Court Opinion

ID: 773217
Source: CourtListenerOpinion
Date Created: 2012-04-18 11:24:07+00
Date Added: 2024-06-11T15:38:53.670775
License: Public Domain

249 F.3d 1032 (D.C. Cir. 2001)
Appalachian Power Company, et al., Petitionersv.Environmental Protection Agency, RespondentCommonwealth of Pennsylvania, Department of Environmental Protection, et al., IntervenorsNo. 99-1200 Consolidated with 99-1205,  99-1206, 99-1246, 99-1266, 99-1285, 99-1289, 99-1291,  99-1292, 99-1293, 99-1295, 99-1299, 99-1300, 99-1301,  99-1303, 99-1304, 99-1306, 99-1307, 00-1013, 00-1021,  00-1022, 00-1024, 00-1038, 00-1042, 00-1050, 00-1071,  00-1074, 00-1077, 00-1083, 00-1087, 00-1088, 00-1096,  00-1097, 00-1098, 00-1099, 00-1102, 00-1103, 00-1105,  00-1106, 00-1107, 00-1108, 00-1109, 00-1110, 00-1113, 00-1114, 00-1119, 00-1122, 00-1123, 00-1125, 00-1128
United States Court of Appeals  FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued December 15, 2000Decided May 15, 2001

[Copyrighted Material Omitted]
On Petitions for Review of Orders of the Environmental Protection Agency
Norman W. Fichthorn, James C. Gulick, Special Deputy  Attorney General, State of North Carolina, Lisa M. Jaeger,  Brian J. Renaud and Anthony C. Sullivan argued the issues  for petitioners.  Counsel appearing with them on the briefs  were Andrea Bear Field, Mel S. Schulze, James D. Elliott,  Allison D. Wood, Grant Crandall, Eugene M. Trisko, Jeff F.  Cherry, Kathy G. Beckett, Scott D. Goldman, David M.  Flannery, Jeffrey J. Lettrich, Gale R. Lea, Charles S. Carter,  Deborah Ann Hotel, Theodore L. Garrett, Michael D. Hockley, Terry W. Schackmann, Robert M. Sussman, Claudia M.  O'Brien, Scott H. Segal, Charles E. Dunn, Rhonda Lee Ross,  Robert L. Brubaker, Andrew S. Bergman, Alan H. McConnell, Kurt E. Blase, J. Jeffrey McNealey, Michael F. Easley,  Attorney General, Grayson G. Kelley, Senior Deputy Attorney General, Thomas J. Ziko and J. Allen Jernigan, Special  Deputy Attorneys General, Marc D. Bernstein, Assistant  Attorney General, State of North Carolina, James M. Hauck,  Gordon Alphonso, Stuart Pierson, Geoffrey K. Barnes, Scott  T. Kragie, Lisa G. Dowden, Matthew W. Ward, Kathy G.  Beckett, Scott Goldman, Eliot Spitzer, Attorney General,  Peter H. Schiff, Senior Counsel, J. Jared Snyder and Michael  J. Myers, Assistant Attorneys General, State of New York,  Thomas F. Reilly, Attorney General, William L. Pardee,  Assistant Attorney General, Commonwealth of Massachusetts, M. Dukes Pepper, Jr., Commonwealth of Pennsylvania,  Jennifer M. Granholm, Attorney General, Thomas L. Casey,  Solicitor General, Alan F. Hoffman, Assistant Attorney General, State of Michigan, John G. Horne, II, Jack B. Bates,  Susan Rose Green, Commonwealth of Kentucky, Betty D.  Montgomery, Attorney General, Bryan F. Zima, Assistant  Attorney General, State of Ohio, Mark L. Earley, Attorney  General, Steward T. Leeth, Assistant Attorney General, Commonwealth of Virginia, Karen M. Freeman-Wilson, Attorney  General, Steven D. Griffin, Deputy Attorney General, State of  Indiana, Thomas H. Zerbe, Office of Legal Services, State of  West Virginia, Bill Pryor, Attorney General, Prudence A.  Cash-Brown, Assistant Attorney General, State of Alabama.  Thomas Y. Au and Gene E. Godley entered appearances.
David J. Kaplan, Norman L. Rave, Jr. and Scott Williams,  Attorneys, U.S. Department of Justice, argued the cause for  respondents.  With them on the briefs were Lois J. Schiffer,  Assistant Attorney General, Alexandra Teitz, Howard Hoffman and Dwight C. Alpern, Attorneys, U.S. Environmental  Protection Agency.  Christopher S. Vaden, Attorney, entered  an appearance.
William L. Pardee, Assistant Attorney General, Commonwealth of Massachusetts, argued the cause for intervenors  Commonwealth of Massachusetts, et al. and amicus curiae  State of New Jersey.  With him on the briefs were Thomas  F. Reilly, Attorney General, Commonwealth of Massachusetts, Eliot Spitzer, Attorney General, J. Jared Snyder, Assistant Attorney General, State of New York, Richard Blumenthal, Attorney General, Richard F. Webb, Assistant Attorney  General, State of Connecticut, M. Dukes Pepper, Jr., Commonwealth of Pennsylvania, Philip McLaughlin, Attorney  General, Maureen D. Smith, Assistant Attorney General,  State of New Hampshire, William H. Sorrell, Attorney General, Dianne H. Sanford, Assistant Attorney General, State  of Vermont, Sheldon Whitehouse, Attorney General, Tricia  Jedele, Assistant Attorney General, State of Rhode Island,  John J. Farmer, Jr., Attorney General, Howard Geduldig,  Deputy Attorney General, State of New Jersey.  Roger L.  Chaffe, Senior Assistant Attorney General, Commonwealth of Virginia, and Ronald A. Shems, Assistant Attorney General,  State of Vermont, entered appearances.
Andrea Bear Field, Norman W. Fichthorn and Mel S.  Schulze appeared on the brief of Appalachian Power Company, et al. as intervenors.
David W. Marshall, Ann Brewster Weeks and David G.  Hawkins appeared on the brief of intervenors Natural Resources Defense Council, et al.  Raissa Griffin entered an  appearance.
David P. Novello was on the brief of the Electric Generator  intervenors.
Before:  Williams, Ginsburg and Sentelle, Circuit Judges.
Opinion for the Court filed Per Curiam.*

1
PER CURIAM.
TABLE OF CONTENTS
I.  BACKGROUND...............................................1036
    A. Statutory Framework...................................1037
    B. The NOx SIP Call..................................... 1037
    C. The Original Section 126 Rule-Conditional Findings....1038
    D. Revised Section 126 Rule-Final Findings...............1039
II. COMMON AND GENERAL ISSUES................................1040
    A. Scrivener's Error.....................................1040
    B. The NOx SIP Call and § 126............................1044
    C. Significant Contribution..............................1048
    D. Emission Limitation Determinations....................1051
       1. Standard of Review.................................1051
       2. The Integrated Planning Model......................1052
       3. EGU Growth Factors.................................1053
       4. Non-EGU Budget Determinations......................1055
       5. Local Regulation and Permit Trading................1055
    E. Regulation of "Future" Sources........................1056
    F. The Dorris Report.....................................1058
III.NON-ELECTRIC GENERATING UNIT ISSUES......................1060
    A. Alleged Budget Allocation Errors......................1060
    B. Treatment of Cogenerators.............................1061
    C. Source-Specific Issues................................1063
       1. AK Steel Corporation.............................. 1063
       2. New Boston Coke Corporation........................1064
IV. FACILITY-SPECIFIC ISSUES.................................1064
    A. Midland Cogeneration Venture..........................1065
    B. Indiana Municipal Power Agency........................1065
V.  PITTSBURGH...............................................1066
VI. CONCLUSION...............................................1067

2
In response to petitions from several northeastern states  that alleged that nitrogen oxide emitted in neighboring states  was harming their local air quality, the Environmental Protection Agency promulgated a rule that requires many NOx emitting facilities in several midwestern and southeastern  states to conform to emission limits set by the EPA and to  participate in an emissions trading program.  Numerous petitioners challenge the rule as inconsistent with the Clean Air  Act, arbitrary and capricious, and technically deficient.  We  uphold most aspects of the rule but remand several particulars to the Agency for reconsideration.

I. BACKGROUND

3
On January 18, 2000, the Environmental Protection Agency  ("EPA") issued its final rule to control emissions of nitrogen oxide ("NOx") under section 126 of the Clean Air Act  ("CAA").  42 U.S.C.  7426.  Under certain conditions, NOx  combines with hydrocarbons in the atmosphere to create  ozone, commonly known as "smog."  In the January rule, the  EPA made final its findings that stationary sources of NOx emissions in twelve upwind states and the District of Columbia contribute significantly to ozone nonattainment in northeastern states.  This finding triggers direct federal regulation  of stationary sources of NOx in the upwind states.  The rule  further established a "cap and trade" system for NOx emissions within each upwind jurisdiction.  Covered sources must  obtain NOx emission allowances to cover their emissions,  adopt additional emission controls, or cease operations.  Numerous petitions for review challenge various aspects of the  rule.

A. Statutory Framework

4
Under the Clean Air Act, the EPA promulgates national  ambient air quality standards ("NAAQS") for criteria air  pollutants, including tropospheric ozone.  See 42 U.S.C.   7409.  The EPA then designates those areas of the United  States that fail to meet the various NAAQS.  42 U.S.C.   7407(d).  States, in turn, are required to adopt state implementation plans ("SIPs") providing for the attainment of the  NAAQS.  42 U.S.C.  7410.  The SIPs are submitted to the  EPA for approval, and may be revised at the EPA's insistence if found to be inadequate to ensure maintenance of the  NAAQS or public health.  States that fail to comply with  these requirements are subject to various sanctions and the  imposition of a Federal Implementation Plan ("FIP").  42  U.S.C.  7509.

5
Much air pollution is a local or regional problem.  Some  pollution, however, is caused or augmented by emissions from  other states.  Emissions from "upwind" regions may pollute  "downwind" regions.  Several provisions of the CAA are  designed to address such transboundary air pollution.  In particular, section 110(a)(2)(D)(i)(I) of the Act requires states  to prohibit emissions within the state in amounts that will  "contribute significantly to nonattainment in, or interfere with  maintenance by, any other State" of the NAAQS.  42 U.S.C.   7410(a)(2)(D)(i)(I).

6
CAA section 126 provides a mechanism whereby downwind  states may petition the EPA to directly regulate upwind  sources of pollution.  Under section 126(b), 42 U.S.C.   7426(b), a downwind state "may petition the Administrator  for a finding that any major source or group of stationary  sources emits or would emit any air pollutant in violation" of  CAA section 110(a)(2)(D).  Once the EPA makes a section  126(b) finding, section 126(c) provides that:

7
it shall be a violation of this section and the applicable implementation plan in such State

8
(1) for any major proposed new (or modified) source with respect to which a finding has been made under subsection (b) of this section to be constructed or to operate in violation [of this section or section 110], or

9
(2) for any major existing source to operate more than three months after such finding has been made with respect to it.

10
42 U.S.C.  7426(c).  The Administrator may allow the continued operation of existing sources beyond three months  provided such sources comply with emission limitations and  compliance schedules provided by the Administrator which  "bring about compliance ... as expeditiously as practicable,  but in no case later than three years after the date of such  finding."  Id.

11
At issue in this case is the extent of the EPA's authority to  make findings and directly regulate sources in upwind states  under section 126, and whether the EPA's section 126 rule  was arbitrary and capricious or contrary to law.

B. The NOx SIP Call

12
In October 1998, the EPA issued a final rule calling upon  twenty two states1 and the District of Columbia to revise  their ozone SIPs to address interstate air pollution (aka  "interstate transport").  See Finding of Significant Contribution and Rulemaking for Certain States in the Ozone Transport Assessment Group Region for Purposes of Reducing  Regional Transport of Ozone, 63 Fed. Reg. 57,356 (1998)  ("NOx SIP Call").  Concluding that upwind states contribute  significantly to ozone nonattainment problems in downwind  states, the EPA required each jurisdiction to promulgate a  new SIP to reduce NOx emissions.  This "NOx SIP call"  required states to reduce NOx emissions by the amount that  could be accomplished by emission controls capable of reducing emissions at a cost of $2,000 or less per ton.  Under the  rule, revised SIPs were due by September 30, 1999, and SIP  provisions covering stationary sources had to be implemented  by May 1, 2003.  Failure to submit an adequate NOx SIP by  the deadline would result in implementation of a FIP by the  EPA.  In other words, if the states do not submit a plan for  meeting their CAA obligations, the EPA will impose one of its  own.

13
C. The Original Section 126 Rule-Conditional Findings

14
In August 1997, eight states submitted petitions requesting  that the EPA find that stationary sources in upwind states  contribute significantly to downwind air pollution.  Specifically, the petitioning states sought findings pursuant to CAA  section 126(b), 42 U.S.C.  7426(b), that specified sources or  categories thereof are the source of NOx emissions that contribute significantly to ozone nonattainment in the petitioning states in violation of CAA section 110(a)(2)(D).  42  U.S.C.  7410(a)(2)(D).  Each petition further sought to have  the EPA implement direct federal regulation of stationary  sources in upwind states, primarily electric generating facilities and fossil-fuel fired industrial boilers and turbines.  Because the section 126 petitions raised many of the same issues  as the NOx SIP call, and would require comparable emission  reductions, the EPA coordinated its response to the section  126 petitions with the NOx SIP call rulemaking.

15
In a final rule published on May 25, 1999, the EPA  determined that NOx emissions in twelve states and the  District of Columbia contribute significantly to nonattainment of the one-hour ozone NAAQS in Connecticut,  Massachusetts, New York, and Pennsylvania.  Findings of  Significant Contribution and Rulemaking on Section 126 Petitions for Purposes of Reducing Interstate Ozone Transport,  64 Fed. Reg. 28,250 (May 25, 1999) ("May 1999 Rule").  The  twelve states are Delaware, Indiana, Kentucky, Maryland,  Michigan, New Jersey, New York, North Carolina, Ohio,  Pennsylvania, Virginia, and West Virginia.

16
Rather than make section 126 findings at that time, however, the EPA determined that it was appropriate to postpone  such findings pending the resolution of the NOx SIP call  process.  Accordingly, the EPA issued a rule providing that  the findings would automatically be deemed made with regard to sources from a given state should that state fail to  comply with a NOx SIP call deadline.  The EPA based this  decision on the judgment that full compliance with the NOx  SIP call would obviate the need for section 126 findings. Once made, the section 126 findings would require covered  sources to come into compliance no later than May 1, 2003. Sources that failed to comply by that date would be required  to cease operations.

D. Revised Section 126 Rule-Final Findings

17
Subsequent to the completion of the section 126 rulemaking,2 this court issued two orders which caused the EPA to  change course.  First, on May 14, 1999 this court remanded  the EPA's proposed revisions to the ozone NAAQS.  American Trucking Ass'ns v. EPA, 175 F.3d 1027, reh'g granted in  part and denied in part, 195 F.3d 4 (D.C. Cir. 1999), rev'd in  part sub nom. Whitman v. American Trucking Ass'ns, 121 S.  Ct. 903 (2001).  Second, this court issued an order staying the  NOx SIP call deadline.  Michigan v. EPA, No. 98-1497 (D.C.  Cir. May 25, 1999) (order granting stay in part).

18
In response to these orders, the EPA revised the section  126 rule.  Findings of Significant Contribution and Rulemaking on Section 126 Petitions for Purposes of Reducing Interstate Ozone Transport, 65 Fed. Reg. 2674 (Jan. 18, 2000)  ("Jan. 2000 Rule").  In particular, the EPA made the requested findings of significant contributions, granting the  relevant portions of the section 126 petitions and delinking  the section 126 findings from compliance with the NOx SIP  call.  The EPA explained that it was "implementing the  requirements of section 126 of the CAA in the absence of any  currently effective requirement for upwind States to address  the interstate pollution transport problems themselves."  Id.  at 2683.  Instead, the EPA's new rule contained a provision  to withdraw the relevant findings upon approval of a NOx SIP  in accordance with the October 1998 NOx SIP call.

19
As with the NOx SIP call, the EPA considered both NOx  emissions and the cost of control in determining which  sources contribute significantly to downwind ozone nonattainment.  Based upon its analysis of the cost of emissions  controls, the EPA concluded that measures which can reduce  NOx emissions for $2,000 or less per ton are highly cost effective.  May 1999 Rule, 64 Fed. Reg. at 28,299.  The EPA  then divided NOx emission sources into various categories and  determined the level of emission reduction that would be  highly cost-effective for each category.  Id. at 28,300-01.

20
The section 126 rule also established an emission allowance  "cap and trade" program, known as the Federal NOx Budget  Trading Program.  Under this program, originally outlined in  the May 1999 rule, regulated sources are allocated tradeable  NOx emission allowances and are prohibited from emitting  more NOx than the amount of allowances held.  If a facility  emits more than its initial allowance allocation, it must purchase additional allowances from another facility, reduce its  emissions, or cease operations.  Jan. 2000 Rule, 65 Fed. Reg.  at 2733.

21
To determine the initial allocations, the EPA established a  NOx emission cap for each upwind state.  Each state's cap is  based upon expected emission reductions from highly costeffective controls in that state as of 2007.  Id. at 2698. Ninety-five percent of each state's cap is allocated proportionally among existing sources based upon each facility's heat  input.  Five percent of the cap is set aside for future, as-yetunproposed sources.  Id. at 2698-99.  These initial allocations  will apply for the 2003-07 time period.  Id. at 2700.  The  EPA will issue revised allocations for the 2008-12 time period, and every five years thereafter.  Id.

22
Since the issuance of the final section 126 rule, this Court  has ruled on various challenges to the EPA's NOx SIP call. In Michigan v. EPA, 213 F.3d 663 (D.C. Cir. 2000), we  upheld the SIP call in most respects, remanding portions of  the rule to the EPA.  Of greatest relevance to these proceedings, we upheld the EPA's analyses of interstate transport of  NOx emissions and its use of cost-effectiveness criteria in  determining which upwind sources "contribute significantly"  to nonattainment in downwind states.  Subsequently, we entered an order amending the deadline for full implementation  of NOx SIP revisions from May 1, 2003 to May 31, 2004. Michigan v. EPA, No. 98-1497, 2000 WL 1341477 (D.C. Cir.  Aug. 30, 2000) (order denying motion to stay mandate pending petition for certiorari).

23
After the EPA published the final section 126 rule in  January 2000, numerous groups petitioned this Court for  review.  Among the petitioners are a group of upwind states  from the midwestern and southeastern United States ("MW  & SE State Petitioners");  utilities and other operators of  electric generating facilities ("Non-State Petitioners");  companies that operate non-electric generating/industrial facilities  ("Non-EGU Petitioners");  and several individual companies  that have facility-specific concerns ("Facility-Specific Petitioners").  A group of northeastern states ("NE State Petitioners") also petitioned for review alleging that the EPA's  rule did not go far enough in controlling upwind NOx emissions.  The northeastern states otherwise intervened in support of the EPA, as did a group of environmental organizations.  The various petitions for review were consolidated into  this case.

II. COMMON AND GENERAL ISSUES
A. Scrivener's Error

24
The Clean Air Act Amendments of 1990 eliminated a  subsection of  110 of the Clean Air Act ("CAA"), causing   110(a)(2)(E) to be renumbered as  110(a)(2)(D).  See  Clean Air Act, Pub. L. No. 101-549, sec. 101(b),   110(a)(2)(D), 104 Stat. 2399, 2404 (1990) (codified at 42  U.S.C.  7410(a)(2)(D)).  The Amendments correspondingly  updated several references to  110(a)(2)(E)(i) that had appeared in  126 of the Clean Air Act, but changed them to  read "section 110(a)(2)(D)(ii)."  See Clean Air Act, Pub. L.  No. 101-549, sec. 109(a),  126(b)-(c), 104 Stat. at 2469-70  (codified at 42 U.S.C.  7426).  The 1990 Amendments thus  not only substituted "(D)" for "(E)" in  126, as necessitated by the renumbering, but also substituted "(ii)" for "(i)."  The  EPA, which contends that the Congress amended  126 only  in order to update the cross-references so as to preserve the  status quo ante, claims that this substitution of "(ii)" for "(i)"  was "inadvertent[ ]."  May 1999 Rule, 64 Fed. Reg. at  28,267/3.  The agency therefore construes  126 as if this  "inadvertence" had not occurred, i.e., as if that section referred to  110(a)(2)(D)(i).  See id.  The Non-State Petitioners, by contrast, argue that  126 should be read as written,  that is, to refer to  110(a)(2)(D)(ii).

25
Section 126 gives a state the right to petition the EPA to  find "that any major source or group of stationary sources [in  another state] emits or would emit any air pollutant in  violation of the prohibition of" a subsection of  110(a)(2)(D),  the subsection here at issue.  42 U.S.C.  7426(b).  As we  have noted, the ability of such a source or group of sources to  operate is severely constrained once such a finding is made. 42 U.S.C.  7426(c).  The constraints in  126(c) are triggered by the "prohibition" in whichever subsection of   110(a)(2)(D) it is that  126 cross-references.  Section  110(a)(2)(D) provides that a state implementation plan  ("SIP"), which describes how a state plans to comply with the  National Ambient Air Quality Standards ("NAAQS"), must

26
(D) contain adequate provisions

27
(i) prohibiting ... any source or other type of emissions activity within the State from emitting any air pollutant in amounts which will

28
(I) contribute significantly to nonattainment in, or interfere with maintenance by, any other State with respect [to the NAAQS] or

29
(II) interfere with [various other] measures.

30
(ii) insuring compliance with the applicable requirements of sections 7426 [CAA  126] and 7415 [CAA  115] of this title (relating to interstate and international pollution abatement).

31
42 U.S.C.  7410(a)(2)(D).  Thus, prior to the 1990 Amendments,  126 provided an avenue by which a state could compel the EPA to enforce emissions limitations upon a  neighboring state the emissions from which contributed to its  own nonattainment of the NAAQS.  The EPA argues that   126 should still be read to have this effect, notwithstanding  the substitution of "(ii)" for "(i)" therein.

32
Reading a statute contrary to its seemingly clear meaning  is permissible "[i]f 'the literal application of a statute will  produce a result demonstrably at odds with the intentions of  its drafters.' "  Mova Pharm. Corp. v. Shalala, 140 F.3d 1060,  1068 (D.C. Cir. 1998) (quoting United States v. Ron Pair  Enterprises, 489 U.S. 235, 242 (1989)).  We will not, however,  invoke this rule to ratify an interpretation that abrogates the  enacted statutory text absent an extraordinarily convincing  justification:

33
[T]he court's role is not to "correct" the text so that it better serves the statute's purposes, for it is the function of the political branches not only to define the goals but also to choose the means for reaching them....  Therefore, for the EPA to avoid a literal interpretation at Chevron step one, it must show either that, as a matter of historical fact, Congress did not mean what it appears to have said, or that, as a matter of logic and statutory structure, it almost surely could not have meant it.

34
Engine Mfrs. Ass'n v. EPA, 88 F.3d 1075, 1089 (D.C. Cir.  1996).  The EPA's reading of the reference in  126 to   110(a)(2)(D)(ii) to mean  110(a)(2)(D)(i) meets this test. The cross-references to  110(a)(2)(D)(ii) that appear in  126  clearly do not reflect the intent of the Congress.  Although  the cross-references as written "point[ ] in one direction, all  the other evidence from the statute points the other way,"  United States Nat'l Bank of Oregon v. Independent Ins.  Agents of America, Inc., 508 U.S. 439, 455 (1993).  See  Thomas W. Merrill, Golden Rules for Transboundary Pollution, 46 Duke L.J. 931, 955 n.124 (1997) ("[S]ection 126(b)  contains what appears to be a typographical error which, if  read literally, would render the EPA's obligation to make [a   126] finding meaningless").

35
For example, although  126 twice refers to the "prohibition of section 7410(a)(2)(D)(ii) [CAA  110(a)(2)(D)(ii)],"  there is no literal "prohibition" in that section--whereas there  is in  110(a)(2)(D)(i) ("prohibiting ... any source").  The  petitioners dismiss this point, arguing that "prohibition" is not  a term of art and that it easily embraces the directive of   110(a)(2)(D)(ii) to "insur[e] compliance with the applicable  requirements of sections 7426 [CAA  126] and 7415 [CAA   115]."  For support, the petitioners note that the third and  final reference to  110 in  126 refers to the "requirements  contained in section 7410(a)(2)(D)(ii) [CAA  110(a)(2)(D)(ii)]." 42 U.S.C.  7426(c).  Although the "requirements" of these  sections certainly include some "prohibitions," the petitioners'  argument that the two terms are "interchangeabl[e]"  stretches the ordinary meaning of the term "prohibition."  It  does not, however, stretch that meaning beyond recognition. Taken alone, therefore, the usage is insufficient to prove the  agency's claim of scrivener's error;  in conjunction with the  other evidence described below, however, it lends credence to  the view that such an error indeed was made.

36
A similar analysis applies to the observation that  126 as  written creates a circular cross-reference:  both  126(b) and   126(c) refer to the "prohibition" or "requirements" of   110(a)(2)(d)(ii), which in turn mandates compliance with  "the applicable requirements of [CAA  126]."  Although a  fully circular cross-reference would be absurd, the petitioners  note that  110(a)(2)(d)(ii) refers to  126 in its entirety,  rather than to   126(b) and (c) alone;  it thus includes the  requirement of  126(a) that a state's SIP provide for notifying its neighbors of any major proposed new source that  might affect their air quality adversely, see 42 U.S.C.   7426(a).  This reading is not unreasonable.  Cf. Connecticut  v. EPA, 656 F.2d 902, 907 (2d Cir. 1981) ("When [CAA   110(a)(2)(D)(ii)] requires an SIP to insure compliance with   126, it clearly refers to subsection (a) [of  126] only and  not to the petition procedure set forth in subsection (b)").  A  statute that incorporates a cross-reference that is only partially circular is not for that reason absurd, although--as in  this case--such a reference may make the statute sufficiently convoluted to warrant searching for a less infelicitous construction.

37
It is impossible to accept, however, that the Congress  intended simultaneously to repeal the regulatory regime that  had existed before the 1990 Amendments and to replace it  with the one that the petitioners describe.  See Nat'l Bank of  Oregon, 508 U.S. at 454 (eschewing "purported plain-meaning  analysis" of statute as written when scrivener's error has  "distort[ed] a statute's true meaning");  id. at 461 n.10 (holding theory of scrivener's error constituted "best reading" of  statute notwithstanding that statute as written could be coherently explained).  Before the 1990 Amendments--and still  today, under the EPA's reading--s 126 provided a mechanism by which a state could compel the EPA to control  emissions from sources in a neighboring state that contributed to the complaining state's nonattainment of the NAAQS. See 42 U.S.C.  7426(b)-(c).  The petitioners argue that, by  substituting "(ii)" for "(i)" in the cross-references of  126,  the Congress intended to withdraw the state's right to force  the hand of the EPA when emissions from a neighboring  state contributed to its own violation of the NAAQS, and  simultaneously to create a right by which a state may compel  such enforcement when a neighboring state fails to meet "the  requirements of [42 U.S.C.   ] 7426 and 7415 of this title  [CAA   126 and 115] (relating to interstate and international  pollution abatement)."  42 U.S.C.  7410(a)(2)(D)(ii).

38
This reading makes no sense of either  126 or  115.  As  we have noted, in order to avoid circularity, the petitioners  suggest that the reference to  126 in  110(a)(2)(d)(ii) refers  only to the notification requirements of  126(a).  According  to the petitioners' reading, the 1990 amendment of   126(b)  and (c) gave each state the right to compel enforcement  against another state that fails to provide notice of new  sources and took away their right to compel enforcement  against a state that actually pollutes the complaining state's  air.  Even were we to assume that such a counterintuitive  switch from substantive to procedural compliance could plausibly reflect congressional policy, the petitioners' reading  would still be flawed.  Section 126(b) permits a state to petition the EPA to find that "any major source or group of  stationary sources emits or would emit any air pollutant in  violation of the prohibition of section 7410(a)(2)(D)(ii) [CAA   110(a)(2)(D)(ii)]."  42 U.S.C.  7426(b).  The notice requirement of  126(a), to which the petitioners claim this reference  ultimately points, binds states only to warn their neighbors of  proposed new and modified sources;  it does not restrict the  behavior of sources or groups of sources, whose "violation" of   110(a)(2)(D) is the predicate for a  126(b) finding.  See id.   7426(a).

39
For  126 to incorporate the reference of  110(a)(2)(d)(ii)  to  115 is similarly anomalous.  Section 115 allows a foreign  nation affected by a state's emissions to complain to the EPA,  which can then require the state to revise its SIP.  42 U.S.C.   7415.  According to the petitioners, the 1990 Amendments  created a new right whereby a state may compel enforcement  against a neighboring state polluting a foreign country, while  simultaneously abrogating that state's preexisting right to  compel enforcement against a neighboring state polluting the  complaining state.  That any state would be empowered to  trump the EPA's discretion in an international dispute to  which it is not a party--even as it lost the power to address  another state's pollution of its own air--cannot be taken to  express congressional intent if there is any plausible alternative reading of the statute.

40
The petitioners' suggestion that the enactment of   176A  and 184, 42 U.S.C.   7506a, 7511c, as part of the 1990  Amendments somehow mitigates these problems is without  foundation.  Those sections authorize the EPA to designate a  multistate "transport region" in a case where one state's  emissions affect another state's attainment of the NAAQS; for each such region, the EPA must convene a "transport  commission," including officials from each state within the  region, to advise the EPA Administrator.  Id.  The petitioners correctly describe these new sections as establishing, at  least in part, a new approach to interstate air pollution. Because the Congress did not repeal  126, however, this new  approach was clearly not meant to be exclusive;  and neither  176A nor  184 renders the change in  126 from "(i)" to  "(ii)" any less linguistically or substantively anomalous.

41
Even if the Congress had simultaneously enacted   176A,  184 and 126 as written, we might not embrace the petitioners'  reading.  See Environmental Defense Fund, Inc. v. EPA, 82  F.3d 451, 468 (D.C. Cir. 1996) (refusing to construe a statute  literally in order to avoid "absurd and futile results").  This  case, however, is much clearer:  the EPA has demonstrated  not only that  126 as written is at odds with congressional  intent;  it also offers a convincing account of how it came to be  enacted nevertheless.  We find it quite plausible that the  Congress substituted "(ii)" for "(i)" in  126 inadvertently in  the course of a routine renumbering of statutory crossreferences.  Cf.  In re Chateaugay Corp., 89 F.3d 942, 953-54  (2d Cir. 1996) (accord regarding a post-amendment renumbering of the bankruptcy code).

42
Because the EPA has established that the "seemingly clear  statutory language does not reflect the 'unambiguously expressed intent of Congress,' " Mova, 140 F.3d at 1068 (quoting Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 842 (1984)), we proceed under Chevron  step two to consider whether the EPA's construction of  126  is reasonable.  Lest it "obtain a license to rewrite the statute," id., however, we do not give an agency alleging a  scrivener's error the benefit of Chevron step two deference,  by which the court credits any reasonable construction of an  ambiguous statute.  Rather, the agency "may deviate no  further from the statute than is needed to protect congressional intent."  Id.  By reading  126 to refer to   110(a)(2)(D)(i)--thus restoring it to the meaning it had  before the 1990 Amendments, as the Congress almost certainly intended--the EPA in no way overreaches;  we therefore  accept its reading.3

B. The NOx SIP Call and  126

43
The Administrator of the EPA must require a state to  revise its SIP "as necessary" whenever she finds such a plan  "substantially inadequate to ... comply" with various requirements of the Act, including the requirement that the  plan "contain adequate provisions" to prevent sources within  a state from contributing significantly to any other state's  nonattainment or nonmaintenance of the NAAQS.  Id.    7410(a)(2)(D)(i)(I), 7410(k)(5).  Pursuant to this authority,  in October 1998 the EPA issued a request for SIP revisions,  or a "SIP call," that required 22 states and the District of  Columbia to revise their SIPs in order to mitigate the interstate transport of ozone.  Michigan v. EPA, 213 F.3d 663,  669 (D.C. Cir. 2000) (explicating NOx SIP Call, 63 Fed. Reg.  at 57,358-59).  This court upheld the essential elements of the  NOx SIP call in March 2000, although we remanded the rule  for further proceedings with regard to three states and to  certain types of sources.  Id. at 695.

44
In August 1997, during the preparation of the NOx SIP call,  eight states petitioned the EPA to find, pursuant to CAA   126(b), that "major stationary sources or groups of sources"  in specified states were contributing to the petitioning states'  failure to meet the NAAQS for ozone.  42 U.S.C.  7426(b). In the first of the two rules challenged here, the EPA  announced that because it was "operating on basically the  same set of facts" in making determinations under  126 as it  had when it issued the NOx SIP call--that is, facts showing  that upwind sources contributed to downwind nonattainment  of the NAAQS--it would eschew making formal findings  under  126.  May 1999 Rule, 64 Fed. Reg at 28,274/3,  28,275/2.  Instead, the agency made the "affirmative technical  determination" that sources in upwind states were contributing to nonattainment in downwind states, and provided that a  formal finding to that effect under  126 would be

45
deemed to be made for such sources in a state if by May 1, 2000, EPA has not either (a) approved a state's SIP revision to comply with the NOx SIP call or (b) promulgated implementation plan provisions meeting the [CAA] section 110(a)(2)(D)(i) requirements.

46
Id. at 28,275/2.

47
The EPA used this "automatic trigger mechanism," Jan.  2000 Rule, 65 Fed. Reg. at 2679/1, as part of a "coordinated  approach" to the SIP call and the  126 petitions, May 1999  Rule, 64 Fed. Reg. at 28,275/3:   126 findings would be  withheld until the conclusion of the SIP call, but would be  entered automatically should a state's response to the SIP  call be either unsatisfactory or untimely.  May 1, 2000 was  chosen as the date for triggering the  126 finding because   126(c) allows the EPA to permit sources found to contribute to another state's nonattainment to continue to operate  for no more than three years after the date of such a finding. 42 U.S.C.  7426(c).  For findings made on May 1, 2000, the  three-year clock would expire on May 1, 2003--the same date  by which states were required to have implemented controls  over sources of interstate ozone under the original NOx SIP  call.  See NOx SIP Call, 63 Fed. Reg. at 57,308/1.

48
The congruence between the two schedules was disrupted  by an order of this court staying the EPA's original SIP call deadline.  See Michigan v. EPA, No. 98-1497 (D.C. Cir. May  25, 1999);  see also Michigan v. EPA, No. 98-1497, 2000 WL  1341477 (D.C. Cir. Aug. 30, 2000) (ordering new deadline of  May 31, 2004 for implementation of SIPs that are revised  pursuant to the SIP call).  The extended timetable for the  SIP call led the EPA to determine that "the circumstances  under which the linkage between action on the section 126  petitions and the NOx SIP call was appropriate are no longer  present."  Jan. 2000 Rule, 65 Fed. Reg. at 2680/1;  see also  id. at 2676/2.  The EPA therefore abandoned the automatic  trigger mechanism and instead simply made the  126 findings.  See id. at 2679/1.

49
The EPA maintains that its approach is necessitated by the  "language and purposes of section 126" and that it is consistent with "the language of section 110, the cooperative federalism structure of title I of the CAA, [and this] court's  decision to stay the deadlines for States to submit SIP  revisions under the NOx SIP call."  Id. at 2680/1.  The MW &  SE State and Non-State Petitioners disagree.  They argue  that   110 and 126 require the agency to refrain from  making any  126 findings while the NOx SIP call is ongoing,  and that a similar constraint is imposed by the doctrine of  "cooperative federalism" that this court has recognized as  being embodied in the Act.

50
Once the "prohibition" to which  126 refers is understood  as the "functional prohibition" upon emissions of pollutants  that subsequently cross state lines, the petitioners can find  little support for their position by parsing   110 and 126.4 The Non-State Petitioners argue that

51
[a]t a time when the relevant States were under a legal obligation to adopt "adequate [SIP] provisions" to control NOx emissions found by EPA to significantly contribute to ozone nonattainment--and at a time when States had not defaulted on that obligation--EPA lacked the authority to determine that those same States' NOx emission sources were "in violation" of that same prohibition.

52
Non-State Petitioners Br. at 29.  This statement lacks a  logical basis.  It is entirely reasonable for the EPA to regard  a state that is under a legal obligation to revise its plan as  being, in the meantime, in violation of a functional prohibition.

53
The petitioners' primary argument, therefore, is that Title I  of the Clean Air Act is animated by a commitment to "cooperative federalism" under which the EPA is to determine what  level of air quality is required but must defer in the first  instance to the judgments of the states regarding how to  achieve that level.  This principle, according to the petitioners, requires that a SIP call inviting states to respond to the  problem of interstate transport be the preferred remedy,  while direct federal regulation of sources, as authorized by   126, must be a last resort reserved for cases in which states  cannot or do not meet their SIP obligation.

54
In Michigan this court assessed the legality of the emissions budgets that the EPA assigned to each state as part of  the NOx SIP call with respect to what we called the "TrainVirginia federalism bar."  213 F.3d at 687.  We referred  there to our holding in Virginia v. EPA, 108 F.3d 1397, 1408,  modified on other grounds, 116 F.3d 499 (1997), that under   110 each state retains the power, in its SIP, to determine  how it will achieve the NAAQS, and that the EPA may not  dictate to a state a particular "source-specific means" to that  end, a proposition for which we relied upon Train v. Natural  Resources Defense Council, Inc., 421 U.S. 60, 79 (1975).  This  principle, of course, cannot be absolute in the face of  126,  which contemplates that in at least some circumstances the  EPA will directly regulate sources within a state.  See 42  U.S.C.  7426(c).  Neither Train and Virginia nor Michigan  considered the interaction of their holdings with  126,5 but in  its 1999 rule the EPA noticed the tension between  126 and  the Train-Virginia line of cases, and properly sought to  accommodate the two:

55
Section 126 is somewhat unusual in Title I [of the CAA] in that it authorizes EPA to control sources directly, rather than providing a means for EPA to encourage states to control those sources.  In that sense, it is similar to the provisions for federal implementation plans in section 110(c).  With both of these provisions, Congress provided tools for direct federal action to address serious failures of state action.  Nevertheless, Congress' clear preference throughout Title I is that states are to decide and plan how they will control their sources of air pollution.

56
May 1999 Rule, 64 Fed. Reg. at 28,273/2.  This analysis led  the EPA to adopt the automatic trigger approach during the  pendency of the NOx SIP call.

57
The petitioners contend that the delay in the NOx SIP call  deadline, because it did not affect the "Congress' clear preference" for state implementation decisions, should not have altered the EPA's determination that the SIP call takes  precedence over  126.  The EPA, however, is obligated not  only to give to  110 a meaning that is consistent with Train  and Virginia, but also reasonably to construe  126.  The  EPA, which considers the two provisions to be "independent  statutory tools to address the problem of interstate pollution  transport" that the EPA may deploy either singly or in  tandem, Jan. 2000 Rule, 65 Fed. Reg. at 2680/1, reasonably  construes both provisions.

58
The EPA's view accords with the position of the Second  Circuit which, in Connecticut v. EPA, was presented with the  converse of the question before us:  Do §§ 110 and 126  require the EPA to postpone its approval of SIP revisions  pending its final action upon petitions for findings under   126(b)?  656 F.2d at 906-08.  Although the Connecticut  court suggested that "s 126(b) appears to have been primarily designed as a means for resolving interstate pollution  disputes in situations where an SIP is not being revised," id.  at 907--a dictum in some tension with the EPA's view that   126 is "independent" of the SIP revision process--the  Second Circuit's point was only that the EPA need not, upon  receipt of a  126 petition, suspend the SIP revision process. The court therefore concluded, properly we think, that "[a]s  the substantive inquiry for decision is the same in both [§ 110  and  126] proceedings, an argument that one proceeding  must be completed as a prerequisite to a final decision in the  other makes no sense."  Id. at 907;  see also id. at 908 n.4  (quoting statement of H.R. Rep. No. 95-249, at 331, reprinted  in 4 A Legislative History of the Clean Air Act Amendments  of 1977, at 2798 (1978), that "the  126(b) process is designed  to provide an 'entirely alternative method and basis for  preventing and abating interstate pollution' ") (emphasis omitted).

59
By contrast, three critical provisions of  126 would lose  their force if, as the petitioners suggest, the lengthened  timetable of the NOx SIP call were to suspend the  126  process.  First,  126 emphatically requires that any source found to contribute to downwind nonattainment may in no  event be permitted to operate for more than three years after  such finding.  See 42 U.S.C.  7426(c).  Second, under  126  "[r]elief does not depend upon any action by the upwind  states, as is necessary for a SIP revision."  May 1999 Rule,  64 Fed. Reg. at 28,264/2.  Third, relief under  126 is independent also of the discretionary policy preferences of the  EPA;  the agency must act upon a request for a  126 finding  within 60 days.  See 42 U.S.C.  7426(b).  Under the EPA's  approach, of course,  126 retains each of these features. See, e.g., Jan. 2000 Rule, 65 Fed. Reg. at 2681/1 ("Congress  provided section 126 to downwind states as a critical remedy  to address pollution problems ... otherwise beyond their  control, and EPA has no authority to refuse to act under this  section").

60
The petitioners argue, however, that the EPA's construction deprives  110 of its force because it constrains the  development of the SIP:  sources subject to a  126 finding  will be bound by emissions limitations set by the agency, see  42 U.S.C.  7426(c), and by the emissions trading program,  see Part II.D below, even if the state in which they are  located prefers to regulate different sources or to use different methods to mitigate downwind nonattainment.  The petitioners argue that such constraints violate  110 as interpreted in Virginia, but they plainly do not.  In Virginia, this  court disapproved the EPA's plan to reject SIPs that did not  incorporate particular limits upon emissions from new cars; we held that the EPA may not, as part of the "section 110  process," intervene in a state's choice of how to reach the  NAAQS.  108 F.3d at 1410;  cf. id. at 1406 (question is what is  permissible "under section 110").  We did not suggest that  under  110 states may develop their plans free of extrinsic  legal constraints.  Indeed, SIP development, like any environmental planning process, commonly involves decisionmaking  subject to various legal constraints.  That  126 imposes one  such limitation--and it is surely not the only independent  provision of federal law to do so--does not affect a state's  discretion under  110.

61
The MW & SE State Petitioners argue in the alternative  that, if   110 and 126 are independent, then the EPA may  select either one but cannot impose  126 findings and a SIP  call simultaneously.  Neither the statute nor the states' brief  offers support for this suggestion, and the states' suggestion  that the EPA embraced it in the preamble to its second rule  is without foundation.  Because it is reasonable, and because  the "Congress provided both [§§ 110 and 126] without indicating any preference for one over the other," Jan. 2000 Rule,  65 Fed. Reg. at 2680/1, the EPA's conclusion that these two  provisions operate independently merits our deference under  Chevron step two.  See Chevron, 467 U.S. at 843.

62
Finally, we note that the MW & SE State Petitioners  object to the EPA's construction of 40 C.F.R.  52.34(i),  which provides that  126 findings will be withdrawn if the  EPA takes "final action" to approve a SIP or impose a FIP  that will control NOx emissions that contribute to downwind  nonattainment.  See 40 C.F.R.  52.34(i) (2000), promulgated  at 65 Fed. Reg. at 2727.  Although the rule contains no date,  the agency avers that it will apply the rule only to SIPs or  FIPs adopted before May 1, 2003, the  126 deadline.

63
The Supreme Court recently held that we should not defer  to an agency's interpretation imputing a limiting provision to  a rule that is silent on the subject, lest we "permit the  agency, under the guise of interpreting a regulation, to create  de facto a new regulation."  Christensen v. Harris County,  529 U.S. 576, 588 (2000).  The Court, however, carefully  limited this principle to cases in which the agency's interpretation postdated its adoption of the rule and was not itself  "subject to the rigors of ... notice and comment."  Id. (citing  Reno v. Koray, 515 U.S. 50, 61 (1995)).  We therefore continue to grant "a high degree of deference" to an interpretation  that the agency promulgates contemporaneously with its own  regulation, affirming it "unless it is plainly erroneous or  inconsistent with the regulation."  Jersey Shore Broad. Corp.  v. FCC, 37 F.3d 1531, 1536 (D.C. Cir. 1994).

64
Here the agency contends that it imputed a date to   52.34(i) not post hoc but "[t]hroughout the Section 126  rulemaking."  Although the date might better have been  made explicit in the preamble to the rule, the agency did  clearly, albeit implicitly, assume that  52.34(i) would apply  only to SIPs promulgated before the  126 deadline.  This is  evident from the agency's express reservation for another  rulemaking of the question whether it would "automatically  withdraw the section 126 findings upon EPA approval of a  later SIP revision."  Jan. 2000 Rule, 65 Fed. Reg. at 2683/2. A contrary interpretation, moreover, would apparently create  a conflict between  52.34(i) and the  126 deadlines, the  sanctity of which the EPA emphasized throughout its rulemaking.  Because the EPA appears ever since the rule was  promulgated to have interpreted  52.34(i) to apply only to  SIPs approved before May 1, 2003, and because this interpretation is not "plainly erroneous or inconsistent with the  regulation," Jersey Shore, 37 F.3d at 1536, we defer to the  agency's view.

C. Significant Contribution

65
Non-State Petitioners challenge the methodology by which  EPA reached its findings of "significant contribution" to  nonattainment of the "1-hour" ozone rule under  126, 42  U.S.C.  7426.  EPA started with the two-step method that it  had used in issuing the SIP call and that we upheld in  Michigan v. EPA, 213 F.3d 663, 674-80 (D.C. Cir. 2000).  As  we explained there, EPA first performed computer modeling  to determine whether a state's manmade NOx emissions  perceptibly hindered a downwind state's attainment.  Id. at  675.  For any state exceeding EPA's threshold criteria, EPA  then defined as "significant" those emissions that could be  eliminated through application of "highly cost-effective" controls, namely measures costing no more than $2,000 per ton of  NOx removed.  Id.  Similarly, EPA relied here on the statewide threshold findings made in the SIP call and then applied  the same cost-effectiveness criterion to determine which  sources to include.  See Findings of Significant Contribution  and Rulemaking on Section 126 Petitions for Purposes of Reducing Interstate Ozone Transport, 63 Fed. Reg. 56,292,  56,301/3 (proposed Oct. 21, 1998) ("Oct. 1998 Rule").

66
As discussed above, see supra Part II.B, both the SIP call  and the  126 rulemaking are directly linked to the requirement under  110(a)(2)(D)(i) that SIPs contain 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...."   110(a)(2)(D)(i), 42 U.S.C.  7410(a)(2)(D)(i).  But the necessary determinations are different in at least two material  respects.  First, whereas the SIP call exercise yielded a total  amount of NOx cutback for each state, which the state was  then free to achieve however it might, see Michigan, 213 F.3d  at 687-88, here the mandate applies directly to sources. Second, whereas  110(a)(2)(D)'s broad reference to "any  source or other type of emissions activity" supported SIP call  findings based on aggregate emissions from within each  regulated state,  126 demands that the significant contribution come from a "major source or group of stationary  sources."  42 U.S.C.  7426(b) (emphasis added).

67
The Non-State Petitioners argue that this latter distinction  renders EPA's reliance on the SIP call findings inadequate; the findings based on all emissions can't determine whether  stationary source emissions are sufficient.  Instead of using  those findings, petitioners argue, EPA needed first to make  the more rigorous finding that the specified stationary  sources within a given state independently met its threshold  test for effect on downwind nonattainment.

68
Petitioners find support for their view of the statute in  Michigan, where we said that the first step in EPA's   110(a)(2)(D)(i) finding must show a "measurable contribution" to downwind nonattainment.  213 F.3d at 683-84. Here, EPA did not purport to satisfy such a standard on the  basis of the covered stationary sources alone.  Rather, it conceded, "[i]t is conceivable that modeling only the emissions  from the section 126 sources would result in smaller ambient  impacts downwind [compared to total man-made emissions],  and....  those smaller impacts, if analyzed on the basis of  the metrics and thresholds developed for State-wide [total  man-made] emissions, may not exceed those thresholds." May 1999 Rule, 64 Fed. Reg. at 28,283/1.

69
EPA defended its approach both as a recognition of the fact  that the ozone problem is due to the accumulation of emissions and as a sensible reconciliation of  110(a)(2)(D)(i) and   126.  See id. at 28,282-83.  On the need for some aggregation, of course, there can be no quarrel.  Congress's use of  the phrase "group of ... sources" plainly reflected a decision  to act against sources whose emissions, while harmless individually, could become harmful when combined with others. And, given the relevant statutory provisions, it was reasonable for EPA to link its stationary source findings to the  significance of a state's total NOx emissions.  By speaking of  stationary sources that emit pollutants "in violation of the  prohibition of [§ 110(a)(2)(D)(i)]," Congress clearly hinged the  meaning of  126 on that of § 110(a)(2)(D)(i).  EPA reasoned  that if it treated any state's entire manmade emissions as the  controlling aggregate for both purposes and found a "significant contribution," "then the State's section 126 sources may  be subject to SIP controls."  Id. at 28,282/3 (emphasis added). In other words, a source can be subject to  126 controls only  if it is at least at risk of being subject to SIP controls.  The  effect, of course, is to displace the discretion the state would  enjoy in the SIP process under  110(a)(2)(D)(i).  But this  displacement of state power seems not materially greater  than is inherent in EPA's interpretation of  126, which we  uphold vis-A-vis the objections petitioners raised in their  initial briefs.  See supra Part II.B.  EPA's current reading,  to be sure, may not be the only possible or even the most  compelling view of  126.  Perhaps the EPA could reasonably  read it as petitioners would, and require that stationary  sources as a whole independently satisfy some "meaningful  contribution" test before they may be subject to  126 findings.  But given  126's silence on what it means for a stationary source to violate  110(a)(2)(D)(i), EPA's approach  is at least reasonable, and therefore entitled to deference  under Chevron.

70
Petitioners point to language we used in Michigan striking  down part of what EPA had done there.  For certain states  EPA had analyzed emissions data only from a portion of the  state closest to the affected downwind areas, and, finding that  portion to have made contributions exceeding the threshold,  had made "contribution" findings for the entire state.  We  held this extension to the whole state invalid because EPA  might well have included areas that were "wholly innocent of  material contributions."  Michigan, 213 F.3d at 681-85.  In  that context, we said that a significant contribution finding  required evidence of a "measurable contribution" and that  "[i]nterstate contributions cannot be assumed out of thin air." Id. at 684.

71
In the present case Non-State Petitioners do not dispute  that emissions from affected  126 sources actually contribute  to total manmade NOx emissions that, at the statewide aggregate level, meet the EPA criteria upheld in Michigan.  The  process here does not involve sweeping up individual sources  that might well not be part of the problem at all.  The  concern that drove our discussion in Michigan is inapplicable.

72
Non-EGU Petitioners, by contrast, suggest a point that  might conceivably implicate Michigan's "measurable contribution" concern.  They argue that because EPA failed to  model the contribution of each particular source individually,  its findings ignore the effects of industrial sources' having  lower smoke stacks than utility sources.  If in fact NOx emissions from stationary sources with low smoke stacks do  not reach other states as easily as emissions from other  sources, these petitioners might have a point as to the scope  of what Michigan allows.  But the petitioners' vague claim  that lower stack height "affects the downwind impact" in no  way quantifies the effect, much less makes out a claim that certain sources do not measurably contribute to downwind  nonattainment.  In Michigan we left "EPA free to select  states as a unit of measurement," saying that "[i]n 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."  213  F.3d at 684.  So, too, the low-stack sources might have come  forward with such numbers, but they have not.  Or they  might have shown that EPA's modeling bore "no rational  relationship to the reality it purport[ed] to represent," Sierra  Club v. EPA, 167 F.3d 658, 662 (D.C. Cir. 1999), thereby  throwing the burden back on EPA, but they have not.

73
A final challenge to the "contribution" findings is the NonState Petitioners' argument that for four states (Indiana,  Kentucky, Michigan and New York) EPA used state-based  aggregations to find the contribution but then applied controls to sources in only part of each state.  This is a reverse  of what we struck down in Michigan:  there extension from  part to the whole, here, contraction from the whole to a part. EPA's explanation was that while the modeling was statewide,  126 empowered it only to address sources named in  the downwind states' petitions (which here they did by area). See Jan. 2000 Rule, 65 Fed. Reg. at 2685/1.  Petitioners do  not contest EPA's legal assumption, but simply say that the  process invalidates the finding.

74
EPA questions whether this objection was raised with  reasonable specificity, which under 42 U.S.C.  7607(d)(7)(B)  is a precondition for judicial review.  But in the rulemaking  itself EPA plainly acknowledged a claim that it was wrong to  rely on all manmade emissions from an entire state where the  petitions sought relief "from sources located in only a portion  of the upwind State."  May 1999 Rule, 64 Fed. Reg. at  28,292/3.  Nonetheless, petitioners' claim leaves out a critical  point.  Extension of a finding from an area responsible for  pollution problems to another area, where the two are linked  only by falling within state boundaries, raises obvious risks of  burdening the innocent with the guilty.  That risk is far lower  in moving from the whole to a part, at least in the absence of some reason to doubt that the part in question shared in the  state's "contribut[ory]" role or that it had been rationally  selected on the basis of relevant criteria.  Accordingly, the  principle that we accepted above in the context of the broad  claim (based on  126's exclusive focus on stationary  sources)--namely, that EPA may subject to  126 controls  any source that might have been subject to SIP controls  properly adopted under  110(a)(2)(D)(i), see id. at 28,282/3-appears to cover this issue equally well--at least in the  absence of any contention that the petitioning states were  arbitrary or discriminatory in their designation of sources  (whether they identified them by geographic category, as  here, or otherwise).

D. Emission Limitation Determinations

75
In order to allocate NOx emission allowances to individual  sources, the EPA made state-by-state emission projections  for 2007.  The EPA based each state's NOx emission budget  on projected 2007 heat input (or "utilization") for electric  generating units ("EGUs") and projected 2007 emissions for  non-electric generating, industrial facilities ("non-EGUs"). The projections were developed with computer models working off of "baseline" emissions and heat input data from 1995  and 1996.  Various petitioners challenge the EPA's budget  allocations as arbitrary and capricious.  While we generally  uphold the EPA's authority to make emission projections and  set emission limitations accordingly, we do so only where the  EPA adequately responded to comments and explained the  basis for its decisions.  Thus, although we uphold the EPA's  use of the Integrated Planning Model ("IPM") as against the  specific challenges forwarded by MW & SE Petitioners, we  conclude that at least one application of the model is sufficiently unexplained that we must remand the EPA's IPMderived growth factors for further explanation.

1. Standard of Review

76
Agency determinations based upon highly complex and  technical matters are "entitled to great deference."  Public  Citizen Health Research Group v. Brock, 823 F.2d 626, 628 (D.C. Cir. 1987);  see also Huls Am., Inc. v. Browner, 83 F.3d  445, 452 (D.C. Cir. 1996) ("[W]e will give an extreme degree  of deference to the agency when it 'is evaluating scientific  data within its technical expertise.' " (citation omitted)).  In a  prior case named Appalachian Power Co. v. EPA, 135 F.3d  791, 802 (D.C. Cir. 1998), we described statistical analysis as  "perhaps the prime example" of an area

77
of technical wilderness into which judicial expeditions are best limited to ascertaining the lay of the land.  Although computer models are "a useful and often essential tool for performing the Herculean labors Congress imposed on EPA in the Clean Air Act," their scientific nature does not easily lend itself to judicial review....  [I]t is only when the model bears no rational relationship to the characteristics of the data to which it is applied that we will hold that the use of the model was arbitrary and capricious.

78
Id. at 802 (citation omitted).

79
Under this standard, the EPA has "undoubted power to  use predictive models" so long as it "explain[s] the assumptions and methodology used in preparing the model" and  "provide[s] a complete analytic defense" should the model be  challenged.  Small Refiner Lead Phase-Down Task Force v.  EPA, 705 F.2d 506, 535 (D.C. Cir. 1983) ("SRLPTF") (citations and internal quotation marks omitted).  That a model is  limited or imperfect is not, in itself, a reason to remand  agency decisions based upon it.

80
Ultimately, ... we must defer to the agency's decision on how to balance the cost and complexity of a more elaborate model against the oversimplification of a simpler model.  We can reverse only if the model is so oversimplified that the agency's conclusions from it are unreasonable.

81
Id.

2. The Integrated Planning Model

82
The MW & SE Petitioners contend that the EPA's emissions growth projections were arbitrary and capricious because they relied upon a computer model--the "IPM"--that  underestimated growth rates for electric power generation in  some upwind states.  Several states, including North Carolina, submitted comments to the EPA arguing that they  projected significantly greater growth in electric power generation than that predicted by the IPM.

83
Rather than address the specific complaints of each commenting state, the EPA defended its reliance upon the IPM  on three broad grounds.  First, all state NOx budget growth  rates should be based upon the same methodology to ensure  consistency in the NOx cap's application.  Responses to Significant Comments on the Proposed Findings of Significant  Contribution and Rulemaking on Section 126 Petitions for  Purposes of Reducing Interstate Ozone Transport at 111  (April 1999) ("April 1999 RTC").  Second, the IPM "has  received extensive comment, review, and revision over the  past several years" during the NOx SIP call and other  proceedings.  Id.;  see also Appalachian Power, 135 F.3d at  814-15 (upholding the EPA's use of the IPM).  Third, the  IPM "provides a reasonable forecast of State growth rates  because it carefully takes into account the most important  determinants of electricity generation growth that are facing  the power industry today."  April 1999 RTC at 112.

84
Given the highly deferential standard of review applied to  such questions, and the EPA's clear authority to rely upon  computer models in place of inconsistent, incomplete, or  unreliable empirical data, the Agency's decision to rely upon  the IPM, rather than the projections offered by individual  states, was not arbitrary and capricious.  See Texas Mun.  Power Agency v. EPA, 89 F.3d 858, 870 (D.C. Cir. 1996).  In  the EPA's judgment, the IPM offered a more comprehensive  and consistent means of allocating emission allowances than  sorting through the various state-specific projections.  That  the EPA's projections depend, in large part, on economic  projections, rather than environmental factors, makes little  difference.  "[I]t is within the scope of the agency's expertise  to make such a prediction about the market it regulates, and a reasonable prediction deserves our deference notwithstanding that there might also be another reasonable view."  Environmental Action, Inc. v. FERC, 939 F.2d 1057, 1064 (D.C.  Cir. 1991).  MW & SE State Petitioners may believe their  projections are superior to the EPA's--and they may even be  correct--but they have not proved their case.

3. EGU Growth Factors

85
Accepting the EPA's general reliance upon the IPM, NonState Petitioners object to the EPA's use of growth rates  generated by the IPM for 2001-2010 to estimate facility  utilization growth for the period 1996-2007.  According to  petitioners, this yielded estimates for facility utilization in  2007 that not only fail to reflect the best information available  to the Agency but that are flatly inconsistent with observed  growth rates through 1998.  Such apparently anomalous estimates, petitioners claim, are arbitrary and capricious, at least  absent any explanation from the agency as to why they are  appropriate.  As a result, Non-State Petitioners claim, at  least some EGUs are subject to excessively stringent emission limitations.

86
The EPA based its state-specific emission budget limitations on projections of facility utilization for 2007.  This  projection was calculated by taking a baseline utilization rate  and applying a "growth factor" to project the 2007 utilization  rate, upon which the emission budget limitation would then be  imposed.  For the starting baseline utilization rate, the EPA  used the actual EGU utilization rate for either 1995 or 1996,  whichever was greater.  For the growth factors, the EPA  relied upon the IPM facility utilization projections for the  2001-2010 period to generate an average annual growth rate  that was then applied to the 1996-2007 period.

87
Petitioners contend that the EPA's resulting projections  significantly underestimated growth rates in some states.  In  Michigan and West Virginia, for example, actual utilization in  1998 already exceeded the EPA's projected levels for 2007. This, on its face, raises questions about the reliability of the  EPA's projections.  While courts routinely defer to agency  modeling of complex phenomena, model assumptions must have a "rational relationship" to the real world.  See, e.g.,  Chemical Mfrs. Ass'n v. EPA, 28 F.3d 1259, 1265 (D.C. Cir.  1994).  Future growth projections that implicitly assume a  baseline of negative growth in electricity generation over the  course of a decade appear arbitrary, and the EPA can point  to nothing in the record to dispel this appearance.

88
Despite the apparent disparity between the EPA's growth  projections and observed growth rates, the EPA claims its  growth factors were reasonable and due deference from this  court.  Yet even in the face of evidence suggesting the EPA's  projections were erroneous, the EPA never explained why it  adopted this particular methodology.  The EPA claims it  made a reasonable choice--and it may be right--but simply  to state such a claim does not make it so.  There must be an  actual reason articulated by the agency at some point in the  rulemaking process.  There is none here.

89
The EPA tries to defend its projections by claiming that  they may, at least in some instances, actually inflate utilization projections generating "slack" for affected EGUs.  Yet  the fact that some petitioners may benefit from the inaccuracy of the EPA's projections does not make them reasonable. Faced with evidence that its projections for 2007 are lower  than actual utilization rates in 1998 for some states, the EPA  has little answer.  The EPA first claims that regulated  facilities can always purchase additional allowances, albeit at  their own expense.  This is no answer.  The EPA then  suggests that facility utilization can fluctuate from year to  year.  For example, the EPA found in some states that  utilization rates were higher in 1995 than 1996.  This may be  true from one year to the next, but the EPA offers no  plausible explanation for how interannual variation can explain utilization rates in 2007 substantially lower than those  observed in 1998.  Finally, the EPA claims that when the  projections are considered on a region-wide level such disparities are likely to disappear.  As budgets are set on a state-bystate level, this is small consolation to petitioners.  The EPA  is well aware of its obligation to "examine the relevant data  and articulate a satisfactory explanation for its action," yet it  failed to discharge this obligation here.  Motor Vehicle Mfrs.  Ass'n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43  (1983).

90
The EPA had other ways of generating 2007 utilization  projections.  The EPA readily admits that it had IPM projections for the 1996-2001 period, as well as for 2007.  The EPA  makes no claim that these results, as opposed to the projections offered up by the states, are inherently less reliable or  consistent than the growth projections the EPA used here. The EPA readily acknowledges it utilized one set of growthrate projections to set allowance budgets, another to assess  emission reduction costs.  As it explained in its Response to  Comments:

91
The budgets were constructed using growth rates for 1996-2007 that were consistent with the growth rates in IPM for 2001-2010, which may be higher or lower than the growth rates for the years 1996-2001.  EPA's analysis of the costs of complying with these budgets, however, was conducted using IPM, which incorporates internally consistent growth assumptions--i.e., the growth for 1996 through 2001 is based on IPM assumptions for 1996 through 2001, and the growth for 2001 through 2010 is based on IPM assumptions for 2001 through 2010.

92
April 1999 RTC at 112-13.  While admitting that two sets of  growth rates were used, the EPA offers no cogent explanation for this difference.  Instead, the EPA merely asserts,  without adequate explanation, that each choice was reasonable.  The EPA further offers no comprehensible explanation  how relying upon erroneously low growth rates will not cause  petitioners harm.

93
As we discussed above, the EPA has "undoubted power to  use predictive models" but only so long as it "explain[s] the  assumptions and methodology used in preparing the model"  and "provide[s] a complete analytic defense" should the model  be challenged.  SRLPTF, 705 F.2d at 535 (citations and  internal quotation marks omitted).  In this case, the EPA has  not fully explained the bases upon which it chose to use one  set of growth-rate projections for costs and another for  budgets, nor has it addressed what appear to be stark disparities between its projections and real world observations.  "With its delicate balance of thorough record scrutiny and deference to agency expertise, judicial review can occur  only when agencies explain their decisions with precision, for  'it will not do for a court to be compelled to guess at the  theory underlying the agency's action ...' "  American Lung  Ass'n v. EPA, 134 F.3d 388, 392 (D.C. Cir. 1998) (quoting  SEC v. Chenery Corp., 332 U.S. 194, 196-97 (1947)).  As a  result, we have no choice but to remand the EPA's EGU  growth factor determinations so that the agency may fulfill its  obligation to engage in reasoned decisionmaking on how to  set EGU growth factors and explain why results that appear  arbitrary on their face are, in fact, reasonable determinations.

4. Non-EGU Budget Determinations

94
Non-State Petitioners allege that the EPA repeatedly modified the growth assumptions in its calculation of non-EGUsector NOx budgets in such a fashion as to preclude any  meaningful opportunity to comment.  According to petitioners, when the EPA modified successive versions of its technical support document ("TSD") it did not include a complete  set of non-EGU growth factors.  Then, when the EPA issued  the final non-EGU growth budgets in December 1999, it  released modified growth rates without any explanation.  The  EPA explained that "corrections to the growth rates ... were  made to reflect the growth rates misapplied in the May 14,  1999 version of the budget."  Technical Amendment to the  Finding of Significant Contribution and Rulemaking for Certain States for Purposes of Reducing Regional Transport of  Ozone, 65 Fed. Reg. 11,222, 11,223 (Mar. 2, 2000).  Because  these changes were made without notice or explanation, petitioners contend they must be set aside.

95
The EPA asserts petitioners waived this claim.  "[T]he  procedural requirements of the Clean Air Act do not permit  [petitioners] to raise this objection for the first time on  appeal."  API v. Costle, 665 F.2d 1176, 1190-91 (D.C. Cir.  1981).  Under section 307(d)(7)(B) of the Act, a reviewing  court may only consider "an objection to a rule or procedure which was raised with reasonable specificity during the period  for public comment."  42 U.S.C.  7607(d)(7)(B).  The petitioner is only excused from raising an objection where it is  "impracticable ... or if the ground for such objection arose  after the period for public comment."  Yet even then the  petitioner must first seek a proceeding for reconsideration. Id.  Only then may petitioner seek judicial review.  This  court "enforces this provision 'strictly.' "  MEMA v. Nichols,  142 F.3d 449, 462 (D.C. Cir. 1998) (citation omitted).

96
These objections were never raised during the notice and  comment period, nor did petitioner ever seek reconsideration. Neither of these facts is contested by petitioners.  Thus, even  if, as petitioners claim, it was impracticable for many facilities  to determine their growth factors, they waived their claim. Moreover, the EPA notes that petitioners do not cite any  facilities that were unable to determine their growth factors  due to the EPA's alleged omissions, suggesting that there is  no harm to redress.  Accordingly, the relevant petitions are  denied.

5. Local Regulation and Permit Trading

97
The MW & SE State Petitioners have also argued that the  permit trading system contravenes CAA  116, which allows  a state to impose a local air quality standard more stringent  than the corresponding NAAQS.  42 U.S.C.  7416.  The  petitioners' concern is that a source might purchase permits  in excess of applicable local limits and then claim the right to  pollute in excess of those limits, up to the full amount of its  permits.  The EPA properly denies that the permit trading  program would make such a claim viable.  Nothing in the  challenged rules exempts from  116 a source that has acquired permits.

98
Although they are unable to point to any provision of the  rule that allows permit trading to trump a local rule authorized by  116, the petitioners worry in their reply brief that  "other interpretations" might prevail in the future.  Perhaps  so, but for now, and until such time as it may conduct a new  rulemaking, the EPA is committed to the position that it  espouses here.  The petitioners also suggest that the EPA might decline to approve a SIP that imposes stringent local  limits because of its commitment to a market in emissions  permits;  but non-approval of a SIP is subject to judicial  review, and an argument based upon the incompatibility of  EPA policy and  116 may be raised when and if the EPA  disapproves a SIP in order to advance the market for emissions permits.

E. Regulation of "Future" Sources

99
The section 126 rule establishes a NOx budget for each  upwind state found to contribute significantly to nonattainment in the petitioning states.  Ninety-five percent of this  budget is allocated in the form of NOx emission allowances to  existing sources.  Five percent of each state's budget is set  aside for future sources.  In this fashion, the rule caps  emissions on existing and proposed sources, as well as  sources to be proposed and built in the future.

100
MW & SE State Petitioners challenge the EPA's authority  to impose the NOx cap limits to future, as-yet-unproposed  stationary sources under section 126.  Petitioners argue that  the statute does not authorize the EPA to regulate future  sources, and that the EPA's contrary interpretation of section  126 is unreasonable. We disagree.

101
We review the EPA's interpretation under the two-part  analysis established in Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984).  "First,  always," we must consider "whether Congress has directly  spoken to the precise question at issue." An affirmative  answer "is the end of the matter;  for the court, as well as the  agency, must give effect to the unambiguously expressed  intent of Congress."  Id. at 842-43.  If, on the other hand,  "the statute is silent or ambiguous with respect to the specific  issue," we must uphold "a reasonable interpretation made by  the administrator of an agency."  Id. at 843, 844;  see also  American Bus Ass'n v. Slater, 231 F.3d 1, 4 (D.C. Cir. 2000).

102
Under section 126(b) a downwind state "may petition the  Administrator for a finding that any major source or group of  stationary sources emits or would emit any air pollutant" in  an amount which contributes significantly to nonattainment in  the petitioning state.  42 U.S.C.  7426(b).  Once the EPA  makes a section 126(b) finding, section 126(c) provides that:

103
it shall be a violation of this section and the applicable implementation plan in such State

104
(1) for any major proposed new (or modified) source with respect to which a finding has been made under subsection (b) of this section to be constructed or to operate in violation [of this section or section 110], or

105
(2) for any major existing source to operate more than three months after such finding has been made with respect to it.

106
Id.  7426(c).  The Administrator may allow the continued  operation of existing sources beyond three months provided  such sources comply with emission reductions provided by the  Administrator to "bring about compliance ... as expeditiously as practicable, but in no case later than three years after  the date of such finding."  Id.

107
Petitioners argue that the EPA's interpretation fails at the  first step of Chevron, contending that section 126(c) authorizes the EPA to regulate existing and proposed sources but  not future sources that are not as yet proposed.  In petitioners' view, the enumeration of two classes of sources that may  be controlled--"major existing sources" and "proposed new  (or modified) sources"--precludes the EPA's authority over a  third class of sources--"future as-yet-unproposed" sources. Expressio unius est exclusio alterius.  Petitioners argue that  irrespective of whether the EPA can make findings with  regard to future, as-yet-unproposed sources, it is not empowered to prohibit their construction or limit their emissions  under section 126(c).

108
We reject petitioners' contention that the statute unambiguously reflects congressional intent to limit the EPA to the  two categories defined by petitioners.  Section 126 is at least subject to the interpretation that Congress intended to authorize the regulation of emissions from future sources.  Under  section 126(b), the EPA may find that "any major source or  group of stationary sources emits or would emit" pollution in  violation of section 110.  The inclusion of the future conditional phrase "would emit" arguably contemplates the EPA's  intervention to prevent future emissions that would contribute significantly to nonattainment in downwind states.  Similarly, as the EPA argues, section 126(c) explicitly bars the  construction or operation of "any major new proposed  sources."  By barring the construction of those sources, the  statute clearly contemplates the imposition of controls on at  least some facilities that do not yet exist.  These provisions,  taken together, may not compel the regulation of future  sources under section 126, but they do not unambiguously  forbid it.  At the least, they introduce sufficient ambiguity  into the statutory scheme to prevent resolution of this issue  under Chevron step one.

109
In the absence of an unambiguous expression of congressional intent in the plain language of the statute, we advance  to the second step of the Chevron analysis to determine  whether the EPA's interpretation of section 126 is a reasonable one.  We conclude that it is.  Prior to 1990, section  126(b) only authorized EPA findings that "a major source  emits or would emit any air pollutant" which contributes  significantly to nonattainment in a downwind state.  42  U.S.C.  7426(b) (1977).  The 1990 Clean Air Act Amendments expanded the scope of this provision by allowing EPA  findings with regard to "any major source or group of stationary sources."  42 U.S.C.  7426(b) (1994) (emphasis added).  Similarly, the EPA notes that the cross-referenced  provision of the act, section 110(a)(2)(D)([i]) prohibits "type[s]  of emissions activity" that contribute significantly.  42 U.S.C.   7410(a)(2)(D)(i).  Like section 126, section 110 confers authority based upon the kind of activity in question.  It does  not impose any temporal limit.

110
The statutory language allows the EPA to regulate facilities in upwind states as a class or category, e.g. all coal-fired  power plants in North Carolina.  If such facilities, as a class, contribute significantly to nonattainment in northeastern  states, this is as true for as-yet-unbuilt plants as it is for  existing ones.  Therefore, the EPA argues, it is reasonable to  include future sources in the "group of stationary sources"  found to contribute significantly to downwind nonattainment  under section 126(b).  Indeed, it would be irrational to enable  the EPA to make findings that a group of sources in an  upwind state contribute to downwind nonattainment, but then  preclude the EPA from regulating new sources that contribute to that same pollution.  As the EPA explained in its  Response to Comments:

111
Once EPA has determined that the emissions from the existing sources in an upwind State already make a significant contribution to one or more petitioning downwind States, any additional emissions from a new source in that upwind State would also constitute a portion of that significant contribution, unless the emissions from that new source are limited to the level of highly effective controls.

112
April 1999 RTC at 39.  The EPA's construction of section 126  avoids this result.

113
The language of section 126(c) does not make the EPA's  interpretation an unreasonable one.  Petitioners note that  section 126(c) specifically identifies two classes of sources-"major existing sources" and "proposed new (or modified)  sources"--and makes no mention of future, as-yet-unproposed  sources.  What petitioners ignore is that section 126(c), by its  terms, defines what constitutes a violation of section 126. For a facility to violate the law, by definition it must either  exist or be proposed.  Future, as-yet-unproposed sources are  not mentioned because unproposed, unbuilt facilities cannot  themselves be in violation of anything.  At the time they  become subject to the section 126(c) limitation, however, they  will either be an "existing" or "proposed new" source.  That  is to say, section 126(c) has no direct effect on plants that  have yet to be proposed for the precise reason that they have  not yet been proposed.  This does not mean, however, that  facilities proposed after the promulgation of the EPA's findings are exempt from section 126(c).  Once they are proposed, they become part of the regulated class.

114
Perhaps it would be reasonable for the EPA to interpret  the statute as urged by petitioners.  Section 126 is arguably a  stop-gap provision designed to protect downwind states from  upwind pollution by empowering the federal government to  take direct action against those specific upwind facilities  which cause downwind harm.  From a structural standpoint,  this interpretation may seem intuitive:  States regulate all  emitters;  the EPA only regulates those emitters shown to  contribute significantly to downwind nonattainment despite  the existence of a SIP.  Yet however rational this alternative  interpretation of the Clean Air Act may be, under Chevron  step two, the EPA's interpretation controls so long as it is  based upon a permissible construction of the statute.  As we  conclude that the EPA adopted a reasonable interpretation of  section 126's somewhat ambiguous provisions, its interpretation is upheld.

F. The Dorris Report

115
In comments submitted on August 9, 1999, North Carolina  requested that the EPA consider and comment upon "all  materials submitted to it by Dr. Gary Dorris, Hagler-Bailly,  or Stratus Consulting since July 1, 1998."  Dr. Dorris was  hired by the EPA to conduct modeling work in conjunction  with the NOx SIP call.  According to North Carolina, Dr.  Dorris's "extensive" modeling "shows that North Carolina  does not significantly contribute to nonattainment areas"  and provides "a rational basis for determining significant  contribution that considers cost effectiveness...."  In its  comments, North Carolina identified numerous materials  submitted by Dr. Dorris, including briefing documents and  preliminary analytical results.  North Carolina states that it  would have commented on these materials directly, however  the EPA had denied North Carolina's FOIA requests for  access to the studies.

116
On November 24, 1999, Dr. Dorris submitted his final  report to the EPA.  According to the EPA, the report used  computer modeling to assess the relative cost-effectiveness of NOx emission reductions in upwind states in comparison to  emission reductions in downwind states.  This report concluded, among other things, that the relative contribution of a ton  of NOx emissions will vary due to "emission source location,  stack elevation, and chemical species."  This, in turn, impacts  the cost-effectiveness of emission reductions in upwind states.

117
In promulgating its final section 126 rule, the EPA made no  mention of the Dorris Report or any of Dr. Dorris' preliminary findings.  While the report was relevant to the significant contribution issue, the EPA maintains that it made its  final significant contribution determination with the May 1999  section 126 rule.  When North Carolina submitted its comments in August, the EPA was only considering narrow  issues related to the stay of the SIP submission deadlines and  the impact of American Trucking Ass'ns v. EPA, 175 F.3d  1027, reh'g granted in part and denied in part, 195 F.3d 4  (D.C. Cir. 1999), rev'd in part sub nom. Whitman v. American Trucking Ass'n, 121 S. Ct. 903 (2001).

118
North Carolina contends that the EPA erred in refusing to  consider the Dorris Report in the section 126 rulemaking. There is no doubt that the EPA is required to examine the  relevant data and articulate a sufficiently reasoned explanation for its action.  See Motor Vehicle Mfrs. Ass'n, Inc. v.  State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983).  This  Court is obligated to "overturn a rulemaking as arbitrary and  capricious where the EPA has failed to respond to specific  challenges that are sufficiently central to its decision."  International Fabricare Inst. v. EPA, 972 F.2d 384, 389 (D.C. Cir.  1992).  An agency is not required to consider issues and  evidence in comments that are not timely filed.  Personal  Watercraft Indus. Ass'n v. Dept. of Commerce, 48 F.3d 540,  543 (D.C. Cir. 1995) ("Agencies are free to ignore such late  filings.").  Therefore, if North Carolina did not raise the  Dorris Report at the appropriate time, the EPA may ignore  the findings contained therein.

119
Contrary to North Carolina's claims, the EPA was justified  in ignoring the Dorris materials because they pertained to  aspects of the section 126 rule which the EPA had already  finalized by the time North Carolina submitted its regulatory  comments.  It may well be true that the EPA had access to  draft copies of the Dorris Report while the comment period  was still open.  Yet the EPA was no longer considering the  significant contribution issues when North Carolina first requested review of the Dorris materials.  Significant contribution was considered in the prior rulemaking and finalized in  the May 1999 rule.  Jan. 2000 Rule, 65 Fed. Reg. at 2684-85.

120
Because North Carolina's request that the EPA consider  the Dorris Report with respect to the significant contribution  issues was not timely filed, the EPA did not arbitrarily and  capriciously ignore the Dorris Report.  Instead of considering  the Dorris Report as part of the section 126 rulemaking, the  EPA treated North Carolina's submission as a petition for  reconsideration.  See id. at 2676.

121
Under CAA section 307(d), any documents "which become  available after the proposed rule has been published and  which the Administrator determines are of central relevance  to the rulemaking shall be placed in the docket as soon as  possible after their availability."  42 U.S.C.  7607(d)(4)(B)(i). Under both the plain language of this provision and this  Court's precedents, the Administrator enjoys substantial deference in determining whether to consider material submitted  after the close of the comment period.  See, e.g., Eastern  Carolinas Broad. Co. v. FCC, 762 F.2d 95, 103 (D.C. Cir.  1985) ("Courts normally reverse an agency's decision not to  reopen the record only for abuse of discretion.").

122
The EPA maintains its comments reveal that it carefully  considered the report and its relevance to the section 126  rule.  After such consideration, however, the EPA concluded  that the report was too preliminary and limited to justify  reopening the record and reconsidering its prior determination.  While the Dorris Report relates to issues at the core of  the NOx SIP call and section 126 rulemaking, the EPA viewed  the report as "preliminary" and its findings limited.  In its August 2000 Response to Comments, the EPA noted the  report "has not undergone scrutiny through notice-andcomment rulemaking" or "careful scientific and technical review."  Rulemaking for Section 126 Petitions-Responses to  Significant Comments Which are [sic] Outside the Scope of  the June 24, 1999 Notice of Proposed Rulemaking at 8 (Aug.  2000).  The EPA further noted that the approach put forward  by the report conflicts with the implementation of a marketbased NOx emission trading program.  Given the deferential  standard employed in this context, the EPA's refusal to  reopen and reconsider its significant contribution findings  must be upheld.

III. NON-ELECTRIC GENERATING UNIT ISSUES
A. Alleged Budget Allocation Errors

123
Non-EGU Petitioners complain that the EPA made substantial errors in the allocation of emission allowances which  can only be cured by a remand and reallocation of all  emission allowances in the affected states.  Specifically, NonEGU Petitioners identify two facilities for which there is a  great disparity between allocated emissions and actual emissions.6  In one case, the EPA allocated a facility less than  one-seventh what it should have been allocated because it  used erroneous heat-input data.  In another, it grossly overestimated a facility's share of state-wide NOx emissions. These errors not only impact the facilities in question, petitioners claim, but all facilities in the state due to the statewide NOx caps.

124
The EPA argues that such claims are waived because they  were not raised during the notice and comment period, nor  does the record contain any indication that petitioners filed a  motion for reconsideration.  The EPA allocated allowances  based upon the heat input data it received from covered  entities.  Where the EPA received information from covered  facilities indicating an allocation error, it made corrections. Insofar as a covered facility failed to ensure that the EPA  was making its allocation based upon proper data, the claim is  waived and cannot be addressed via judicial review.  Of the  two facilities cited by Petitioners in their brief, the EPA notes  that one has settled its claim with the EPA, and the other  was specifically identified in the EPA's rulemaking.  Oct.  1998 Rule, 63 Fed. Reg. at 56,369.  The EPA's proposed rule  also specified what sorts of units would be covered, irrespective of their inclusion on the proposed list of allocations.  Id.  at 56,332.

125
Petitioners nonetheless argue that the existence of any  allocation error requires setting aside all allowance allocations  for a given state because the EPA has imposed state-specific  budgets.  Even were this claim to have merit, it too was  waived. Under the CAA, "[o]nly an objection to a rule or  procedure which was raised with reasonable specificity during  the period for public comment ... may be raised during  judicial review."  42 U.S.C.  7607(d)(7)(B).  The general  complaints raised by Non-EGU Petitioners during the rulemaking about errors in allowance allocations are insufficient  to meet this requirement as they failed to provide the agency  with enough information to address the alleged failing of the  rule.

B. Treatment of Cogenerators

126
The world of significant stationary sources producing NOx  can loosely be divided into two categories--electric generating units ("EGUs") and sources that do not generate electricity ("non-EGUs").  Cogenerators straddle these lines, as they serve two functions, electricity generation and some direct  industrial activity. We deal here with their classification.

127
EPA concluded that the application of its $2000/ton costeffectiveness principle called for different standards for the  two types of units.  First, for "large EGUs"--boilers and  turbines that serve generators capable of producing greater  than 25 megawatts ("MWe") and that produce electricity for  sale to an electric grid (with different minimum sales levels  depending on the generator's date), see May 1999 Rule, 64  Fed. Reg. at 28,300-01--EPA imposed a ceiling of .15 pounds  per million Btu per hour ("lb./mmBtu/hr.").

128
Second, for "large non-EGUs" or "large boilers"--boilers  and turbines with a heat input greater than 250 mmBtu/hr.  that, in general, only generate steam and/or mechanical work  or that produce electricity for internal use only, see Jan. 2000  Rule, 65 Fed. Reg. at 2731 (40 C.F.R.  97.4(a)(1)-(2))--EPA  required a 60% reduction in NOx emissions, which it says  corresponds to an average control level of approximately 0.17  lb./mmBtu/hr., May 1999 Rule, 64 Fed. Reg. at 28,301/2.

129
We do not know why EPA frames one limit in terms of NOx  emissions per mmBtu and the other as a percentage reduction.  In the original SIP call, EPA stated a preference for a  flat limit over a percentage reduction for EGUs, noting that a  percentage reduction rule tended to benefit states that had  made less effort.  62 Fed. Reg. at 60,351/1.  We've found, and  the parties offer, no explanation for rejecting this logic for  non-EGUs.  But here the concern is that large cogenerators  selling electricity to the grid end up being treated as large  EGUs (at least if they sell at the minimum levels specified),  subject to the more stringent rule (evaluated in terms of  maximum emissions per mmBtu/hour).

130
Petitioners claim that EPA departed without adequate  explanation from a long-standing agency and congressional policy favoring cogeneration, and also failed affirmatively to  justify the new classification.  We do not find the historical  policy concerns to be dispositive, but we agree on their  second point.

131
In previous regulatory contexts, EPA and Congress have  treated cogenerators as non-EGUs if they sold to the grid  less than one-third of their potential capacity, or less than 25  MWe per year.  May 1999 Rule, 64 Fed. Reg. at 28,297/2.  In  proposing its new definition of large EGUs in the preamble to  the May 1999 rule, EPA offered two relevant responses to  comments.  First it argued that when the agency began using  the earlier division in 1978, it served broadly as "a proxy" to  distinguish between units that were, or were not, owned by  utilities.  But it reasoned that since 1990 deregulation had  had a dramatic effect on the industry, allowing non-utilities  increasingly to compete with utilities.  EPA believed that this  effect obviated the need to differentiate between utilities and  non-utilities.  See id.  In addition, EPA cited a supplemental  notice of proposed rulemaking under the NOx SIP call for the  proposition that "there is no relevant physical or technological  difference between utilities and other power generators," id.  at 28,297/3 (quoting 63 Fed. Reg. at 25,923), and stated that it  "continue[d] to believe that cogeneration units can achieve  similar NOx emission reductions as utility units," id. at  28,298/1.

132
The explanation by reference to electric utility deregulation  may well explain abandonment of the old definition, although  the point is hard to evaluate since the link between choosing  suitable emissions limits and the degree of direct competition  between the classes of regulated firms is unexplained and not  self-evident.  In any event, the rationality of moving away  from the prior classification in itself says nothing about why  EPA chose the new one.  On that score, EPA's current  reasoning, to the extent that we are able to discern it,  supports the new classification as a means to implement the  cost-effectiveness criteria.  While as we noted above the standard for large EGUs is more stringent than the one for  large non-EGUs when evaluated in terms of emissions per  mmBtu/hour heat input (.15 lb. as opposed to .17 lb.), a table  in the preamble to the May 1999 rule indicates that the two  control levels have virtually identical predicted incremental  costs ($1,468 for the former, $1,467 for the latter, all in terms  of estimated cost per ton in 1990 dollars in 2007).  See id. at  28,300 (Table II-4).7

133
If this analysis is correct (and EPA has presented no  alternative), then the classification of cogenerators should  turn on whether their NOx reduction costs best match those  of EGUs or non-EGUs.  We note at the outset that the nonEGU class includes cogenerators that produce electricity for  internal purposes only.  Thus sources that apparently may be  identical physically are subject to different standards--a divergence hard to reconcile to the supposedly controlling  criterion of cost.  To the extent that it is linked to EPA's  former concern over competition with utilities, the agency's  own abandonment of that concern renders it obsolete.  Indeed, EPA does not even attempt to justify the distinction. It merely notes that "it may be appropriate at some time in  the future to consider all units generating electricity, whether  for sale or internal use, as a single category."  Id. at 28,298/1.

134
EPA does assert that "there is no relevant physical or  technological difference between utilities and other power  generators."  Id. at 28,297/3 (quoting 63 Fed. Reg. at 25,923). If true, this similarity would support treating cogenerators as  EGUs, but EPA cites no record support.  See id.  Otherwise,  EPA merely claimed that "it continues to believe that industrial cogeneration units can achieve similar NOx emission  limitations reductions as utility units" and that selective catalytic reduction and selective non-catalytic reduction are "prov en technologies demonstrated on industrial and utility units." Id. at 28,298/1.  But the point that cogenerators can implement these technologies hardly shows that they can do so at  the same costs as other EGUs.

135
In its brief, EPA claims that it "specifically reviewed the  cost-effectiveness of controls for cogeneration facilities in  response to comments" and "determined that the control  technologies that EPA had determined to be highly costeffective for EGUs ..., had been successfully applied to  cogeneration facilities, and, therefore, there was no technical  reason to distinguish between generating facilities owned by  utilities and other electric generators, including cogenerators."  But, once again, neither this statement nor any of the  record documents cited in support purports to assess the  costs of "successfully" applying such controls to cogenerators. Additional materials cited in EPA's brief are equally silent on  the subject.  See Office of Air and Radiation, U.S. Environmental Protection Agency, "Analyzing Electric Power" (July  1996);  62 Fed. Reg. at 60,349 (Table III-3),  60,350/3.

136
Finally, EPA's brief also notes that "EPA's analysis of  which controls are highly cost-effective for EGUs included all  cogeneration units that generated electricity for sale."  But  the fact that all units currently classified as "EGUs" can, on  average, cost-effectively implement the EGU cap, see May  1999 Rule, 64 Fed. Reg. at 28,300 (Table II-4), says nothing  about whether cogenerators, as a discrete subclass, can do so. Indeed, if cogenerators represented a small enough portion of  the sample size, even astronomical control costs would have  little effect on the average.  On the central question of  whether EPA actually compared the costs of cogenerator  controls to those of other EGUs, EPA does not speak and the  documents it cites shed no light.

137
As EPA has failed to explain its classification of cogenerators, see, e.g., American Lung Ass'n v. EPA, 134 F.3d 388,  392 (D.C. Cir. 1998), and its failure to respond to significant  comments leaves us only to guess whether its decision was "based on a consideration of the relevant factors," see, e.g.,  Thompson v. Clark, 741 F.2d 401, 409 (D.C. Cir. 1984)  (quoting Citizens to Preserve Overton Park v. Volpe, 401 U.S.  402, 416 (1971)), we vacate and remand that portion of the  rule.

C. Source-Specific Issues
1. AK Steel Corporation

138
AK Steel, one of the Non-EGU Petitioners, claims that the  final rule improperly subjected four of its waste heat boilers  to regulation as large non-EGUs.  The regulations at issue  apply to these boilers only if they (a) are "fossil fuel fired"  boilers with a 1995 "heat input" comprised more than 50% of  fossil fuel, Jan. 2000 Rule, 65 Fed. Reg. at 2728/3, 2731/1 (40  C.F.R.  97.2 (definitions of "unit" and "fossil fuel fired")),  and (b) have a "maximum design heat input" greater than 250  mmBtu/hr., id. at 2731/2 (40 C.F.R.  97.4(a)(2)(i)).

139
AK Steel argues initially that its four furnaces fail to meet  the first criterion:  The waste heat input from its "slab heat  furnaces" is great enough to render its fossil fuel input less  than 50% of the total, so that its boilers are not "fossil fuelfired."  EPA argues that AK Steel failed to raise its objection  with the necessary specificity.  See 42 U.S.C.  7607(d)(7)(B)  ("Only an objection to a rule or procedure which was raised  with reasonable specificity during the period for public comment ... may be raised during judicial review.").  We think  its submission adequate, though only barely so.  On the  merits, however, AK Steel is mistaken;  it hasn't read the  regulations carefully enough.

140
EPA correctly notes that the regulation defines "heat  input" as excluding "heat derived from preheated combustion  air, recirculated flue gases, or exhaust from other sources." Jan. 2000 Rule, 65 Fed. Reg. at 2729/1 (40 C.F.R.  97.2). The EPA asserts, and petitioners do not dispute, that the  waste heat input that it invokes is precisely such "preheated  combustion air" or "exhaust from other sources."  So those  inputs do not prevent its boilers from satisfying the 50%  fossil-fuel calculation.

141
In their reply brief, petitioners raise a new issue.  There  they argue that waste heat should be excluded from calculation of the 250 mmBtu/hr. threshold for "maximum design  heat input," see id. at 2731/2 (40 C.F.R.  97.4(a)(2)(i)), which  if true would mean that their boilers would not exceed the 250  mmBtu/hr standard.  AK Steel has no explanation for why  waste heat should be counted in one context and not the  other, but EPA does offer a defense of the opposite position,  arguing that, unlike the definition for "heat input," the capacity-based definition of "maximum design heat input" does not  exclude specific input types.  See Jan. 2000 Rule, 65 Fed.  Reg. at 2729/1 (40 C.F.R.  97.2) (defining maximum design  heat input as "the ability of a unit to combust a stated  maximum amount of fuel per hour ... on a steady state basis,  as determined by the physical design and physical characteristics of the unit").  But because of petitioners' failure to raise  the issue in their opening brief, we do not address it on the  merits.  See United States v. Wilson, 240 F.3d 39, 45 (D.C.  Cir. 2001).

2. New Boston Coke Corporation

142
New Boston Coke Corporation operates two regulated boilers subject to the same set of regulations.  Its brief states  that these boilers "are each designed with maximum heat  capacity of 464 mmBtu/hr.," but claims that in actual operation the heat input of each is less than half that figure.  One  boiler is usually kept in reserve while the other fires, and the  one that fires usually does so at 40% of capacity or less. Thus, argues New Boston, the normal input capacity for the  units is less than 232 mmBtu/hr., below the 250 mmBtu/hr.  threshold.

143
The EPA responds that New Boston has forfeited the claim  because it never raised the objection before the agency, as  required by  307(d)(7)(B) of the Clean Air Act, 42 U.S.C.   7607(d)(7)(B).  New Boston's rebuttal is that it never received notice of the proposed rule, arguing that its name  didn't appear in the appendix to that notice and denying that  it was included by virtue of the notice's generic terms.  See  Oct. 1998 Rule, 63 Fed. Reg. 56292, 56,332 (40 C.F.R.  52.34(k) & Table F-1), 56,341 (40 C.F.R.  97.4), 56,360-91.  (This same defect in notice is raised by the Non-EGU  Petitioners on behalf of an unspecified group of sources, but it  is only for New Boston that petitioners claim that the supposed defect had any adverse effect (from petitioners' perspective) on the ultimate regulation, and so we address the  claim only in this connection.)

144
Section 307(d)(7)(B) addresses the possibility of defective  notice.  It excuses a party's failure to object in the course of  the rulemaking where it was "impracticable to raise" the  objection, and the agency's failure to give proper notice would  plainly create such impracticality.  American Petroleum Institute v. Costle, 665 F.2d 1176, 1190-91 (D.C. Cir. 1981). Section 307(d)(7)(B), however, explicitly makes the excuse  conditional on the party's seeking relief before the agency by  petition for reconsideration.  See id. at 1191-92.  As there is  no evidence that any such petition was submitted, we cannot  reach the merits of petitioners' claim, including even the claim  of defective notice.

IV. FACILITY-SPECIFIC ISSUES

145
Two petitioners raise facility-specific objections to the section 126 rule.  In each case, we have no occasion to reach the  merits of petitioners' arguments.  By failing to raise their  objections to the EPA prior to seeking judicial review, petitioners waived their claims.

A. Midland Cogeneration Venture

146
Petitioner Midland Cogeneration Venture ("MCV") operates a "combined cycle" cogeneration plant that produces  electricity and steam in Midland, Michigan.  MCV alleges  that the EPA was arbitrary and capricious in applying the  section 126 rule to its facility because MCV is legally and  operationally incapable of emitting in excess of the rule's  "NOx Cap."8

147
This Court has no jurisdiction to consider MCV's claims. Under section 307(d) of the Act, "[o]nly an objection to a rule  or procedure which was raised with reasonable specificity  during the period for public comment ... may be raised  during judicial review."  42 U.S.C.  7607(d)(7)(B).  MCV  does not dispute that its comments did not address this issue. Its defense is that no such comments were possible because,  as the EPA admits, the agency did not have sufficient data on  cogenerators to develop an output-based approach to setting  emission limits for given facilities.  This may be so, but "the  procedural requirements of the Clean Air Act do not permit  [MCV] to raise this objection for the first time on appeal." API v. Costle, 665 F.2d 1176, 1190 (D.C. Cir. 1981).  Rather,  the CAA requires a petitioner to first raise its objection to the  agency though a petition for reconsideration.  See id. at 1191  ("The statute states that before this court may review a  procedural objection the parties must raise the objection on a  petition for reconsideration before the EPA when the grounds  for such objection 'arose after the period for public comment  (but within the time specified for judicial review).' ");  Appalachian Power Co. v. EPA, 135 F.3d 791, 799 n.14 (D.C. Cir.  1998) (same).  Because MCV never registered its objections  with the agency, let alone filed a formal petition for reconsideration, we cannot reach the merits of its claim.

B. Indiana Municipal Power Agency

148
Petitioner Indiana Municipal Power Agency ("IMPA") is a  municipal power agency that operates four combustion turbines that provide supplemental power on days with high  power usage. IMPA alleges that the "25-ton exemption" in 40  C.F.R.  97.4(b) is arbitrary and capricious because it "ignores actual emissions and instead calculates hypothetical  maximum emissions" in determining whether a unit is eligible  for the exemption.  By adopting a "worst-case-fuel assumption," the exemption treats IMPA as if its emissions were  nearly five times greater than the actual emissions rate  during normal operating conditions.

149
Like MCV, IMPA never raised its objection in comments  before the agency.  Unlike MCV, however, IMPA cannot claim that it was caught by surprise by the EPA's final rule. While the specific contours of the 25-ton exemption were not  identified in the EPA's Notice of Proposed Rulemaking  ("NOPR"), the NOPR did propose adopting the exemption  contained in the NOx SIP regulations at 40 C.F.R.  96.4(b). See Oct. 1998 Rule, 63 Fed. Reg. at 56,313.  The proposal  used different language than  97.4, but it similarly bases the  exemption on a unit's "maximum potential hourly NOx mass  emissions."  40 C.F.R.  96.4(b)(1)(ii), (iii).  This satisfies the  requirement that the final rule be a "logical outgrowth" of the  proposed rule.  See Fertilizer Inst. v. EPA, 935 F.2d 1303,  1311 (D.C. Cir. 1991).  Therefore, IMPA had ample opportunity to comment on the proposed rule.  Because it did not, it  waived its claim under section 307(d).  42 U.S.C.   7607(d)(7)(B).

V. PITTSBURGH

150
Like many of the affected states, Pennsylvania is both an  "upwind" state subject to the  126 regulation and a "downwind" state that has petitioned EPA under  126 to regulate  "upwind" contributions to Pennyslvania's own nonattainment  problems.  Acting in its capacity as a downwind state, Pennsylvania objects to EPA's refusal to use ozone pollution in the  Pittsburgh area as a basis for  126 findings (thus, it argues,  potentially failing to impose crackdowns on additional sources  upwind of Pittsburgh).  The problems arise from two circumstances:  Pittsburgh appeared at the time of the rulemaking  to be on the verge of being reclassified as in attainment of the  1-hour standard, but also on the verge of being subject to the  more stringent 8-hour rule.

151
In its May 1999 Rule, EPA denied the portion of Pennsylvania's  126 petition that alleged upwind contribution to the  nonattainment of the 1-hour ozone standard in the Pittsburgh  area.  Having received preliminary data showing that Pittsburgh (and a number of other areas) were no longer in  violation of that standard, and having taken steps to formally  revoke its nonattainment determination, see 64 Fed. Reg. at 28,257/2, EPA thought "it would not be appropriate" to  consider whether the pertinent upwind areas were "significantly contributing" to a nonattainment that was apparently  non-existent, id. at 28,291/2.  Section 110(a)(2)(D)(i) also requires that SIPs bar emissions that would "interfere with  maintenance" of ambient standards, and petitioning states  such as Pennsylvania asked for such a finding as to the 1hour standard.  EPA declined this too, explaining that its  policy was to revoke the 1-hour standard for any area that  attained it and replace it with the stricter 8-hour standard. See id. at 28,291-92.  But in January 2000, after this court's  decision in American Trucking Ass'ns v. EPA, 175 F.3d 1027,  reh'g granted in part and denied in part, 195 F.3d 4 (D.C.  Cir. 1999), rev'd in part sub nom. Whitman v. American  Trucking Ass'n, 121 S. Ct. 903 (2001), which remanded the 8hour standard, EPA moved to reimpose the 1-hour standard  for all areas where it had been revoked and has yet to reintroduce the 8-hour standard.  See Jan. 2000 Rule, 65 Fed.  Reg. at 2678-79.  In its January 2000 rule, in which it  converted its technical determinations into formal  126 findings, EPA recognized that the 1-hour standard might once  again become the sole NOx standard.  But it didn't seize the  occasion to revisit its rejection of the "interfere with maintenance" portion of Pennsylvania's petition.  See id. at 2678/3.

152
Pennsylvania's first objection is that the Pittsburgh attainment data were only preliminary;  to this day they have not  yielded a formal finding of attainment.  (In fact, data from  the 1999 ozone season indicate renewed violations.)  Moreover, the statute provides that a region in "moderate" nonattainment that fails to move into attainment will, at the very  least, be reclassified as "serious" and thus subject to more  stringent controls, see 42 U.S.C.   7511(b)(2), 7511a(c), and  petitioners claim that such a fate awaits Pittsburgh.  Pennsylvania argues that if EPA had pursued the "substantial  contribution" inquiry, Pennsylvania would get the benefit of  upwind states' being forced to share some of burden of  achieving ozone attainment in Pittsburgh.

153
EPA responds that Pennsylvania suffered no prejudice and  thus lacks the "injury in fact" necessary to claim Article III  standing.  Lujan v. Defenders of Wildlife, 504 U.S. 555, 560 (1992).  It claims that had it granted Pennsylvania's petition  with regard to Pittsburgh, EPA's modeling methods dictated  that it would have found linkages with regard to North  Carolina, Ohio, and West Virginia, all states on which EPA  has imposed  126 controls anyway, as a result of its findings  as to the Philadelphia area.  But Pennsylvania observes that  its  126 petition had sought findings as to the contribution of  a number of other upwind states, several of which were not  ultimately subjected to  126 findings.  EPA cannot, it argues, deflect judicial review of its refusal to inquire into  effects on Pittsburgh simply by filing a brief asserting that, if  it had done so, it would have found no more than it did when  it focused on Philadelphia.  If EPA's ground for refusing to  crunch the data for Pittsburgh is illegal, Pennsylvania has  been wrongly denied potential benefits.  Thus Pennsylvania  asserts a real injury that the court could redress.  See Lujan,  504 U.S. at 560-61.

154
While Pennsylvania wins on the standing argument, it loses  on the merits.  EPA observes that  110(a)(2)(D)(i) speaks  simply of emissions that "contribute significantly to nonattainment ... in any other State," with no language suggesting, as  the Act does in a number of places, that formal designation or  reclassification is critical.  See 42 U.S.C.  7407(d)(1)(A) (allowing EPA to require state governors to supply EPA with a  list designating areas as "attainment" or "nonattainment");  7502 (framework for setting deadlines and plans for areas  deemed "nonattainment");   7511(b)(2) (procedures for reclassifying areas that fail to meet attainment deadlines).  It  seems reasonable for EPA to refrain from investigating  whether upwind emissions "significantly contribute" to nonattainment that, according to evidently undisputed data, does  not exist, rather than to march forward on the basis of a  formal classification that it believed to be outdated and was in  the process of revoking.  (In reaching this conclusion we  express no opinion on the issue that intervenors Appalachian  Power et al. tell us is raised in D.C. Cir. No. 00-1223, namely, whether EPA may make significant contribution determinations for areas that have never been formally classified as  nonattainment.).

155
Developments in the Pittsburgh area after the close of the  present rulemaking record of course cannot be a basis for  faulting EPA's decision on that record.  Nor did its January  2000 decision, converting its May 1999 technical determinations into formal findings (without, as originally contemplated,  conditioning such findings on the failure of the SIP process),  require a reopening.  Pennsylvania may, of course, use later  developments as the basis for another  126 petition.

156
Pennsylvania further argues that in light of EPA's reinstatement of the 1-hour ambient standard, it should have  addressed the "interfere with maintenance" portion of Pennsylvania's petition.  Here too EPA was reasonable.  Because  the EPA policy in May 1999 was to supplant the 1-hour  standard with the 8-hour standard as soon as an area met the  1-hour standard, it made sense to decline all petitions seeking  findings of interference with maintaining the 1-hour standard;  there was then every reason to suppose that such  findings would almost immediately become obsolete.  Once  again, Pennsylvania can respond to later developments by  submitting another  126 petition.

VI. CONCLUSION

157
In summary, we remand the rules to the EPA to allow the  agency to (1) properly justify either the current or a new set  of EGU utilization growth factors to be used in estimating  utilization in 2007, and (2) either alter or properly justify its  categorization of cogenerators that sell electricity to the  electric grid as EGUs.  With respect to all other issues,  including those not discussed expressly herein, the petitions  are denied.

158
So ordered.

Notes:

*
 Judge Williams wrote Parts II.C, III.B-C, and V;  Judge Ginsburg wrote Parts II.A-B and II.D.5;  Judge Sentelle wrote Parts  I, II.D.1-4, II.E-F, III.A., and IV.

1
  The states are Alabama, Connecticut, Delaware, Georgia,  Illinois, Indiana, Kentucky, Maryland, Massachusetts, Michigan,  Missouri, New Jersey, New York, North Carolina, Ohio, Pennsylvania, Rhode Island, South Carolina, Tennessee, Virginia, West Virginia, and Wisconsin.

2
  Although published on May 25, the initial section 126 rule was  signed by the Administrator on April 30, 1999.  See May 1999 Rule,  65 Fed. Reg. at 28,318.

3
  In the alternative, the petitioners suggest that the reference  in  126 to  110(a)(2)(D)(ii) may have stemmed from a different  error than that posited by the EPA;  perhaps, they argue, the  Congress intended to refer not to  110(a)(2)(D)(i) but to   110(a)(2)(D)(i)(II).  This construction is less plausible than the  EPA's for the simple reason that the EPA's reading restores the  statute to its unarguably coherent, pre-Amendment form.  In any  event, when "there are multiple ways of avoiding a statutory  anomaly, all equally consistent with the intentions of the statute's  drafters (and equally inconsistent with the statute's text)," we  accord standard Chevron step two deference to an agency's choice  between such alternatives.  See Mova, 140 F.3d at 1068.

4
  The EPA may make findings under  126 only if a major  source or group of sources is in "violation of the prohibition of  [§ 110(a)(2)(D)(i)]."  42 U.S.C.  7426(b).  The petitioners might  have argued, therefore, that because  110(a)(2)(D) requires a SIP  to "contain adequate provisions prohibiting" interstate emissions,  the "prohibition of [CAA  110(a)(2)(D)(i)]" in  126 refers only to  restrictions upon emissions incorporated into state or federal implementation plans prepared pursuant to  110(a)(2)(D).  When this  argument was raised during the rulemaking, the EPA rejected it in  favor of the view that "prohibition" means "the actual functional  prohibition of section 110(a)(2)(D)(i), which bars impermissible state  transport, rather than the specific provisions through which states  implement that prohibition ... in an approved SIP."  May 1999  Rule, 64 Fed. Reg. at 28,272/2.  No petitioner, however, argued the  former view in its opening brief, and we therefore need not decide  it.

5
  Train, of course, was decided before  126 was enacted.

6
  Non-EGU Petitioners also argue that non-EGU sources that  began operating between 1995 and May 1, 1997 were never allocated the required NOx allowances.  We do not consider this claim  because the EPA addressed the claims of the three units identified  that fell into this category.  See Appalachian Power Co. v. EPA,  No. 99-1200, 2000 WL 1683469 (D.C. Cir. Oct. 13, 2000) (order,  inter alia, severing claims of petitioners and holding them in  abeyance pending implementation of settlement agreements).

7
  The preamble to the final rule presents updated figures that  are more divergent, estimating the large EGU controls to cost  $1,432 per ton in 1990 dollars in 1997, and the large non-EGU  controls to cost $1,589.  Jan. 2000 Rule, 65 Fed. Reg. at 2677.

8
  MCV also challenges the EPA's treatment of cogeneration  facilities.  This issue is addressed supra Part III.B.