                UNITED STATES COURT OF APPEALS
                    FOR THE FIRST CIRCUIT
                                         

No. 92-2359

                 PUERTO RICO SUN OIL COMPANY,

                         Petitioner,

                              v.

        UNITED STATES ENVIRONMENTAL PROTECTION AGENCY,

                         Respondent.

                                         

            ON PETITION FOR REVIEW OF AN ORDER OF

      THE UNITED STATES ENVIRONMENTAL PROTECTION AGENCY

                                         

                            Before

                    Selya, Cyr and Boudin,

                       Circuit Judges.
                                     

                                         

Robert Brager with whom Richard S.  Davis, Joseph C. Stanko,  Jr.,
                                                                 
Patricia Ross  McCubbin, Beveridge &amp; Diamond,  P.C., Leonardo Andrade-
                                                                  
Lugo, Jose A. Cepeda-Rodriguez,  Carlos A. Rodriguez-Vidal, Eli Matos-
                                                                  
Alicea, Goldman Antonetti Cordova &amp; Axtmayer and Edward J. Ciechon Jr.
                                                                  
were on brief for petitioner.
Alan  D.  Greenberg, Environment  &amp;  Natural  Resources  Division,
                   
Environmental Defense Section, Department  of Justice, with whom Myles
                                                                  
E.  Flint,  Acting Assistant  Attorney General,  Randolph L.  Hill and
                                                              
Meyer Scolnick,  Assistant Regional Counsel,  Environmental Protection
          
Agency, were on brief for respondent.

                                         

                       October 21, 1993
                                         

     BOUDIN,   Circuit   Judge.      In  August   1990,   the
                              

Environmental Protection Agency issued a  pollution discharge

permit  to Puerto Rico Sun  Oil Company ("the  Company").  In

doing so  EPA complied  with the substantive  requirements of

the governing  statute and  the procedures  set forth  in the

statute and EPA regulations.  Only the result gives cause for

concern,  and that  concern is  not allayed  by  the agency's

explanation for its decision.  In our judgment, the result is

so  odd that either  the EPA has abused  its discretion or it

has  explained  itself  so   poorly  as  to  require  further

justification.  On  either view, we must vacate  the agency's

order adopting the permit and remand for further proceedings.

                         I. THE FACTS

     The  Clean  Water  Act,  33  U.S.C.     1251,  et  seq.,
                                                            

prohibits  the  discharge   into  protected  waters  of   any

pollutant by any  person, id.    1311(a), unless a  discharge
                             

permit  has  been  secured  from  EPA.   Id.     1342.    The
                                            

permitting regime is  a hybrid one in which  both EPA and the

counterpart  state  agency play  a  role.   The  precise role

depends on whether EPA has delegated permit issuing authority

to the state; but no such delegation is present here.  Puerto

Rico is  treated as a state  for purposes of the  Clean Water

Act, id.   1362(3), and its local agency is the Environmental
        

Quality Board ("EQB").  

                             -2-

     To obtain a permit, the applicant must satisfy a variety

of substantive requirements under the Clean Water Act but, in

addition, no EPA permit  can issue unless the state  in which

the  discharge  will occur  gives  its  own approval  (called

"certification") or waives its right to  do so.  33 U.S.C.   

1341(a)(1).   Further,  the  state  certification may  impose

discharge  limitations  or requirements  more  stringent than

federal law requires,  and those  more stringent  obligations

are  incorporated into  the  federal permit  as  a matter  of

course.  See generally  United States v. Marathon Development
                                                             

Corp.,  867 F.2d  96, 99  (1st  Cir. 1989)  (describing state
     

role).  What  lies at the heart of this  case is EQB's effort

to  impose,  and then  back  away from,  such  more stringent

obligations.

     For some years before this case began, the  Company held

a  discharge permit for its  oil refining facility at Yabucoa

Bay,  Puerto Rico,  where it  discharges pollutants  from two

different sources.  On May 27, 1988, the Company submitted to

EPA an application to  renew the permit for its facility.  On

October  31,  1988, EPA  forwarded  the  application to  EQB,

requesting that  a draft certification be  prepared promptly.
                        

EPA also warned EQB that under EPA regulations, Puerto Rico's

right to impose obligations  by certification would be waived

if a  final certification were  not received  within 60  days

                             -3-

after EPA sent a copy of a (yet to be  prepared) draft permit

to EQB.  40 C.F.R.   124.53(c)(3) (60 day time limit).1  

     On   January  25,   1989,   EQB  released   a  tentative

certification--essentially a draft document  that facilitates

public  comment  on  the  proposed  state  certification  and

proposed  federal permit.   The  draft certification  in this

case probably came as a surprise to the Company.  The earlier

permit had employed a "mixing  zone" analysis in setting  the

pollution limitations for  the Company's discharged effluent;

the draft certificate did not include a mixing zone analysis.

The difference, which is  central to this case, needs  a word

of explanation.

     A discharge permit under the Clean Water Act may include

several  types  of  requirements.     One  set  concerns  the

technology used to limit pollution;  another, pertinent here,

requires that  the amount of specified  pollutants not exceed

certain percentage levels.   In theory, the percentage levels

could  be  measured in  the  effluent  itself--such as  storm

runoff or waste  water--just as  it drains  into the  stream,

river  or  bay which  is protected  by  the Clean  Water Act;

alternatively,  it could be measured at the edge of a defined
                                                

                    

     1The Clean Water Act provides  that the state waives its
certification  rights if  it  fails to  issue  or to  deny  a
certification  "within a  reasonable  period  of time  (which
shall  not exceed one year) after receipt of such request . .
. ."  33 U.S.C.   1341(a(1).

                             -4-

area of the receiving  body of water after the  pollutant has

been diluted by that water.

     Such  a defined  area is  called a  mixing zone,  and it

appears that  measuring pollutants at the edge  of the mixing

zone is widespread in the application of the Clean Water Act.

According to an EPA publication, "[w]hether to establish such

a mixing zone policy is a matter of State discretion."   EPA,

Mixing  Zones--Water Quality Standards  Criteria Summaries: A
                                                             

Compilation  of  State/Federal  Criteria 2  (September  1988)
                                        

("Mixing Zones").   Practically  every state and  Puerto Rico
              

have adopted mixing zone criteria, id., although the criteria
                                      

appear  to differ widely.  Id. at 70-78 (Puerto Rico criteria
                              

as  of  1988).   The  mixing  zone  concept  is described  in

Marathon Oil Co. v. EPA, 830 F.2d 1346, 1349 (5th Cir. 1987),
                       

which concludes with the  observation that "the `mixing zone'

determination is basically a cost-benefit judgment on a given

set  of   environmental  facts,  rather  than   any  sort  of

`scientific' determination."  Id. at 1351.
                                 

     When in January 1989  EQB issued its draft certification

for the Company's requested permit, the EQB was reformulating

its mixing zone criteria.   EQB's draft certification for the

Company  neither  continued  in  force the  old  mixing  zone

criteria temporarily nor made  the certificate subject to the

new  criteria still  under development.   Instead,  the draft

certification simply set further pollutant limitations which,

                             -5-

absent  the  mixing  zone  analysis, apply  directly  to  the

effluent  as it enters  the receiving waters.   Mixing Zones,
                                                            

supra,  at 2  ("If no  such mixing  zone is  recognized by  a
     

State, then the waters must meet the criteria at the point of

discharge.").

     The  next event was EPA's release on August 11, 1989, of

a draft permit  and request  for public comment.   The  draft

permit   incorporated   the   requirements   of   the   draft

certification issued by EQB and therefore used no mixing zone

analysis.  Although issuance  of the draft permit  meant that

final EQB certification  was now due in 60 days,  40 C.F.R.  

124.53(c)(2),  EQB   apparently  paid  no  attention  to  the

deadline or to EPA's earlier warning that failure to meet the

deadline  would   waive  Puerto  Rico's  right   to  certify.

Nevertheless,  in  October   1989  EPA  told  the   Company's

attorneys that  it was  extending the  comment period on  the

draft permit  "indefinitely" while awaiting  the EQB's  final

certification.  When the  certification arrived, said EPA, it

would set a "prompt" close to the comment period.

     On  July 24,  1990, almost  a  year after  receiving the

draft permit,  EQB issued  what it  called its  "final" water

quality  certification  for the  Company,  again  eschewing a

mixing  zone analysis.  Both the timing and substance of this

action  are puzzling because, only four  days before, on July

20, 1990, EQB had promulgated new regulations to be effective

                             -6-

on  August  20, 1990,  adopting a  new method  of determining

mixing zones.    But  if  EQB's  behavior  was  slothful  and

careless, EPA's reaction was even stranger.

     At this  point the  EQB's final certification  must have

appeared a  probable candidate for administrative or judicial

revision in Puerto Rico.  EQB had used a mixing zone analysis

in the past and was proposing to do so in the future, and the

use of such an analysis was likely to be significant; indeed,

the Company later represented,  and EPA has not disputed  the

claim, that its refinery cannot operate if forced to meet the

pollution  standards  without  the  help  of  a  mixing  zone

analysis.   Yet just as the  Company moved to correct the EQB

certification, EPA  moved even more swiftly to  adopt a final

permit based  on the  EQB certificate  that omitted  a mixing

zone analysis.

     The  chronology can be compressed.   On August 17, 1990,

the  Company asked  EQB to  reconsider its  certification and

include  a mixing  zone analysis.   On  August 21,  1990, EPA

published  a  new  draft  permit  incorporating  EQB's  final

certification requirements, and it  offered 30 days to submit

comments.  On September 7, 1990, EQB wrote to EPA saying that

it was evaluating  the Company's comments on  reconsideration

and that it might  alter its certification.  On  September 10

and on September  21, 1990,  the Company asked  EPA to  delay

action  on  the  permit to  allow  the  EQB  to complete  its

                             -7-

reconsideration.   On September 28, 1990, EPA  issued a final

permit, based  on the  then July 1990  EQB certification  and

without provision for a mixing zone.

     On November 7,  1990, the Company  sought administrative

review within  EPA, an  action that automatically  stayed the

new permit, 40 C.F.R.   124.15(b)(2), and left the old one in

force  on a  temporary  basis.   On  November 28,  1990,  EQB

adopted  a  resolution  staying  its   certification  pending

reconsideration and announcing, for  the benefit of EPA, that

the  certificate    was  "not  to  become  final"  until  the

reconsideration was  completed.  In February  1991, EQB wrote

formally  to  EPA  stating  that the  certificate  should  be

treated  as not final and  urging EPA to  leave the Company's

previous permit in  effect for the time being.   In June 1992

EPA's  regional administrator  issued a  decision reaffirming

the new permit without a mixing zone provision but continuing

the stay of the new  permit pending a further  administrative

appeal.

     In  July 1992,  the Company  duly appealed  the regional

administrator's  decision  to  EPA's   Environmental  Appeals

Board, urging a number of  the arguments discussed below, and

making one further contention of note: the Company said  that

unless EPA modified the permit  on direct review, the Company

would  likely   be  unable  get  the   mixing  zone  analysis

incorporated  into the permit through subsequent proceedings.

                             -8-

The reason,  said the Company, was  "the probable application

of  the anti-backsliding policy"  of the Clean  Water Act, 33

U.S.C.   1342(o).  On October 26, 1992, the EPA Environmental

Appeals  Board  issued a  lengthy  decision refusing  further

review.  The  Company's appeal  to this court  followed.   33

U.S.C.   1369(b)(1)(F).

                             -9-

                        II. DISCUSSION

     Faced with  what may  be a disastrous  outcome from  its

standpoint, the Company  has offered this court  a variety of

procedural  challenges to EPA.  They range from a broad claim

that  EQB's  final  certification  was  ineffective  (because

Puerto  Rico's time  to  certify had  expired)  to a  trivial

complaint  that the EPA did  not allow a  15-day extension to

the comment period at  one phase of the proceeding.  We think

virtually  all  of  the  procedural claims  fail  and,  while

addressing them at  the close  of the opinion,  we prefer  to

begin by discussing EPA's central error.

     EPA's  action in adopting the permit in this case is not

flawed by procedural  mistake.   On the contrary,  EPA did  a

commendable  job of  dotting i's  and crossing  t's.   Nor is

there any  violation of  substantive provisions of  the Clean

Water Act;  for example,  nothing in that  statute explicitly

requires EPA to use mixing zone analyses in its permits.  The

problem  with  EPA's  decision  is simply  that  the  outcome

appears  on its  face to  make no  sense.   We  say "appears"

because  we cannot rule out the possibility that some further

explanation could shore up the EPA's result.  Either way, the

EPA's present action cannot stand.

     It may  come as  a surprise  that agency  decisions must

make sense  to reviewing courts.   Agencies,  after all,  are

normally entitled  to substantial deference so  long as their

                             -10-

decisions do not collide directly  with substantive statutory

commands  and  so long  as  procedural  corners are  squarely

turned.   This  deference is  especially marked  in technical

areas.    But in  the  end an  agency  decision must  also be

rational--technically speaking,  it must not be "arbitrary or

capricious,"  Administrative   Procedure  Act,  5   U.S.C.   

706(2)(A)--and  that requirement  exists  even  in  technical

areas of  regulation.  E.g., Public  Citizens Health Research
                                                             

Group, v. Tyson, 796 F.2d  1479, 1505 (D.C. Cir. 1986).   The
               

requirement is not very hard to meet, but it has not been met

here.

     The "arbitrary and capricious" concept, needless to say,

is  not easy  to  encapsulate in  a  single list  of  rubrics

because it embraces  a myriad of possible  faults and depends

heavily upon the circumstances of the case.  Still, there are

rules of thumb, e.g., Motor Vehicle Mfrs. Ass'n v. State Farm
                                                             

Mutual Ins. Co., 463 U.S.  29, 43 (1983) (listing  examples).
               

In addressing  individual aspects of EPA's  decision, we cite

to   those   requirements--discussion  of   relevant  issues,

consistency  with  past  practice,  avoidance  of unexplained

discrimination--that are pertinent to  EPA's decision in this

case.

     On  the  surface  of  the  administrative   record,  the

following  scene presents itself.  EQB,  having used a mixing

zone  analysis in  past cases,  neglected to  include  such a

                             -11-

provision in its latest certification for this facility.  EQB

had  previously used  a mixing  zone  analysis for  this very

facility; and far from abandoning the concept, EQB was in the

process  of revising  its  regulations to  prescribe such  an

analysis  at the  very time  it was  preparing the  Company's

certification.    Four  days   before  it  issued  the  final
                                     

certification in this case, omitting a mixing zone provision,

it formally promulgated its new mixing zone regulations.

     It is not clear  whether in August 1990 EPA  appreciated

that  EQB  had  probably  misstepped.   The  Company's  brief

implies   that   the  EPA,   having   obtained  EQB's   final

certification, then  proceeded with sinister  speed--surely a

rare  accusation  in  administrative  law--to  mousetrap  the

Company by issuing a  final permit before EQB's certification

could be revised.  An alternative explanation, to us entirely

plausible,  is  that the  EPA's  patience with  EQB  had been

exhausted  and  it wanted,  as it  had  warned almost  a year

before, simply to get done with  the permit as soon as it had

EQB's final certification.

     However this may be, both the Company and EQB made clear

to  the EPA at once, and before the final permit issued, that

reconsideration was  under way.  EPA published  its new draft

permit for  comment in  August 1990;  and in  September 1990,

before the EPA issued the final permit on September 28, 1990,
      

EQB advised EPA  (on September 7)  that it was  reconsidering

                             -12-

its certification and might  alter it, and the  Company wrote

letters (on September  10 and  21) begging the  EPA to  defer

final  action until  the  EQB acted.    The EPA  nevertheless

proceeded to  issue the final permit with  no explanation for

its refusal to wait.

     Even  at this  stage, it  appears that  EPA was  free to

correct the problem on administrative review.  There being no

fixed  timetable, the  regional administrator  presumably had

discretion to defer action  until EQB acted on the  Company's

reconsideration request  and, if a mixing  zone analysis were

adopted  by   EQB  in   a  revised  certification,   then  to

incorporate  this revision into the new permit.  One of EPA's

regulations, 40 C.F.R.   124.55(b), which is discussed below,

seems to contemplate just such a situation.  During this same

period EQB made crystal clear, by its resolution  of November

28, 1990, and its formal letter of February 25, 1991, that it

was planning to reexamine its certification and  did not want

the  certification  treated  as   final.    Once  again,  EPA

proceeded to reject the  pleas and reaffirm the  permit, sans

mixing zone.

     EPA has now explained its  position at least three times

administratively and for a  fourth time in this court.   Each

time   EPA  deals  deftly   with  the   Company's  procedural

objections  by showing  why  some regulation  allowed EPA  to

await EQB's final certification, but to refuse to await EQB's

                             -13-

attempt to repair the certification, and allowed EPA to adopt

EQB's certification, but to reject EQB's  retroactive attempt

to brand  it as non-final.   The only thing that  is missing,

among  this  array of  finely  wrought  explanations, is  any

reason why the EPA should want to frustrate the EQB's clumsy,
          

long-delayed but increasingly evident  desire to reconsider a

mixing zone analysis for this permit.

     Assuredly, some explanation  is called  for. The  mixing

zone analysis is not some freakish idea or whim of the Puerto

Rico   authorities.     According   to  EPA's   Mixing  Zones
                                                             

publication, it is available for use in at least 49 states in

varying situations; and the Company said that the refinery in

question  cannot  operate  if   the  permit  limitations  are

applied, without  a mixing zone  analysis, at the  point that

the   effluent   enters   the   water.      Patently,   these

considerations of  history and  practical effect would,  in a

rational decision,  warrant at least some  discussion.  Motor
                                                             

Vehicle Mfrs. Ass'n, 463 U.S. at 43 (agency may not "entirely
                   

fail[] to consider an important aspect of the problem").

     At oral  argument, we  inquired of  counsel representing

the  EPA whether there were other situations in which EPA had

refused  to  use a  mixing  zone analysis  despite  a state's

desire that  such an analysis  be used.   Yes, we  were told,

counsel for EPA knew of several such instances.  On rebuttal,

the Company's counsel responded  that there were indeed other

                             -14-

instances but they were limited to  EPA's issuance of permits

in Puerto  Rico, in the same  time frame as this  case and to

other  applicants whose  situations  paralleled that  of  the

Company.   If this is the situation  (counsel for EPA made no

later effort  to respond), then  EPA's current posture  is in

some  measure  at odds  with precedent.    Cf. Atchison,  T &amp;
                                                             

S.F.R.R.  v. Wichita Bd. of  Trade, 412 U.S.  800, 808 (1973)
                                  

("departure from prior norms" must be explained).

     The point is not that EPA has some overriding obligation

under the Clean Water Act to do whatever it is that the state

wants to  do.  On the  contrary, EPA was entirely  free, once

Puerto  Rico had  ignored  the clear  deadlines  for a  final

certification,  to treat  the Commonwealth  as an  interested

bystander with  no further  veto authority.   What  is beyond

explanation,  or  at least  wholly  unexplained,  is why  EPA

should be intent  on adopting half  of what the  Commonwealth

wanted while systematically frustrating its attempt to secure

the  other half.   The obligation, we  repeat, is not  one of

deference to local authorities but of making sense.

     There  is  also in  this  case  an  element of  apparent

irrational   discrimination.     See,  e.g.,   Green  Country
                                                             

Mobilephone,  Inc.  v. FCC,  765  F.2d 235  (D.C.  Cir. 1985)
                          

(obligation to treat similar cases  similarly).  For all that

appears,  similarly situated  facilities  in Puerto  Rico, if

permitted for the first time next year, are likely to receive

                             -15-

permits including a mixing zone analysis.  Like facilities in

other states, permitted in September 1990 at the same time as

the  Company, probably  received the  benefit of  mixing zone

analyses.   Only Puerto Rican facilities that  happened to be

permitted or  re-permitted in  this strange "window,"  during

which  EQB was  reformulating its  mixing zone  criteria, are

left  out   in  the  cold--possibly  forever   if  the  anti-

backsliding provisions apply.2

     Perhaps there is some explanation for EPA's action other

than a mechanical desire to reach  a rapid conclusion without

regard  to whether the result  is sound.   Indeed, we suspect

that  there  is  an  explanation.    As  noted,  the  Company

insinuates  that EPA  deliberately  took  advantage of  EQB's

carelessness  to mousetrap  the Company  into standards  that

could not  later be  relaxed because of  the anti-backsliding

provisions  previously mentioned.    Such a  result would  at

least explain what happened, although it is doubtful that the

explanation,  if adopted  by EPA,  would commend itself  to a

reviewing court.

     Or, there may  be more benign reasons for  EPA's action.

Perhaps  the  Company's science  is  faulty  and very  slight

adjustments  in  technology  would  permit  it  to  meet  the

                    

     2Needless  to say,  we  do not  know  whether the  anti-
backsliding  provisions  would  produce  this  result.    The
provisions  are complicated  and contain  certain exceptions.
33  U.S.C.   1342(o).  The Company's prediction is qualified,
and EPA's brief is silent on this issue.

                             -16-

pollution limitations, and  improve the environment to  boot,

without any mixing zone  analysis.  In all events,  until EPA

emerges from  its fortress of  procedural-rule citations  and

adopts  a  rationale for  its  action,  any speculations  are

beside the point:  the  agency's decision cannot be supported

on reasoning that the agency has not yet adopted.  See SEC v.
                                                          

Chenery Corp., 332 U.S. 194, 196 (1947).
            

     We turn now to the  Company's other arguments on  appeal

because  some of them, if  adopted, would alter  the terms of

the  remand.    The  main  thrust of  the  Company's  various

arguments is  that, for  various procedural reasons,  EPA was
                                           

not  entitled  to rely  on the  EQB  certification.   On this

premise,  the  Company  argues   that  EPA  was  required  to

formulate  its  own  permit  standards based  upon  the  real

requirements of  Puerto Rico law, which  the Company believes

requires the use  of a mixing zone analysis.  Since we reject

the Company's premise of  procedural error, the further steps

in the Company's argument need not concern us.

     The  Company's  broadest  procedural  argument  is  that

Puerto Rico's final certification came too late and therefore

could not furnish the  basis for EPA's own final  permit.  As

already noted, the  Clean Water Act  required Puerto Rico  to

provide  its  certificate,  or  announce a  decision  not  to

certify,  within a  reasonable  time not  to exceed  one year

after  the  application,  33  U.S.C.     1341(a)(1);  and  by

                             -17-

regulation EPA required  a certification  decision within  60

days  of  the  issuance  of a  draft  permit.    40 C.F.R.   

124.53(c)(3).  Here, EQB apparently ignored both time limits,

failing both to meet the statutory one-year deadline and  the

regulation-based 60-day deadline.

     Under  the  statute and  the  regulation,  the price  of

failing to meet the deadlines is that the state agency waives

its right to  dictate permit  terms that go  beyond what  EPA

would  do on its  own.   Based on  this waiver  language, the

Company argues  that a  state certification issued  after the

deadline is  without legal effect.   In reply EPA says  it is

free  either to declare a  waiver or, instead,  to follow the

course  taken  in  this  case  and  await  the  final, though

belated, certification.   The statute itself  merely provides

that  the state must act  within a reasonable  period, not to

exceed  a  year, or  the  certification  requirement will  be

deemed "waived."  33 U.S.C.   1341(a)(1).

     Although  we  are   provided  no  useful   precedent  or

legislative  history, our  reading  of  the  statute  largely

coincides with that of EPA.  The statutory time limit and the

word  "waived" do not tell us the answer; Congress could have

meant that  a state  certification issued after  the deadline

had to  be ignored by EPA,  or it could have  meant only that

EPA was  free to do so.   EPA interprets the  statute to mean

the latter  and under  the Chevron doctrine,  Chevron U.S.A.,
                                                             

                             -18-

Inc. v.  NRDC, 467 U.S.  837 (1984), its view  is entitled to
             

weight.  State of California v. FERC, 966 F.2d 1541 (9th Cir.
                                    

1992),  cited by  the Company  as holding  that the  deadline

cannot be waived, holds no such thing.3

     Further,  EPA's  reading both  of  the  statute and  its

regulation seems  to  us  a  sensibly flexible  one.    EPA's

reading  gives it the practical  benefit of the state process

even  if that benefit comes a little  late.  Indeed, where no

one  complains  (e.g.,  because  the applicant  is  happy  to
                     

operate  under an  earlier permit),  it could  be pointlessly

rigid to  insist  that EPA  begin  its own  calculations  the

moment the certification deadline expires for the state.  The

concern on the other side  is that without a deadline,  a new

applicant could be left  dangling forever.  But we  think the

courts have  adequate power  to assure that  flexibility does

not become an excuse for permanent inaction.4 

                    

     3EPA's interpretation  of its  own 60-day  regulation is
even  more   compelling  since  it   wrote  the   regulation.
Gardebring v. Jenkins, 485 U.S. 415, 430 (1988)  In addition,
                     
agencies can  usually (although  not always) waive  their own
procedural  regulations  even  where  there   is  no  express
provision  for waiver.    American Farm  Lines v.  Black Ball
                                                             
Freight Service, 397 U.S. 532, 538 (1970).
               

     4See  Administrative Procedure  Act,  5 U.S.C.    706(1)
         
(power to compel agency action  unduly delayed).  The  courts
are normally deferential to  the agency in such cases.   See,
                                                            
e.g., Telecommunications Research &amp; Action Center v. FCC, 750
                                                        
F.2d  70  (D.C. Cir.  1984).    Here, however,  Congress  has
expressed its  intent that the state  proceeding be completed
in a year.  If EPA wants to waive the state's failure to meet
a deadline, and  wait longer for its certification,  we think
that  the propriety of its deferral might be open to judicial

                             -19-

     The   Company's   remaining   arguments   require   less

discussion.  The claim that EQB's certification was not final

when EPA adopted it is unpersuasive.  "Finality" is a concept

with  several shades  of meaning  in administrative  law; but

where, as here, the agency  itself (rather than a subordinate

body)  has  spoken  and  has explicitly  labeled  its  action

"final,"  we think that is enough, even though the agency may

choose to reconsider or may  be reversed on judicial  review.

The Company failed  to get  a stay of  the EQB  certification

before EPA acted in reliance upon it.  We agree with EPA that

the   subsequent  decision  of  EQB  to  re-characterize  its
                

certification order as non-final cannot affect the procedural

validity of EPA's decision to grant the permit.

     In fact, EPA has regulations that govern the effect of a

state stay or modification of a certification after  a permit

has issued.  The  pertinent regulation permits EPA's regional

administrator under certain circumstances to  incorporate the

modifications  into the  permit so  long as the  state agency

stays  or modifies the old certificate and forwards a new one
                                          

to  EPA as a  substitute.  40  C.F.R.   124.55(b).   But this

regulation does not apply in this case because EQB never sent

a substitute certificate to the EPA.

     The Company  relies upon a different  EPA regulation, 40

C.F.R.   122.44(d)(3).  This provides in part that if a state

                    

review that is somewhat more searching than customary.

                             -20-

court or board  stays a certification,  EPA shall notify  the

state  that  certification will  be  deemed  waived unless  a

finally  effective  certificate  is  issued  within  60 days;

absent such a new certification, the regulation says that EPA

shall  impose  its  own  requirements  in  the  permit.    In

agreement  with EPA, we read this regulation to apply only to

stays that occur before EPA has issued its own permit.   Once

again, the agency's reading of its own regulation is entitled

to deference.  Gardebring, 485 U.S. at 430.  Its reading also
                         

has  the benefit  of making  this regulation,  governing pre-

permit  stays,  dovetail  with  section  124.55(b), governing

post-permit stays.

     In an attempt to bolster the importance of the EQB stay,

the  Company reminds us of  the central role  that the states

were intended to  play under the  Clean Water Act.   Yet that

role is to be  played within the framework of  the procedures

fixed by the statute and EPA regulations.   Indeed, precisely

because   two  different   jurisdictions   are  expected   to

collaborate  on  a  permit,  there  is  a  special  need  for

compliance  with the rules  of the road.   Here, the EQB stay

came  after  the  permit   and--strictly  from  a  procedural
           

standpoint--EPA  was  entitled to  disregard  it,  unless and

until  EPA's  regulation  governing  a  post-permit stay  was

satisfied.

                             -21-

     In  summing up, we stress  again that the  flaw in EPA's

action   is  not  a  procedural  defect.    EPA's  result  is

irrational, or  at least inadequately  explained, not because
                                                     

of  EQB's hapless stay, but  because of the  substance of the

EPA's  permitting  decision.   To  restate  the gist  of  the

matter, EPA has  failed to explain why  it makes sense, as  a

matter  of substantive  policy,  to  frustrate Puerto  Rico's

incipient  desire to use  the mixing  zone analysis,  and why

those  companies who  fall  in this  "window" between  Puerto

Rico's old and  new regulations  should alone  be denied  the

benefits of  a  mixing analysis.    Those concerns  would  be

virtually  the same  even  if EQB  had  never used  the  word

"stay."5

                       III. CONCLUSION

     In  framing the remand, we begin  by emphasizing what we

have not decided.   Whether the final certification issued by
        

the EQB in August  1989 is vulnerable to attack  under Puerto

Rican  law, if not altered  by EQB on  reconsideration, is an

issue not  before this  court.  Although  state certification

provisions are incorporated into federal permits, review of a

                    

     5We have not discussed the Company's separate claim that
EPA abused its discretion by not extending the comment period
for 15 days, as requested by the Company, to permit more time
for comment  on technical  issues.  This  argument, summarily
stated in a paragraph at  the end of the Company's brief,  is
not seriously  supported and  is therefore not  preserved for
review.  United States v. Zannino, 895 F.2d 1, 27 (1st Cir.),
                                 
cert. denied, 494 U.S. 1082 (1990).
            

                             -22-

state certification is a matter for  local courts.  Roosevelt
                                                             

Campobello Int'l Park Comm'n v. EPA, 684 F.2d 1041, (1st Cir.
                                   

1982).   The apparent past  and future inclination  of EQB to

employ mixing zone analyses is part of the background of this

case, but nothing we have said should be taken to declare the

law of Puerto Rico on this subject.

     Similarly, we  do not suggest that  mixing zone analysis

has  a  sacrosanct  role under  the  Clean  Water  Act.   Our

impression from EPA's own publication is that the use of such

analysis is widespread.   But that  impression is subject  to

correction.  In any  event, sound reasons may dictate  that a

mixing  zone analysis not be used in certain cases or certain

classes  of cases, despite a possible hint to the contrary in

Marathon  Oil Co.,  830  F.2d at  1349  ("By definition,  the
                 

effluent  itself  does  not  meet  water  quality  standards;

otherwise, it would not be considered polluted.").  There may

even be reasons why, apart  from EQB's procedural default,  a

mixing zone analysis is improper in this case.

     All that we hold  here is that EPA's decision to issue a

permit in  September 1990,  adopting EQB's  certification but

refusing to await EQB's decision on reconsideration, produces

a  result  that  on  the present  record  appears  manifestly

arbitrary and  capricious.   If legitimate reasons  exist for

such  an outcome,  then EPA is  free to provide  them and re-

adopt the present permit (and the  Company in turn is free to

                             -23-

challenge those reasons and  that action by petitioning again

for judicial  review).  EPA, EQB, and the Company may find it

possible to chart a more constructive course and make further

litigation unnecessary.

     The  EPA order adopting the permit at issue in this case

is  vacated and  the matter  is remanded  to EPA  for further
                                        

proceedings in accordance with this opinion.  Costs are taxed

in favor of the petitioner.

                             -24-
