  Notice: This opinion is subject to formal revision before publication in the
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       United States Court of Appeals
                  FOR THE DISTRICT OF COLUMBIA CIRCUIT




Argued November 13, 2003                   Decided February 24, 2004

                               No. 01-1053

       NORTHEAST MARYLAND WASTE DISPOSAL AUTHORITY,
                       PETITIONER

                                     v.

                ENVIRONMENTAL PROTECTION AGENCY,
                          RESPONDENT



                        Consolidated with
            01-1054, 01-1055, 02-1280, 02-1299, 03-1093



           On Petitions for Review of an Order of the
               Environmental Protection Agency



  Timothy R. Henderson argued the cause for petitioners
Northeast Maryland Waste Disposal Authority, et al. With
him on the briefs was Warren K. Rich.

 Bills of costs must be filed within 14 days after entry of judgment.
The court looks with disfavor upon motions to file bills of costs out
of time.
                                 2

  James S. Pew argued the cause and filed the briefs for
petitioners Sierra Club and New York Public Interest Re-
search Group.
  H. Michael Semler and Stephen E. Crowley, Attorneys,
U.S. Department of Justice, argued the cause and filed the
brief for respondents.
   Before: SENTELLE, HENDERSON and GARLAND, Circuit
Judges.
   Opinion for the court Per Curiam.
   Per Curiam: This action challenges the Emission Guide-
lines for Existing Small Municipal Waste Combustion Units,
65 Fed. Reg. 76,378 (Dec. 6, 2000), and the New Source
Performance Standards for New Small Municipal Waste
Combustion Units, 65 Fed. Reg. 76,350 (Dec. 6, 2000), pro-
mulgated by the United States Environmental Protection
Agency (EPA, Agency) pursuant to § 129 of the Clean Air
Act (CAA), 42 U.S.C. § 7429.1 The petitioners include three
members of the municipal waste combustor industry (Indus-
try Petitioners): Northeast Maryland Waste Disposal Au-
thority (Northeast Maryland), which operates four municipal
waste combustor (MWC) units in Harford County, Maryland;2
Dutchess County Resource Recovery Agency, which operates
  1 Under the regulatory scheme, for existing units EPA promul-

gates ‘‘emission guidelines’’ which ‘‘do not directly regulate any
MWC units, but TTT require States to develop plans to limit air
emissions from existing small MWC units.’’ 65 Fed. Reg. at 76,379.
For new units, by contrast, EPA promulgates ‘‘new source perform-
ance standards’’ with which MWC operators must directly comply.
See id. Both the new source performance standards and the
emission guidelines for existing sources are commonly referred to
as ‘‘standards.’’
  2 Waste Energy Partners (WEP), a one-time owner of the Har-
ford County, Maryland facility, originally filed this action. On July
1, 2002, however, Northeast Maryland acquired WEP’s ownership
interest in the Harford facility. Accordingly, on August 14, 2002,
we added Northeast Maryland as a party to WEP’s petition in No.
01–1053, and on November 4, 2003, we granted WEP’s motion to
withdraw from these proceedings.
                                3

two MWC units at a facility in Poughkeepsie, New York and
Islip Resource Recovery Agency, which operates two MWC
units at a facility in Islip, New York. The petitioners also
include two environmental organizations: the New York Pub-
lic Interest Research Group (NYPIRG) and the Sierra Club
(collectively identified as Sierra Club). For the reasons set
out below, we grant the petitions in part and deny the
petitions in part.

                               I.
   The challenged rulemaking is now in its third decade. In
1987 EPA issued an advance notice of a rulemaking to
regulate pollutants produced by MWC emissions pursuant to
§ 111 of the CAA, 42 U.S.C. § 7411, which requires EPA to
develop emission standards generally for each category of
pollutant EPA determines ‘‘causes, or contributes significant-
ly to, air pollution which may reasonably be anticipated to
endanger public health or welfare,’’ 42 U.S.C. § 7411(b)(1)(A).
See Assessment of Municipal Waste Combustor Emissions
Under the Clean Air Act, 52 Fed. Reg. 25,399, 25,399 (July 7,
1987). In 1989 EPA issued proposed emission regulations
imposing limits on the MWC emission levels for specific
pollutants, based on the level of emissions achievable with the
best pollution control technology, but did not prescribe specif-
ic control technologies to be used to achieve the limits. See
Standards of Performance for New Stationary Sources; Mu-
nicipal Waste Combustors, 54 Fed. Reg. 52,251 (Dec. 20,
1989).
  In 1990 the Congress enacted CAA § 129, 42 U.S.C.
§ 7429, which expressly requires EPA to establish specific
standards for each ‘‘solid waste incineration unit.’’3 The
standards must ‘‘reflect the maximum degree of reduction in
emissions of air pollutants listed under section (a)(4) that
[EPA], taking into consideration the cost of achieving such
  3 The statute defines a ‘‘solid waste incineration unit’’ as ‘‘a
distinct operating unit of any facility which combusts any solid
waste material from commercial or industrial establishments or the
general public.’’ 42 U.S.C. § 7429(g)(1).
                                    4

emission reduction, and any non-air quality health and envi-
ronmental impacts and energy requirements, determines is
achievable for new or existing units in each category.’’ Id.
§ 7429(a)(2).4 These standards are known as ‘‘maximum
achievable control technology’’ or ‘‘MACT’’ standards. The
statute limits EPA’s discretion to determine the stringency of
MACT standards. MACT standards must be at least as
stringent as the MACT floor set for each pollutant. The
MACT floor for new units is defined as ‘‘the emissions control
TTT achieved in practice by the best controlled similar unit.’’
Id. The MACT floor for existing units is defined as ‘‘the
average emissions limitation achieved by the best performing
12 percent of units in the category.’’ Id. The statute man-
dates two ‘‘categories’’ within both existing and new units
(defined in terms of combustion capacity), with different
deadlines for promulgating standards, id. § 7429(a)(1)(B)-(C),
and further provides that EPA ‘‘may distinguish among
classes, types, TTT and sizes of units within a category in
establishing [MACT] standards,’’ id. § 7429(a)(2).
  In 1994 EPA proposed new standards governing MWC
units pursuant to § 129. See Standards of Performance for
New Stationary Sources: Municipal Waste Combustors, 59
Fed. Reg. 48,198 (Sept. 20, 1994). The Agency proposed
distinct sets of standards for new and for existing sources, as
the statute contemplates, and broke down both source types
  4   Subsection (a)(4) of § 129 provides:
      The performance standards promulgated under TTT this section
      and applicable to solid waste incineration units shall specify
      numerical emission limitations for the following substances or
      mixtures: particulate matter (total and fine), opacity (as appro-
      priate), sulfur dioxide, hydrogen chloride, oxides of nitrogen,
      carbon monoxide, lead, cadmium, mercury, and dioxins and
      dibenzofurans. The Administrator may promulgate numerical
      emissions limitations or provide for the monitoring of postcom-
      bustion concentrations of surrogate substances, parameters or
      periods of residence time in excess of stated temperatures with
      respect to pollutants other than those listed in this paragraph.
42 U.S.C. § 7429(a)(4).
                               5

into two categories based on the aggregate plant capacity for
municipal solid waste (MSW), that is, based on the sum of the
maximum amount of waste each MWC unit located at a
particular site is designed to combust daily. Thus, within
both existing and new source types, EPA created a large unit
category — consisting of units located at plants with an
aggregate MSW capacity greater than 250 tons per day
(tpd) — and a small unit category — consisting of units
located at plants with an aggregate MSW capacity of 250 tpd
or less (but greater than 35 tpd).
  In 1995 EPA issued its final standards, which generally
tracked the proposed ones. See Standards of Performance
for New Stationary Sources and Emission Guidelines for
Existing Sources: Municipal Waste Combustors, 60 Fed.
Reg. 65,387 (Dec. 19, 1995) (1995 Rule). Two MWC facility
operators petitioned this court to review the 1995 Rule,
asserting that EPA violated § 129’s unambiguous language
when it defined large and small units based on the aggregate
MSW combustion capacity of the plant at which a MWC unit
is located rather than on the combustion capacity of the
individual MWC unit itself. We agreed with the petitioners
and vacated the standards, holding that ‘‘the EPA’s use of
aggregate plant MSW capacity rather than unit MSW capaci-
ty in the 1995 standards to create categories of MWC units
for MACT purposes violates the plain meaning of section 129
and exceeds the EPA’s statutory authority.’’ Davis County
Solid Waste Mgmt. v. EPA, 101 F.3d 1395, 1411 (D.C. Cir.
1996). Subsequently, on EPA’s motion for rehearing, the
court modified the remedy to vacate only the small unit
standards because it concluded ‘‘the Davis opinion will not
meaningfully alter the [new source performance standards] or
the emission guidelines applicable to [existing] large units and
that vacating the large unit standards will have a significant
deleterious effect.’’ Davis County Solid Waste Mgmt. v.
EPA, 108 F.3d 1454, 1460 (D.C. Cir. 1997) (rehearing).
  In August 1999 EPA proposed new standards for the
category of small MWC units, which it defined as units ‘‘with
a combustion design capacity of 35 to 250 tons per day.’’
                                 6

Emission Guidelines for Existing Stationary Sources: Small
Municipal Waste Combustion Units, 64 Fed. Reg. 47,234,
47,236 (Aug. 30, 1999).5 Existing small units were further
divided into three subcategories according to type and aggre-
gate plant capacity: Class A, consisting of ‘‘nonrefractory-
type small MWC units located at plants with an aggregate
plant capacity greater than 250 tons per day of MSW’’; Class
B, consisting of ‘‘refractory-type small MWC units located at
plants with an aggregate plant capacity greater than 250 tons
per day of MSW’’;6 and Class C, consisting of all ‘‘small
MWC units located at plants with an aggregate plant capacity
less than or equal to 250 tons per day of MSW.’’ Id. New
small units were divided into only two subcategories, strictly
by aggregate plant capacity: Class I, consisting of small units
located at plants with aggregate plant capacities greater than
250 tons of MSW per day, and Class II, consisting of small
units located at plants with aggregate plant capacities less
than or equal to 250 tons of MSW per day. New Source
Performance Standards for New Small Municipal Waste
Combustion Units, 64 Fed. Reg. 47,276, 47,279 (Aug. 30,
1999).
   Following comment and hearing, in December 2000 EPA
issued its final standards, which established subcategories by
aggregate plant capacity alone both for existing units, 65 Fed.
Reg. 76,378, and for new units, 65 Fed. Reg. 76,350, (collec-
tively, the 2000 Rule). For both existing and new units, Class
I consists of small MWC units located at plants with aggre-
gate plant capacities greater than 250 tons of MSW per day,
  5 EPA has not yet promulgated standards to regulate units with a

design capacity of 35 tpd or less, although a consent decree entered
in Sierra Club v. Whitman, No. 01–1537 (D.D.C. filed July 16,
2001), requires it to do so by November 30, 2005. Because such
units are not regulated, hereinafter our references (regarding both
the proposed and the final rule) to units with a combustion capacity
of equal to or less than 250 tpd refer to MWC units with MSW
capacity between 35 tpd and 250 tpd.
  6A ‘‘refractory type’’ MWC unit is one ‘‘that has no energy
recovery (such as through a waterwall) in the furnace of the
municipal waste combustion unit.’’ 64 Fed. Reg. at 47,262.
                               7

while Class II comprises small MWC units located at plants
with aggregate plant capacities equal to or less than 250 tons
of MSW per day. 65 Fed. Reg. at 76,379 (existing small
units); 65 Fed. Reg. at 76,351 (new small units). Within each
subcategory EPA calculated a MACT floor for each pollutant
and set a standard at or beyond the floor.
  On February 2, 2001 Waste Energy Partners, together
with other parties to the administrative proceeding, petitioned
EPA for reconsideration, and all Industry Petitioners filed
petitions for review of the final standards with the court. On
February 5, 2001 NYPIRG filed a petition for administrative
reconsideration, and on February 6, 2001 Sierra Club filed a
petition for judicial review of the standards. EPA denied
WEP’s petition for reconsideration on August 7, 2002, J.A.
2317, and denied NYPIRG’s petition on August 14, 2002, J.A.
2319.

                                II.
  Under § 307(d)(9) of the CAA, the court reviews EPA
action as follows:
     In the case of review of any action of the Administrator
     to which this subsection applies, the court may reverse
     any such action found to be —
       (A) arbitrary, capricious, an abuse of discretion, or
       otherwise not in accordance with law;
       (B) contrary to constitutional right, power, privilege,
       or immunity;
       (C) in excess of statutory jurisdiction, authority, or
       limitations, or short of statutory right; or
       (D) without observance of procedure required by law,
       if (i) such failure to observe such procedure is arbi-
       trary or capricious, (ii) the requirement of paragraph
       (7)(B) has been met, and (iii) the condition of the last
       sentence of paragraph (8) is met.7
  7Paragraph 7(B) provides: ‘‘Only an objection to a rule or
procedure which was raised with reasonable specificity during the
period for public comment (including any public hearing) may be
                                 8

42 U.S.C. § 7607(d)(9). We apply this standard of review
seriatim to each of the petitioners’ challenges to EPA’s
standards.

                   A.    Industry Challenges
   We begin with the challenges raised by Industry Petition-
ers. Each of these petitioners owns and operates small
MWC units — i.e., units with capacities equal to or less than
250 tpd. Because each of these small MWC units is located
at a plant with multiple units, the aggregate capacity of which
exceeds 250 tpd, each is classified as a Class I facility under
the 2000 Rule. Industry Petitioners challenge the emission
limits set by the 2000 Rule for existing units on both substan-
tive and procedural grounds. We consider those challenges
below.

                  1.    Substantive Challenges
   Industry Petitioners raise two substantive challenges to the
2000 Rule. First, they contend that § 129(a)(2) of the Clean
Air Act requires EPA to establish one MACT floor for all
existing units within the small unit category, and that the
Agency therefore exceeded its statutory authority by estab-
lishing different MACT floors for subcategories of units (i.e.,
Class I and Class II units). Second, Industry Petitioners
argue that, even if EPA may subcategorize when setting
MACT floors, the Act does not permit it to do so on the basis
of aggregate plant capacity. The consequence of this unlaw-
ful subcategorization, they protest, is that their Class I units
are subjected to more stringent standards than they would be
raised during judicial review.’’ 42 U.S.C. § 7607(d)(7)(B). The
final sentence of paragraph 8 provides: ‘‘In reviewing alleged
procedural errors, the court may invalidate the rule only if the
errors were so serious and related to matters of such central
relevance to the rule that there is a substantial likelihood that the
rule would have been significantly changed if such errors had not
been made.’’ Id. § 7607(d)(8).
                                 9

if MACT floors were instead calculated on a category-wide
basis.8

                    a. Subcategorization
   Both Industry Petitioners and EPA contend that our opin-
ion in Davis County Solid Waste Management v. EPA, 101
F.3d 1395 (D.C. Cir. 1996), governs the question of subcate-
gorization authority — although each side draws a different
lesson from that case. Accordingly, we begin with a brief
recap of Davis.
   As noted above, EPA promulgated an earlier round of
standards to regulate municipal waste combustion in 1995.
See 60 Fed. Reg. 65,387. Unlike the 2000 Rule, which applies
only to the category of small (250 tpd or less) MWC units and
which subcategorizes that category based on aggregate plant
capacity, the 1995 Rule categorized units based on aggregate
plant capacity. As a consequence, the 1995 Rule grouped a
number of small MWC units with individual capacities of less
than 250 tpd into the same category as large units with
individual capacities greater than 250 tpd, because those
small units were located at facilities with aggregate capacities
greater than 250 tpd. Id. In Davis, we found the 1995 Rule
unlawful, concluding that the Clean Air Act created two
  8 This is so, Industry Petitioners contend, because Class I units
have more efficient pollution control systems than the smaller Class
II units. By creating a subcategory of better-performing units, and
calculating the MACT floor on that basis, the resulting standard is
more stringent than it would be if EPA grouped all MWCs in the
small MWC unit category together and calculated one MACT floor
for all of them. This is especially true, petitioners continue, be-
cause if EPA were to establish one MACT floor for all small MWC
units, the Agency would have to include in its calculation ‘‘very
small’’ units — those with capacities of less than 35 tpd — a group
that is currently unregulated. See supra note 5. On the other
hand, were EPA to adopt Industry Petitioners’ view, Class II units
as well as below-35 tpd units would be subject to more stringent
controls than they are under the 2000 Rule. Respondent’s Br. at
25–26. Indeed, according to EPA, a MACT floor applicable to all
small MWCs would be stricter than most Class II units and below-
35 tpd units could feasibly achieve. Id. at 26 & n.29.
                              10

separate ‘‘categories of MWC units based on unit capacity,
units with unit MSW capacities above 250 tons/day and units
with unit MSW capacities of 250 tons/day or less.’’ 101 F.3d
at 1410. In support, we relied on the fact that § 129(a)(1)
imposed ‘‘different dates by which the standards for large and
small MWC units must be promulgated,’’ and that it therefore
‘‘separately define[d] these two types of MWC units.’’ Id. at
1403.9
    Although the only question in Davis was the lawfulness of
including both large and small units within the same catego-
ry, the opinion contains dicta upon which each side has seized
regarding the question of subcategorization. EPA focuses on
the Davis court’s suggestion — repeated four times in the
opinion — that the Agency may ‘‘exercise[ ] its discretion to
distinguish among units within a category and create[ ] subca-
tegories of small units, for which it can then calculate MACT
floors and standards separately.’’ Id. at 1408; see also id. at
1404–05, 1405 n.11, 1409 n.12, 1411. EPA reads this state-
ment as advising that, while the Agency is obligated to
categorize MWCs based on unit capacity, it remains free to
subcategorize the small unit category based on other factors.
See Respondent’s Br. at 27; see also 64 Fed. Reg. at 47,237
(quoting passage from Davis and concluding that the court’s
decision allows EPA to exercise its discretion to set MACT
floors based on subcategories of small units). In opposition,
Industry Petitioners maintain — ‘‘[w]ith all due respect’’ to
the Davis court — that the above-quoted material ‘‘is directly
at odds with’’ other sentences in the same opinion. Reply Br.
at 5. In particular, petitioners rely on Davis’ statement that,
‘‘in order to promulgate emissions standards, the EPA must
first calculate the MACT floors, and the EPA cannot calculate
the MACT floors until it has studied the emissions levels of
all units in the relevant category,’’ as barring EPA from
  9Under 42 U.S.C. § 7429(a)(1), EPA was to promulgate stan-
dards for MWC units with capacities of more than 250 tpd by
November 15, 1991, but did not have to promulgate standards for
MWC units with capacities of 250 tpd or less until November 15,
1992.
                               11

calculating MACT floors based on anything other than a
category-wide basis. Davis, 101 F.3d at 1404.
   Given that Davis — which did not involve subcategorization
within a category at all, but rather an attempt by the Agency
to collapse two statutory categories into one — contains no
holding on the subcategorization question at issue here, we
see little to be gained by striving to reconcile its dicta.
Instead, we look directly to the relevant statutory language in
order to determine whether EPA’s action was authorized.
That language is contained in § 129(a)(2) of the Clean Air
Act, which, with sentence numbers inserted for ease of subse-
quent discussion, states as follows:
     Emissions standard
        [1] Standards applicable to solid waste incineration
     units promulgated under TTT this section shall reflect the
     maximum degree of reduction in emissions of [listed air
     pollutants] that the Administrator, taking into consider-
     ation the cost of achieving such emission reduction, and
     any non-air quality health and environmental impacts
     and energy requirements, determines is achievable for
     new or existing units in each category. [2] The Adminis-
     trator may distinguish among classes, types (including
     mass-burn, refuse-derived fuel, modular and other types
     of units), and sizes of units within a category in establish-
     ing such standards. [3] The degree of reduction in
     emissions that is deemed achievable for new units in a
     category shall not be less stringent than the emissions
     control that is achieved in practice by the best controlled
     similar unit, as determined by the Administrator. [4]
     Emissions standards for existing units in a category may
     be less stringent than standards for new units in the
     same category but shall not be less stringent than the
     average emissions limitation achieved by the best per-
     forming 12 percent of units in the categoryTTTT
42 U.S.C. § 7429(a)(2). In brief summary: § 129(a)(2)’s first
sentence directs EPA to set overall emission standards that
(inter alia) reflect the maximum degree of achievable emis-
sions reduction (‘‘beyond-the-floor’’ MACT levels); the second
                               12

sentence grants EPA discretion to distinguish among units
within a category in establishing emission standards; the
third sentence instructs EPA that emission standards for new
units must ‘‘not be less stringent than’’ a specified level (the
new-unit MACT ‘‘floor’’); and the fourth sentence instructs
the Agency that emission standards for existing units must
‘‘not be less stringent than’’ a (different) specified level (the
existing-unit MACT ‘‘floor’’).
   Chevron U.S.A. Inc. v. Natural Resources Defense Council,
Inc., 467 U.S. 837 (1984), governs our review of Industry
Petitioners’ claim that the 2000 Rule conflicts with
§ 129(a)(2). As the Supreme Court has recently explained,
under Chevron ‘‘we must decide (1) whether the statute
unambiguously forbids the Agency’s interpretation, and, if
not, (2) whether the interpretation, for other reasons, exceeds
the bounds of the permissible.’’ Barnhart v. Walton, 535
U.S. 212, 218 (2002). Industry Petitioners contend that the
2000 Rule cannot survive the first step of the Chevron
inquiry. We disagree, concluding that the Rule survives both
steps of Chevron because the statutory language is ambigu-
ous, and the Agency’s interpretation is reasonable. See
Barnhart v. Thomas, 124 S. Ct. 376, 380 (2003).
  In support of its Chevron argument, Industry Petitioners
focus on § 129(a)(2)’s fourth sentence. That sentence states
that emissions limitations for existing units ‘‘shall not be less
stringent than the average emissions limitation achieved by
the best performing 12 percent of units in the category.’’ 42
U.S.C. § 7429(a)(2) (emphasis added). By its plain terms,
petitioners insist, this provision requires EPA to calculate one
MACT floor for all existing units in the small MWC category.
  The problem with this argument is that it reads the fourth
sentence of § 129(a)(2) in isolation, as if it were the only
sentence in the section rather than the final sentence of four.
As the Supreme Court has instructed, ‘‘the words of a statute
must be read in their context and with a view to their place in
the overall statutory scheme.’’ Davis v. Michigan Dep’t of
Treasury, 489 U.S. 803, 809 (1989); see National R.R. Pas-
senger Corp. v. Boston & Maine Corp., 503 U.S. 407, 417
                              13

(1992). And when we follow that instruction and look — as
EPA does — at the second sentence of § 129(a)(2), we find
express authorization for the Agency to ‘‘distinguish among
classes, types TTT, and sizes of units within a category in
establishing such standards.’’ 42 U.S.C. § 7429(a)(2) (empha-
sis added).
   Petitioners contend that EPA cannot rely on the second
sentence of § 129(a)(2) for authorization because, in their
view, that sentence permits subcategorization only after
MACT floors are calculated. That is so, they argue, because
the second sentence refers to subcategorization in the setting
of ‘‘such standards,’’ which petitioners read as pertaining only
to the beyond-the-floor levels described in the bulk of the
section’s first sentence. On that reading, subcategorization is
permissible in setting beyond-the-floor levels, but not in
setting the floors themselves.
   But Industry Petitioners’ reading is not the only reasonable
way to read § 129(a)(2). It is, of course, possible that the
second sentence’s use of the phrase ‘‘such standards’’ refers
to the first sentence as a whole. But another valid reading is
that ‘‘such standards’’ refers merely to the opening phrase of
the first sentence: ‘‘standards applicable to solid waste incin-
eration promulgated under TTT this section.’’ And that
phrase can be read as encompassing both the beyond-the-
floor requirements of the balance of the first sentence and the
floor requirements of the third and fourth sentences. Read
in this fashion, the second sentence authorizes the Agency to
distinguish among units ‘‘within a category’’ during all stages
of the MACT standard-setting process described in the sec-
tion.
  The order of the sentences in § 129(a)(2) further supports
EPA’s view that the second sentence does not only authorize
subcategorization after MACT floors are established. In-
deed, the second sentence, which expressly permits subcate-
gorization, precedes the two sentences that mandate the
establishment of MACT floors. And it is certainly reasonable
to conclude that a statutory provision that authorizes an
agency to take a particular action contemplates that such
                               14

action will be taken before — rather than after — another
action that is not even mentioned until a subsequent provi-
sion. Thus, if one reads the sentences of § 129(a)(2) in order,
the second sentence appears to contemplate that EPA may
first distinguish among units in a category, and then apply
the resulting subcategories when setting MACT floors. See
Holloway v. United States, 526 U.S. 1, 6 (1999) (‘‘In interpret-
ing the statute at issue, ‘[w]e consider not only the bare
meaning’ of the critical word or phrase ‘but also its placement
and purpose in the statutory scheme.’ ’’ (quoting Bailey v.
United States, 516 U.S. 137, 145 (1995))).
   Finally, still further support for EPA’s view is provided by
close attention to § 129(a)(2)’s third sentence, which immedi-
ately follows the authorization to subcategorize and directs
the Agency to establish MACT floors for new units. That
sentence states that ‘‘for new units in a category,’’ the MACT
floor ‘‘shall not be less stringent than the emissions control
that is achieved in practice by the best controlled similar
unit.’’ 42 U.S.C. § 7429(a)(2) (emphasis added). The word
‘‘similar’’ may reasonably be read as referring to a unit that is
in the same subcategory. Indeed, to find otherwise would
work the disfavored result of giving the word ‘‘similar’’ no
effect. See TRW Inc. v. Andrews, 534 U.S. 19, 31 (2001);
Duncan v. Walker, 533 U.S. 167, 174 (2001). And, if EPA can
group ‘‘similar’’ units together in setting the MACT floor for
new units, then Industry Petitioners’ central contention —
that the (second) subcategorization sentence must be limited
to beyond-the-floor calculations — cannot be sustained.
  In sum, we conclude that § 129(a)(2) is at least ambiguous
on the question of whether EPA may subcategorize the small
unit category when establishing MACT floors for MWCs, and
that the Agency’s construction of the section as permitting
such subcategorization is permissible.10
  10 In a footnote, Industry Petitioners argue that an altogether
different provision of the Clean Air Act shows that Congress knew
how to explicitly grant EPA discretion to set MACT floors for
subcategories when it wanted to do so. Petitioners’ Br. at 13 n.6.
                                15

      b.   Subcategorization by Aggregate Plant Size
   We now turn to Industry Petitioners’ second substantive
claim, that even if EPA may subcategorize when setting
MACT floors, the Clean Air Act does not permit it to do so on
the basis of aggregate plant capacity. This inquiry centers
on § 129(a)(2)’s second sentence, which provides: ‘‘The Ad-
ministrator may distinguish among classes, types (including
mass-burn, refuse-derived fuel, modular and other types of
units), and sizes of units within a category in establishing
such standards.’’ 42 U.S.C. § 7429(a)(2). According to In-
dustry Petitioners, aggregate plant capacity is not encom-
passed within any of the sentence’s three permissible grounds
of distinction: class, type and size of unit.
  Once again, Industry Petitioners insist that their position is
compelled by dicta in this court’s opinion in Davis. In
support, they point to a fragment of a sentence in a footnote
that states: ‘‘EPA cannot use location to override the MWC
unit categories established by Congress.’’ Davis, 101 F.3d at
1405 n.11. But even if the word ‘‘location’’ is correctly read
as a reference to a unit’s location at a plant of a specified
aggregate capacity, the complete footnote is at least equally
supportive of EPA’s position: that while location may not be
used to combine statutory categories, it may be used to
subcategorize within each category. The footnote states:

That provision is CAA § 112(d)(3), which governs standards for
emissions from major stationary sources, and provides:
    Emission standards promulgated under this subsection for
    existing sources TTT shall not be less stringent TTT than — (A)
    the average emission limitation achieved by the best perform-
    ing 12 percent of the existing sources TTT in the category or
    subcategoryTTTT
42 U.S.C. § 7412(d)(3). But the fact that Congress had available a
clearer way of expressing what EPA believes the legislature said in
§ 129(a)(2) does not compel us to reject EPA’s interpretation.
Although § 112(d)(3)’s single-sentence formulation is clearer, we
cannot conclude that EPA was unreasonable in relying on two of
§ 129(a)(2)’s sentences to do the same work.
                                16

      We emphasize that we do not hold that the EPA is
      precluded from ever taking a unit’s location into account,
      but simply that EPA cannot use location to override the
      MWC unit categories established by Congress. Section
      129(a)(2) gives the EPA broad discretion to differentiate
      among units in a category, and there is nothing in the
      text of section 129(a)(2) that would prevent the EPA
      from subcategorizing within the two categories of MWC
      units TTT on the basis of the units’ location, provided the
      EPA indicated why such a subcategorization was appro-
      priate.
Id. (emphasis added); see also id. at 1411.
   As before, we need not spend time deconstructing Davis’
dicta, because the words of the statute must ultimately decide
the issue. See Ernst & Ernst v. Hochfelder, 425 U.S. 185, 201
(1976). As we have noted, § 129(a)(2) authorizes EPA to
‘‘distinguish among classes.’’ ‘‘Class’’ is an ambiguous term.
It is not defined in the Clean Air Act, and the dictionary
definition — ‘‘a group, set, or kind marked by common
attributes’’ — could hardly be more flexible. WEBSTER’S
THIRD NEW INTERNATIONAL DICTIONARY 416 (1976) (3rd mean-
ing). There is certainly nothing about the term or its dictio-
nary definition that precludes the use of aggregate plant
capacity as a factor for drawing distinctions among units.
   Because the term ‘‘class’’ is ambiguous, we would now
ordinarily take Chevron’s second step and ask whether it was
reasonable for the Agency to construe that term as permit-
ting subcategorization based on aggregate plant capacity.
But because Industry Petitioners regard this case as gov-
erned by step one of Chevron, their briefs do not dispute that,
assuming subcategorization is permitted at all, aggregate
capacity is a reasonable criterion. Petitioners’ Br. at 11, 16.
Instead, they contend that EPA failed to provide any explana-
tion at all for subcategorizing on that basis. Because we
ultimately find that argument dispositive, we pretermit our
discussion of Chevron and proceed directly to that challenge.11
  11Industry Petitioners also contend, somewhat elliptically, that
the 2000 Rule is inconsistent with the statute because the emission
                                 17

                  2.   Procedural Challenges
   In addition to their substantive challenges, Industry Peti-
tioners level a number of procedural attacks against the 2000
Rule. Specifically, petitioners claim that in promulgating the
regulations, EPA: (1) failed to articulate a rationale for its
decision to subcategorize on the basis of aggregate plant
capacity; (2) failed to respond to significant comments; (3)
promulgated a rule that was not a logical outgrowth of the
rule the Agency originally proposed; (4) relied on late-
docketed materials; and (5) wrongfully denied a request for a
new round of public comment.
   The Clean Air Act limits the scope of our review of these
claims. In particular, we may not consider an objection to a
rule or procedure unless it was raised ‘‘with reasonable
specificity during the period for public comment.’’ 42 U.S.C.
§ 7607(d)(7)(B). Moreover, we may invalidate a rule because
of procedural errors only if: (1) the agency’s failure to
observe the required procedures was arbitrary or capricious,
id. § 7607(d)(9)(D); and (2) the error was ‘‘so serious and
related to matters of such central relevance to the rule that
there is a substantial likelihood that the rule would have been
significantly changed if such errors had not been made,’’ id.
§ 7607(d)(8); see id. § 7607(d)(9)(D); Chemical Mfrs. Ass’n
v. EPA, 28 F.3d 1259, 1262 (D.C. Cir. 1994).

standards it sets for small MWC units in Class I are substantially
the same as those the 1995 Rule set for large MWC units. See
Petitioners’ Br. at 15–16. As EPA points out, however, CAA § 129
does not mandate that the standards for small MWC units must
necessarily differ from those for large MWCs. Instead, the section
establishes statutory criteria and the methodology that EPA is to
use in applying those criteria to calculate standards. As long as the
Agency separately analyzes the two statutory categories, the fact
that the ultimate standards are equivalent need not concern us.
Indeed, as EPA explains, it is not surprising that emission stan-
dards would be the same for both existing Class I units and large
units, since the best performing units in both groups already use
similar control technology. Respondent’s Br. at 22–23.
                                18

                   a.   Absence of Rationale
   Industry Petitioners first attack EPA for failing to set
forth a rationale for its classification of units based on aggre-
gate plant capacity. According to petitioners, even if EPA
may legally distinguish among MWCs based on this charac-
teristic, it did so here without explaining why such classifica-
tion was appropriate. Although we would ordinarily consider
a challenge to an agency’s rulemaking rationale as a form of
substantive attack, in this case petitioners level only a proce-
dural charge. That is, they do not contend that it would be
substantively unreasonable for the Agency to distinguish
among MWCs based on the aggregate capacities of the plants
at which they are located. Rather, they simply contend that
the Agency has failed altogether to proffer a rationale for so
doing. Industry Petitioners assert that EPA’s failure violates
the requirement of CAA § 307(d) that each proposed and
promulgated rule be accompanied by a ‘‘statement of its basis
and purpose’’ that includes a summary of ‘‘the major legal
interpretations and policy considerations underlying’’ the rule.
42 U.S.C. § 7607(d)(3), (d)(6)(A).
   EPA responds by claiming that petitioners are foreclosed
from making this charge because they did not satisfy the
exhaustion requirement of CAA § 307(d)(7)(B), 42 U.S.C.
§ 7607(d)(7)(B), by objecting with reasonable specificity to
EPA’s failure to articulate a rationale during the public
comment period. We disagree for two reasons. First, a
number of commenters plainly did challenge the Agency’s
failure to explain its subcategorization rationale during the
rulemaking.12 Second, as we held in Appalachian Power Co.
  12 See Comments of Dutchess and Islip (J.A. 1830); Comments of
Institute of Clean Air (J.A. 1841); Comments of Illinois Environ-
mental Protection Agency (J.A. 2089). It is sufficient that an issue
was raised by any commenter; the party petitioning for judicial
review need not have done so itself. See Reytblatt v. Nuclear
Regulatory Comm’n, 105 F.3d 715, 721 (D.C. Cir. 1997); accord
Cellnet Communication, Inc. v. FCC, 965 F.2d 1106, 1109 (D.C. Cir.
1992) (‘‘Consideration of the issue by the agency at the behest of
another party is enough to preserve it.’’).
                              19

v. EPA, the EPA at all times ‘‘retains a duty to examine key
assumptions as part of its affirmative burden of promulgating
and explaining a nonarbitrary, non-capricious rule,’’ and
therefore must justify its basic ‘‘assumption[s] even if no one
objects TTT during the comment period.’’ 135 F.3d 791, 818
(D.C. Cir. 1998) (quoting Small Refiner Lead Phase–Down
Task Force v. EPA, 705 F.2d 506, 534–35 (D.C. Cir. 1983))
(internal quotation marks omitted). As there is no question
that the validity of the distinction between large and small
aggregate plant capacities was a key assumption underlying
the 2000 Rule, EPA was duty-bound to set forth its rationale
for subcategorizing on that basis.
   We thus turn to the underlying question: Did EPA explain
its decision to establish subcategories based on aggregate
plant capacity? We are, frankly, stunned to find that it did
not. As the Agency concedes, there is not one word in the
proposed or final rule that explains why the Agency chose to
distinguish among small MWCs on the basis of the aggregate
capacities of the plants at which they are located. Indeed,
other than arguing that petitioners are barred from raising
the issue, the text of EPA’s brief does not even respond to
Industry Petitioners’ argument that the failure to provide a
rationale dooms the 2000 Rule.
   In a footnote to its brief, EPA does assert that the Agency
‘‘articulated its rationale for distinguishing among MWC units
based on aggregate capacity when it proposed the first com-
prehensive MWC regulations in 1989.’’ Respondent’s Br. at
32 n.31 (citing Emission Guidelines: Municipal Waste Combu-
stors, 54 Fed. Reg. 52,209, 52,219–20 (Dec. 20, 1989)). That
rationale, which was contained in the preamble to a rule that
EPA proposed but never adopted, stated as follows:
    The proposed capacity aggregation is necessary because
    of the common practice within the MWC industry of
    constructing multiple MWC’s at the same location. This
    aggregation ensures that similar MWC plants with simi-
    lar emission potential are subject to the same emission
    guidelines regardless of the number of individual MWC’s
    at the plants. Because multiple MWC’s can have the
                              20

    same emission quality impacts as a larger single MWC, it
    is reasonable to apply the proposed emission guidelines
    to all existing MWC’s at the same locationTTTT
54 Fed. Reg. at 52,219–20. At oral argument, EPA further
asserted that this 1989 rationale was ‘‘incorporated’’ into the
2000 Rule, and thus was sufficient to satisfy the requirement
of CAA § 307(d).
   We are not persuaded. While an express statement of
intent to incorporate a rationale contained in another, specific
document might satisfy the Agency’s statutory obligation,
EPA made no such statement here. The sum and substance
of the statement in the 2000 Rule that the Agency regards as
incorporating the 1989 preamble reads as follows:
    Docket No. A–98–18 [1998] and associated Docket Nos.
    A–90–45 [1990] and A–89–08 [1989] contain supporting
    information for the emission guidelines. The dockets are
    available for public inspection and copyingTTTT
65 Fed. Reg. at 76,378; see 64 Fed. Reg. at 47,234 (identical
statement in proposed rule). That statement does not ex-
pressly ‘‘incorporate’’ anything, let alone refer interested
parties or the courts to a specific document containing the
Agency’s rationale. At best, it is an invitation to search
through a mountain of documents, contained in three rule-
making dockets stretching back over a decade, in pursuit of
‘‘supporting information.’’
   Such a vague reference cannot possibly satisfy § 307(d)’s
instruction that each proposed and promulgated rule ‘‘shall be
accompanied by’’ a ‘‘statement of basis and purpose’’ that
‘‘shall include a summary of TTT the major legal interpreta-
tions and policy considerations underlying the proposed rule.’’
42 U.S.C. § 7607(d)(3) (emphasis added);             see id.
§ 7607(d)(6)(A). A rationale buried in a document published
in 1989 simply does not ‘‘accompany’’ a rule proposed and
promulgated more than a decade later. Nor can such a
reference satisfy the fundamental requirement of nonarbi-
trary administrative decisionmaking: that an agency set forth
the reasons for its actions. See Motor Vehicle Mfrs. Ass’n of
                              21

United States, Inc. v. State Farm Mut. Auto. Ins. Co., 463
U.S. 29, 48–50 (1983); Appalachian Power Co., 135 F.3d at
818; see also Small Refiner, 705 F.2d at 551 (‘‘A rule without
a stated reason is necessarily arbitrary and capricious.’’).
Without a readily accessible statement of the agency’s ratio-
nale, interested parties cannot comment meaningfully during
the rulemaking process. Nor can they, or the courts, deter-
mine whether the agency has acted capriciously or whether
its statutory interpretation is reasonable under Chevron’s
second step.
   Although EPA’s failure to set forth its rationale requires us
to remand the 2000 Rule for further consideration, see State
Farm, 463 U.S. at 57, that defect does not require us to
vacate the rule. See Allied–Signal, Inc. v. Nuclear Regulato-
ry Comm’n, 988 F.2d 146, 150 (D.C. Cir. 1993) (‘‘An inade-
quately supported rule TTT need not necessarily be vacated.’’).
We decline to do so for several reasons. First, the 1989
rationale pointed to by EPA is sufficient to persuade us that
the Agency ‘‘may be able to explain’’ the subcategorization
decision it made in 2000. Id. at 151. That rationale also
militates against a finding that the error was ‘‘so serious TTT
that there is a substantial likelihood that the rule would have
been significantly changed’’ if it had not been made. 42
U.S.C. § 7607(d)(8). At the same time, there is no doubt that
‘‘the consequences of vacating’’ would be ‘‘quite disruptive.’’
Allied–Signal, Inc., 988 F.2d at 151. Indeed, it was concern
over just such disruption of EPA’s pollution control program
that ultimately persuaded us to remand rather than vacate
the 1995 large-unit regulations, originally invalidated in
Davis. See Davis County Solid Waste Mgmt. v. EPA, 108
F.3d 1454, 1458 (D.C. Cir. 1997) (expressing concern ‘‘that
vacating the standards for large units could have significant
deleterious effects on MWC emissions control’’). According-
ly, rather than vacate, we remand the 2000 Rule to EPA ‘‘for
it to develop a reasoned’’ explanation for its decision to
subcategorize on the basis of aggregate plant capacity. Al-
lied–Signal, Inc., 988 F.2d at 151; see, e.g., Radio–Television
News Directors Ass’n v. FCC, 184 F.3d 872, 888–89 (D.C. Cir.
                               22

1999); American Mining Cong. v. EPA, 907 F.2d 1179, 1190
(D.C. Cir. 1990).

                  b. Response to Comments
   We next consider Industry Petitioners’ second procedural
charge: that EPA failed to respond to significant comments,
as required by CAA § 307(d)(6)(B). That provision requires
that ‘‘[t]he promulgated rule shall also be accompanied by a
response to each of the significant comments TTT submitted in
written or oral presentations during the comment period.’’
42 U.S.C. § 7607(d)(6)(B); see Appalachian Power Co. v.
EPA, 249 F.3d 1032, 1051 (D.C. Cir. 2001) (‘‘While we gener-
ally 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.’’).
   Petitioners assert, first, that EPA failed to respond to
comments complaining about the high cost of retrofitting acid
gas controls for certain units. This assertion fails on its facts.
The Agency did respond to those complaints, explaining that
the Clean Air Act does not permit it to take cost into account
in setting MACT floors, and that (in its view) the beyond-the-
floor standards strike the correct balance between cost and
emissions reductions. EPA Response to Comments at 52
(J.A. 2199).
   Industry Petitioners also claim that EPA failed to respond
to comments asserting that § 129(a)(2) of the Clean Air Act
bars the Agency from subcategorizing MACT floors on the
basis of aggregate plant capacity. We need expend no fur-
ther effort in analyzing that charge, however, as we have
already decided to remand the 2000 Rule to EPA so that the
Agency may explain its rationale for such subcategorization.
See supra Part II.A.2.a. During the course of that remand,
the Agency will have ample opportunity to respond to the
cited comments and to cure this procedural failure as well.

                   c. Adequate Notice
  The third procedural challenge is raised only by Industry
Petitioner Northeast Maryland Waste Disposal Authority.
                                 23

Northeast Maryland contends that, because the 2000 Rule
differs from the rule EPA originally proposed, the Agency
failed to provide the advance notice required by the Clean Air
Act. See 42 U.S.C. § 7607(d)(3) (requiring EPA to publish a
notice of proposed rulemaking ‘‘as provided under’’ 5 U.S.C.
§ 553(b)); 5 U.S.C. § 553(b)(3) (requiring each agency to
publish notice of proposed rulemaking that includes ‘‘either
the terms or substance of the proposed rule or a description
of the subjects and issues involved’’).
   As we have discussed, the final 2000 Rule subcategorizes
small MWC units into two classes based on aggregate plant
capacity: Class I units are those located at plants with
aggregate capacities greater than 250 tpd; Class II units are
those located at plants with aggregate capacities equal to or
less than 250 tpd. By contrast, the proposed rule established
three classes for existing small MWCs: it subcategorized
them not only on the basis of aggregate plant capacity, but
also based on whether a unit utilized ‘‘refractory’’ or ‘‘nonref-
ractory’’ technology. 64 Fed. Reg. at 47,237.13 The three
proposed classes were: Class A, for nonrefractory units
located at plants with aggregate capacities of more than 250
tpd; Class B, for refractory units located at plants with the
same aggregate capacities; and Class C, for all units located
at plants with aggregate capacities equal to or less than 250
tpd. Id. The proposed rule subjected the Class A units to
the most stringent emission standards.
   EPA initially distinguished between refractory and nonref-
ractory units based on its belief that refractory units were
less amenable to pollution control technology. The Agency
thought that refractory units generated significantly more
exhaust (flue gas) per ton of waste burned, and that emission
control devices were less efficient at removing pollutants from
larger air volumes with lower concentrations. Id. However,
  13 The refractory-nonrefractory distinction hinges on a unit’s cool-
ing technology. After combustion, refractory units are cooled by
circulating excess air. Nonrefractory MWC units are lined with
water-filled steel tubes. Cool water flows through the tubes to
remove heat and protect the unit’s structure.
                               24

after receiving public comments opposing the subcategoriza-
tion scheme and reanalyzing the issue, EPA ultimately con-
cluded that any difference in flue gas flow rates between
refractory and nonrefractory units was insufficient to justify
the imposition of different emission standards. 65 Fed. Reg.
at 76,380. Accordingly, in the final rule, EPA collapsed Class
A and Class B into a single class — Class I — composed of all
units located at plants with aggregate capacities exceeding
250 tpd. Id.
   Because the proposed rule indicated that EPA was consid-
ering three subcategories, while the final rule establishes only
two, Northeast Maryland contends that it was deprived of
proper notice of the Agency’s intentions. As petitioners
recognize, however, EPA is not required to adopt a final rule
that is identical to the proposed rule. Indeed, ‘‘[i]f that were
the case, [EPA] could learn from the comments on its propos-
als only at the peril of subjecting itself to rulemaking without
end.’’ First Am. Discount Corp. v. Commodity Futures
Trading Comm’n, 222 F.3d 1008, 1015 (D.C. Cir. 2000) (inter-
nal quotation marks omitted); see American Water Works
Ass’n v. EPA, 40 F.3d 1266, 1274 (D.C. Cir. 1994). Agencies,
are free — indeed, they are encouraged — to modify pro-
posed rules as a result of the comments they receive. See
Arizona Pub. Serv. Co. v. EPA, 211 F.3d 1280, 1300 (D.C. Cir.
2000) (noting that ‘‘the Agency’s change of heart TTT only
demonstrates the value of the comments it received’’); Koor-
itzky v. Reich, 17 F.3d 1509, 1513 (D.C. Cir. 1994) (‘‘It is an
elementary principle of rulemaking that a final rule need not
match the rule proposed, indeed must not if the record
demands a change.’’).
   In light of these considerations, we have held that an
agency satisfies the notice requirement, and need not conduct
a further round of public comment, as long as its final rule is
a ‘‘logical outgrowth’’ of the rule it originally proposed. First
Am. Discount Corp., 222 F.3d at 1015; Arizona Pub. Serv.
Co., 211 F.3d at 1299. A rule is deemed a logical outgrowth if
interested parties ‘‘should have anticipated’’ that the change
was possible, and thus reasonably should have filed their
comments on the subject during the notice-and-comment
                                25

period. City of Waukesha v. EPA, 320 F.3d 228, 245 (D.C.
Cir. 2003); see First Am. Discount Corp., 222 F.3d at 1015;
National Mining Ass’n v. Mine Safety & Heath Admin., 116
F.3d 520, 531 (D.C. Cir. 1997); Kooritzky, 17 F.3d at 1513.
   We conclude that the final 2000 Rule, which merely collaps-
es the proposed rule’s three categories into two, is a logical
outgrowth of the proposed rule. By announcing that it
proposed to distinguish between refractory and nonrefractory
units, EPA invited comments on both the pros and cons of
that distinction. It thus effectively served notice that, if
persuaded that the latter outweighed the former, the distinc-
tion might not survive. Nor did the interested parties mis-
read either the invitation or the stakes involved. Numerous
commenters — including two that are among the Industry
Petitioners here — filed comments that were critical of the
distinction between refractory and nonrefractory units.14 On
the other side, Northeast Maryland’s predecessor, WEP, filed
comments that supported the distinction. Comments of WEP
at 1 (J.A. 2093). Accordingly, we reject Northeast Mary-
land’s contention that the evolution of the rule deprived it of
adequate notice and an opportunity to comment. See Appa-
lachian Power Co., 135 F.3d at 816 (finding that a rule was a
logical outgrowth where commenters ‘‘clearly understood’’
that a matter was under consideration, since ‘‘the agency
received comments on [the matter] from several sources’’).

              d.   Late Docketing of Materials
   Next, Industry Petitioners assert that, in promulgating the
2000 Rule, EPA improperly relied on documents added to the
docket after the close of the comment period and too late for
effective rebuttal. While the docket for this rulemaking
closed on October 29, 1999, EPA docketed a number of
materials in late September 2000, approximately two months
  14 See, e.g., Comments of Dutchess and Islip at 2 (J.A. 1832); see
also, e.g., Comments of Institute of Clean Air Companies at 1 (J.A.
1917); Comments of Wasatch Clean Air Coalition at 1 (J.A. 1921);
Supplemental Comments of Institute of Clean Air Companies at 1
(J.A. 1839).
                                26

before the rule’s December 6, 2000, publication. Industry
Petitioners specifically complain about Document IV–B–5, an
EPA-drafted memorandum that set forth EPA’s rationale for
eliminating the refractory-nonrefractory distinction. EPA
Combustion Group Mem. (docketed Sept. 28, 2000) (J.A.
1801).
  In this case, as Industry Petitioners concede, all of the
documents at issue were docketed by the time the 2000 Rule
was promulgated. Hence, EPA did not violate the letter of
CAA § 307(d)(6)(C), which bars EPA from basing a rule on
data ‘‘which has not been placed in the docket as of the date
of [the rule’s] promulgation.’’ 42 U.S.C. § 7607(d)(6)(C).
Nevertheless, as petitioners correctly point out, our cases
hold that EPA violates ‘‘the structure and spirit of section
307’’ if it ‘‘submit[s] so late as to preclude any effective public
comment’’ a document ‘‘vital to EPA’s support for its rule.’’
Sierra Club v. Costle, 657 F.2d 298, 398 (D.C. Cir. 1981); see
Small Refiner, 705 F.2d at 540.
  But Document IV–B–5 is not the kind of document to which
our cases refer. Document IV–B–5 expressed EPA’s re-
sponse to, and agreement with, public comments that it had
received indicating there was no significant difference in flue
gas flow rates between refractory and nonrefractory units.
In effect, then, the memorandum was little more than a
statement of the Agency’s response to comments and of its
rationale for eliminating the proposed distinction between
Classes A and B. It is thus the kind of statement that would
ordinarily not appear until the notice of final rulemaking, and
the fact that EPA placed it in the docket in advance of that
notice cannot be regarded as a procedural defect. See Costle,
657 F.2d at 352–53 (‘‘It is entirely proper and often necessary
for the agency to continue its deliberations and internal
decisionmaking process after the close of public comment in
order to assimilate those comments and arrive at a policy
choice.’’).

              e.   Petition for Reconsideration
  Finally, we address Industry Petitioners’ claim that EPA
erred in refusing to ‘‘convene a proceeding for reconsidera-
                              27

tion,’’ pursuant to CAA § 307(d)(7)(B), 42 U.S.C.
§ 7607(d)(7)(B), in response to a petition for reconsideration
that WEP filed after publication of the final rule. That
petition sought reconsideration principally on the grounds
that the final rule was not a logical outgrowth of the proposed
rule, and that reliance on the late-docketed Document IV–B–5
violated the Clean Air Act. As we have concluded that
neither of those claims of procedural error has merit, there is
no ground for holding that a reconsideration proceeding was
required, see 42 U.S.C. § 7607(d)(7)(B), or that the denial of
WEP’s request had a prejudicial effect, see id. § 7607(d)(8).

                   B. Sierra Club Challenges
 Sierra Club challenges the 2000 Rule on three grounds.
We address each ground in turn.

              1.    Permit–Based MACT Floors
                    for Existing Small Units
   First, Sierra Club challenges EPA’s decision to base exist-
ing small unit MACT floors on the emission limits contained
in state permits. As in the 1995 Rule, in the 2000 Rule EPA
based the MACT floor on the limits set for state-permitted
MWC units in the particular subcategory. For each pollu-
tant, EPA calculated the MACT floor by averaging the most
stringent 12% of state permit limits in each class.15 For
pollutants for which there were too few permitted units, EPA
assigned a ‘‘default’’ emission level, namely, the estimated
emission level of a totally uncontrolled unit. Sierra Club
contends there is nothing in the record to demonstrate that
state permit limits or the uncontrolled default levels reflect
‘‘the average emissions limitation achieved by the best per-
forming 12 percent of units in the category,’’ the floor re-
quired by § 129(a)(2), 42 U.S.C. § 7429(a)(2). We agree with
Sierra Club and conclude that the MACT floors for existing
small units must therefore be remanded.
  15EPA extracted the permit limits from its 1995 rulemaking
database. EPA Permit Basis Mem. at 2 (J.A. 1757).
                               28

   In Sierra Club v. EPA, 167 F.3d 658 (D.C. Cir. 1999), the
court rejected EPA’s similar use of state permit limits to set
the MACT floor for medical waste incinerators (MWIs). The
court recognized that CAA § 129 may permissibly be con-
strued ‘‘to permit the use of regulatory data’’ but only ‘‘if they
allow EPA to make a reasonable estimate of the performance
of the top 12 percent of units.’’ 167 F.3d at 662. The court
rejected the use of such data in that case because ‘‘[a]lthough
EPA said that it believed the combination of regulatory and
uncontrolled data gave an accurate picture of the relevant
MWIs’ performance, it never adequately said why it believed
this.’’ Id. at 663. EPA fares no better here. It offered the
following justification for deciding to use state permit limits:
    The EPA used a permit approach to determine the
    MACT floors in the 1995 emission guidelines (40 CFR
    part 60, subpart Cb) and believes that using the permit
    approach is appropriate for this rulemaking. Permit
    limits and regulatory limits provide a reasonable esti-
    mate of the actual performance of the best performing
    units under the worst reasonably foreseeable circum-
    stances, making this approach consistent with the court
    opinion in the Sierra Club case. Permits include a
    margin for compliance and must be achievable.
EPA Response to Comments at 75 (J.A. 2222). As in Sierra
Club, EPA here stated only that it ‘‘believes’’ state permit
limits reasonably reflect the actual performance of the best
performing units without explaining why this is so. There is
also evidence here that the MWCs, like the MWIs in Sierra
Club, ‘‘might be substantially overachieving the permit lim-
its,’’ that is, ‘‘the regulatory limits are in fact much higher
than the emissions that units achieve in practice,’’ 167 F.3d at
663. See Sierra Club’s Br. at 22 (asserting, with record
evidence, that EPA’s testing data show MWCs in general
(and small MWCs in particular) ‘‘routinely overachieve their
permit limits’’). Given the absence of evidence that the
permit levels reflect the emission levels of the best-
performing 12 percent of existing MWCs and the affirmative
                                 29

evidence that they do not, we cannot uphold the MACT floors
for existing units under the CAA.
   In support of using state permit levels, EPA points to its
determinations that emission levels are inherently variable,
EPA Response to Comments (1995 Rule) (J.A. 1570), and that
basing MACT floors on the Agency’s test data would not
accurately reflect this variability, id. at J.A. 1633 (noting ‘‘it is
not unusual for one or more of the annual tests to produce
emissions that fall within the best 12–percent data, while the
remaining annual test data fall outside this range’’). Even
assuming actual testing data should not be used for setting
MACT floors, EPA must still justify selecting state permit
and uncontrolled default levels as alternative bases for the
floors.

            2.   Technology–Based MACT Floors
                      for New Small Units
   The CAA requires that the MACT floor for new small units
be set at the ‘‘emissions control that is achieved in practice by
the best controlled similar unit.’’ 42 U.S.C. § 7429(a)(2). To
satisfy this requirement, EPA must ‘‘demonstrate with sub-
stantial evidence — not mere assertions’’ that the chosen
floors ‘‘represent ‘a reasonable estimate of the performance of
the [best-performing] units.’ ’’ Cement Kiln Recycling Coali-
tion v. EPA, 255 F.3d 855, 866 (D.C. Cir. 2001) (quoting
Sierra Club v. EPA, 167 F.3d 658, 662 (D.C. Cir. 1999))
(alteration in original). To set the floors for new small MWC
units, EPA (1) reviewed available MWC emissions test data
associated with all types of combustors and all types of
emission control technologies currently used to control emis-
sions of specific pollutants, (2) identified the best controlled
unit and reviewed the performance of its associated control
technology and (3) set the floor for each pollutant at the level
of emissions that units equipped with that technology can
continuously achieve in practice (based on 24–hour averaging
periods or, if continuous emission monitoring was unavailable,
on annual stack tests). See 59 Fed. Reg. at 48,214–16.
Sierra Club asserts EPA has not demonstrated that that
technology alone, without regard to other technologies or to
                               30

non-technology factors, achieves ‘‘the emissions control that is
achieved in practice by the best controlled similar unit,’’ as
CAA § 129(a)(2) requires. We agree that EPA has not
shown that the technology-based approach will achieve a
reasonable estimate of the emission level achieved by the best
performing MWC unit and, accordingly, remand to the Agen-
cy to establish MACT floors for new units that do. Because
we remand for new MACT floors, we need not consider
Sierra Club’s alternate contention that the Agency should
have considered how factors other than the chosen technology
affect emissions.
   In setting the MACT floor, the EPA reasoned that ‘‘[b]e-
cause MACT must be achievable and there is inherent varia-
tion in emissions among MWC units, TTT the floor emission
levels are set at levels that are demonstrated to be achievable
by the population of MWC units with the best technology.’’
EPA Response to Comments at 31 (J.A. 2178). This is
precisely the rationale we rejected in Cement Kiln. As we
explained in Cement Kiln, ‘‘[w]hile standards achievable by all
sources using the MACT control might also ultimately reflect
what the statutorily relevant sources achieve in practice, EPA
may not deviate from [the statute’s] requirement that floors
reflect what the best performers actually achieve by claiming
that floors must be achievable by all sources using MACT
technology.’’ Cement Kiln, 255 F.3d at 861 (citing Chevron
U.S.A. Inc. v. Natural Res. Def. Council, Inc., 467 U.S. 837,
842–43 (1984)). EPA has once again improperly invoked
achievability (incorrectly relying on the emission variability of
all MWCs that use the technology rather than on the variabil-
ity of the best performing unit) to gloss over the actual
achievement requirement.

              3.   Beyond-the-Floor Standards
   Finally, Sierra Club raises three objections to EPA’s be-
yond-the-floor standards. First, Sierra Club asserts that in
deciding whether to set beyond-the-floor standards for cer-
tain pollutants — namely Hazardous Air Pollutant (HAP)
metals (mercury, lead and cadmium) and dioxins — EPA
                              31

failed to consider ‘‘nonair quality health and environmental
impacts,’’ such as the impacts of deposition, persistence and
bioaccumulation, as required under 42 U.S.C. § 7429(a)(2).
Second, Sierra Club contends EPA failed to require pre-
combustion separation of pollutants from the waste as re-
quired by CAA § 129(a)(3), which provides that standards
‘‘shall be based on methods and technologies for removal or
destruction of pollutants before, during, or after combustion.’’
42 U.S.C. § 7429(a)(3). And third, Sierra Club challenges
EPA’s decision to set ‘‘no-control’’ floors and beyond-the-floor
standards for nitrogen oxide emissions from new and existing
Class II MWC units. These no-control standards, according
to Sierra Club, violate 42 U.S.C. § 7429(a)(4) and (a)(2), as
well as our holding in National Lime Ass’n v. EPA, 233 F.3d
625 (D.C. Cir. 2000). In light of our remand of all of the
MACT floors, we need not address these objections at this
time. As Sierra Club’s counsel acknowledged at oral argu-
ment, the Agency’s beyond-the-floor determinations cannot be
evaluated if, as we have concluded, the MACT floors them-
selves were improperly set.

                              III.
   For the foregoing reasons, we grant the petitions in part
and deny them in part and remand to EPA to: (1) explain its
decision to subcategorize small MWC units according to the
aggregate capacities of the plants at which they are located;
(2) establish new MACT floors for new and existing small
units; and (3) readdress the beyond-the-floor standards as
required.
                                                    So ordered.
