                    FOR PUBLICATION
  UNITED STATES COURT OF APPEALS
       FOR THE NINTH CIRCUIT

CALIFORNIA ENERGY COMMISSION,             
                       Petitioner,
               v.                                No. 07-71576
DEPARTMENT OF ENERGY,
                     Respondent,
                                                  DOE No.
                                                EE-RM-PET-100
THE ASSOCIATION OF HOME                             OPINION
APPLIANCE MANUFACTURERS,
           Respondent-Intervenor.
                                          
          On Petition for Review of an Order of the
                    Department of Energy

                 Argued and Submitted
       November 17, 2008—San Francisco, California

                     Filed October 28, 2009

 Before: William C. Canby, Jr. and Kim McLane Wardlaw,
   Circuit Judges, and David G. Trager,* District Judge.

                    Opinion by Judge Canby




   *The Honorable David G. Trager, Senior United States District Judge
for the Eastern District of New York, sitting by designation.

                               14565
            CALIFORNIA ENERGY COMMISSION v. DOE          14569




                         COUNSEL

Jonathan Blees, Assistant Chief Counsel, Sacramento, Cali-
fornia, for the petitioner.

H. Thomas Byron, III, Civil Division, United States Depart-
ment of Justice, Washington, D.C., for the respondent.

Charles A. Samuels, Mintz, Levin, Cohn, Ferris, Glovsky and
Popeo, PC, Washington, D.C., for the intervenor-respondent.

S. David Hotchkiss, Assistant City Attorney, Los Angeles,
California, for amicus curiae City of Los Angeles; Kristin
Grenfell, San Francisco, California, for amicus curiae Natural
Resources Defense Council; Arlen Orchard, Sacramento, Cal-
ifornia, for amici curiae Sacramento Municipal Utility District
and California Municipal Utilities Association; Jose E. Guz-
man, Jr., Nossaman, Gunthner, Knox & Elliott, LLP, San
Francisco, California, for amicus curiae California Water
Association; Joseph M. Mattingly, Stephen R. Yurek, Arling-
ton, Virginia, for amici curiae Gas Appliance Manufacturers
Association, Inc, and Air-Conditioning and Refrigeration
Institute, Inc.; and Karen L. Tachiki, Los Angeles, California,
for amicus curiae Metropolitan Water District of Southern
California.


                         OPINION

CANBY, Circuit Judge:

  The California Energy Commission (“CEC”) petitions for
review of an order of the U.S. Department of Energy (“DOE”)
14570       CALIFORNIA ENERGY COMMISSION v. DOE
denying CEC’s request for a waiver of preemption under the
Energy Policy and Conservation Act (“EPCA”), 42 U.S.C.
§ 6297. The CEC sought this waiver in order to establish
water efficiency standards for residential clothes washers, as
set forth in its state regulations, Cal. Code Regs. tit. 20,
§ 1605.2(p)(1). To obtain such a waiver, CEC was required to
show by a preponderance of the evidence that the state regula-
tion was “needed to meet unusual and compelling State or
local . . . water interests.” 42 U.S.C. § 6297(d)(1)(B). The
DOE rejected the CEC’s petition for three separate reasons,
but asserts that “each [of these reasons] flowed from CEC’s
failure to provide adequate information to DOE to allow the
federal agency to make an informed decision.” The DOE also
challenges this court’s jurisdiction under the EPCA to review
the denial of the waiver, raising an issue of first impression
in this circuit. We hold that this court has jurisdiction under
the EPCA. Because the DOE’s stated justifications demon-
strate an arbitrary and capricious failure meaningfully to
address the CEC’s application for a waiver, we reverse the
DOE’s ruling and remand for further proceedings.

                    Factual Background

   California is experiencing a severe water crisis, and that
crisis is worsening. The need for water continues to grow, as
the state’s population is expected to increase greatly in the
next three decades. At the same time, current water supplies
are decreasing. California’s surface water sources are signifi-
cantly over-appropriated, and its groundwater aquifers are
severely overdrafted. A variety of problems have exacerbated
the water shortage, including salt water contamination and
environmental degradation. California has no new significant
conventional supplies available to increase the amount of
water available to its citizens. It thus must pursue alternative
solutions to the crisis, including efforts at water recycling,
desalination, and increased water efficiency. California views
improved water use efficiency as the most promising means
of alleviating its water crisis.
            CALIFORNIA ENERGY COMMISSION v. DOE          14571
   As part of this effort, the California Legislature in 2002
required the CEC to establish water efficiency standards for
residential clothes washers, which were said to account for 22
percent of the water use in a typical household. Cal. Assemb.
B. 1561 (Kelley), 2002 Cal. Stat. ch. 421, § 1(b) (enacting
Cal. Pub. Res. Code § 25,402(e)(1)). In response, the CEC
adopted the proposed standards at issue in this case. Cal. Code
Regs. tit. 20, § 1605.2(p)(1). These standards are expressed in
terms of a “water factor” (“WF”), which is the ratio of the
gallons of water used per load to the capacity, in cubic feet,
of the washtub. Id. Thus a clothes washer that has 5 cubic feet
of capacity and uses 50 gallons of water per load would have
a WF of 10.0, while a machine of the same capacity that uses
only 25 gallons per load would have a WF of 5.0. These stan-
dards would apply to both top-loading and front-loading
clothes washers, and were divided into two tiers with differing
times at which they were scheduled to take effect. Tier 1, ini-
tially scheduled to take effect on January 1, 2007, would
require all washers (top-loading and front-loading) to perform
with a WF of no greater than 8.5. Tier 2, initially scheduled
to take effect on January 1, 2010, would require all washers
to perform with a WF of no greater than 6.0. The CEC asserts
that these standards, if implemented, would result in annual
water savings equal to the City of San Diego’s current water
usage.

   The EPCA expressly preempts state regulation of energy
efficiency, energy use, or water use of any product covered by
federal energy efficiency standards. 42 U.S.C. § 6297(b)-(d).
In 2001, the DOE adopted federal energy efficiency standards
for residential clothes washers, pursuant to 42 U.S.C. § 6295.
10 C.F.R. § 430.32(g). The DOE decided, however, that it did
not have the authority to prescribe water efficiency standards
for residential clothes washers. 66 Fed. Reg. 3314 (Jan. 12,
2001). Nevertheless, because the DOE regulates energy effi-
ciency standards for residential clothes washers, the EPCA
expressly preempted state agencies from regulating the energy
or water efficiency of that appliance. In 2002, the CEC
14572      CALIFORNIA ENERGY COMMISSION v. DOE
adopted both energy and water efficiency standards for com-
mercial clothes washers; this step was permissible because
commercial clothes washers were not covered by any federal
regulation. Cal. Code Regs. tit. 20, § 1605.3(p)(1). The Cali-
fornia Legislature, however, also directed the CEC to adopt
water efficiency standards for residential clothes washers.
Recognizing that such regulation was expressly preempted by
the EPCA because of the DOE’s regulation of energy effi-
ciency standards for residential clothes washers, the Califor-
nia Legislature required the CEC to petition the DOE for a
rule waiving preemption. 2002 Cal. Stat. ch. 421 (enacting
Cal. Pub. Res. Code § 25,402(e)(1)).

  The CEC filed a petition for a waiver with the DOE, which
was accepted as complete on December 23, 2005. The DOE
denied this petition one year later, citing three reasons:

    First, CEC’s proposed regulations purported to take
    effect on January 1, 2007, far less than the statutory
    three-year minimum, and CEC did not provide any
    information necessary to support a different effective
    date. Second, CEC did not meet the statutory stan-
    dard, which requires a state to show unusual and
    compelling water interests. CEC contended that a
    cost-benefit analysis showed that its regulation
    would be preferable to non-regulatory alternatives,
    but CEC’s petition did not support its conclusions
    with the underlying data that would have allowed
    DOE to determine whether the statutory standard
    was satisfied. Third, the record demonstrated that
    CEC’s proposed regulation would make a class of
    washers unavailable in California, requiring denial
    of the waiver petition.

The CEC requested reconsideration. Following DOE’s inac-
tion for 30 days, the request was denied by operation of law
on February 28, 2007. The CEC then filed its Petition for
Review with this court.
            CALIFORNIA ENERGY COMMISSION v. DOE           14573
                          Discussion

   We must resolve two primary issues in this appeal. First,
the DOE has contested our jurisdiction, arguing that the
EPCA provides for direct review in the courts of appeals only
of “rule[s] prescribed under section 6293, 6294, or 6295” of
Title 42, whereas the action challenged here is an order issued
pursuant to 42 U.S.C. § 6297(d). See 42 U.S.C. § 6306(b)(1)).
Second, if jurisdiction properly lies in this court, we must
determine whether any of the DOE’s three stated reasons for
rejecting the CEC’s petition can support that action under the
relevant standard of review.

  1. This Court Properly Has Jurisdiction Under the
  EPCA

   [1] The DOE contends that the EPCA does not grant this
court jurisdiction to review the denial of a preemption waiver,
and that the CEC should have sought judicial review in fed-
eral district court under the Administrative Procedure Act
(“APA”). Its argument is based on the following provision of
the EPCA governing judicial review:

    Any person who will be adversely affected by a rule
    prescribed under section 6293, 6294, or 6295 of this
    title, may . . . file a petition with the United States
    court of appeals . . . for judicial review of such rule.

42 U.S.C. § 6306(b)(1). The DOE contends that the CEC is
not challenging a rule adopted pursuant to §§ 6293, 6294, or
6295 but instead is challenging the denial of a waiver that was
sought pursuant to § 6297(d). Accordingly, argues the DOE,
we lack jurisdiction to proceed.

   [2] Despite the surface plausibility of DOE’s argument, we
conclude that it does not effectuate the intent of Congress for
the review scheme of the EPCA. It is true that review of
agency action is typically located in the district courts under
14574       CALIFORNIA ENERGY COMMISSION v. DOE
the APA absent a specific statutory provision to the contrary.
Owner-Operators Indep. Drivers Ass’n v. Skinner, 931 F.2d
582, 585 (9th Cir. 1991) (“[U]nless Congress specifically
maps a judicial review path for an agency, review may be had
in federal district court under its general federal question
jurisdiction.”). The provisions of § 6306, taken as a whole, are
not consistent, however, with a view that Congress intended
default jurisdiction to lie in the district courts for all review
except direct challenges to rules adopted under §§ 6293,
6294, or 6295.

   [3] The EPCA specifically confers jurisdiction on the dis-
trict courts for two categories of actions under the EPCA:
suits to determine state compliance with requirements of the
EPCA, and suits challenging the denial of rulemaking to
amend a product standard. 42 U.S.C. § 6306(c). These provi-
sions would appear to be unnecessary if Congress intended
district court jurisdiction under the APA to apply to every
challenge other than direct challenges to rules adopted under
§§ 6293, 6294, or 6295. It seems most likely that Congress
listed one group of cases to be decided initially by the circuit
courts, and another class to be decided in the first instance by
the district courts. For unlisted matters, considerations of effi-
ciency, consistency with the congressional scheme, and judi-
cial economy may be employed to determine whether initial
review in the circuit courts best accomplishes the intent of
Congress. See Fla. Power & Light Co. v. Lorion, 470 U.S.
729, 741-45 (1985). These considerations militate in favor of
jurisdiction in this court for the present controversy.

   [4] First, the denial of CEC’s petition for a waiver of pre-
emption is closely intertwined with the exercise of DOE’s
authority under § 6295. It was the statutory and regulatory
adoption of residential washing machine standards for energy
efficiency that caused the preemption of CEC’s regulations.
Denial of the waiver leaves the CEC preempted by the effect
of the statute and subsequent DOE energy regulations. To
some extent, therefore, CEC is “adversely affected by a rule
            CALIFORNIA ENERGY COMMISSION v. DOE            14575
prescribed under section . . . 6295” within the meaning of
§ 6306(b), which confers jurisdiction on the circuit courts of
appeals. “[S]tatutes authorizing review of specified agency
actions should be construed to allow review of agency actions
‘which are functionally similar’ or ‘tantamount to those speci-
fied actions.’ ” Thermalkem, Inc. v. EPA, 25 F.3d 1233, 1237
(3d Cir. 1994) (quoting Vineland Chem. Co. v. EPA, 810 F.2d
402, 405 (3d Cir. 1987)).

   Considerations of practicality and consistency with the con-
gressional scheme also militate in favor of review by the court
of appeals. In addressing those considerations, we are aided
by the decision of the Second Circuit in NRDC v. Abraham,
355 F.3d 179 (2d Cir. 2004) (“NRDC 1“), the only case
addressing a similar jurisdictional issue under the EPCA.
There, the court reviewed a DOE rule promulgated under sec-
tion 6295, as well as related orders concerning the effective
date of implementation of that rule. The court rejected the
petitioner’s argument that review of the orders belonged in
the district court. The Second Circuit acknowledged that “the
EPCA does also specifically provide for jurisdiction in the
district court in limited circumstances,” citing the two inappli-
cable provisions set forth in § 6306(c). Id. at 192 n.6. It con-
tinued by holding that, “when there is a specific statutory
grant of jurisdiction to the court of appeals, it should be con-
strued in favor of review by the court of appeals.” Id. at 193.

   NRDC 1 also provided several policy reasons why jurisdic-
tion in the court of appeals was appropriate, and those consid-
erations apply equally here. NRDC 1 drew a sharp distinction
between “[r]ulemaking proceedings [which] do not ordinarily
necessitate additional factfinding by a district court to effectu-
ate the review process” and “the exceptions to review by a
court of appeals found in § 6303 . . . [which] ordinarily would
entail additional factfinding, as they do not reflect the culmi-
nation of a structured rulemaking process with its attendant
record.” Id. at 193-94 (emphasis added). Holding that the lat-
ter exceptions “are therefore appropriately reserved for review
14576       CALIFORNIA ENERGY COMMISSION v. DOE
by the district court,” the Second Circuit based its distinction
between these two types of cases on the records they would
present to their respective courts. Id. at 194.

   [5] It is quite clear that DOE’s denial of a waiver of pre-
emption falls into the category of “[r]ulemaking proceedings
[which do not] necessitate additional factfinding by a district
court to effectuate the review process.” Id. at 193. Here, we
are presented with a full record upon which the agency has
deliberated. No further factfinding is necessary to determine
whether the DOE acted arbitrarily and capriciously in reject-
ing the waiver petition. We should not presume, without sup-
porting evidence, that Congress would intend to implement a
review system that created an entirely duplicative process
whereby both the district courts and the circuit courts would
review the same fully-developed record under the same legal
standards.

   The DOE attempts to differentiate the denial of a waiver of
preemption from its normal rulemaking function. It argues
that, if it were to adopt water conservation rules under § 6295,
“[the] DOE must determine national standards in the broad
context of the national need for . . . water conservation,” but
a waiver proceeding “is a much narrower inquiry, guided by
different statutory factors, which are focused on state or local
interests.” But the decision to grant or deny a waiver certainly
involves consideration of such national factors, and requires
an evaluation of whether a waiver is consistent with the goals
of the national scheme or frustrates those goals. We discern
no qualitative difference in the two types of decisions that
militates in favor of initial review of the decisions in different
courts.

   The case of NRDC v. Abraham (“NRDC 2”), 244 F.3d 742
(9th Cir. 2001), relied on by DOE, is inapposite. In NRDC 2,
the court held that it lacked original jurisdiction to hear a case
challenging a decision arising under the Atomic Energy Act,
which did not explicitly provide for direct review in appellate
            CALIFORNIA ENERGY COMMISSION v. DOE            14577
courts. The petitioner in NRDC 2 argued that the court could
assert jurisdiction under a different statute—the Nuclear
Waste Policy Act—even though the challenged ruling was
quite clearly issued under the Atomic Energy Act. Id. at 743.
The court appropriately rejected this argument. In our case,
however, the question is not whether resort may be had to
another statute, but simply whether the EPCA provides juris-
diction in the courts of appeals. NRDC 2 therefore does not
apply.

   Finally, the DOE’s attempt to analogize the case of Public
Citizen, Inc. v. NHTSA, 489 F.3d 1279 (D.C. Cir. 2007) also
fails, and there is much within that case that suggests that we
should find jurisdiction in our case. In Public Citizen, the peti-
tioners sought “an order prescribing a motor vehicle safety
standard” under the Safety Act, but were not granted that
order. Id. at 1287 (emphasis omitted). Like to the EPCA, the
Safety Act provides that such orders, when issued, are review-
able in the first instance by the courts of appeals. 49 U.S.C.
§ 30161(a). However, denials of requests to initiate proceed-
ings to consider orders or rules are clearly governed by 49
U.S.C. § 30,162(a)(1), which does not provide for direct
appellate review. Public Citizen, 489 F.3d at 1287. The Public
Citizen petition was denied at this early stage. The D.C. Cir-
cuit held that “the plain terms of the statute dictate that judi-
cial review of NHTSA’s denial of a petition for rulemaking
must begin in district courts—not in courts of appeals.” Id.

   The circumstances here are quite different. We are pres-
ented with no comparable statutory command. Moreover, the
same policy considerations that support our conclusion are
consistent with the result in Public Citizen. The court in Pub-
lic Citizen rejected jurisdiction when the agency refused to act
on a petition, and thus had compiled no record whatsoever.
Without such a record, any circuit court would find it difficult
or impossible to determine whether the administrative agency
had acted legally; a district court with its fact-finding capabil-
ity was a more appropriate venue. In our case, however, we
14578       CALIFORNIA ENERGY COMMISSION v. DOE
are presented with a fully-developed record addressing all of
the statutory requirements demanded of the CEC. The type of
review required of us is qualitatively no different from the
sort that we would engage in upon review of a rule promul-
gated under 42 U.S.C. § 6295, over which we are expressly
assigned jurisdiction under the EPCA.

   [6] For all of these reasons, we conclude that we have juris-
diction to entertain CEC’s petition for review.

  2. The DOE’s Rejection of the CEC’s Petition was
  Arbitrary and Capricious

   Our review of the DOE’s administrative decision is gov-
erned by 42 U.S.C. § 6306(b)(2), which provides for review
in accordance with the Administrative Procedure Act. That
Act states that the reviewing court “shall . . . compel agency
action unlawfully withheld [and] hold unlawful and set aside
agency action, findings, and conclusions found to be . . . arbi-
trary, capricious, an abuse of discretion, or otherwise not in
accordance with the law . . . .” 5 U.S.C. § 706(1)-(2)(A); see
Envtl. Def. Ctr. v. EPA, 344 F.3d 832, 858 n.36 (9th Cir.
2003), cert. denied, 541 U.S. 1085 (2004).

   Under this standard, we will uphold an agency decision
only on the basis of the reasoning articulated therein. Anaheim
Mem’l Hosp. v. Shalala, 130 F.3d 845, 849 (9th Cir. 1997).
We will overturn a decision as “arbitrary and capricious”
when the agency (1) relied on a factor that Congress did not
intend it to consider; (2) failed to consider an important factor
or aspect of the problem; (3) failed to articulate a rational con-
nection between the facts found and the conclusions made; (4)
supported the decision with a rationale that runs counter to the
evidence or is so implausible that it could not be ascribed to
a difference in view or the product of agency expertise; or (5)
made a clear error in judgment. Envtl. Def. Ctr. v. EPA, 344
F.3d at 858 n.36.
            CALIFORNIA ENERGY COMMISSION v. DOE            14579
  The DOE gave three reasons for denying CEC’s request for
a waiver of preemption. We address those reasons in turn.

  a.   The Three-Year Waiting Period

   [7] The EPCA establishes a mandatory three-year delay
between the date of the DOE’s grant of a waiver and the date
on which the state standard takes effect. 42 U.S.C.
§ 6297(d)(5)(A). The CEC’s petition contained two different
dates on which the requested regulations would have gone
into effect: January 1, 2007, for regulations requiring an 8.5
WF ratio, and January 1, 2010, for regulations requiring a 6.0
WF ratio. Because the CEC’s application for a waiver was not
accepted as complete until December 23, 2005, and not ruled
upon until December 28, 2006, the DOE clearly could not
have issued a waiver for the first set of regulations that com-
plied with the EPCA’s three-year delay provision. If, how-
ever, the DOE had chosen to approve only the second set of
regulations, their implementation would not have violated the
three-year rule.

   [8] There is no argument between the parties that the start-
ing date for implementation of the first set of state regulations
did not comply with the three-year rule. The dispute is over
what should have been done about it. Some possible
responses to the problem were: (1) rejection of the entire
waiver petition, (2) rejection of the portion which would have
violated the three-year waiting period, or (3) the acceptance
of the waiver petition with an effective date re-drafted by the
DOE sua sponte or by agreement with CEC.

   The CEC argues that the California efficiency standards are
drafted with a nominal effective date, which is necessary to
advise the persons affected as to when enforcement is sched-
uled to begin under state law. Whether or not the proposed
date of implementation was explicitly termed “nominal” in
the CEC’s initial application, California appliance regulations
provide that such standards take effect only upon the effective
14580       CALIFORNIA ENERGY COMMISSION v. DOE
date of a DOE waiver. Cal. Code Regs. tit. 20, §§ 1605(b),
1065.2(p)(1). California asserts that, within the meaning of its
regulation, the effective date of a DOE waiver is three years
after the grant of the waiver.

   The DOE maintains the position, however, that in order to
meet EPCA’s requirements, the CEC’s petition as submitted
would require that the DOE “sua sponte craft[ ] a different
state regulation . . . [and] come up with its own effective date
for such a regulation.” The DOE claims that it lacked the
power to do so because “the statute imposes a burden of proof
on the state seeking a waiver of federal preemption to demon-
strate that the proposed state regulation satisfies the statutory
standards, and the three-year minimum lead time is an essen-
tial element of those standards.” Thus, in its decision the DOE
held that the CEC did not comply with the EPCA because the
“CEC has provided information only in the context of the
compliance dates of the California regulation, and has not
provided the information necessary for DOE to promulgate a
rule with an effective date that would be compliant under the
EPCA, i.e., a rule with an effective date three years following
the date of issuance.” 71 Fed. Reg. 78,157. We find this con-
clusion to be both unsupported by the record and “so implau-
sible that it could not be ascribed to a difference in view or
the product of agency expertise.” Envtl. Def. Ctr. v. EPA, 344
F.3d at 858 n.36.

   [9] The EPCA requires that a state applying for a waiver
establish a compelling state need by a preponderance of the
evidence. 42 U.S.C. § 6297(d)(1)(B). The DOE’s rejection of
underlying analysis and data provided by the CEC, without
any consideration of whether this analysis would still hold
force if implemented slightly later, was arbitrary and capri-
cious. The DOE made no attempt to determine whether the
analysis provided in the application would reasonably support
a waiver, but instead dismissed it as part of an inflexible rule
demanding a strict parity between proposed implementation
dates and the research supporting the proposed standards.
            CALIFORNIA ENERGY COMMISSION v. DOE            14581
   [10] The CEC correctly argues that a rule demanding strict
parity between the analysis provided and the proposed time-
line would be unworkable in practice. The DOE does not gen-
erally provide a specific date by which it will have ruled upon
a waiver application, and it did not do so in this case. It took
DOE a year to rule on CEC’s application. Because states
seeking waivers cannot be prescient as to the date upon which
the DOE will approve or deny a given application, some flexi-
bility is patently necessary in order for the petitioning state to
provide any analysis that is reasonably timely.

   [11] The DOE’s claim that the CEC was “obliged to dem-
onstrate that a different effective date would satisfy EPCA’s
statutory criteria, or at least to provide data that would allow
DOE to make such a determination” is unconvincing when
the record demonstrates the DOE made no attempt to apply
the data that were provided to a permissible implementation
date. Because California appliance regulations provide that
proposed regulations take effect only upon the effective date
of a DOE waiver, it would have been reasonable to assess the
sufficiency of the data provided in terms of a projected date
three years after the likely date of decision on the waiver.

   [12] Whether the data and analysis provided were sufficient
ultimately to support the CEC’s waiver application is a sepa-
rate issue that is outside the competence of this court to deter-
mine in the first instance. The DOE argues, in effect, that it
was entitled to reject the CEC’s data and analysis as entirely
irrelevant and inapplicable because the proposed implementa-
tion timeline could not be granted under the EPCA. This argu-
ment is contrary to the preponderance of evidence standard,
as well as common sense. We therefore conclude that the
DOE’s wholesale rejection of the CEC’s analysis on the basis
that the proposed waiver could not be implemented according
to its proposed timeline was arbitrary and capricious. It there-
fore cannot constitute a justification for the DOE’s denial of
CEC’s waiver application.
14582       CALIFORNIA ENERGY COMMISSION v. DOE
  b.    Unusual and Compelling Interests

   The DOE’s second ground for its denial of the CEC’s
waiver petition was that “[the] CEC ha[d] not established by
a preponderance of the evidence that the State of California
has unusual and compelling water interests” as required by
the EPCA. To satisfy this standard, the CEC was required to
demonstrate that California has interests in saving water that
“are substantially different in nature or magnitude than those
prevailing in the United States generally” and “are such that
the costs, benefits, burdens, and reliability of energy or water
savings resulting from the State regulation make such regula-
tion preferable or necessary when measured against the costs,
benefits, burdens, and reliability of alternative approaches to
energy or water savings or production . . . .” 42 U.S.C. § 6297
(d)(1)(C)(i)-(ii). The DOE did find that CEC had met the first
requirement; i.e., it found that California’s water interests are
“substantially different . . . in magnitude than those prevailing
in the U.S. generally,” because the State “has a volumetric
total demand far greater than the national average, . . . a pro-
jected population increase that is above the median growth
rate, . . . [and] higher than average water rates.” 71 Fed. Reg.
78,162. The DOE found, however, that the CEC had not satis-
fied the second requirement—namely, that its standards were
“preferable or necessary when measured against alternative
approaches.” Id. 78,163.

   The DOE’s explanation for this finding was that the CEC
had failed to provide underlying analysis of its assumptions
and data inputs and that, as a consequence, DOE was “unable
to determine that the California Petition meets EPCA require-
ments.” Id. According to the DOE, the CEC merely asserted
that “the economic assumptions and data inputs used in this
analysis were vigorously tested in [the CEC’s] public rule-
making process that led to the adoption of this standard” and
did not indicate where in that record the requisite analysis
could be found. Id.
            CALIFORNIA ENERGY COMMISSION v. DOE            14583
   We find the DOE’s conclusions unsupported by the record.
The CEC provided “a full explanation of its assumptions,
data, and analyses” in the form of its own rulemaking record.
The DOE itself, in its notice soliciting comment, referred
readers to the web site at which CEC’s rulemaking record
could be found. 71 Fed. Reg. 6023 (Feb. 6, 2006). This record
contained a study commissioned by California Pacific Gas &
Electric (“PG&E”) which provided much of the analysis used
in the CEC rulemaking, including a first cost analysis which
the DOE claimed did not exist in the CEC’s petition.
Morever, CEC correctly points out that it cited the PG&E
study as support for its conclusions in its petition for reconsid-
eration to the DOE.

  It is also worth noting that the DOE’s own regulations
require that it accept as complete “[o]nly such petitions which
conform to the requirements of [DOE’s regulations] and
which contain sufficient information for the purposes of a
substantive decision . . . .” 10 C.F.R. § 430.42(f)(1). The
DOE’s acceptance of the petition as complete casts some
doubt on its later faulting of CEC’s reliance on the CEC rule-
making proceeding.

   [13] We conclude, therefore, that the CEC provided suffi-
cient data and analysis for the DOE to make a decision con-
cerning whether California’s standards were preferable or
necessary compared to alternatives. Whether those data and
analysis were sufficient to meet CEC’s burden is not for this
court to decide in the first instance. It is clear, however, that
whether or not the data and analysis were sufficient, the DOE
simply did not evaluate them. Thus, at the very minimum, the
DOE failed to consider an important factor or aspect of the
problem. The DOE’s reliance on its second ground for deny-
ing CEC’s petition for waiver was, therefore, arbitrary and
capricious.

  c.   The Unavailability of Top-Loading Washers

  The DOE’s third and final basis for rejecting the CEC’s
waiver petition was its finding that opponents of the proposed
14584       CALIFORNIA ENERGY COMMISSION v. DOE
regulation had demonstrated that the 6.0 WF standard for top-
loading washers “would likely result in the unavailability of
top-loading residential clothes washers in California.” 71 Fed.
Reg. 78,168. Therefore, the DOE concluded, it was precluded
from granting the waiver by § 6297(d)(4), which mandates
denial of a waiver if “interested persons have established, by
a preponderance of the evidence, that the State regulation is
likely to result in the unavailability in the State of any covered
product type (or class) of performance characteristics (includ-
ing reliability), features, sizes, capacities, and volumes that
are substantially the same as those generally available in the
state at the time of the [DOE’s] finding . . . .” 42 U.S.C.
§ 6297(d)(4) (emphasis added). The DOE based this conclu-
sion on the ground that commenters had established that
“there are no top-loading residential clothes washer[s] in the
current market that would comply with the 6.0 WF level of
the proposed California regulation.” 71 Fed. Reg. 78,167.

  It is uncontested that, at the time that the CEC filed its
waiver application, no top-loading washers existed that would
meet the 6.0 WF standards; the most efficient top-loading
washing machine on the market had a WF of 6.3. The CEC
argues, however, that the fact that the market in 2006 has no
better top-loader than a 6.3 WF model does not support the
DOE’s conclusion that the market is unlikely to have 6.0 WF
top-loaders in 2010.

   [14] The efficiency standards of existing residential wash-
ing machines are undoubtedly relevant to the capabilities of
such machines to comply with a 6.0 WF in the future, and
thus we do not subscribe to the CEC’s sweeping argument
that there was no “rational connection between the facts found
and the conclusions made.” Envtl. Def. Ctr. v. EPA, 344 F.3d
832, 858 n.36 (9th Cir. 2003). But to deny a waiver on this
final ground, the DOE was required to find that “interested
persons have established, by a preponderance of the evidence,
that the State regulation is likely to result in the unavailability
[of top-loading washers].” 42 U.S.C. § 6297(d)(4) (emphasis
             CALIFORNIA ENERGY COMMISSION v. DOE                 14585
added). To determine whether the interested parties had satis-
fied the standard of preponderance of the evidence, it was
necessary for the DOE to weigh the commenters’ evidence of
future availability of top-loaders against that offered by the
CEC. The DOE’s finding cannot be sustained on the strength
of its citation only of the commenters’ evidence with refer-
ence to present capabilities. Of course, the DOE may use its
own expertise to predict that, on the basis of its previous
experience and current trends, the relevant industry could not
achieve the requisite 5% increase in efficiency over the next
three years. No such analysis appears in the DOE’s order,
however. The CEC provided testimony in the DOE’s record
in which PG&E stated that it was unlikely that there will be
“any limitations in features, sizes, capacities, or volumes that
would result even after the implementation of the 6.0 water
factor [standard].” The DOE now dismisses this testimony as
a conclusionary prediction by an insufficiently expert body,
but its order did not address this evidence. The DOE’s failure
to address CEC’s evidence of the probable capability of top-
loaders in the future constitutes “a clear error of judgment,”
and thus this basis for the DOE’s ruling cannot stand. Envtl.
Def. Ctr., 344 F.3d at 858 n.36.1

  3. The Proper Form of Relief

   [15] The CEC has requested that this Court order the DOE
to grant the CEC’s waiver petition. However, this Court’s
appropriate role is not to engage in the underlying analysis to
determine whether the statutory criteria are met, even if the
CEC might have supplied the DOE with sufficient informa-
tion to do so. We are “not generally empowered to conduct a
  1
    The parties also contest whether the DOE was empowered or com-
pelled to grant the three additional WF standards requested by the CEC
which would not have eliminated a feature of residential clothes washers
from the market; namely, the 6.0 WF standard for front-loading washers
and the 8.5 WF standard for both front- and top-loading washers. Because
we are reversing the order of the DOE, we find it unnecessary to address
this issue.
14586       CALIFORNIA ENERGY COMMISSION v. DOE
de novo inquiry into the matter being reviewed and to reach
[our] own conclusions based on such an inquiry.” Lorion, 470
U.S. at 744 (citing FCC v. ITT World Commc’ns., Inc., 466
U.S. 463 (1984)). Considering the significant number of
issues left for resolution, many of which require factual find-
ings in the DOE’s area of expertise, we decline to order a
waiver on the present record. We reverse the challenged order
of the DOE and remand for further proceedings consistent
with this opinion.

 PETITION FOR REVIEW GRANTED; REVERSED
AND REMANDED.
