Wisconsin Electric Power Company v. William K. Reilly, Administrator and United States Environmental Protection Agency

The Petitioner, Wisconsin Electric Power Company (“WEPCO”), challenges two final determinations issued by the Environmental Protection Agency (the “EPA”). In these determinations, the EPA concluded that WEPCO’s proposed renovations to its Port Washington power plant would subject the plant to certain pollution control provisions of the Clean Air Act, as amended, 42 U.S.C. §§ 7401 et seq. (1982). We affirm in part, vacate in part and remand to the EPA.

I. The Underlying Dispute

A. Relevant Provisions of the Clean Air Act

Some discussion of the Clean Air Act is required before turning to the merits of this case. In 1970, Congress enacted the Clean Air Act Amendments, Pub.L. No. 91-604, 84 Stat. 1676, to establish minimum air quality standards that would regulate the emission of certain pollutants into the atmosphere. To this end, Congress instructed the EPA to develop National Ambient Air Quality Standards (“NAAQS”) that would specify the maximum permissible concentration of air pollutants in different areas across the country.

In section 111 of the 1970 Amendments, Congress required the EPA to promulgate New Source Performance Standards (“NSPS”) in order to regulate the emission of air pollutants from new sources. These standards addressed hourly rates of emission and, in addition to new sources, applied to modifications of existing facilities that created new or increased pollution. Indeed, section 111(a)(2) of the Act stated that NSPS would apply to

any stationary source, the construction or modification of which is commenced after the publication of regulations (or, if earlier, proposed regulations) prescribing a standard of performance under this section which will be applicable to such source.

42 U.S.C. § 7411(a)(2) (emphasis supplied). Congress then defined “modification” as

any physical change in, or change in the method of operation of, a stationary source which increases the amount of any air pollutant emitted by such source or which results in the emission of any air pollutant not previously emitted.

42 U.S.C. § 7411(a)(4) (emphasis supplied).

Subsequently, faced with only varying degrees of success in controlling pollution in different parts of the country, Congress enacted the Clean Air Act Amendments of 1977, Pub.L. No. 95-95, 91 Stat. 685 (codified at 42 U.S.C. §§ 7401-7642 (1982)). Congress revised the NSPS so that regulated sources of pollution would have to use “the best system of continuous emission reduction which (taking into consideration the costs of achieving such emission reduction, and any nonair quality health and environmental impact and energy requirements) the Administrator determines has been adequately demonstrated....” 42 U.S.C. § 7411(a)(1)(C). In addition, Congress added a program for the Prevention of Significant Deterioration (“PSD”), concerned with increases in total annual emissions, to ensure that operators of regulated sources in relatively unpolluted areas would not allow a decline of air quality to the minimum level permitted by NAAQS. Air quality is preserved in this program by *905 requiring sources to limit their emissions to a "baseline rate”; regulated owners or operators in areas that have attained NAAQS must obtain a permit before constructing or modifying facilities. 42 U.S.C. § 7475(a)(1). Congress also essentially adopted its NSPS definition of “modification” for the PSD program. 42 U.S.C. § 7479(2)(C).

From this statutory framework, the EPA promulgated regulations for both the NSPS and PSD programs. In this case, its regulations concerning modifications are central. The EPA defines “modification” in substantially the same terms used by Congress:

[A]ny physical or operational change to an existing facility which results in an increase in the emission rate to the atmosphere of any pollutant to which a standard applies shall be considered a modification within the meaning of section 111 [42 U.S.C. § 7411] of the Act.

40 C.F.R. § 60.14(a) (1988). To determine whether a physical change constitutes a modification for purposes of NSPS, the EPA must determine whether the change increases the facility’s hourly rate of emission. 40 C.F.R. § 60.14 (1988). For PSD purposes, current EPA regulations provide that an increase in the total amount of emissions activates the modification provisions of the regulations. 40 C.F.R. § 52.21(b)(3) (1988).

Even at first blush, the potential reach of these modification provisions is apparent: the most trivial activities — the replacement of leaky pipes, for example — may trigger the modification provisions if the change results in an increase in the emissions of a facility. As a result, the EPA promulgated specific exceptions to the modification provisions:

The following shall not, by themselves, be considered modifications under this part:

(1)Maintenance, repair, and replacement which the Administrator determines to be routine for a source category

(2) An increase in production rate of an existing facility, if that increase can be accomplished without a capital expenditure on that facility.

(3) An increase in the hours of operation ....

40 C.F.R. § 60.14(e) (1988) (NSPS program); see 40 C.F.R. § 52.21(b)(2)(iii) (1988) (PSD program). These regulations (and the statutes from which they derive) are the focal point of this case.

B. WEPCO’s Proposed Life-Extension Project

WEPCO’s Port Washington electric power plant is located on Lake Michigan north of Milwaukee, Wisconsin. The plant consists of five coal-fired steam generating units that were placed in operation between 1935 and 1950. Each generating unit has a design capacity of 80 megawatts, but the recent performance of some of the units has declined due to age-related deterioration of the physical plant.

WEPCO and its consultant, Bechtel Eastern Power Corporation, conducted a Plant Availability Study in 1983 to examine and assess the condition of the power plant. As a result of the Study, WEPCO concluded “that extensive renovation of the five units and the plant common facilities is needed if operation of the plant is to be continued.” Letter from Thomas J. Cassi-dy, Executive Vice President of WEPCO, to Jacqueline K. Reynolds, Secretary to the Public Service Commission of Wisconsin, at 2 (July 8, 1987) [Cassidy Letter] (emphasis supplied). The Study noted that the air heaters on the first four units had deteriorated severely, while the rear steam drums in units 2 through 5 had experienced serious cracking. 1 Air heater deterioration prevented units 1 and 4 from operating at full capacity, while the potential for steam drum blowout required a reduction in pressure (and output) in units 2 and 3. The possibility of catastrophic failure (steam *906 drum blowout) in unit 5 was so great that WEPCO shut down the unit completely.

As a result of this Study, WEPCO submitted a proposed replacement program (which it termed a “life extension” project) to the Wisconsin Public Service Commission for its approval, as required by state law. Wis.Stat. § 196.49 (1987). WEPCO explained in its proposal that “[rjenovation is necessary to allow the Port Washington units to operate beyond their currently planned retirement dates of 1992 (units 1 and 2) and 1999 (units 3, 4 and 5) ... [and that renovation would render the plant] capable of generating at its designed capability until year 2010.... ” Cassidy Letter at 1-2. Among the renovations required were repair and replacement of the turbine-generators, boilers, mechanical and electrical auxiliaries and the common plant support facilities. Id. at 1. After preliminary review of the program, the Public Service Commission consulted the Wisconsin Department of Natural Resources (which then consulted EPA Region V) to determine whether WEPCO needed to obtain a PSD permit before commencing the repair and replacement program. David Kee, the Director of EPA Region V’s Air and Radiation Division, then referred the matter to EPA Headquarters. See, e.g., 40 C.P.R. § 60.5 (1988) (discussing the EPA’s procedures regarding determinations of construction or modification).

EPA staff members conferred with WEPCO representatives between March and September 1988 to gain additional information regarding the proposed repair and replacement project. On September 9, 1988, EPA Acting Assistant Administrator Don R. Clay issued a memorandum in which he preliminarily concluded that the project would subject the plant to both NSPS and PSD requirements. Memorandum from Don R. Clay, Acting Assistant Administrator for Air and Radiation of the EPA, to David A. Kee, Director of Air and Radiation Division, Region V (Sept. 9, 1988) [Clay Memorandum]. The Clay Memorandum pointed out that the project would constitute a “physical change” resulting in an increase of production and emissions, which would therefore subject the plant to the relevant strictures of the Clean Air Act. Id. at 3-4. Further, the Clay Memorandum dismissed WEPCO’s contention that the program was routine and was therefore exempt from the requirements of NSPS and PSD. This conclusion was adopted in to to by EPA Administrator Lee M. Thomas. Letter from Lee M. Thomas, Administrator of the EPA, to John Boston, Vice President of WEPCO (Oct. 14, 1988) [Thomas Letter],

Following the Thomas Letter, WEPCO continued to conduct capacity tests on the units. Based upon these tests, Assistant Administrator Clay issued a “revised final determination” that generally affirmed the EPA’s earlier findings, but modified the baseline figures used by the EPA for units 2 and 3. Letter from Don R. Clay, Acting Assistant Administrator for Air and Radiation of the EPA, to John W. Boston, Vice President of WEPCO (Feb. 15, 1989) [Supplemental Determination],

Alleging that the EPA has misconstrued both the Clean Air Act and its own regulations, WEPCO appeals the EPA’s final determination. We have jurisdiction to hear this appeal pursuant to 42 U.S.C. § 7607(b) (1982).

II. Standard of Review

Courts have generally accorded substantial deference to the EPA’s interpretation of the Clean Air Act Amendments, reasoning that “considerable weight should be accorded to an executive department’s construction of a statutory scheme it is entrusted to administer....” Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 844, 104 S.Ct. 2778, 2782, 81 L.Ed.2d 694 (1984); see Union Elec. Co. v. EPA, 427 U.S. 246, 256, 96 S.Ct. 2518, 2525, 49 L.Ed.2d 474 (1976); Train v. Natural Resources Defense Council, Inc., 421 U.S. 60, 75, 87, 95 S.Ct. 1470, 1479, 1485, 43 L.Ed.2d 731 (1975); ASARCO Inc. v. EPA, 578 F.2d 319, 325 (D.C.Cir.1978). This deference with regard to the Clean Air Act follows logically from the highly technical provisions of the Amendments, Chevron, 467 U.S. at 848, 104 S.Ct. at 2784, and is consistent with the *907 Administrative Procedure Act, which provides that agency actions are to be set aside only if they are “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.” 5 U.S.C. § 706(2).

To be sure, this standard does not give the EPA unbridled discretion to construe the Clean Air Act Amendments free from judicial oversight. We must consider whether the EPA’s construction comports with its statutory mandate and Congress’s intent in enacting clean air legislation. But we cannot simply substitute our judgment for that of the EPA. Our role has been sharply defined and limited by the Supreme Court:

When a court reviews an agency’s construction of the statute which it administers, it is confronted with two questions. First, always, is the question whether Congress has directly spoken to the precise question at issue. If the intent of Congress is clear, that is the end of the matter; for the court, as well as the agency, must give effect to the unambiguously expressed intent of Congress. If, however, the court determines Congress has not directly addressed the precise question at issue, the court does not simply impose its own construction on the statute, as would be necessary in the absence of an administrative interpretation. Rather, if the statute is silent or ambiguous with respect to the specific issue, the question for the court is whether the agency’s answer is based on a permissible construction of the statute.

Chevron, 467 U.S. at 842-43, 104 S.Ct. at 2781-82 (footnotes omitted).

Further, we defer even more to an agency’s construction of its own regulations. Lyng v. Payne, 476 U.S. 926, 939, 106 S.Ct. 2333, 2341, 90 L.Ed.2d 921 (1986); see Wilkins v. Sullivan, 889 F.2d 135, 139 (7th Cir.1989); Homemakers North Shore, Inc. v. Bowen, 832 F.2d 408, 411 (7th Cir. 1987) (agency construction of its regulations usually upheld). An agency’s interpretation must be upheld “ ‘unless it is plainly erroneous or inconsistent with the regulation.’ ” Udall v. Tallman, 380 U.S. 1, 16-17, 85 S.Ct. 792, 801-802, 13 L.Ed.2d 616 (1965) (quoting, in part, Bowles v. Seminole Rock & Sand Co., 325 U.S. 410, 413-14, 65 S.Ct. 1215, 1217, 89 L.Ed. 1700 (1945)). The principle of deference has particular force where, as is the case here, the subject being regulated is technical and complex. Aluminum Co. of Am. v. Central Lincoln Peoples’ Util. Dist., 467 U.S. 380, 390, 104 S.Ct. 2472, 2479, 81 L.Ed.2d 301 (1984); Wilkins v. Sullivan, 889 F.2d at 140; see also Skidmore v. Swift & Co., 323 U.S. 134, 140, 65 S.Ct. 161, 164, 89 L.Ed. 124 (1944) (rulings of agency constitute bodies of experience and informed judgment).

III. Like-Kind Replacement and Modification under the Act

A. The Underlying Statutory Framework

With these principles in mind, we may address the merits. We must first consider whether WEPCO’s Port Washington replacement program constitutes a modification under the terms of the controlling statute, 42 U.S.C. section 7411(a)(4). Cf. Blue Chip Stamps v. Manor Drug Stores, 421 U.S. 723, 756, 95 S.Ct. 1917, 1935, 44 L.Ed.2d 539 (1975) (Powell, J., concurring) (“The starting point in every case involving construction of a statute is the language itself.”). Section 7411(a)(4) defines modification as “any physical change ... which increases the amount of any air pollutant emitted_” 42 U.S.C. § 7411(a)(4). Both parts of this definition — any physical change and an increase in emissions — must be satisfied before a replacement will be considered a “modification.”

1. Physical Change

Certainly, under the plain terms of the Act, WEPCO’s replacement program constitutes a “physical change.” WEPCO proposes to replace rear steam drums on units 2, 3, 4 and 5; each of these steam drums measures 60 feet in length, 50.5 inches in diameter and 5.25 inches in thickness. Clay Memorandum at 4. In addition, WEPCO plans to replace another ma *908 jor component, the air heaters, in units 1-4. To implement this four-year program, WEPCO will need to make the replacements by taking the units successively out of service for nine-month periods. Id. These steps clearly amount to a “physical change” in the Port Washington plant. See Butler, New Source Netting in Nonat-tainment Areas under the Clean Air Act, 11 Ecology L.Q. 343, 349-50 (1984) (“[T]he new source review requirements are triggered not only when an operator builds a new plant, but also whenever the operator installs or alters a piece of equipment in an existing plant and thereby increases emissions.”) (emphasis supplied).

WEPCO does not dispute that its steam drum and air heater replacements will result in an altered plant. But WEPCO does assert that Congress did not intend for simple equipment replacement to constitute a physical change for purposes of the Clean Air Act’s modification provisions:

The plain meaning of “modify” is “to change or alter” [Webster’s New World Dictionary] or “to make basic or fundamental changes in.” [Webster’s Ninth New Collegiate Dictionary] Reflecting the plain meaning of this term, Congress provided that a facility (1) must undergo a physical or operational “change” before it is evaluated under the modification provision.... Thus, under the plain meaning of the Act, a unit should not be deemed “modified” as a result of replacement of equipment with equipment similar to that replaced. As in the case of Port Washington, such like-kind replacement does not “change or alter” the design or nature of the facility. Rather, it merely allows the facility to operate again as it had before the specific equipment deteriorated.

Petitioner’s Brief at 32-33.

Chevron instructs us to rely more on congressional direction and on agency construction (pursuant to congressional delegation) than on glosses found in the dictionary. What WEPCO calls “plain” is anything but plain and takes the definition far beyond the words enacted by Congress. Chevron, 467 U.S. at 843-45, 104 S.Ct. at 2781-83; see generally, R. Anthony, Report to the Administrative Conference of the United States: Which Agency Interpretations Should Bind the Courts and the Public? (1989) (explaining Chevron approach). Thus, whether the replacement of air heaters and steam drums is a “basic or fundamental change” in the Port Washington plant is irrelevant for our purposes, given Congress’s directions on the subject: “The term ‘modification’ means any physical change — ” 42 U.S.C. § 7411(a)(4) (emphasis supplied). We follow Congress’s definition of “modification” — not Webster’s —when interpreting this term within the context of the Clean Air Act. Cf. Chevron, 467 U.S. at 861, 104 S.Ct. at 2790 (“[T]he meaning of a word must be ascertained in the. context of achieving particular objectives _”).

Nor can we find any support in the relevant case law for the narrow constructions of “modification” and “physical change” offered by WEPCO. The Supreme Court reported in Chevron that Senator Muskie, one of the principal supporters of the Clean Air Act, remarked: “A source ... is subject to all the nonattainment requirements as a modified source if it makes any physical change which increases the amount of any air pollutant_” 467 U.S. at 853, 104 S.Ct. at 2787 (quoting 123 Cong.Rec. 26847 (1977)) (emphasis supplied). And other courts considering the modification provisions of NSPS and PSD have assumed that “any physical change” means precisely that. See, e.g., National-Southwire Aluminum Co. v. EPA, 838 F.2d 835 (6th Cir.), cert. denied, - U.S.-, 109 S.Ct. 390, 102 L.Ed.2d 379 (1988) (turning off pollution control equipment constitutes “physical change” and modification); Alabama Power Co. v. Costle, 636 F.2d 323, 400 (D.C.Cir.1979) (“[T]he term ‘modification’ is nowhere limited to physical changes exceeding a certain magnitude.”); ASARCO Inc. v. EPA, 578 F.2d 319, 322 (D.C.Cir. 1978) (NSPS applies to any stationary source that is “physically or operationally changed in such a way that its emission of any air pollutant increases.”) (emphasis removed). Cf . United States v. Narragansett Improvement Co., 571 F.Supp. 688, *909 694-95 (D.R.I.1983) (replacement program not modification because, despite physical change, no increase in emissions).

Further, to adopt WEPCO’s definition of “physical change” would open vistas of indefinite immunity from the provisions of NSPS and PSD. Were we to hold that the replacement of major generating station systems — including steam drums and air heaters — does not constitute a physical change (and is therefore not a modification), the application of NSPS and PSD to important facilities might be postponed into the indefinite future. There is no reason to believe that such a result was intended by Congress. The Clean Air Act Amendments were enacted to “speed up, expand, and intensify the war against air pollution in the United States with a view to assuring that the air we breathe throughout the Nation is wholesome once again.” H.R. Rep. No. 91-1146, 91st Cong., 2d Sess. 1, 1, reprinted in 1970 U.S.Code Cong. & Admin.News 5356, 5356. In particular, the permit program established by the 1977 Amendments to the Clean Air Act represented a balance between “the economic interests in permitting capital improvements to continue and the environmental interest in improving air quality.” Chevron, 467 U.S. at 851, 104 S.Ct. at 2786. The House echoed this theme in its- Committee report: “[The compliance program is designed, in part,] to allow reasonable economic growth to continue in an area while making reasonable further progress to assure attainment of the [pollution-control] standards by a fixed date_” H.R.Rep. No. 294, 95th Cong., 1st Sess. 211, reprinted in 1977 U.S.Code Cong. & Admin.News 1077, 1290. A too restrictive interpretation of “modification” might upset the economic-environmental balance in unintended ways.

Consistent with its balanced approach, Congress chose not to subject existing plants to the requirements of NSPS and PSD. Members of the House recognized that “[b]uilding control technology into new plants at time of construction will plainly be less costly then [sic] requiring retrofit when pollution control ceilings are reached.” H.R.Rep. No. 294, 95th Cong., 1st Sess. 185, reprinted in 1977 U.S.Code Cong. & Admin.News at 1264. But Congress did not permanently exempt existing plants from these requirements; section 7411(a)(2) provides that existing plants that have been modified are subject to the Clean Air Act programs at issue here. As Judge Boggs, dissenting in National-Southwire, reasoned: “The purpose of the ‘modification’ rule is to ensure that pollution control measures are undertaken when they can be most effective, at the time of new or modified construction. See 116 Cong.Rec. 32,-918. (remarks of Sen. Cooper), reprinted in 1 Senate Committee on Public Works, A Legislative History of the Clean Air Act Amendments of 1970 (1974), at 260.” National-Southwire Aluminum Co. v. EPA, 838 F.2d 835, 843 (6th Cir.) (Boggs, J., dissenting), cert. denied, - U.S.-, 109 S.Ct. 390, 102 L.Ed.2d 379 (1988). Judge Boggs argued that the shutting down of pollution control equipment in an existing plant should not be considered a modification because it would not afford the utility an opportunity for “effective placement of new control technology.” Id. Here the record is silent on this point (although the point is important). How easy or difficult would be “the effective placement of new control technology” in these renovated units is not clear, but we do know that the project already contemplates replacement of steam drums, air heaters and other components; each unit would, therefore, in any event be shut down for nine months.

Our reading of the phrase “any physical change” is also consistent with another of the basic goals of the 1977 Amendments: technology-forcing. The legislative history suggests and courts have recognized that in passing the Clean Air Act Amendments, Congress intended to stimulate the advancement of pollution control technology. See, e.g., S.Rep. No. 91-1196, 91st Cong., 2d Sess. 17 (1970) (“Standards of performance should provide an incentive for industries to work toward constant improvement in techniques for preventing and controlling emissions from stationary sources.... ”); Duquesne Light Co. v. EPA, 698 F.2d 456, 475 (D.C.Cir.1983); *910 Alabama Power, 636 F.2d at 372; ASARCO, 578 F.2d at 327; United States v. SCM Corp., 667 F.Supp. 1110, 1126-27 (D.Md. 1987). The development of emissions control systems is not furthered if operators could, without exposure to the standards of the 1977 Amendments, increase production (and pollution) through the extensive replacement of deteriorated generating systems.

2. Increase in Emissions

The controversy involving WEPCO’s alleged increase in emissions primarily concerns the regulations, not the statute: WEPCO argues that the EPA’s regulatory method of measuring emissions is arbitrary and capricious. From a statutory standpoint, however, the modification provisions of the Clean Air Act Amendments are activated once a physical change is coupled with an “increase[ ] [in] the amount of any air pollutant emitted.’’ 42 U.S.C. § 7411(a)(4). See, e.g., United States v. Narragansett Improvement Co., 571 F.Supp. at 694. In the case before us, WEPCO does not dispute that its replacement program — intended to enable its deteriorated generators to operate at full capacity — will cause its emissions to increase from their current operating levels. The question for resolution, however, is whether the EPA properly construed its regulations by comparing actual emission rates with so-called “baseline” rates to determine the increase in emissions for NSPS and PSD purposes. We will discuss this subject later; but for purposes of the statutory requirement, we simply observe that the rejuvenated Port Washington plant will produce more emissions after the completion of the renovation project than the operating deteriorated plant produced shortly before the project was undertaken.

B. The EPA’s Regulations

Although we have determined that WEP-CO’s repair and replacement program satisfies the modification provisions of the Clean Air Act Amendments, this is not the end of our inquiry. WEPCO’s attack focuses primarily on EPA regulations, which in a number of respects are narrower than the statute. WEPCO argues that the EPA applied its regulations arbitrarily and capriciously to the Port Washington project.

1. Physical Change and the “Routine” Exception

EPA regulations define “modification” as “any physical or operational change to an existing facility which results in an increase in the emission rate to the atmosphere of any pollutant to which a standard applies.” 40 C.F.R. § 60.14(a) (1988). To a major degree, this definition parallels 42 U.S.C. section 7411(a)(2), and it is unnecessary to repeat the analysis already applied to the statute. See supra 111(A)(1). However, the EPA has, in addition, used its regulations to exempt a number of activities from the broader definition. The exemption that may be relevant here is accomplished by the following language:

The following shall not, by themselves, be considered modifications under this part:

(1) Maintenance, repair, and replacement which the Administrator determines to be routine for a source category....

40 C.F.R. § 60.14(e) (1988). See 40 C.F.R. § 52.21(b)(2)(iii). WEPCO relies on this language to argue that, even if its repair and replacement program amounts to a physical change, it was specifically exempted by the regulations.

Again, we accord substantial deference to an agency’s interpretation of its own regulations, especially with respect to technical and complex matters. Lyng v. Payne, 476 U.S. 926, 939, 106 S.Ct. 2333, 2341, 90 L.Ed.2d 921 (1986); Aluminum Co. of Am. v. Central Lincoln Peoples’ Util. Dist., 467 U.S. 380, 390, 104 S.Ct. 2472, 2479, 81 L.Ed.2d 301 (1984). In this connection, to determine whether proposed work at a facility is routine, “EPA makes a case-by-case determination by weighing the nature, extent, purpose, frequency, and cost of the work, as well as other relevant factors, to arrive at a common-sense finding.” Clay Memorandum at 3. The EPA considered all these factors in determining that the Port Washington project was not *911 routine; first, the EPA observed that the nature and extent of the project was substantial: WEPCO proposed to replace sixty-foot steam drums (in units 2, 3, 4 and 5) and air heaters (in units 1, 2, 3 and 4) during successive nine-month outages at each unit. Id. at 4. Certainly, the magnitude of the project (as well as the downtime required to implement it) suggests that it is more than routine.

Further, the EPA points to WEPCO’s admission in its application that “[work items] falling into the category of repetitive maintenance that are normally performed during scheduled equipment outages ... are not included in this application.” Cassidy Letter at 1 (emphasis supplied). This admission suggests that WEP-CO at first blush did not regard the repair and replacement project as ordinary or routine.

In addition, the EPA noted that far from being routine, the Port Washington project apparently was unprecedented: “WEPCO did not identify, and EPA did not find, even a single instance of renovation work at any electric utility generating station that approached the Port Washington life extension project in nature, scope or extent.” Respondent’s Brief at 44; see Clay Memorandum at 4 (“[T]his is a highly unusual, if not unprecedented, and costly project.”). We surmise, although the record is silent, that the “case of first impression” character of the project may reflect historical practice in the electric utility industry of replacing old plants (at the expiration of their useful lives) with new plants, employing improved technologies and achieving improved efficiencies. This was the typical practice, rather than the mere extension of life of existing plants through massive like-kind replacements. Cf Clay Memorandum at 4 (“[The Port Washington project’s] purpose is to completely rehabilitate aging power generating units whose capacity has significantly deteriorated over a period of years, thereby restoring their original capacity and substantially extending the period of their utilization as an alternative to retiring them as they approach the end of their useful physical and economic life.”).

WEPCO asks us to overlook the factors outlined in the Clay Memorandum and reverse the EPA primarily on the basis of earlier EPA decisions characterizing certain replacement programs as routine; WEPCO argues that the nature and extent of these "routine" projects parallel those of its Port Washington project. For example, WEPCO presented the EPA with a list of forty air heaters in other plants that had been replaced without triggering NSPS or PSD provisions. Letter from Mark P. Steinberg, Superintendent-Air Quality of WEPCO, to Dale Ziege, Wisconsin Department of Natural Resources (Jan. 11, 1989). But as WEPCO has acknowledged, the plate-type air heaters at issue in the Port Washington project must be replaced in whole; in contrast, the forty units where replacement was apparently considered routine contained a Ljungstrom basket or tubular type heater. The Ljungstrom basket type, at least, permits the replacement of the heat transfer surface without requiring the removal of the entire unit. Supplemental Determination at 6-7. Obviously, the precise nature of the physical change is a material factor in determining whether the change is routine, and for this purpose it is important that the subject of past EPA practice be closely comparable with the change under consideration here. See Thomas Letter at 3 ("PSD and NSPS applicability determinations are made on a case-by-case basis."). WEPCO has not demonstrated that the EPA's conclusion that the forty other air heater replacements were dissimilar is arbitrary and capricious. 2

The purpose, frequency and cost of the work also support the EPA’s decision here.

*912 WEPCO admits that the plans for extensive renovation “represent a life extension of the units from their planned retirement dates,” Cassidy Letter at 2-3 (emphasis supplied), and it recognizes that “the renovation work items included in this application are those that would normally occur only once or twice during a unit’s expected life cycle.” Id. at 1. Indeed, WEPCO reported that it had never previously replaced a steam drum or “header” of comparable size at any of its coal-fired electrical generating facilities. Clay Memorandum at 5. Further, the Port Washington renovation project will cost at least $70.5 million. Letter from John W. Boston, Senior Vice President of WEPCO, to Gary D. McCutchen, Chief New Source Review Section of the EPA, at 4 (May 19, 1988). These factors suggest that the project is not routine.

WEPCO urges that the EPA’s conclusions are supported by neither the evidence nor the provisions of the Clean Air Act Amendments. WEPCO reasons that because any replacement project will presumably extend the life of a facility, the EPA’s reliance on life extension as a factor in denying the “routine” nature of a project is overbroad. Petitioners’ Brief at 44. Although perhaps persuasive on its face, WEPCO’s analysis is ultimately wide of the mark. While it is certainly true that the repair of deteriorated equipment will contribute to the useful life of any facility, it does not necessarily follow that the repairs in question would extend the life expectancy of the facility. The need for some repairs along the line is a given in determining in the first instance the life expectancy of a plant. WEPCO cannot seriously argue that its units’ planned retirement dates of 1992 (units 1 and 2) and 1999 (units 3, 4 and 5) did not take into account at least minor equipment repairs and replacements. 3 And WEPCO concedes that the Port Washington program will extend the life expectancy of the plant until 2010. The EPA concluded that the proposed project will increase the life expectancy of the Port Washington facility, and this conclusion was a factor in the finding that the work was not routine. These determinations were not arbitrary and capricious.

Still, WEPCO asserts that the cost, magnitude and nature of its Port Washington project are irrelevant for purposes of the “routine” exception to NSPS and PSD. WEPCO contends that the EPA has already addressed these factors — including the perpetuation of existing sources— through its so-called “reconstruction” rule:

(a) An existing facility, upon reconstruc