the human ey e. EPA simply offered no response to this objection.

EPA’s only detailed defense of the model addressed PPL Montana’s concern about d i s t ance—not the marg in of error issue. See F inal Rule, 77 Fe d

. R eg

. at 57,867–68. W ith
reg ard to distance, EPA noted that gu i dance issued by the I nterag ency W orkg roup on Air Q ua l ity Modeling “provides for the use of the CAL PUF F model a t r eceptor distances o f
up to 200 to 300 km.” EPA then ex plai n e d w h y i t believed CAL PUF F could be used “cautiously ” for dis t a nces in that

r a ng e, even thoug h the puffs would be more dispersed at

5 Req u irin g s u ch an ex

p lan atio n d o es n o t, as EP A arg u es, i m p r o p erly
req u ire d e n o v o rev iew o f EP A ’ s u se o f th e CA L P UFF m o d el itself

. EP A

“ n eed n o t j u stif

y th e m o d el o n an ad h o c b asis f o r ev ery ch em ical to w

h ich th e m o d el is ap p lied

, ev en w h en f aced w ith d ata in d icatin g t h at it is n ot a p erf ect f it.” Ch em. Mfrs. Ass’n v. EPA
, 2 8 F.3 d 1 2 5 9
, 1 2 6 5 (D.C. Cir. 1 9 9 4 ). B u t P P L Mo n tan a d o es n o t ask EP A to j u stif y its m o d el. Ac c e p t in g C A L P UFF as th e ap p l icab l e m o del, P P L Mo n tan a ask s h o w CALPUFF exp la in s EP A ’ s selecti o n o f an ad d itio n al tech n olo g y f or B A RT
, a q u estio n

EP A h as n o t an sw ered . In su ch a situ atio n , d ef eren ce

ev en o n m eth o d o lo g ical q u estio n s is i n ap pro p riate. S ee Bro wer v. Eva n s , 2 5 7 F.3 d 1 0 5 8
, 1 0 6 7 (9 th Cir. 2 00 1) (h o ld in g d ef eren ce o v erco m e w

h ere ag en cy “ co m

p letely f ailed to ad d ress so m e f

acto r co n sid eratio n o f w

h ich

w as essen t ial to [m ak in g an ] in f o rm ed d ecisio n ” (in tern al q u o tatio n m ark s

an d citatio n

o m i tted )).N A T ’ L P A R K S C O N S E R

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gr e a ter distances, and stated that the model was not suita b l e for “very long -rang e transport (300 km and bey ond).” Id. at 57,868. EPA thus offered a reasoned respon s e to PPL Montana’s c halleng e to the use of CAL PUF F at the distances in question. That e x planation did not, however, also suffice

as a reasoned response reg arding how CAL PUFF could be relied upon to pred i c t an improvement of as little as 0.085 deciviews when PPL offered re a s o n s to think that d oing so was outside the model’s capabilities.

Th e p redictability concern is important because the A ct requires that any visibility improvement b e “ r ea sonably

. . . anticipated” as a result of B ART installation. 42 U .S.C. § 7491(g ) (2). As the D.C. Circuit ex plained i n v acating a portion of the Reg ional Haz e Rule itself, it is arbitrary a nd capricious for EPA to force an emis s ions source “to spend millions o f dollars for n ew techn o l o g y that w ill h ave no appreciable effect o n the h az e in any Class I area.” Am. Corn Growers Ass’n
, 291 F .3d at 7. I n r esponse to PPL Montana’s

c ontentions that the F inal Rule would do just that, by requiring PPL Montana to install SNCR at Colstrip Units 1 and 2 without sufficient a ssurance of any improvement at all, EPA has offered no reasoned ex p lanation.

I I I

PPL Montana also cha l l e n g es the emissions limitations EPA imposed a t Corette—namely

, the requirement that Corette lower its emissions l e v els even without installing additional technolog y

. As ex plained, EPA’s d eter m ination that installation of additional technolog y to control emissions from Corette was n ot cost-effective suffer s t h e same failure

o f ex planation as its B ART determinations at Colstrip. See
supra § I I .B

. B ut the Rule a lso tig htened the emissions limitsN A T ’ L P A R K S C O N S E R

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identified for Corette in the Proposed Rule. Specifically

, in
response to comments (including c o m m ents made by PPL Montana )

, E P A altered its rule to establish an e mission rate of 0.57 lb/MMbtu for SO 2 emissions and an emission rate o f 0.35 lb/MMB tu for No X emissions, both monitored on a 30- day rolling averag e. See F inal Rule, 77 F e d

. Reg

. at 57,893–94. PPL Montana a r g ues that the CAA does not author i z e EPA to impose e missions limits without determining B ART, but EPA insists that its ana l y s i s comported with the B ART Guidelines. 6

EPA c orrectly arg ues that, afte r i t found Corette already had BA R T t e chnolog y in place, it was authoriz e d b y the Reg ional Haz e Rule to “ skip the remaining an a l y ses in this section, including the visibility analy sis in step 5.” See 2005 Reg ulations, 70 F ed. Reg

. at 39,165

. P PL Montana’s contention that EPA was nevertheless required to proceed with the remaining B ART analy sis is a challeng e to this provision of the Reg ional Haz e Rule its e l f

, n ot properly asserted in this challeng e to the Montana F I P. See 42 U .S.C. § 7607(b)(1) (challeng e to r ulemaking m

u st be broug ht within six ty day s).

6 EP A co n ten d s f

irst th at P PL Mo n tan a w aiv ed i ts o b j ectio n o n th is p o i n t b y f ailin g to m ak e a relev an t co m m en t t o th e P ro p o sed Ru l e. Co n trary to EP A ’ s arg u m en t, P PL Mo n tan a p reserv ed its o b j ectio n to th e Co rette

em issio n s lim its w

h en it m ad e its co m

m en ts, w h ich u rg ed th at, w i th Co rette’ s cu rren t tech n o lo g y , co n v ertin g an n u alized em issio n s lim its to 3 0

- d ay ro l l i ng av erag e lim its w o u ld req u ire an in crea se in em issio n s lim its. Mo reo v er, EP A sp ecif ically a d d ressed th is co m m en t in th e Ru le,

n o tin g th at a co m

m en t er h ad su g g ested an i n crease in em issio n s lim its to 0 .8 1 l b / M MB tu f

o r SO 2 em issio n s an d to 0 .4 6 lb /MMB tu f o r NO X em issio n s. S

ee Fin al Ru le, 7 7 Fed . Reg . at 5 7,8 9 3

.N A T ’ L P A R K S C O N S E R

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EPA als o p r o perly set emissions limits f or Corette on a 3 0

- d ay r olling averag e. The Reg ional Haz e Rule prescrib e s such limits. See 2005 Reg ulations, 70 F ed. R eg. 39,172 (r equiring emissions limits to “specify an averag ing time o f

a 3 0

- day rolling averag e”). EPA noted and addressed P P L Montana’s c omment about the 30-day rolling a verag e req u i r ement. See F inal Rule, 77 F ed. Reg

. at 57,893–94. PPL Montana contended that converting curr ent emissions limits to 30-day rolling averag e s would require EPA to raise the limits set forth in the Proposed Rule. EPA concluded to the contrary that, by c hoosing 99th percentil e monthly emission rates and adding a n add i t ional marg in for compliance, the 30-day

rolling averag es provided in the rule comported with Corette’s current technolog ical capabilities. See id. EPA’s reasoned disag reement on this topic with PPL Montana’s comment reflects i t s c onclusion on a hig hly scientific question—the variance in emiss ions calculations that occurs w hen annualiz ed rates are translated into thirty

day rolling averag es—pr e c i s ely the kind of question justify ing d eference to EPA’s discretion. See Nat’l W ildlife Fed’n v. U.S. Army Corps of E ng’rs
, 384 F .3d 1163, 1177–78 (9th Cir. 2004).

I V

NPCA c ontends that E PA’s decision no t t o r e quire any

a d d i t i o n a l e m i s s i o n

- r e d u c i n g t e c h n o l o g y , l e t al o n e in s t a l l a tion of SCR, at Colstrip Units 3 and 4 was arbitrary and capricious because it fails to satisfy the Act’s reasonable
prog r ess requirements. Colstrip Units 3 and 4 are not subject
to B ART requirement s b e c ause they were constructed a fter 1977. S ee 42 U.S.C. § 7 491(b)(2), (g ). Nevertheless, the A ct

s t i l l directs EPA to issue reg ulations a ssuring “reasonable
prog r ess” toward improving visibility in Class I areas. SeeN A T ’ L P A R K S C O N S E R

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42 U.S.C. § 7491(a)(4). The statute r equires EPA to consider several factors in d etermining reasonable prog ress: ( a ) costs of compliance; (b) the time necessary f or compliance; (c) the
energ y and other environmental impacts of compliance; and (d) the remaining useful life of a source subject to reasonable
p r og ress requirements. See 42 U.S.C. § 7491(g )(1). E P A ’s Reg ulations prescribe r easonable prog ress toward at t a i ning natural visibility conditions by 2 064. See 40 C.F .R. § 51.308(f).

EPA responded t o c o m m e n t s c o ntending that the visibility benefits to be g ained f

rom SCR at Colstrip Units 3 and 4 justify the requirement for reasonable prog ress purposes. See F inal Rule, 77 F ed. Reg . at 57,902–03. I t ex plained that the
cost of compliance i s o n l y o ne of the four statutory requirements for reasonable prog ress analy sis. See id. EPA also offered a better ex p lanation f or its cost-based decision on this point than it did f

o r its cost-effectiveness determination

o f B ART at Colstrip and Corette. I t reasoned t h a t t h e visibility benefits to b e g ained from requiring SCR ( rang ing from 0.273 deciviews to 0.260 d eciviews) were not sufficient considering their cost, between $4,5 7 4 and $4,607 p er ton. See id. E PA contrasted this effectiveness with the reasonable
prog r ess g oals it implemented in North Dako t a a t Antelope Valley Station—a location to which NPCA specifically urg ed comparison. S

e e id. EPA ex plained that it had f ound improvements of 0. 2 d eciviews at each unit of that location
to b e cost-justified for reasonable prog r ess purposes when the
costs of such improvement rang ed f rom $586/ton to $661/ton. See id. EPA’s comparison o f the two sources provided NPCA with at least some b r o a d metric for understanding which cost-per-ton ratios EPA will approve and which it will
not—a rational ex planation w hy the re a sonable prog ress options available at Colstrip Units 3 and 4 were not feasible.N A T ’ L P A R K S C O N S E R

V A T I O N A S S ’ N V

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V

F or the reasons ex plained, w e G RANT I N P ART a nd DENY IN P ART the petitions f or r e v iew, V ACATE the portions of the Rule setting emissions limits at Colstrip Units 1 and 2 and Corette and REMA N D to E PA f or f urther proceeding s consist e n t w ith this opinion. E ach party shall bear its own costs. 7

P ETITIONS F OR R EVIEW G RANTED IN P ART A N D D E N I E D I N P A R T ; V A C A T E D AN D R E M A N D E D

.

B ERZ ON, Circuit J udg e , concurring

.

I concur. I write separately to underline my understanding that, in Part I I .C of the lead opinion, we are not impug ning EPA’s use of the CAL PUF F mod el g enerally

. I n stead, w e are requiring a sufficiently reasoned response to

a particular comment r ega rding CAL PUF F ’s usefulness in these specific circumstances. Had EPA g iven any reasonable

ex p lanatio n as to w hy CAL PUF F was n ot just “ sufficiently

7 P etitio n ers Natio n al P ark s C o nserv atio n A sso ciatio n , Mo n tan a En v iro n m en tal In f

o rm atio n Cen t er, an d Sierra Clu b ’ s Mo tio n f

or J u d icial No tice o f Stan d in g Declaratio n s fi l ed March 1 4
, 2 0 1 3 is D ENIED as

m o o t.

P etitio n er P P L Mo n t an a, L L C’ s Un o p p o sed Mo tio n to T ak e J u d icial No tice Reg ard in g J .E. Co rette Steam Electric Statio n f iled March 1 7
, 2 0 1 5 is DENIED

. T h e f

acts co n tain ed th erein are n e i t h er g en erally k n o w n

w ith in th e co u rt’ s territo rial j u risd ictio n n o r accu rately an d r e a d ily d eterm in ab l e f

ro m so u rces w

h ose accu racy can n o t reaso n ab ly b e q u estio n ed

. S

ee Fed . R. Ev id . 2 01 (b ).N A T ’ L P A R K S C O N S E R

V A T I O N A S S ’ N V

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r e liable to inform the decision making process” g enerally

, 77 F ed. Reg

. 57,864, 5 7,868 (Sept. 1 8
, 2 0 1 2 ), but also specifically suitable for predicting visibility improvement in the pertinent f

actual c ontex t at incr e m e n ts as small as 0.085 deciviews, then we could require no more.

The arbitrary -and-capriciou s standard of r eview authoriz es remand where, inter alia, the ag ency has “ entirely failed to consider an important aspect of the pro b l e m , ” b y “g [ iving ] no consideration whatever” to it. Mot o r V e h icle Mfrs. Ass’n of the United Stat e s , I n c. v. State Farm M

ut. Auto. Ins. Co.
, 463 U.S. 29, 43, 4 6 (1983) (emphasis added). The “ standard of review

. . . [ r equ i r e s] only reasonableness,
not perfection.” Kennecott Greens Creek Mining Co. v. Mine Safety & Health A dmin.

, 476 F .3d 946, 9 54 (D.C. Cir. 2 007);

see also J & G Sales Ltd. v. Truscott
, 473 F .3d 1043, 1051–52 (9th Cir. 2007). “[ W ] here the a g enc y ‘ c o n sidered the relevant f actors and articulated a rational connection b etween the facts found and the choice made,’” w e must defer to the “reasonable basis” of that decision. A r r i n g t on v. D aniels

, 516 F .3d 1106, 1112 ( 9 t h Cir. 2 008) (quoting Ranchers Cattlemen Action Legal Fund v. U.S. Dep’t of Agr i c

. , 415 F .3d 1078, 1099 (9th Cir. 2005)). As the Supreme Court has frequently reiterated, c ourts “should ‘ uphold a decision o f less than ideal clarity if the ag ency ’s path may reasonably be discerned.’” FCC v. Fox Television Stations, I nc. , 556 U.S. 502, 513–14 (2009) (quoti n g Bowman Transp., Inc. v

. Arkansas-Best Freight Sys., Inc.
, 419 U .S. 281, 286 (1974)).

Here, as the maj o r i t y o pinion concludes, in lig ht o f the
comments received, EPA did not g ive any adequate, reasoned

ex p lanation as to why CAL PUF F supported installation o f SNCR at Colstrip Units 1 a nd 2. PPL Montana arg ued in its
comment that the predicted improvement of 0 .085 deciviewsN A T ’ L P A R K S C O N S E R

V A T I O N A S S ’ N V

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from SCNR was “within the error rang e of t h e m odel,” a nd therefore such improvement could n ot “reasonably be anticipated” to result from SNCR. 42 U.S.C. § 7491(g )(2). EPA’s g eneric response, that “the CAL PUF F model c an both underpredict and overpredict v i s i b i lity impacts,” but that it viewed the model as nonet h e less “sufficiently reliable to inform the d ecisionmaking p r o cess,” does not meaning f ully respond to PPL ’s arg

ument. 77 F ed. Reg . at 57,868.

Several kinds of r esponsive answers to PPL Montana’s
comment a

bout CAL PUF F ’s marg in of error, if supportable,

c o u l d have sufficed to e nable “the ag ency ’s path

. . . reasonably [ to] be di s cerned.” Fox Television Stations
, 556 U.S. at 513–1 4 ( q u o t ing B o wman Transp.
, 419 U.S. at 286) (internal quot a t i o n marks omitted). F or ex ample, perhaps there is a basis to di s pute the assertion that a visibility improvement o f 0.085 deci views f ell w ithin the model’s marg in o f error. Or perhaps it is sig nificant that the fact that a predicted improvement falls w i t h i n a model’s
marg in of error does n ot p rove the predict e d i m provement will n o t o c c u r , just that it is less likely to occur. Or perhaps there is another reason why EPA thoug ht a 0.085 d ec iview improvement could “reasonab l y be anticipated” to result from SNCR even if such increment fell within the model’s marg in of error. 42 U.S.C. § 7491(g )(2).

My ex a mples are not meant to put words in EPA’s mouth (if an ag e ncy can be said to have a mouth). B u t E P A said nothing of either sort, o r any thing else responsive to the PPL CAL PUF F comment. I nstead, i t just professed g eneral confidence i n t he CAL PUF F model—which may w ell be

war ranted—but w as not responsive to the particular concerns

e x p r es sed. Courts are just not in a position to provide data

based or statistically b ased ex planations, which is one reasonN A T ’ L P A R K S C O N S E R

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why thi s C o u r t “may not supply a reasoned b asis for the
ag ency ’s action that the [ e x pert] ag ency itself has not g iven.” Motor Vehicle Mfrs. As s ’ n , 463 U .S. at 43 (quoting SEC v

. Chenery Corp.
, 332 U.S. 194, 196 (1947)) (internal quotation mark omitted).

I n short, even under t h e d eferential arbitrary -andcapricious standard o f r eview, it is impossible to say whether EPA has “‘con s i d e r ed the relevant factors and articulated a rational connection b etween the facts found and the choice made’” with reg ar d t o CAL PUF F ’s ability to predict improvements as small as 0.085 d eciview at Colstrip Units 1

a n d 2

. Arrington
, 516 F .3d at 1112 (quoting Ranchers Cattlemen Action Legal Fund

, 415 F .3d at 1093). Perhaps it did. B ut it has not, even minimally

, provided any indication that it d id in the comments and ana l y s is accompany ing the Rule. F or that reason alone, and n o t b e c ause I h ave any

reason to question whether the CAL PUF F model is g enerally fully adequate to the purposes for which E P A uses it, I

concur.