251 F.3d 1026 (D.C. Cir. 2001)
Appalachian Power Company, et al., Petitionersv.Environmental Protection Agency, RespondentCommonwealth of Pennsylvania, Department of Environmental Protection, et al. Intervenors
No. 99-1268 Consolidated with 99-1270, 99-1274, 99-1276, 99-1277, 99-1279, 99-1280, 99-1281, 99-1286, 99-1287, 00-1169, 00-1187, 00-1189, 00-1190, 00-1191, 00-1192, 00-1194
United States Court of Appeals FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued March 23, 2001Decided June 8, 2001

[Copyrighted Material Omitted]
On Petitions for Review of an Order of the Environmental Protection Agency
Norman W. Fichthorn argued the cause for the Industry  Petitioners on the Electric Generating Facility Issues.  With  him on the briefs were Andrea Bear Field, James D. Elliott,  Mel S. Schulze, David M. Flannery, Kathy G. Beckett, Gale  R. Lea, Scott D. Goldman, and Jeff F. Cherry.  Kyle W.  Danish entered an appearance.
Marc D. Bernstein, Assistant Attorney General, State of  North Carolina, argued the cause for the Petitioning States. With him on the briefs were Michael F. Easley, Attorney  General, James C. Gulick and J. Allen Jernigan, Special  Deputy Attorneys General, James P. Longest, Jr. and Amy  R. Gillespie, Assistant Attorneys General, Betty D. Montgomery, Attorney General, State of Ohio, Bryan F. Zima, Assistant Attorney General, Bill Pryor, Attorney General, State of  Alabama, Tommy E. Bryan and Prudence A. Cash-Brown,  Assistant Attorneys General, Jennifer Granholm, Attorney  General, State of Michigan, Alan F. Hoffman, Assistant  Attorney General, Charles M. Condon, Attorney General,  State of South Carolina, Samuel L. Finklea and Thomas G.  Eppink, Attorneys, Mark L. Earley, Attorney General, Commonwealth of Virginia, Roger L. Chaffe, Senior Assistant  Attorney General, Stewart T. Leeth, Assistant Attorney General, and Thomas H. Zerbe, Senior Counsel, State of West  Virginia.
Theodore L. Garrett argued the cause for the Split State  Petitioners Kansas City Power & Light Company, et al. With him on the briefs were Michael D. Hockley and Terry  W. Schackman.
Scott H. Segal argued the cause for the Non-Electric  Generating/Industrial Petitioners.  With him on the briefs  were Lisa M. Jaeger, Charles S. Carter, Deborah Ann Hotel,  Kathy G. Beckett and Scott Goldman.
Andrew J. Doyle, Attorney, U.S. Department of Justice,  argued the cause for respondent.  With him on the brief were Lois J. Schiffer, Assistant Attorney General, and Sara  Schneeberg, Attorney, U.S. Environmental Protection Agency.
Robert A. Reiley and M. Dukes Pepper, Jr. were on the  brief of Intervenor Commonwealth of Pennsylvania.  Thomas  Y. Au entered an appearance.
Before:  Edwards, Chief Judge, Williams and Sentelle,  Circuit Judges.
Opinion for the Court filed by Circuit Judge Sentelle.
Sentelle, Circuit Judge:


1
This case involves multiple challenges to "Technical Amendments" to the "NOx SIP Call"  rulemaking at issue in Michigan v. EPA, 213 F.3d 663 (D.C.  Cir. 2000), cert. denied, 121 S.Ct. 1225 (2001).  At issue here  are revisions to the database used to establish state "budgets"  for emissions of nitrogen oxide ("NOx") which are regulated  by the Environmental Protection Agency ("EPA") under the  Clean Air Act ("CAA").  Petitioners include upwind states  subject to the NOx SIP Call and industries located therein. The Commonwealth of Pennsylvania intervenes in support of  the EPA.


2
We hold that petitioners' challenges to the EPA's growth  factors are neither time-barred nor estopped by principles of  res judicata.  On the merits, we remand the EPA's growth  factors for electric generating units for the same reasons as  in Appalachian Power Co. v. EPA, Nos. 99-1200, et al. (May  15, 2001).  The remaining claims in the various petitions for  review are denied with two exceptions.  We remand the  EPA's source definitions pending completion of further rulemakings in accordance with Michigan, and remand and vacate the NOx emission budget for the state of Missouri as the  EPA continues to include portions of the state for which no  significant contribution findings have been made.

I. Background
A. Relevant Facts

3
In October 1998, the EPA issued the "NOx SIP Call"--a  final rule under CAA section 110(k)(5), 42 U.S.C.      7410(k)(5), requiring 22 states and the District of Columbia ("upwind  states") to revise their State Implementation Plans ("SIPs")  to impose additional controls on NOx emissions.  See Finding  of Significant Contribution and Rulemaking for Certain  States in the Ozone Transport Assessment Group Region for  Purposes of Reducing Regional Transport of Ozone, 63 Fed.  Reg. 57,356 (Oct. 27, 1998) ("NOx SIP Call").  The EPA  concluded that emissions from the upwind states "contribute  significantly" to ozone nonattainment in downwind states, in  violation of CAA section 110(a)(2)(D)(i).  42 U.S.C.       7410(a)(2)(D)(i).  Under the SIP Call, upwind states are  required to reduce NOx emissions by the amount accomplishable by "highly cost-effective controls," defined as those  controls capable of removing NOx at a cost of $2,000 or less  per ton.


4
Under the NOx SIP Call, each upwind state must limit its  summertime NOx emissions to a statewide emission "budget"  for the year 2007.  "The budgets represent the amount of  allowable NOx emissions remaining after a covered state  prohibits the NOx amount contributing significantly to downwind nonattainment."  Michigan, 213 F.3d at 686.  Specifically, the NOx state budgets represent the EPA's projection for  what NOx emissions in 2007 would be for each state were  "highly cost-effective controls" implemented.  Under the NOx  SIP Call, states have substantial flexibility in selecting combinations of emission control measures to meet their respective  budgets, so long as they do so by the regulatory deadline.


5
In setting the NOx budgets, the EPA relied upon emission  inventory data collected by the Ozone Transport Assessment  Group, a working group comprised of federal, state, industry,  and environmental group representatives.  See Findings of  Significant Contribution and Rulemaking on Section 126 Petitions for Purposes of Reducing Interstate Ozone Transport,  64 Fed. Reg. 28,250, 28,253 (May 25, 1999);  Michigan, 213  F.3d at 672.  The EPA divided each state's NOx emissions  according to five source types or "sectors":  electric generating units ("EGUs"), non-EGU stationary sources (such as  industrial boilers), area sources (smaller stationary sources),  highway mobile sources, and nonroad mobile sources.  The EPA calculated 2007 budget allocations for each sector.  Under the NOx SIP Call, the EPA assumed that emission  reductions would occur primarily in the EGU and non-EGU  sectors, representatives of which are petitioners here.  In  developing their SIPs, however, states are free to achieve  emission reductions from other sources, so long as the SIP  provides for attainment of the requisite emission reduction  level.


6
To calculate the EGU emission budgets, the EPA obtained  source-specific "utilization" (heat-input) data for either 1995  or 1996.  To this baseline, the EPA applied "growth factors"  derived from growth projections for the years 2001 through  2010 generated by the "Integrated Planning Model" ("IPM"),  a widely used utility planning model.  Even though the EPA  had 2007 utilization projections from the IPM, the EPA  instead opted to apply the 2001-2010 growth factors to project growth over the 1996-2007 period in each state.  The  resulting 2007 emission projections were then reduced based  on the EPA's estimate of the amount of emission reductions  that could be achieved through "highly cost-effective" means. The resulting 2007 budgets are at issue in this case.


7
On March 3, 2000 this Court upheld the bulk of the EPA's  NOx SIP Call.  See Michigan, 213 F.3d 663.  Relevant to  this case, we specifically upheld the EPA's ability to set statespecific NOx budgets.  At the same time, this Court remanded the regulatory definition of EGU because the EPA failed  to provide an adequate explanation.  This Court also partially  vacated and remanded the SIP call as it applied to Missouri  because the EPA included portions of Missouri in the SIP call  with no evidence that these areas contributed to downwind  nonattainment.


8
At the same time that it promulgated the NOx SIP Call,  the EPA also proposed a Federal Implementation Plan  ("FIP") that would impose direct emission controls on EGUs  and non-EGUs in any state that failed to implement an  adequate SIP by the regulatory deadline--May 31, 2004.  In  January 2000, the EPA also mandated specific NOx emission  controls on EGUs and non-EGUs in upwind states in response to petitions filed by eight Northeastern states under  section 126 of the CAA.  42 U.S.C.      7426.  Both the FIP  and the section 126 rule seek NOx reductions in accordance  with the NOx budgets established for the NOx SIP Call, as  amended by the rules challenged in this case.  Earlier this  year, this Court upheld the EPA's section 126 rule in most  respects, though some portions of that rule relevant to this  case were remanded to the EPA for additional consideration. See Appalachian Power Co. v. EPA, Nos. 99-1200, et al. (May  15, 2001).

B. The Technical Amendments

9
In the final SIP Call rule promulgated on October 27, 1998,  the EPA reopened public comment on the accuracy of data  upon which the emission inventories and budgets were based. See NOx SIP Call, 63 Fed. Reg. at 57,427.  On December 24,  the EPA extended the comment period "for emission inventory revisions to 2007 baseline sub-inventory information used  to establish each State's budget in the NOx SIP Call," and  further explained that it was seeking comment on the relevant data and assumptions so the agency could correct errors  and update information used to compute the 2007 budgets.  See Correction and Clarification to the Finding of Significant  Contribution and Rulemaking for Purposes of Reducing Regional Transport of Ozone, 63 Fed. Reg. 71,220 (Dec. 24,  1998) ("SIP Call Correction").  The EPA also announced that  it would reopen the comment period on equivalent inventory  data for the FIP and section 126 rulemakings as well because  all three rules relied upon the same inventories.  Id.


10
Following this rulemaking, the EPA published two "Technical Amendments" ("TAs") revising the SIP Call NOx emission  budgets.  In the first TA published May 14, 1999 ("May 1999  TA"), the EPA made some modifications to source-specific  emissions data, as well as to the 2007 baseline inventories. Technical Amendment to the Finding of Significant Contribution and Rulemaking for Certain States for Purposes of  Reducing Regional Transport of Ozone, 64 Fed. Reg. 26,298  (May 14, 1999).  In the second Technical Amendment published March 2, 2000 ("March 2000 TA"), the EPA made additional "corrections" based upon additional public comments it  received and the EPA's own internal review of the accuracy  of its data and calculations.  Technical Amendment to the  Finding of Significant Contribution and Rulemaking for Certain States for Purposes of Reducing Regional Transport of  Ozone, 65 Fed. Reg. 11,222 (Mar. 2, 2000).  The EPA also  explained that the March 2000 TA was "necessary to make  the NOx SIP Call inventory consistent with the inventory  adopted" by the EPA in the final section 126 rule, as the two  rules were to be based upon the same inventory.  Id.  The  EPA also made "corrections to the growth rates of many nonEGU sources" because it had "misapplied" these growth rates  in the May 1999 TA "version of the budget."  Id. at 11,223. These changes altered the 2007 baselines for some source  categories and some states.


11
II. Industry Petitioners--Electric Generating Issues

A. EGU Growth Factors

12
Industry Petitioners challenge the lawfulness of the NOx  emission budgets as set forth in the TAs, specifically, the  particular "growth factors" the EPA used to project future  utilization rates for EGUs in 2007.  Petitioners allege that the  EPA's reliance upon these growth factors was arbitrary and  capricious because the growth factors were unsupported and  in conflict with state-based growth estimates.  Petitioners  further contend that the EPA arbitrarily failed to determine  whether the resulting emission budgets could be achieved in a  cost-effective manner.  Other petitioners raise similar challenges to the TAs.  Before turning to the merits of these  arguments, we must first address several jurisdictional issues  raised by the EPA.  Specifically, the EPA claims that petitioners' claims are time barred and precluded by our Michigan decision under principles of res judicata and collateral  estoppel.1

1. Statute of Limitations

13
The EPA contends that petitioners' objections to the EGU  growth factor determinations are not properly before this  Court because they were resolved in the underlying NOx SIP  Call rulemaking, not in the TA proceeding.  Therefore, the  growth factors were subject to challenge in Michigan, and  not here.  The EPA outlined and finalized its method for  determining state emission budgets, including the use of  growth factors, in the NOx SIP Call rulemaking.  See NOx  SIP Call, 63 Fed. Reg. at 57,405-39.  The EPA argues that  under CAA section 307(b)(1), 42 U.S.C.      7607(b)(1), petitioners had sixty days from the publication of the SIP Call in the  Federal Register to challenge the EPA's final growth factor  determinations.  By these lights, petitioners may not challenge the growth factors because they did not raise their  challenges within sixty days of publication of the SIP Call.


14
In October 1998, the EPA reopened comment on "the  source-specific data used to establish each State's budget." NOx SIP Call, 63 Fed. Reg. at 57,427.  However, the EPA  maintains petitioners' claims are precluded because it did not  explicitly invite comments on growth rate methodology.  In  other words, the EPA argues that it undertook the TA  rulemakings for the purpose of ensuring the accuracy of the  EPA's data inputs, and not to reconsider prior methodological  determinations, such as how to construct growth factors and  how to use those growth factors in determining 2007 emission  budgets.  According to the EPA, "[c]omments related to the  use of growth factors in determination of State budgets" were  addressed "in the context of the final NOx SIP call."  May  1999 Response to Comments at 47.  Therefore, the agency  pleads, petitioners' growth factor arguments are time-barred  under National Ass'n of Reversionary Property Owners v.  Surface Transportation Board, 158 F.3d 135, 141 (D.C. Cir.  1998) ("NARPO") ("If NARPO's reopening theory does not  apply, we are without jurisdiction to consider NARPO's due  process claim.").


15
The TA proceedings are not as clear cut as the EPA  maintains, nor are our precedents so restrictive.  The initial TA rulemaking invited comment on both the source-specific  emission data used to calculate state budgets and the "2007  baseline sub-inventory information."  NOx SIP Call, 63 Fed.  Reg. at 57,493.  As the EPA recognizes, the 2007 baseline  sub-inventory information is nothing more than the product of  growth factors and the source-specific emission data used to  calculate state budgets.  See SIP Call Correction, 63 Fed.  Reg. at 71,223 (noting that 2007 baseline inventory "is based  on the universe of sources in the 1995 inventory and a growth  factor ..." (emphasis added)).  Therefore, insofar as the  EPA reopened comment on the 2007 baselines, it would seem  that the EPA reopened comment on the growth factors in  addition to the source-specific emission data used to calculate  state budgets.  While the EPA did not reopen comment on  the broader issues of its authority to impose NOx emission  budgets on states, it did open comment on the budgets  themselves.  Insofar as the agency was ambiguous on this  point, that only further supports petitioners' argument that  the growth factor issue was reopened.  See NARPO, 158 F.3d  at 142 ("Ambiguity in an NPRM may also tilt toward a  finding that the issue has been reopened.").


16
Even accepting that the EPA did not explicitly reopen  growth factors for public comment, this does not preclude  petitioners' claim.  Under Public Citizen v. NRC, "whether  an agency has in fact reopened an issue" is dependent upon  "the entire context of the rulemaking including all relevant  proposals and reactions of the agency," and not just on the  agency's stated intent.  901 F.2d 147, 150 (D.C. Cir. 1990). Thus, "if an agency's response to comments 'explicitly or  implicitly shows that the agency actually reconsidered the  rule, the matter has been reopened.' "  Panamsat Corp. v.  FCC, 198 F.3d 890, 897 (D.C. Cir. 1999) (citation omitted).


17
The EPA claims that the growth factors were completely  settled for the purposes of the NOx SIP Call by the time the  TA rulemaking began in October 1998.  Yet this claim is  difficult to square with the EPA's purported justification for  the TA rulemakings--specifically to conform the emission  inventories of the NOx SIP Call and section 126 rules.  The  TA rulemaking began in October 1998, but the first section 126 rule was not final until May 1999.  Thus, if the EPA was  sincere in seeking to use the TA rulemaking to conform the  emission inventories of the two rules, then the EPA's various  growth factor methodologies must have been open for comment for the purposes of the NOx SIP Call as they were  subject to revision in the section 126 rulemaking at least up  until the close of that proceeding.


18
Where a rulemaking notice is ambiguous "and could fairly  be read to 'suggest [ ] that the search for harmony might lead  to the rethinking of old positions' " this Court has "found that  the earlier decision was reopened."  NARPO, 158 F.3d at 142  (citation omitted).  This is an apt description of what happened here.  Therefore, insofar as there are problems with  section 126 inventories and budgets, the EPA implicitly gave  petitioners an opportunity to identify the equivalent problems  with the NOx SIP Call inventories and budgets when the  EPA opened the TA rulemaking for the purpose of conforming the inventories for the two rules.

2. Res Judicata and Collateral Estoppel

19
Res judicata "bars relitigation not only of matters determined in a previous litigation but also ones that a party could  have raised."  NRDC v. Thomas, 838 F.2d 1224, 1252 (D.C.  Cir. 1988) (emphasis in EPA brief).  Collateral estoppel further bars parties from relitigating issues of law or fact  resolved in prior cases between those parties.  Securities  Indus. Ass'n v. Bd. of Governors, 900 F.2d 360, 363 (D.C. Cir.  1990) ("When a court determines an issue of fact or law that  is actually litigated and necessary to its judgment, that  conclusion binds the same parties in a subsequent action."). As the growth factor determinations were made as part of the  NOx SIP Call, the EPA maintains that petitioners should  have presented any challenge to the growth factors in Michigan, where "there were actual legal and factual challenges on  budget and growth-related topics" and where "nearly all" of  the petitioners here were represented. Brief for Respondent  EPA at 24-25.


20
Petitioners' challenges are based upon the emission inventories and budgets laid out in the TAs.  As such, they present issues not litigated in Michigan.  Though it is true that  petitioners could have challenged the EPA's growth factor  methodologies in that litigation, we hold here that the EPA  reopened comment on that issue.  Just as it would be absurd  for the EPA to argue that res judicata and collateral estoppel  would preclude review had the EPA decided to change its  growth factor methodologies in response to invited comments,  so too is it absurd for the EPA to argue here that res  judicata and collateral estoppel preclude review of its decision not to change in response to those same invited comments.

3. Merits

21
On the merits, Industry Petitioners allege that the EPA's  emission budget determinations for EGUs are arbitrary and  unsupported on several grounds.  First, they maintain that  the 2007 emission baselines reflect the unrealistic assumptions that utilization growth will be linear.  Second, they  question the EPA's use of IPM-generated 2001-2010 growth  rates to estimate growth over the 1996-2007 period.  Third,  they claim the EPA's reliance upon the growth factors resulted in unrealistic utilization estimates.  For example, 1998  utilization rates in some states, such as Michigan and West  Virginia, are greater than the 2007 baselines estimated by the  EPA.


22
Petitioners contend that the arbitrariness of the growth  factors is compounded by the fact that more representative  growth estimates were available.  In conducting its costeffectiveness analysis, the EPA used the IPM to generate  growth assumptions for 1996-2001, as well as to generate  state-by-state EGU utilization estimates for 2007.  Yet the  EPA did not use this data for the purpose of developing its  growth factors for the 2007 baseline, and it offered no reasonable explanation for its choice.  Even if the EPA finds on  remand that its choice was the better one, failure to "examine  the relevant data and articulate a satisfactory explanation for  its action" either is arbitrary decisionmaking or at least  prevents a court from finding it non-arbitrary.  Motor Vehicle  Mfrs. Ass'n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29,  43 (1983).


23
We confronted nearly identical challenges to the EPA's use  of growth factors to estimate baseline NOx emissions for 2007  in the section 126 litigation.  See Appalachian Power Co. v.  EPA, Nos. 99-1200, et al. (May 15, 2001).  Although the NOx  SIP Call covers more states than the section 126 rule, the  EPA's methodological choices and explanations (or lack thereof) were the same.  Therefore, we see no reason to depart  from our conclusions in that litigation.


24
There is no question that "[a]gency determinations based  upon highly complex and technical matters are 'entitled to  great deference.' "  Id.,249 F.3d at 1051-52 (quoting Public Citizen  Health Research Group v. Brock, 823 F.2d 626, 628 (D.C. Cir.  1987)).  The EPA has "undoubted power to use predictive  models," such as the IPM, but it must "explain the assumptions and methodology used in preparing the model" and  "provide a complete analytic defense" should the model be  challenged.  Small Refiner Lead Phase-Down Task Force v.  EPA, 705 F.2d 506, 535 (D.C. Cir. 1983) (citations and internal quotation marks omitted).  "Given the highly deferential  standard of review applied to such questions, and the EPA's  clear authority to rely upon computer models in place of  inconsistent, incomplete, or unreliable empirical data, the  Agency's decision to rely upon the IPM, rather than the  projections offered by individual states, was not arbitrary and  capricious."  Appalachian Power Co., 249 F.3d at 1052-53.  However, this Court cannot excuse the EPA's reliance upon a  methodology that generates apparently arbitrary results particularly where, as here, the agency has failed to justify its  choice.


25
In the case at hand, the EPA adopted a particular methodology to estimate EGU utilization rates in 2007 that generated seemingly implausible results, such as a negative growth  forecast for some states in the coming decade.  The EPA  adopted this methodology without offering any reasoned explanation for its choice.  The EPA's decision not to use the  IPM projections for 2007 that were used to estimate the costeffectiveness of emissions controls may well have been reasonable.  So too may have been the EPA's choice to rely upon  IPM projections for the 2001-2010 period in order to generate a growth factor for the 1996-2007 period.  However,  there is no way for us to tell because the EPA never offered  an explanation.  Merely asserting that the choice was "reasonable" is not enough.


26
As we held in the section 126 litigation, so too here:


27
the EPA has not fully explained the bases upon which it chose to use one set of growth-rate projections for costs and another for budgets, nor has it addressed what appear to be stark disparities between its projections and real world observations.  "With its delicate balance of thorough record scrutiny and deference to agency expertise, judicial review can occur only when agencies explain their decisions with precision, for 'it will not do for a court to be compelled to guess at the theory underlying the agency's action ...' "  American Lung Ass'n v. EPA, 134 F.3d 388, 392 (D.C. Cir. 1998) (quoting SEC v. Chenery Corp., 332 U.S. 194, 196-97 (1947)).  As a result, we have no choice but to remand the EPA's EGU growth factor determinations so that the agency may fulfill its obligation to engage in reasoned decisionmaking on how to set EGU growth factors and explain why results that appear arbitrary on their face are, in fact, reasonable determinations.


28
Id. at 37-38.

4. Cost-Effectiveness

29
Industry Petitioners make the additional argument that the  EPA failed to find the 2007 budgets achievable at the $2,000/ ton significant-contribution cut-off established in the NOx  SIP Call rule.  Essentially, petitioners contend that the budgets the EPA analyzed for cost-effectiveness purposes were  different from the emission budgets imposed on the states. This argument is without merit.  The emission budget levels  themselves are based upon reductions deemed by the EPA to  be cost-effective.  In the case of EGUs, the EPA concluded  that an average emissions rate of 0.15 lb/mmBtu could be  achieved at a cost of less than $2000/ton.  NOx SIP Call, 63  Fed. Reg. at 57,399-403.  Thus, insofar as the EPA properly generates, and adequately explains, estimated 2007 utilization  rates, it need not repeat its cost-effectiveness analysis.

B. Significant Contribution

30
Industry petitioners also allege that the TAs are arbitrary  because they rely upon emission inventories that are substantially different from those that were used to make the initial  "contribution" findings for the NOx SIP Call.  Essentially,  petitioners argue that because the TAs changed the underlying state emission inventories and budgets, thereby altering  the relative contributions of upwind states to downwind nonattainment, the EPA was obligated to reevaluate its "significant contribution" findings for each of the affected states. For example, the TAs decreased the 2007 baseline emissions  for West Virginia, an upwind state, and increased baseline  emissions for New York, a downwind state.  Due to this  change, petitioners contend, the EPA could not continue to  assume that West Virginia contributes to New York nonattainment without additional analysis.


31
It is black-letter administrative law that "[a]bsent special  circumstances, a party must initially present its comments to  the agency during the rulemaking in order for the court to  consider the issue."  Tex Tin Corp. v. EPA, 935 F.2d 1321,  1323 (D.C. Cir. 1991) (citing Eagle-Picher Indus. v. EPA, 822  F.2d 132, 146 (D.C. Cir. 1987)).  Generalized objections to  agency action or objections raised at the wrong time or in the  wrong docket will not do.  "An objection must be made with  sufficient specificity reasonably to alert the agency."  Id.  An  agency cannot be faulted for failing to address such issues  that were not raised by petitioners.  Petitioners waived their  argument, and can cite no "special circumstances" to justify  their waiver.


32
Petitioners are able to cite no comments that were in the  relevant docket that raise the significant contribution issue. For example, petitioners note that the West Virginia Manufacturers Association argued that "[i]f EPA has in fact made  adjustments to the inventories, we believe that this would  dramatically affect the modeled impact of the contribution of  upwind states and sources to downwind ozone nonattainment."  The problem is that this document was submitted to  the dockets for the section 126 and FIP rulemakings, and was  not part of the TA rulemaking.  Petitioners do cite other  documents which were part of the relevant rulemaking, but  these documents do not address the significant contribution  argument.  This is insufficient;  notice does not operate by  osmosis.  Having failed to raise their concern in the relevant  agency docket, petitioners could perhaps have cured their  waiver by seeking reconsideration before the EPA, but they  did not.  Thus, petitioners waived their argument that the  EPA was required to revisit its significant contribution findings.

III. State Petitioners

33
State Petitioners echo many of the arguments addressed  above.  Their claims are unique insofar as they object to the  EPA's imposition of "erroneous projections of their economic  growth" on states through the NOx SIP Call.  Joint Brief of  Petitioning States at 4.  The State Petitioners' primary complaint is with the EPA's reliance upon the IPM to generate  state-by-state growth rates without promulgating a mechanism to review these projections based upon actual growth  rates.  Petitioning states contend that the EPA's projections  underestimate actual growth in some affected states, but the  EPA refused to address this concern in the TA rulemaking. While the EPA acknowledged some inconsistency between  IPM growth projections and those provided by individual  states, the EPA rejected the claim that the states' projections  are inherently more reliable.  State Petitioners claim that it  was unreasonable for the EPA to reach this conclusion without conducting any analysis of the state projections.


34
State Petitioners aver that deference to the EPA's findings  in this area is unwarranted because deference is only due  within an agency's area of expertise.  See NRDC v. EPA, 194  F.3d 130, 136 (D.C. Cir. 1999).  Were the EPA making  environmental projections, they concede, deference would be  warranted.  Since, however, the growth projections are essentially economic projections, this Court should give the EPA no more deference "than it would to the agency's  predictions of 2007 interest rates or the level of the Dow  Jones Index."  Joint Brief of Petitioning States at 10 (citing  Montana v. EPA, 137 F.3d 1135, 1141 (9th Cir. 1998)).  While  the EPA has authority to impose emission limits on states,  they argue, it does not have the authority to regulate a state's  economic growth.  Insofar as the EPA has done this through  its growth projections, it has adopted an "overly broad"  reading of the CAA that "usurps States' sovereign power to  manage their own economic growth."  Id. at 12.


35
The EPA raises the same untimeliness arguments discussed above.  See infra Part II.A.1-2.  We reject them for  the same reasons.  However, insofar as the State Petitioners  seek relief beyond that which is provided above, their complaints are not well taken.  The EPA has sufficient discretion  to use the IPM model in the first instance even if states  believe that some other state-specific modeling is more accurate.  When it comes to these sorts of technical matters, the  EPA is entitled to great deference.  See Environmental  Action, Inc. v. FERC, 939 F.2d 1057, 1064 (D.C. Cir. 1991)  ("[I]t is within the scope of the agency's expertise to make  such a prediction about the market it regulates, and a reasonable prediction deserves our deference notwithstanding that  there might also be another reasonable view.").  "[I]t is only  when the model bears no rational relationship to the characteristics of the data to which it is applied that we will hold  that the use of the model was arbitrary and capricious." Appalachian Power Co. v. EPA, 135 F.3d 791, 802 (D.C. Cir.  1998).


36
"That the EPA's projections depend, in large part, on  economic projections, rather than environmental factors,  makes little difference."  Appalachian Power Co. v. EPA, 249 F.3d 1032, 1053 (D.C.Cir.2001). Congress  has delegated to the EPA the power to set emissions limits  under the Clean Air Act.  Merely because this requires the  selection and utilization of complex computer models to forecast future emissions does not change the standard with  which we evaluate the agency's actions, so long as the agency's actions are, as here, confined to those technical issues that must be resolved for the agency intelligently to address  the matters over which Congress has given it authority.  See  generally id.;  Small Refiner Lead Phase-Down Task Force  v. EPA, 705 F.2d 506, 535 (D.C. Cir. 1983).  State Petitioners'  hyperbolic suggestion that the EPA's choice of industry forecasting models is tantamount to stock market forecasting is  simply absurd.


37
Similarly, that the EPA's selection of a computer model  and forecasting methodology results in the imposition of  emission controls on states that crimp economic growth does  not change the underlying analysis.  In Michigan, this Court  squarely upheld the EPA's authority to establish statespecific NOx budgets against a claim that such authority  impermissibly intrudes on the statutory rights of states to  select their own emission control policies in the first instance. Michigan v. EPA, 213 F.3d 663, 686-87 (D.C. Cir. 2000). Acknowledging this point, State Petitioners seek to argue  that the Michigan holding somehow left open the claim that  the EPA's authority to set state emission budgets did not  entail authority to make the state-specific growth projections  upon which such emission budgets are inevitably based.  This  is a distinction without a meaningful difference.  Given the  regulatory structure created by the Clean Air Act, the former  authority clearly encompasses the latter, notwithstanding  State Petitioners' veiled appeals to federalism principles.


38
For these reasons, we hold that State Petitioners are not  entitled to any relief beyond that which is entailed by remanding the growth factor determinations for further proceedings in response to Industry Petitioners' claims.

IV. Non-Electric Generating Facility Issues

39
Non-Electric Generating Petitioners ("Non-EGU Petitioners") make two additional arguments against the EPA's TAs  to the NOx SIP Call.  First, petitioners allege that the EPA  modified its methodology for calculating budgets for nonEGUs in its final rule without providing non-EGUs with  adequate notice of the change.  Second, Non-EGU Petitioners claim that insofar as the EPA's emission budgets for Non-EGUs rely upon the source definitions remanded in  Michigan v. EPA, they are contrary to law and must be  remanded here as well, if not vacated in their entirety.  We  conclude that the EPA's misapplication of non-EGU growth  factors constituted little more than clerical error, which the  EPA corrected without additional notice and comment. While petitioners erroneously challenge the characterization  of the error as clerical, they do not challenge the power of the  EPA to correct clerical errors, compare Utility Solid Waste  Activities Group v. EPA, 236 F.3d 749 (D.C. Cir. 2001), and  we do not address that issue.  The petitioners are therefore  not entitled to vacatur.  However, petitioners are correct that  the EPA continues to rely upon source definitions that were  issued without adequate notice and comment and remanded  in Michigan.  Therefore, we remand the source definitions  here as well.

A. Notice

40
The EPA began the budget-setting process with incomplete  data on emission sources upon which to base its 2007 projections.  The EPA also began the process relying on one set of  growth factors, Non-EGU Petitioners charge, but then substituted other factors.  The constant changes to the EPA's  methodology, "combined with the virtual inaccessibility of the  files containing the growth factors," made it impossible for  affected parties to determine whether the EPA's calculations  were reasonably accurate.  Joint Brief of Non-Electric Generating/Industrial Petitioners at 6.  As the aggregate nonEGU budget changed over time, petitioners allege the EPA  did not maintain a consistent explanation for these revisions. In the May 1999 TA, the EPA said that a fourteen percent  increase in the aggregate non-EGU budget was due to source  reclassifications.  May 1999 TA, 64 Fed. Reg. at 26,299.  In  the March 2000 TA, however, it claimed that the budget  change was due to the EPA's prior misapplication of the  proper growth factors.  Rather than consistently modify its  estimates, Petitioners attest that the EPA should have explained how the growth factors were misapplied and specifically sought comment from affected parties.  In failing to do  so, it disregarded regulated entities' rights to notice and comment.  Even if providing such opportunity to comment  would have delayed SIP implementation, Non-EGU Petitioners argue that this would not authorize the EPA to deprive  regulated entities of their rights to notice and comment.


41
The EPA responds that Non-EGU Petitioners allege no  more than a harmless procedural error.  See 5 U.S.C.      706  (instructing courts to take "due account ... of the rule of  prejudicial error.").  The EPA merely adjusted inventory  data to fix clerical errors to ensure conformity between the  various rules.  Petitioners had ample opportunity to comment  and yet have failed to identify "a single source that has not  been able to determine the growth factor assigned to it." Brief for Respondent EPA at 42.  The EPA readily admits  that it did not announce the correction of its previous misapplication of non-EGU growth factors until the March 2000  TA.  Insofar as Non-EGU Petitioners challenge specific  changes in the Non-EGU portion of emission budgets, we  agree with the EPA.  The record suggests that the changes  complained of here were little more than fixes to technical  errors, and not the sort of modifications that evince a change  in policy or methodology.  Therefore, this portion of the  petition for review is denied.  Petitioners' entreaty at oral  argument that their notice challenge was tantamount to an  unintelligible rulemaking challenge is likewise denied, as it  came too late.

B. Source Definitions

42
Non-EGU Petitioners further challenge the EPA's reliance  upon regulatory definitions of EGUs and non-EGUs that  were remanded by this Court in Michigan.  There, we found  that the EPA changed the definition of "EGU" in the final  NOx SIP Call rule without providing sufficient notice and  opportunity to comment.  Michigan, 213 F.3d at 692.  The  altered definition reclassified some non-EGUs as EGUs. This is significant because the EPA assumed that EGUs can  reduce more NOx emissions cost effectively, on a percentage  basis, than can non-EGUs.  The EPA maintains that a new  source definition rulemaking is imminent, see Brief for Respondent EPA at 51 ("EPA is, in fact, presently reconsidering its EGU definition and intends to issue a proposed rule in the  near future, perhaps as early as December 2000.").  However,  as of oral argument, a year had passed since the Michigan  remand and the EPA had yet to initiate new administrative  proceedings on source definitions.


43
Non-EGU Petitioners maintain that the EPA's continued  reliance on the remanded source definitions requires remanding and vacating the TAs in their entirety because the EPA  cannot accurately apply growth factors and calculate state  budgets until source categories are final.  The EPA contends  that Non-EGU Petitioners seek more relief here than they  were afforded in Michigan.  As the EPA notes, we did not  vacate the budgets or any other portion of the NOx SIP Call  in Michigan.  Instead, we left the budgets in place while  EPA reconsidered a handful of narrow issues, including the  proper delineation of what constitutes an EGU.  It seems  that Non-EGU Petitioners are entitled to the same relief  here-no more and no less.  Therefore, because the "EPA did  not provide sufficient notice and opportunity to comment for  its redefinition of EGUs," 213 F.3d at 693, we remand this  portion of the rulemaking to the EPA for further consideration in light of this opinion and that in Michigan.

V. Missouri ("Split-State Petitioners")

44
A group of Missouri utilities and the City of Independence,  Missouri ("Split-State Petitioners") argue that the Technical  Amendments are unlawful insofar as they establish a budget  for the state of Missouri.  In Michigan, this Court vacated and remanded the NOx SIP Call insofar as it applied to  Missouri because the EPA's Missouri NOx budget was "calculated on the basis of hypothesized cutbacks from areas that  have not been shown to have made significant contributions." 213 F.3d at 684.  Specifically, the EPA set a NOx emission  budget for the entire state of Missouri, even though the  computer models upon which the EPA relied only included  the eastern portion of the state.  Before requiring a state or  portion thereof to control emissions that make a "significant"  contribution to downwind nonattainment, we held the EPA "must first establish that there is a measurable contribution."  Id. at 683-84 (emphasis in original).  Where the  agency's own data "inculpate part of a state and not another,  EPA should honor the resulting findings."  Id. at 684.


45
Even though the NOx emission budget for Missouri was  vacated and remanded in Michigan, the EPA included Missouri's budget in the TAs.  It is undisputed that insofar as  the TAs include a statewide Missouri emission budget they  are unlawful under Michigan.  The only real dispute between  Split-State Petitioners and the EPA is on the proper remedy  for EPA's failure to address the Michigan holding.


46
Split-State Petitioners contend that this court must vacate  the entire Missouri budget, covering the budget for the "1hour" ozone standard as well as the "8-hour" ozone standard  at issue in American Trucking Ass'ns v. EPA, 175 F.3d 1027,  reh'g granted in part and denied in part, 195 F.3d 4 (D.C.  Cir. 1999), rev'd in part sub nom. Whitman v. American  Trucking Ass'ns, 121 S. Ct. 903 (2001).  The EPA prefers a  more limited remand.  In Michigan, this Court vacated the  budget for the 1-hour standard, but stayed addressing the  applicability of the 8-hour standard to the NOx SIP Call, at  the EPA's request, due to the pendency of the American  Trucking litigation.  Michigan, 213 F.3d at 671.  On this  basis, we only resolved issues involving the EPA's 1-hour  ozone standard, leaving issues related to the 8-hour standard  until another day.


47
Because we did not consider 8-hour issues in Michigan, the  EPA suggests, we should only vacate and remand Missouri's  budget under the 1-hour standard and stay consideration of a  statewide Missouri budget under the 8-hour standard pending completion of litigation.  In other circumstances, we  might be inclined to offer the more modest remedy the EPA  suggests.  After all, the EPA is simply asking that the  judgment in this case mirror that in Michigan, and that this  Court stay consideration of the 8-hour basis for Missouri's  budget until such time as the stay on the 8-hour standard is  lifted.  Were there reason, any reason, to believe that the  EPA could justify a statewide Missouri budget based upon existing record evidence, this would be a prudent step.  As it  happens, the record and briefing in Michigan addressed both  standards, and the EPA offered no evidence that would  suggest western Missouri contributes significantly to downwind nonattainment of any ozone standard.  The EPA asserts that "it is entirely possible that the EPA's record could  support including Missouri in the SIP Call under the 8-hour  standard and assigning it a budget."  Brief for Respondent  EPA at 49.  However, the EPA does not dispute that it has  never modeled western Missouri sources under any standard. In other words, it is undisputed that the EPA has no more  analytical basis for setting a statewide Missouri NOx budget  under the 8-hour standard than it did for the 1-hour standard, for which it had no analytical basis at all.  While there  may be areas for which the EPA could, with existing data and  analysis, justify setting an emission budget for purposes of  the 8-hour standard, but not for purposes of the 1-hour  standard, western Missouri is not among them.


48
So long as any statewide NOx budget remains in place,  Split-State Petitioners and other entities potentially subject  to emission controls in western Missouri must operate under  the cloud of potential future controls.  Therefore, we find it  prudent to vacate and remand the TAs insofar as they include  a budget for Missouri under any ozone standard.  While we  vacate and remand the statewide Missouri budget, it should  be clear that we take this step only upon the record proffered  to date.  As noted above, the EPA concedes that it has never  conducted the analyses that would be required to impose a  statewide budget for Missouri.  Should the agency ever conduct such analyses and, for instance, model the contribution  of facilities located in western Missouri to downwind nonattainment of the 8-hour standard, it is quite possible that such  a budget could be justified.  This decision should be read  neither to endorse nor to preclude such action.  If the EPA  some day decides to impose a statewide NOx budget for  Missouri, that decision will be evaluated on its own merits at  that time.

VI. Conclusion

49
In accordance with the above, we remand the EPA's EGU  growth factors as well as the source definitions challenged by  Non-EGU Petitioners.  We further remand and vacate the  NOx emission budget for Missouri.  With respect to all other  issues, including those not discussed expressly herein, the  petitions are denied.



Notes:


1
 The EPA's alternative claim that this Court should stay consideration of these issues pending resolution of Appalachian Power  Co. v. EPA, Nos. 99-1200, et al. (May 15, 2001), is obviously moot.


