UNITED STATES COURT OF APPEALS FOR THE D.C. CIRCUIT


APPALACHIAN POWER CO

v.

EPA


98-1512a

D.C. Cir. 2000


*	*	*


Randolph, Circuit Judge: These consolidated petitions for  judicial
review, brought by electric power companies, and  trade associations
representing the nation's chemical and  petroleum industry, challenge
the validity of portions of an  EPA document entitled "Periodic
Monitoring Guidance," re- leased in 1998. In the alternative,
petitioners seek review of  a 1992 EPA rule implementing Title V of
the Clean Air  Amendments of 1990.


I.


Title V of the 1990 amendments to the Clean Air Act  altered the method
by which government regulated the pri- vate sector to control air
pollution. Henceforth, stationary  sources of air pollution, or of
potential air pollution, must  obtain operating permits from State or
local authorities ad- ministering their EPA-approved implementation
plans. The  States must submit to EPA for its review all operating 
permits and proposed and final permits. See 42 U.S.C.  s 7661d. EPA
has 45 days to object; if it does so, "the  permitting authority may
not issue the permit," id.  s 7661d(b)(3).1 Congress instructed EPA to
pass regulations  establishing the "minimum elements of a permit
program to  be administered by any air pollution control agency,"




__________

n 1 If the State permitting authority fails to revise the permit to 
satisfy EPA's objection, EPA shall issue or deny the permit, at  which
point EPA's action becomes subject to judicial review. See  42 U.S.C.
s 7661d(c).


ing "Monitoring and reporting requirements." 42 U.S.C.  s 7661a(b).
Under Title V, the Governor of each State could  submit to EPA a
permit program by November 15, 1993, to  comply with Title V and with
whatever regulations EPA had  promulgated in the interim. See 42
U.S.C. s 7661a(d). This  was to be accompanied by a legal opinion from
the State's  attorney general that the laws of the State contained
suffi- cient authority to authorize the State to implement the pro-
gram. Id. If a State decided not to participate, or if EPA 
disapproved the State's program, federal sanctions would kick  in,
including a cut-off of federal highway funds and an EPA  takeover of
permit-issuing authority within the State. See  Commonwealth of
Virginia v. Browner, 80 F.3d 869, 873-74  (4th Cir. 1996).


EPA promulgated rules implementing the Title V permit  program in 1992.
The rules list the items each State permit  program must contain,2
including this one:


(3) Monitoring and related record-keeping and report- ing requirements.
(i) Each permit shall contain the fol- lowing requirements with
respect to monitoring:


(A) All monitoring and analysis procedures or test  methods required
under applicable monitoring and test- ing requirements, including part
64 of this chapter and  any other procedures and methods that may be
promul- gated pursuant to sections 114(a)(3) or 504(b) of the Act.  If
more than one monitoring or testing requirement  applies, the permit
may specify a streamlined set of  monitoring or testing provisions
provided the specified  monitoring or testing is adequate to assure
compliance at  least to the same extent as the monitoring or testing 
applicable requirements that are not included in the  permit as a
result of such streamlining;


(B) Where the applicable requirement does not re- quire periodic
testing or instrumental or noninstrumental  monitoring (which may
consist of record-keeping de-




__________

n 2 The list is nicely summarized in David R. Wooley, Clean Air  Act
Handbook: A Practical Guide to Compliance s 5.02[1] (9th ed.  2000).


signed to serve as monitoring), periodic monitoring suffi- cient to
yield reliable data from the relevant time period  that are
representative of the source's compliance with  the permit, as
reported pursuant to paragraph(a)(3)(iii) of  this section. Such
monitoring requirements shall assure  use of terms, test methods,
units, averaging periods, and  other statistical conventions
consistent with the applica- ble requirement. Recordkeeping provisions
may be suffi- cient to meet the requirements of this paragraph 


(C) As necessary, requirements concerning the use,  maintenance, and,
where appropriate, installation of mon- itoring equipment or
methods.... 


40 C.F.R. s 70.6(a)(3).


The key language--key because this dispute revolves  around it--is in
the first sentence of s 70.6(a)(3)(i)(B). Per- mits contain terms and
conditions with which the regulated  entities must comply. Some of the
terms and conditions--in  regulatory lingo, "applicable requirements"
(see  s 70.6(a)(3)(i)(B))3--consist of emission limitations and stan-
dards, State and federal. Experts in the field know that  federal
emission standards, such as those issued for hazard- ous air
pollutants and new stationary sources, contain far  more than simply
limits on the amount of pollutants emitted.


Take for instance the following examples drawn at random  from the Code
of Federal Regulations. The national emission  


__________

n 3 One EPA official explained:


Permits must incorporate terms and conditions to assure  compliance
with all applicable requirements under the Act,  including the [state
implementation plan], title VI, sections 111  and 112, the sulfur
dioxide allowance system and NOx limits  under the acid rain program,
emission limits applicable to the  source, monitoring, recordkeeping
and reporting requirements,  and any other federally-recognized
requirements applicable to  the source.


John S. Seitz, Director, Office of Air Quality Planning and Stan-
dards, Developing Approvable State Enabling Legislation Required  to
Implement Title V, at p. 4 (Feb. 25, 1993).


standard for hazardous air pollutants from primary lead  smelting is
contained in 40 C.F.R. ss 63.1541-.1550. In  addition to emission
limits,4 the operator must comply with  detailed and extensive testing
requirements contained in  s 63.8 of the regulations, and must monitor
certain pressure  drops daily; make weekly checks to ensure that dust
is being  removed from hoppers; perform quarterly inspections of 
fans, and so forth. Id. s 63.1547. Or consider the standards  of
performance for new stationary sources contained in 40  C.F.R. part
60, one of the thickest of the dozen or so volumes  EPA commands in
the C.F.R. In the "beverage can surface  coating industry," those
subject to these regulations must--if  they use "a capture system and
an incinerator"--install some  sort of "temperature measurement
device," properly calibrat- ed and having a specified accuracy stated
in terms of degrees  Celsius. 40 C.F.R. s 60.494.5 Or if the new
source is in the  rubber tire manufacturing industry, an operator
doing a  "green tire spraying operation" using organic solvent-based 
sprays must install "an organics monitoring device used to  indicate
the concentration level of organic compounds based  on a detection
principle such as infrared ..., equipped with a  


__________

n 4 See 40 C.F.R. s 63.1543(a): No owner or operator of any existing,
new, or reconstructed  primary lead smelter shall discharge or cause
to be discharged  into the atmosphere lead compounds in excess of 500
grams of  lead per megagram of lead metal produced ... from the 
aggregation of emissions discharged from the air pollution  control
devices used to control emissions from the sources  [listed].


5 If the facility does not use a capture system, it must calculate its 
emission limits using a series of equations provided by EPA. For  some
idea of the complexity of this exercise, consider that the  facility
must figure its total volume of coating solids per month  using the
following equation:


n 


Ls =E LciVsi


i=1


40 C.F.R. s 60.493(b)(1)(i)(B). It would serve no useful purpose to 
explain this or the many other equations in the sequence.


continuous recorder, for the outlet of the carbon bed." Id.  s
60.544(a)(3).


Typically, EPA delegates to the States its authority to  require
companies to comply with these federal standards.  The States
incorporate the federal standards in their imple- mentation plans and,
under Title V of the 1990 law, the  applicable standards become terms
and conditions in permits.  States too have their own emissions
limitations and standards  in their implementation plans, which they
need in order to  comply with national ambient air quality standards.
See 40  C.F.R. part 52; Chevron U.S.A. Inc. v. Natural Resources 
Defense Council, Inc., 467 U.S. 837, 846 (1984); Union Elec- tric Co.
v. EPA, 427 U.S. 246, 249-50 (1976); Commonwealth  of Virginia v. EPA,
108 F.3d 1397, 1406 (D.C. Cir.), modified,  116 F.3d 499 (D.C. Cir.
1997). Petitioners tell us that States  may formulate their emission
standards not only by limiting  the amount of air pollutants, but also
by imposing practices,  including the monitoring of emissions.6


On one thing the parties are in agreement. If an applica- ble State
emission standard contains no monitoring require- ment to ensure
compliance, EPA's regulation requires the  State permitting agency to
impose on the stationary source  some sort of "periodic monitoring" as
a condition in the  permit or specify a reasonable frequency for any
data collec- tion mandate already specified in the applicable
requirement.  According to petitioners this sort of gap-filling is all
 s 70.6(a)(3)(i)(B)--the so-called periodic monitoring rule--re-
quires of State permit programs. By petitioners' lights, if a  federal
or State emission standard already contains some sort  of requirement
to do testing7 from time to time, this portion  of the standard must
be incorporated in the permit, not  changed by the State to conform to
EPA's imprecise and 




__________

n 6 In some instances, States may adopt emission standards or 
limitations that are more stringent than federal standards. 42  U.S.C.
s 7416. States may also adopt more stringent permit  requirements. 40
C.F.R. s 70.1(c).


7 By testing we mean to include instrumental and noninstrumen- tal
monitoring as well.


evolving notion of what constitutes "periodic monitoring."8  Otherwise,
State authorities will wind up amending federal  emission standards in
individual permits, something not even  EPA could do without
conducting individual rulemakings to  amend the regulations containing
the federal standards. And  with respect to State standards, the State
agency will in  effect be revising its implementation plan at EPA's
behest,  without going through the procedures needed to accomplish 
this. See, e.g., 42 U.S.C. s 7410(k)(5) & (l).


In a document entitled "Periodic Monitoring Guidance for  Title V
Operating Permits Programs," released in September  1998, EPA took a
sharply different view of s 70.6(a)(3) than  do petitioners. The
"Guidance" was issued over the signature  of two EPA officials--the
Director of the Office of Regulatory  Enforcement, and the Director of
the Office of Air Quality  Planning and Standards. It is narrative in
form, consists of  19 single-spaced, typewritten pages, and is
available on EPA's  internet web site (www.epa.gov). "Periodic
monitoring," the  Guidance states, "is required for each emission
point at a  source subject to title V of the Act that is subject to an
 applicable requirement, such as a Federal regulation or a SIP 
emission limitation." Periodic Monitoring Guidance for Title  V
Operating Permits Programs (hereinafter "Guidance") at 5.  New source
performance standards, and national emission  standards for hazardous
pollutants, if EPA promulgated the  standards after November 15, 1990,
the effective date of the  Clean Air Act amendments, are "presumed to
have adequate  monitoring." Id. Also, for "emission units subject to
the  acid rain requirements," EPA has determined that its "regu-
lations contain sufficient monitoring for the acid rain require-
ments." Id. Outside of these categories and one other, the 




__________

n 8 In support of their view, petitioners point to the Title V rule's 
preamble which states: "If the underlying applicable requirement 
imposes a requirement to do periodic monitoring or testing ..., the 
permit must simpl[y] incorporate this provision under  s
70.6(a)(3)(i)(A)." 57 Fed. Reg. 32,278 (1992).


Guidance states that "periodic monitoring is required ...  when the
applicable requirement does not require ... moni- toring sufficient to
yield reliable data from the relevant time  period that are
representative of the source's compliance with  the permit." Id. at 6.
How to determine this? Clearly,  according to the Guidance, if an
"applicable requirement  imposes a one-time testing requirement,
periodic monitoring  is not satisfied ...," presumably because one
time is not from  time to time, which is what periodic means. Id.


II.


The phenomenon we see in this case is familiar. Congress  passes a
broadly worded statute. The agency follows with  regulations
containing broad language, open-ended phrases,  ambiguous standards
and the like. Then as years pass, the  agency issues circulars or
guidance or memoranda, explain- ing, interpreting, defining and often
expanding the commands  in the regulations. One guidance document may
yield anoth- er and then another and so on. Several words in a
regulation  may spawn hundreds of pages of text as the agency offers 
more and more detail regarding what its regulations demand  of
regulated entities. Law is made, without notice and com- ment, without
public participation, and without publication in  the Federal Register
or the Code of Federal Regulations.  With the advent of the Internet,
the agency does not need  these official publications to ensure
widespread circulation; it  can inform those affected simply by
posting its new guidance  or memoranda or policy statement on its web
site. An  agency operating in this way gains a large advantage. "It 
can issue or amend its real rules, i.e., its interpretative rules  and
policy statements, quickly and inexpensively without fol- lowing any
statutorily prescribed procedures." Richard J.  Pierce, Jr., Seven
Ways to Deossify Agency Rulemaking, 47  Admin. L. Rev. 59, 85 (1995).9




__________

n 9 How much more efficient than, for instance, the sixty rounds of 
notice and comment rulemaking preceding the final rule in Motor 


there is another advantage--immunizing its lawmaking from  judicial
review.


A.


EPA tells us that its Periodic Monitoring Guidance is not  subject to
judicial review because it is not final, and it is not  final because
it is not "binding."10 Brief of Respondent at 30.  See Guidance at 19.
It is worth pausing a minute to consider  what is meant by "binding"
in this context. Only "legislative  rules" have the force and effect
of law. See Chrysler Corp. v.  Brown, 441 U.S. 281, 302-03 & n.31
(1979). A "legislative  rule" is one the agency has duly promulgated
in compliance  with the procedures laid down in the statute or in the 
Administrative Procedure Act.11 If this were all that "bind- ing"
meant, EPA's Periodic Monitoring Guidance could not  possibly qualify:
it was not the product of notice and com- 


__________

n Vehicle Mfrs. Ass'n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 
34 (1983).


10 Our jurisdiction extends to "any ... nationally applicable ... 
final action taken by" the EPA "Administrator." 42 U.S.C.  s
7607(b)(1). The Guidance issued over the signatures of two high  level
EPA officials rather than the Administrator. EPA does not,  however,
contest petitioners' assertion that because "the document  was
drafted, and reviewed by, high ranking officials in several EPA 
offices, including EPA's lawyers, there is no reason to doubt the 
authors' authority to speak for the Agency." Brief of Petitioners at 
42. See Her Majesty the Queen v. EPA, 912 F.2d 1525, 1531-32  (D.C.
Cir. 1990); Natural Resources Defense Council, Inc. v. Thom- as, 845
F.2d 1088, 1094 (D.C. Cir. 1988).


11 We have also used "legislative rule" to refer to rules the agency 
should have, but did not, promulgate through notice and comment 
rulemaking. See, e.g., American Mining Congress v. Department  of
Labor, 995 F.2d 1106, 1110 (D.C. Cir. 1993). In this case, by  "rule"
we mean the following:


... the whole or a part of an agency statement of general or 
particular applicability and future effect designed to implement, 
interpret, or prescribe law or policy or describing the organiza-
tion, procedure, or practice requirements of an agency....


5 U.S.C. s 551(4).


ment rulemaking in accordance with the Clean Air Act, 42  U.S.C. s
7607(d), and it has not been published in the Federal  Register.12 But
we have also recognized that an agency's  other pronouncements can, as
a practical matter, have a  binding effect. See, e.g., McLouth Steel
Prods. Corp. v.  Thomas, 838 F.2d 1317, 1321 (D.C. Cir. 1988). If an
agency  acts as if a document issued at headquarters is controlling in
 the field, if it treats the document in the same manner as it  treats
a legislative rule, if it bases enforcement actions on the  policies
or interpretations formulated in the document, if it  leads private
parties or State permitting authorities to believe  that it will
declare permits invalid unless they comply with  the terms of the
document, then the agency's document is for  all practical purposes
"binding." See Robert A. Anthony,  Interpretative Rules, Policy
Statements, Guidances, Manu- als, and the Like--Should Federal
Agencies Use Them to  Bind the Public?, 41 Duke L.J. 1311, 1328-29


For these reasons, EPA's contention must be that the  Periodic
Monitoring Guidance is not binding in a practical  sense. Even this,
however, is not an accurate way of putting  the matter. Petitioners
are not challenging the Guidance in  its entirety. Under the
Administrative Procedure Act, a  "rule" may consist of "part of an
agency statement of general  or particular applicability and future
effect...." 5 U.S.C.  s 551(4), quoted in full in supra note 11; see 5
U.S.C.  ss 551(13), 702. "Interpretative rules" and "policy state-
ments" may be rules within the meaning of the APA and the  Clean Air
Act, although neither type of "rule" has to be  promulgated through
notice and comment rulemaking. See  42 U.S.C. s 7607(d)(1), referring
to 5 U.S.C. s 553(b)(A) &  (B).13 EPA claims, on the one hand, that




__________

n 12 5 U.S.C. s 552(a)(1)(D) requires publication in the Federal 
Register of all "interpretations of general applicability." Compare  5
U.S.C. s 552(a)(2)(B), requiring agencies to make available for 
inspection and copying "those statements of policy and interpreta-
tions which have been adopted by the agency and are not published  in
the Federal Register."


13 We quoted, in Panhandle Eastern Pipeline Co. v. FERC, 198  F.3d 266,
269 (D.C. Cir. 1999), the statement in Pacific Gas &  Electric Co. v.
Federal Power Commission, 506 F. 2d 33, 38 (D.C. 


policy statement, rather than an interpretative rule, and is  not
binding.14 On the other hand, EPA agrees with petition- ers that "the
Agency's position on the central legal issue  here--the
appropriateness of a sufficiency review of all Title  V monitoring
requirements--indeed is settled...." Brief of  Respondent at 32. In
other words, whatever EPA may think  of its Guidance generally, the
elements of the Guidance  petitioners challenge consist of the
agency's settled position, a  position it plans to follow in reviewing




__________

n Cir. 1974), that a policy statement is not a "rule," apparently
within  the meaning of 5 U.S.C. s 551(4). Dicta in Syncor
International  Corp. v. Shalala, 127 F.3d 90, 94 (D.C. Cir. 1997),
suggests the same  without referring to s 551(4). See also Hudson v.
FAA, 192 F.3d  1031 (D.C. Cir. 1999).


On the other hand, in Batterton v. Marshall, 648 F.2d 694, 700  (D.C.
Cir. 1980), we interpreted the term "rule" in s 551(4) as  "broad
enough to include nearly every statement an agency may  make...."
Quoting this language, we held in Center for Auto  Safety v. National
Highway Safety Administration, 710 F.2d 842,  846 (D.C. Cir. 1983),
that agency policy statements accompanying  the withdrawal of a notice
of proposed rulemaking fell within the  definition of a "rule." A few
years later, then-Judge Scalia--citing  Batterton--wrote for the court
that under APA s 551(4), it is  "clear" that "the impact of an agency
statement upon private  parties is relevant only to whether it is the
sort of rule that is ... a  general statement of policy." Thomas v.
New York, 802 F.2d 1443,  1447 n.* (D.C. Cir. 1986). See also National
Tank Truck Carriers,  Inc. v. Federal Highway Admin., 170 F.3d 203,
207 n.3 (D.C. Cir.  1999).


There is no need for us to try to reconcile these two lines of 
authority. Nothing critical turns on whether we initially character-
ize the Guidance as a "rule."


14 EPA is under the impression that policy statements can never  be
"rules" within the meaning of APA s 551(4): "even if the  Guidance
were somehow deemed to be a 'rule' (a conclusion that  would, in EPA's
view, be erroneous due to the non-binding nature  of the Guidance),
Petitioners' procedural challenge would still fail  because the
Guidance undoubtedly would be an interpretive (not  legislative)
rule...." Brief of Respondent at 43-44 n.40.


position it will insist State and local authorities comply with in 
setting the terms and conditions of permits issued to petition- ers, a
position EPA officials in the field are bound to apply.


Of course, an agency's action is not necessarily final merely  because
it is binding.15 Judicial orders can be binding; a  temporary
restraining order, for instance, compels compliance  but it does not
finally decide the case. In the administrative  setting, "two
conditions must be satisfied for agency action to  be 'final': First,
the action must mark the 'consummation' of  the agency's
decisionmaking process, Chicago & Southern  Airlines, Inc. v. Waterman
S.S. Corp., 333 U.S. 103, 113  (1948)--it must not be of a merely
tentative or interlocutory  nature. And second, the action must be one
by which 'rights  or obligations have been determined,' or from which
'legal  consequences will flow,' Port of Boston Marine Terminal  Assn.
v. Rederiaktiebolaget Transatlantic, 400 U.S. 62, 71  (1970)." Bennett
v. Spear, 520 U.S. 154, 178 (1997). The first  condition is satisfied
here. The "Guidance," as issued in  September 1998, followed a draft
circulated four years earlier  and another, more extensive draft
circulated in May 1998.  This latter document bore the title "EPA
Draft Final Period- ic Monitoring Guidance."16 On the question whether
States  must review their emission standards and the emission stan- 


__________

n We should note that the Guidance itself states that it "interprets" 
s 70.6(a)(3) of the regulations. Guidance at 4 n.1.


15 We add that agency action does not necessarily have binding 
effect--that is, does not necessarily alter legal rights and obli-
gations--merely because it is final. Denials of petitions for rule-
making, for instance, may be final although no private person is 
required to do anything. In the past, when this court examined the 
binding effect of agency action, we did so for the purpose of 
determining whether the non-legislative rule should have undergone 
notice and comment rulemaking because it was, in effect, a regula-
tion. See, e.g., Florida Power & Light Co. v. EPA, 145 F.3d 1414, 
1418-19 (D.C. Cir. 1998); American Portland Cement Alliance v.  EPA,
101 F.3d 772, 776 (D.C. Cir. 1996); Kennecott Utah Copper  Corp. v.
Dep't of Interior, 88 F.3d 1191, 1207 (D.C. Cir. 1996);  National
Solid Waste Mgmt. Ass'n v. EPA, 869 F.2d 1526, 1534  (D.C. Cir.


16 In the title to the Guidance we have before us, EPA dropped  the
word "final."


dards EPA has promulgated to determine if the standards  provide enough
monitoring, the Guidance is unequivocal--the  State agencies must do
so. See Guidance at 6-8. On the  question whether the States may
supersede federal and State  standards and insert additional
monitoring requirements as  terms or conditions of a permit, the
Guidance is certain--the  State agencies must do so if they believe
existing require- ments are inadequate, as measured by EPA's
multi-factor,  case-by-case analysis set forth in the Guidance. See


EPA may think that because the Guidance, in all its  particulars, is
subject to change, it is not binding and there- fore not final action.
There are suggestions in its brief to this  effect. See, e.g., Brief
of Respondent at 3, 33 n.30. But all  laws are subject to change. Even
that most enduring of  documents, the Constitution of the United
States, may be  amended from time to time. The fact that a law may be 
altered in the future has nothing to do with whether it is  subject to
judicial review at the moment. See McLouth Steel  Prods. Corp. v. EPA,
838 F.2d at 1320.


On the issue whether the challenged portion of the Guid- ance has legal
consequences, EPA points to the concluding  paragraph of the document,
which contains a disclaimer:  "The policies set forth in this paper
are intended solely as  guidance, do not represent final Agency
action, and cannot be  relied upon to create any rights enforceable by
any party."  Guidance at 19. This language is boilerplate; since 1991 
EPA has been placing it at the end of all its guidance  documents. See
Robert A. Anthony, supra, 41 Duke L.J. at  1361; Peter L. Strauss,
Comment, The Rulemaking Contin- uum, 41 Duke L.J. 1463, 1485 (1992)
(referring to EPA's  notice as "a charade, intended to keep the
proceduralizing  courts at bay"). Insofar as the "policies" mentioned
in the  disclaimer consist of requiring State permitting authorities
to  search for deficiencies in existing monitoring regulations and 
replace them through terms and conditions of a permit,  "rights" may
not be created but "obligations" certainly are-- obligations on the
part of the State regulators and those they  regulate. At any rate,
the entire Guidance, from beginning to  end--except the last
paragraph--reads like a ukase. It 


commands, it requires, it orders, it dictates. Through the  Guidance,
EPA has given the States their "marching orders"  and EPA expects the
States to fall in line, as all have done,  save perhaps Florida and
Texas. See Natural Resources  Defense Council, Inc. v. Thomas, 845
F.2d 1088, 1094 (D.C.  Cir. 1988); Community Nutrition Inst. v. Young,
818 F.2d  943, 947-48 (D.C. Cir. 1987). Petitioners tell us, and EPA
does not dispute, that many of  them are negotiating their Title V
permits, that State authori- ties, with EPA's Guidance in hand, are
insisting on continuous  opacity monitors17 for determining compliance
with opacity  limitations although the applicable "standard specifies
EPA  Method 9 (a visual observation method) as the compliance  method
(and, in some cases, already provides for periodic  performance of
that method)." Brief of Petitioners at 43-44.  See Natural Resources
Defense Council, Inc. v. EPA, 22 F.3d  1125, 1133 (D.C. Cir. 1994).


The short of the matter is that the Guidance, insofar as  relevant
here, is final agency action, reflecting a settled  agency position
which has legal consequences both for State  agencies administering
their permit programs and for compa- nies like those represented by
petitioners who must obtain  Title V permits in order to continue


__________

n 17 A continuous opacity monitor employs "a calibrated light source 
that provides for accurate and precise measurement of opacity at all 
times." See Credible Evidence Revisions, 62 Fed. Reg. 8319 (1997).  In
contrast, "Method 9 requires that a trained visible emissions 
observer (VEO) view a smoke plume with the sun at a certain angle  to
the plume" to determine the opacity of the plume released. Id.


18 EPA also claims that the Guidance is not ripe for review  because
the court's review would be more focused in the context of  a
challenge to a particular permit. We think there is nothing to  this.
Whether EPA properly instructed State authorities to con- duct
sufficiency reviews of existing State and federal standards and  to
make those standards more stringent if not enough monitoring  was
provided will not turn on the specifics of any particular permit. 
Furthermore, EPA's action is national in scope and Congress  clearly
intended this court to determine the validity of such EPA  actions.
See 42 U.S.C. s 7607. A challenge to an individual permit  would not
be heard in this court. (Petitioners contend that only  state courts
could adjudicate such cases. We express no view about  that.)


B.


As to the validity of the Guidance, petitioners' arguments  unfold in
the following sequence. First, they contend that the  Guidance amended
the "periodic monitoring rule" of  s 70.6(a)(3)(i)(B). Although the
rule only allowed State au- thorities to fill in gaps, that is, to
require periodic monitoring  when the applicable State emission
standard contained no  monitoring requirement, a one-time startup
test, or provided  no frequency for monitoring, the Guidance applies
across the  board, charging State authorities with the duty of
assessing  the sufficiency of all State and federal standards.19 With
the  Guidance in place, regional EPA offices have solid legal  grounds
for objecting to State-issued permits if the State  authorities refuse
to bend to EPA's will. Therefore, as peti- tioners see it, the
Guidance is far more than a mere interpre- tation of the periodic
monitoring rule and it is far more than  merely a policy statement. In
practical effect, it creates a  new regime, a new legal system
governing permits, and as  such it should have been, but was not,
promulgated in compli- ance with notice and comment rulemaking
procedures. Peti- tioners say that if they are wrong about this, if
the Guidance  represents a valid interpretation of the periodic
monitoring  rule in s 70.6(a)(3)(i)(B), then the rule itself is
invalid. Con- gress did not authorize EPA to require States, in
issuing Title  V permits, to make revisions to monitoring requirements


The case is presented to us in pure abstraction. Neither  side cites
any specific federal or State emission standard.  Although petitioners
complain that State officials will revise  federal standards
promulgated before November 1990, peti- tioners' briefs identify no
specific federal standard potentially  subject to revision. Which, if
any, federal standards are  susceptible to State revision in a permit
for lack of periodic  monitoring is thus something about which we can
only guess.  The same is true regarding State emission standards.




__________

n 19 Petitioners also claim that the Guidance revised EPA's "Com-
pliance Assurance Monitoring" rule, sustained in Natural Resources 
Defense Council, Inc. v. EPA, 194 F.3d 130 (D.C. Cir. 1999), an 
argument we find unnecessary to consider.


Perhaps petitioners should not be faulted. They disagree  with EPA's
general principle, with the agency's position that  it can give State
permit officials the authority to substitute  new monitoring
requirements in place of existing State or  federal emission standards
already containing some sort of  monitoring requirements. The validity
of that general princi- ple does not turn on the specifics of any
particular emission  standard, although its application does. Besides,
EPA is  currently developing even more detail in far more extensive 
"guidance" using concrete examples of what would, and would  not,
constitute "periodic monitoring" in EPA's opinion. See 
Draft--Periodic Monitoring Technical Reference Document  (Apr. 30,


It is well-established that an agency may not escape the  notice and
comment requirements (here, of 42 U.S.C. s 7607  (d)) by labeling a
major substantive legal addition to a rule a  mere interpretation. See
Paralyzed Veterans v. D.C. Arena  L.P., 117 F.3d 579, 588 (D.C. Cir.
1997); American Mining  Congress v. MSHA, 995 F.2d 1106, 1109-10 (D.C.
Cir. 1993).  "We must still look to whether the interpretation itself
carries  the force and effect of law, ... or rather whether it spells
out  a duty fairly encompassed within the regulation that the 
interpretation purports to construe." (citations and internal 
quotations omitted). See Paralyzed Veterans, 117 F.3d at  588. With
that in mind, we will deal first with petitioners'  claim that the
Guidance significantly expanded the scope of  the periodic monitoring
rule. Section 70.6(a)(3)(i)(B) tells us  that "periodic monitoring"
must be made part of the permit  when the applicable State or federal
standard does not pro- vide for "periodic testing or instrumental or
noninstrumental  monitoring."20 If "periodic" has its usual meaning,21




__________

n 20 EPA identified the source of its authority for s 70.6(a)(3) as 42 
U.S.C. s 7661c(b). This provides that EPA "may by rule" set forth 
methods and procedures "for monitoring and analysis of pollutants 
regulated under this chapter, but continuous emissions monitoring 
need not be required if alternative methods are available that 
provide sufficiently reliable and timely information for determining 


21 Although EPA defined many terms in its regulations governing 
permits, 40 C.F.R. s 70.2, it provided no definition of "periodic" or 
of "monitoring."


signifies that any State or federal standard requiring testing  from
time to time--that is yearly, monthly, weekly, daily,  hourly--would
be satisfactory. The supplementing authority  in s 70.6(a)(3)(i)(B)
therefore would not be triggered; in- stead, the emission standard
would simply be incorporated in  the permit, as EPA acknowledged in
the rule's preamble, see  supra note 8. On the other hand, if the
State or federal  standard contained merely a one-time startup test,
specified  no frequency for monitoring or provided no compliance meth-
od at all, s 70.6(a)(3)(i)(B) would require the State authorities  to
specify that some testing be performed at regular intervals  to give
assurance that the company is complying with emis- sion limitations.


So far, our parsing of the language of s 70.6(a)(3)(i)(B)  corresponds
with petitioners' view that the rule serves only a  gap-filling
function. If this is what the rule means, there is  no doubt that it
is much narrower than the Guidance issued in  1998. There, EPA
officials stated that regardless whether an  emission standard
contained a "periodic testing" or monitor- ing requirement, additional
monitoring "may be necessary" if  the monitoring in the standard "does
not provide the neces- sary assurance of compliance."22 E.g., Guidance
at 7-8. Pe- titioners describe that aspect of the Guidance this way:
"The  Guidance unequivocally directs state permitting authorities,  as
a minimum element of continued EPA program approval,  to conduct
wide-ranging sufficiency reviews and upgrade  monitoring in nearly all
individual permits or permit applica- tions, even where the underlying
applicable requirement in- corporates 'periodic testing or




__________

n 22 By measuring the adequacy of monitoring in this manner,  EPA's
position introduces circularity. The Guidance instructs per- mitting
authorities that monitoring is sufficient if it provides "a 
reasonable assurance of compliance with requirements applicable to 
the source." Guidance at 7. But some of the applicable require- ments
are themselves methods for testing a source's compliance  with other
standards. For instance, in the case of a requirement to  conduct an
annual stack test, EPA's methodology suggests that  performance of the
one-time test would be sufficient as it provides  "a reasonable
assurance of compliance" with the applicable require- ment. The
problem is this gives permitting authorities no assis- tance in
evaluating the proper frequency of such tests.


tal monitoring' in facial compliance with s 70.6(a)(3)(i)(B)."  Reply
Brief of Petitioners at 13.


EPA's view of the scope of the Guidance is about the same  as
petitioners'. But the agency thinks statements in the  preamble to its
1992 rule and its responses to comments in  the final rulemaking
alerted interested onlookers to its cur- rent position and show that
the Guidance issued in 1998 is no  broader than the rule itself. EPA's
strongest point is the  following statement made in 1992: "To the
extent commenta- tors assert that Title V does not authorize EPA to
require  monitoring beyond that provided for in the applicable
require- ment, EPA disagrees with the commenters." EPA Response  to
Comments (hereinafter "RTC") at 6-3. On the face of it,  this
assertion of statutory authority may have reflected  EPA's
claim--which no one now disputes--that if an "applica- ble
requirement" contained a one-time stack test, the federal  agency
could insist that the State authority insert in the  permit a
requirement that the test be performed at regular  intervals. If that
is all the EPA statement signified, it would  be entirely consistent


In its response to comments and in the preamble to the  Title V
regulations, EPA promised that if there is "any  federally promulgated
requirement with insufficient monitor- ing, EPA will issue a
rulemaking to revise such requirement."  57 Fed. Reg. 32,278 (1992);
RTC at 6-4.24 The Guidance, of  course, charts a very different
course. Now, it is initially up  to the States to identify federal
standards with deficient  


__________

n 23 According to EPA's response to comments:


Examples of situations where Section 70.6(a)(3)(i)(B) would  apply
include a SIP provision which contains a reference test  method but no
testing obligation, or a NSPS which requires  only a one time stack
test on startup. Any Federal standards  promulgated pursuant to the
Act amendments of 1990 are  presumed to contain sufficient monitoring
and, therefore, only  Section 70.6(a)(3)(i)(A) applies. RTC at 6-4. 24
Later in its response to comments, EPA repeated this promise:  "...
EPA will revise federal regulations that need additional speci-
fication of test methods, including specification of frequency and 
degree of testing." RTC at 6-5.


monitoring, doubtless with EPA's input, formal or informal.  And it is
the State and local agencies that must alter the  standards by
requiring permittees--such as petitioners--to  comply with more
stringent monitoring requirements. Need- less to say, EPA's
approach--delegating to State officials the  authority to alter duly
promulgated federal standards--raises  serious issues, not the least
of which is whether EPA possess- es the authority it now purports to
delegate. One would  suppose, and EPA did in 1992, that if federal
regulations  proved inadequate for one reason or another, EPA would 
have to conduct a rulemaking to amend them. See Clean Air 
Implementation Project v. EPA, 150 F.3d 1200, 1203-04 (D.C.  Cir.


EPA thinks two other statements in its response to com- ments alerted
everyone that its new rule would set in motion  an across-the-board
review of the existing monitoring require- ments contained in federal
and State emission standards.  The first of these statements is: "In
many cases, the monitor- ing requirements in the underlying regulation
will suffice for  assessing compliance." RTC at 6-3. EPA treats the
"in  many cases" as a qualification. What does this tell the  careful
reader? Only that sometimes the State or federal  emission standard
will need to be supplemented. But the  critical question is when--when
the monitoring in the stan- dard consists only of a one-time test? or
when the yearly or  monthly or weekly or daily testing specified in
the standard is  not enough, as determined by State authorities or EPA
 during the permit process?


The second statement is this:


The EPA reiterates that permits must be enforceable,  and must include
periodic monitoring, which might in- volve the use of, or be based on,
appropriate reference  test methods.... Where EPA has not provided
ade- quate guidance in regard to source testing or monitoring, 
permitting authorities are allowed to establish additional 
requirements, including requirements concerning the de- gree and
frequency of source testing on a case-by-case  basis, as necessary to
assure compliance with Part 70  [Title V] permit terms or conditions.


case may such frequency be less stringent than any  frequency required
by an underlying applicable require- ment.


Id. at 6-5. If "periodic monitoring" means testing from time  to time,
the first sentence in this passage hardly advances  EPA's current
position. And the second sentence seems set  against it. Only when
"EPA has not provided adequate  guidance in regard to source testing
or monitoring," may  State authorities provide additional monitoring.
So what is  "adequate guidance"? Once again the only concrete example 
EPA gave in 1992 was a one-time stack test, which rather  makes
petitioners' point.


The short of the matter is that the regulatory history EPA  offers
fails to demonstrate that s 70.6(a)(3)(i)(B) initially had  the broad
scope the Guidance now ascribes to it. Nothing on  the face of the
regulation or in EPA's commentary at the time  said anything about
giving State authorities a roving commis- sion to pore over existing
State and federal standards, to  decide which are deficient, and to
use the permit system to  amend, supplement, alter or expand the
extent and frequency  of testing already provided. In fact, EPA's
promise in the  1992 rulemaking--that if federal standards were found
to be  inadequate in terms of monitoring it would open rulemaking 
proceedings--is flatly against EPA's current position. (EPA  makes no
attempt to square this promise with the argument  it makes today.)


Furthermore, we attach significance to EPA's recognition,  in its 1992
permit regulations, that "Title V does not impose  substantive new
requirements," 40 C.F.R. s 70.1(b). Test  methods and the frequency of
testing for compliance with  emission limitations are surely
"substantive" requirements;  they impose duties and obligations on
those who are regulat- ed. Federal testing requirements contained in
emissions  standards are promulgated after notice and comment rule-
making. Testing requirements in emission standards in State  standards
are presumably adopted by the State's legislature  or administrative
agency, and approved by EPA as part of  the State's implementation
plan. We have recognized before  that changing the method of measuring
compliance with an  emission limitation can affect the stringency of


itself. Portland Cement Ass'n v. Ruckelshaus, 486 F.2d 375,  396-97
(D.C. Cir. 1973), discussed in Clean Air Implementa- tion Project v.
EPA, 150 F.3d at 1203. In addition, monitor- ing imposes costs.
Petitioners represent that a single stack  test can "cost tens of
thousands of dollars, and take a day or  more to complete," which is
why "stack testing is limited to  once or twice a year (at most)."
Brief of Petitioners at 22  n.75. If a State agency, acting under
EPA's direction in the  Guidance, devised a permit condition
increasing a company's  stack test obligation (as set forth in a State
or federal  standard) from once a year to once a month, no one could 
seriously maintain that this was something other than a  substantive


There is still another problem with EPA's position. Al- though its
Guidance goes to great lengths to explain what is  meant by the words
"periodic monitoring," it almost com- pletely neglects a critical
first step. On the face of  s 70.6(a)(3)(i)(B), "periodic monitoring"
is required if and only  if "the applicable requirement does not
require periodic test- ing or instrumental or noninstrumental
monitoring (which  may consist of record-keeping designed to serve as
monitor- ing)." While the Guidance is quick to say that all Title V 
permits must contain "periodic monitoring," it never explains  what
constitutes "periodic testing" or what constitutes "in- strumental or
noninstrumental monitoring." Instead,  throughout the Guidance, EPA
either yokes these three items  together, or treats the terms as
synonymous, without saying  why. Yet if "periodic testing" and
"instrumental or nonin- strumental monitoring" mean the same thing as
"periodic  monitoring," there is no accounting for why s
70.6(a)(3)(i)(B)  was written as it was. The regulation could simply
have said  "periodic monitoring" is required for all permits,




__________

n 25 The Guidance, at p. 8, provides a six-point bullet point list for 
permit-writers, making clear that EPA expects them to engage in  an
intricate regulatory trade off (often on a unit-by-unit basis), 
assessing the costs and benefits of available technologies for the 
particular pollutant. This six-part list has mutated into a complex 
flow chart in the Draft Periodic Monitoring Technical Reference 
Document, and is reprinted as an Addendum to this opinion.


26 EPA argues that our opinion in Natural Resources Defense  Council,
Inc. v. EPA, 194 F.3d 130, 135-36 (D.C. Cir. 1999), reflects 


In sum, we are convinced that elements of the Guidance-- those elements
petitioners challenge--significantly broadened  the 1992 rule. The
more expansive reading of the rule,  unveiled in the Guidance, cannot
stand. In directing State  permitting authorities to conduct
wide-ranging sufficiency  reviews and to enhance the monitoring
required in individual  permits beyond that contained in State or
federal emission  standards even when those standards demand some sort
of  periodic testing, EPA has in effect amended s 70.6(a)(3)(i)(B). 
This it cannot legally do without complying with the rulemak- ing
procedures required by 42 U.S.C. s 7607(d).27 See Alas-




__________

n an understanding of s 70.6(a)(3) "nearly identical" to that contained
 in the Guidance. Supplemental Brief of Respondent at 4. The  opinion
stated:


[T]he 1990 Clean Air Act Amendments did not mandate that  EPA fit all
enhanced monitoring under one rule and EPA has  reasonably illustrated
how its enhanced monitoring program,  when considered in its entirety,
complies with s 114(a)(3).  Specifically, EPA demonstrated that many
of the major station- ary sources exempt from CAM are subject to other
specific  rules, and if they are not, they are subject to the two
residual  rules: (1) "[The permit shall contain] periodic monitoring
suffi- cient to yield reliable data ... that are representative of the
 source's compliance with the permit...." 40 C.F.R.  s
70.6(a)(3)(i)(B); (2) "All part 70 permits shall contain the 
following elements with respect to compliance: (1) Consistent  with
paragraph (a)(3) of this section, compliance certification,  testing,
[and] monitoring ... requirements sufficient to assure  compliance
with the terms and conditions of the permit." Id.  s 70.6(c)(1).


Id. The bracketed portion of the quotation reads out of subsection  (B)
the conditions that "periodic monitoring" is required only when  "the
applicable requirement does not require periodic testing or 
instrumental or noninstrumental monitoring (which may consist of 
record-keeping designed to serve as monitoring)." When that  clause is
reinserted, it becomes clear that the quotation does not  speak to the
situation of permits which already provide for periodic  testing,
addressed in 40 C.F.R. s 70.6(a)(3)(i)(A).


27 Unless EPA certifies that the amendments to the Title V rule  would
not "have a significant economic impact on a substantial 


ka Professional Hunters Ass'n v. FAA, 177 F.3d 1030, 1034  (D.C. Cir.
1999); Caruso v. Blockbuster-Sony Music Enter- tainment Centre, 174
F.3d 166, 176-78 (3d Cir. 1999); Para- lyzed Veterans, 117 F.3d at
585-86.


For the reasons stated, we find setting aside EPA's Guid- ance to be
the appropriate remedy. Though petitioners  challenge only portions of
the Guidance, partial affirmance is  not an option when, as
here,"there is 'substantial doubt' that  the agency would have adopted
the severed portion on its  own." Davis County Solid Waste Management
v. EPA, 108  F.3d 1454, 1458 (D.C. Cir. 1997) (quoting North Carolina
v.  FERC, 730 F.2d 790, 795-96 (D.C. Cir. 1984)). In view of the 
intertwined nature of the challenged and unchallenged por- tions of
the Guidance, the Guidance must be set aside in its  entirety. See 42
U.S.C. s 7607. State permitting authorities  therefore may not, on the
basis of EPA's Guidance or 40  C.F.R. s 70.6(a)(3)(i)(B), require in
permits that the regulated  source conduct more frequent monitoring of
its emissions  than that provided in the applicable State or federal
standard,  unless that standard requires no periodic testing,
specifies no  frequency, or requires only a one-time test.


So ordered.




__________

n number of small entities," 5 U.S.C. s 605(b), it must also comply 
with the various procedural requirements of the Small Business 
Regulatory Enforcement Fairness Act, 5 U.S.C. ss 601-612.


[Addendum not available electronically]