Michigan v. EPA

1(SlipOpinion) OCTOBER TERM, 2014

Syllabus

NOTE: Where it is feasible,asyllabus (headnote)willbereleased,as isbeing done in connectionwith this case, at the time the opinion is issued.The syllabus constitutes no part of the opinion of the Court but has beenprepared by the Reporter of Decisions for the convenience of the reader.SeeUnited Statesv.Detroit Timber & Lumber Co.,200U.S.321,337.

SUPREME COURT OF THE UNITED STATES Syllabus

MICHIGANETAL.v.ENVIRONMENTALPROTECTIONAGENCYETAL.

CERTIORARITOTHEUNITEDSTATESCOURTOFAPPEALSFORTHEDISTRICTOFCOLUMBIACIRCUIT*

No.1446. ArguedMarch25,2015DecidedJune29,2015TheCleanAirActdirectstheEnvironmentalProtectionAgencytoreg-ulate emissions of hazardous air pollutants from certain stationarysources (such as refineries and factories). 42 U.S.C. 7412. TheAgencymayregulatepowerplantsunderthisprogramonlyifitcon-cludesthat regulation isappropriateandnecessaryafterstudyinghazards to public health posed by power-plant emissions.7412(n)(1)(A). Here,EPA found power-plant regulation appropri-atebecausetheplantsemissionsposeriskstopublichealthandtheenvironment and because controls capable of reducing these emis-sionswereavailable.Itfoundregulationnecessarybecausetheim-positionofotherCleanAirActrequirementsdidnoteliminatethoserisks.TheAgencyrefusedtoconsidercostwhenmakingitsdecision.Itestimated,however,thatthecostofitsregulationstopowerplantswould be $9.6 billion a year, but the quantifiable benefits from theresultingreductioninhazardous-air-pollutantemissionswouldbe$4to$6millionayear.Petitioners(including23States)soughtreviewofEPAsruleintheD.C.Circuit,whichupheldtheAgencysrefusaltoconsidercostsinitsdecisiontoregulate.

Held:EPA interpreted 7412(n)(1)(A) unreasonably when it deemedcostirrelevanttothedecisiontoregulatepowerplants.Pp.515.(a)Agencyactionisunlawfulifitdoesnotrestonaconsideration

*TogetherwithNo.1447,Utility Air Regulatory Groupv.Environ-

mental Protection Agency et al.,andNo.1449,National Mining Assn.v.Environmental Protection Agency et al.,alsooncertioraritothesamecourt.

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Syllabus

oftherelevantfactors.Motor Vehicle Mfrs. Assn. of United States, Inc.v.State Farm Mut. Automobile Ins. Co.,463U.S.29,43.Evenunder the deferential standard ofChevron U. S. A. Inc. v.Natural Resources Defense Council, Inc.,467U.S.837,whichdirectscourtstoacceptanagencysreasonableresolutionofanambiguityinastatutethat the agency administers, id., at 842843, EPA strayedwell be-yondtheboundsofreasonableinterpretationinconcludingthatcostis not a factor relevant to the appropriateness of regulating powerplants.Pp.56.(b)Appropriateandnecessaryisacapaciousphrase.Readnatu-

rally against the backdrop of established administrative law, thisphraseplainlyencompassescost.Itisnotrational,nevermindap-propriate,toimposebillionsofdollarsineconomiccostsinreturnforafewdollarsinhealthorenvironmentalbenefits.Statutorycontextsupports this reading. Section7412(n)(1) required theEPA to con-ductthreestudies,includingonethatreflectsconcernaboutcost,see7412(n)(1)(B);andtheAgencyagreesthatthetermappropriateandnecessarymustbeinterpretedinlightofallthreestudies.Pp.69.(c)EPAs counterarguments are unpersuasive. That other Clean

Air Act provisions expressly mention cost only shows that7412(n)(1)(A)s broad reference to appropriateness encompassesmultiple relevantfactors,oneofwhichiscost.Similarly,themodestprinciple ofWhitman v.American Trucking Assns., Inc., 531 U.S.457when the CleanAir Act expressly directs EPA to regulate onthebasisofadiscretefactorthatdoesnotincludecost,theActshouldnotbereadasimplicitlyallowingconsiderationofcostanywayhasnobearingonthiscase. Furthermore, thepossibilityofconsideringcost at a later stage, when deciding how much to regulate powerplants,doesnotestablishitsirrelevanceatthisstage. AndalthoughtheCleanAirActmakescostirrelevanttotheinitialdecisiontoregu-late sources other than power plants, the whole point of having aseparateprovisionforpowerplantswastotreatpowerplantsdiffer-ently. Pp.912.(d)EPAmustconsidercostincludingcostofcompliancebefore

decidingwhetherregulationisappropriateandnecessary.ItwillbeuptotheAgencytodecide(asalways,withinthelimitsofreasonableinterpretation)howtoaccountforcost.Pp.1215.

748F.3d1222,reversedandremanded.

SCALIA, J., delivered the opinion of the Court, in which ROBERTS,C.J.,andKENNEDY,THOMAS,andALITO,JJ.,joined.THOMAS,J.,filedaconcurring opinion. KAGAN, J., filed a dissenting opinion, in whichGINSBURG,BREYER,andSOTOMAYOR,JJ.,joined.

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NOTICE: Thisopinionissubjecttoformalrevisionbeforepublicationinthepreliminaryprint of theUnitedStatesReports. Readers are requested tonotifytheReporterofDecisions,SupremeCourtoftheUnitedStates,Wash-ington, D.C. 20543, of any typographical or other formal errors, in orderthatcorrectionsmaybemadebeforethepreliminaryprintgoestopress.

SUPREME COURT OF THE UNITED STATES Nos.1446,1447,and1449

MICHIGAN,ETAL.,PETITIONERS1446 v.

ENVIRONMENTALPROTECTIONAGENCY,ETAL.

UTILITYAIRREGULATORYGROUP,PETITIONER1447 v.


NATIONALMININGASSOCIATION,PETITIONER1449 v.


ONWRITSOFCERTIORARITOTHEUNITEDSTATESCOURTOFAPPEALSFORTHEDISTRICTOFCOLUMBIACIRCUIT

[June29,2015]

JUSTICESCALIAdeliveredtheopinionoftheCourt.TheCleanAirActdirectstheEnvironmentalProtection

Agency to regulate emissions of hazardousair pollutantsfrompower plants if theAgency finds regulation appro-priate and necessary. We must decide whether it wasreasonableforEPAtorefusetoconsidercostwhenmakingthisfinding.

IThe Clean Air Act establishes a series of regulatory

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programs to control air pollution from stationary sources(suchasrefineriesandfactories)andmovingsources(suchas cars and airplanes). 69 Stat. 322, as amended, 42U.S.C. 74017671q. One of these is the NationalEmissions Standards for Hazardous Air Pollutants Pro-gramthe hazardous-air-pollutants program, for short.Established in its current form by the Clean Air ActAmendmentsof1990,104Stat.2531,thisprogramtargetsfor regulation stationary-source emissions of more than180specifiedhazardousairpollutants.7412(b).For stationary sources in general, the applicability of

the programdepends in part on howmuch pollution thesourceemits. Asourcethatemitsmorethan10tonsofasinglepollutantormorethan25tonsofacombinationofpollutantsperyear is calledamajorsource. 7412(a)(1).EPA is required to regulate allmajor sources under theprogram. 7412(c)(1)(2). A source whose emissions donot cross the just-mentioned thresholds is called anareasource. 7412(a)(2). TheAgencyisrequiredtoregulateanareasourceunder theprogram if it presentsa threatofadverse effects to human health or the environment ...warrantingregulation.7412(c)(3).Atthesametime,Congressestablishedauniqueproce-

dure to determine the applicability of the program tofossil-fuel-fired power plants. The Act refers to theseplants as electric utility steam generating units, but wewillsimplycallthempowerplants.Quiteapartfromthehazardous-air-pollutants program, the Clean Air ActAmendments of 1990 subjected power plants to variousregulatory requirements. The parties agree that theserequirementswereexpectedtohavethecollateraleffectofreducing power plants emissions of hazardous air pollu-tants, although the extent of the reduction was unclear.Congress directed theAgency to perform a study of thehazardstopublichealthreasonablyanticipatedtooccurasa result of emissions by [power plants] of [hazardous air

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pollutants] after imposition of the requirements of thischapter. 7412(n)(1)(A).IftheAgencyfinds...regula-tion is appropriate and necessary after considering theresults of the study, it shall regulate [power plants]under [7412]. Ibid. EPA has interpreted the Act tomean that power plants become subject to regulation onthesametermsasordinarymajorandareasources,see77Fed. Reg. 9330 (2012), and we assume without decidingthatitwascorrecttodoso.And what are those terms? EPA must first divide

sources covered by the program into categories and sub-categories in accordance with statutory criteria.7412(c)(1). Foreachcategoryorsubcategory,theAgencymust promulgate certainminimum emission regulations,known as floor standards. 7412(d)(1), (3). The statutegenerally calibrates the floor standards to reflect theemissions limitations already achieved by the best-performing12%ofsourceswithinthecategoryorsubcate-gory. 7412(d)(3). In some circumstances, the Agencymay also impose more stringent emission regulations,known as beyond-the-floor standards. The statute ex-pressly requires the Agency to consider cost (alongsideother specified factors) when imposing beyond-the-floorstandards. 7412(d)(2).EPAcompleted thestudyrequiredby7412(n)(1)(A) in

1998,65Fed.Reg.79826(2000),andconcludedthatregu-lationofcoal-andoil-firedpowerplantswasappropriateand necessary in 2000, id., at 79830. In 2012, it reaf-firmed the appropriate-and-necessary finding, dividedpower plants into subcategories, and promulgated floorstandards. The Agency found regulation appropriatebecause(1)powerplantsemissionsofmercuryandotherhazardousairpollutantsposedriskstohumanhealthandtheenvironmentand(2)controlswereavailabletoreducetheseemissions. 77Fed.Reg.9363. It found regulationnecessary because the imposition of the Acts other

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requirements did not eliminate these risks. Ibid. EPA concluded that costs should not be considered whendecidingwhetherpowerplantsshouldberegulatedunder7412. Id.,at9326.InaccordancewithExecutiveOrder, theAgency issued

a Regulatory Impact Analysis alongside its regulation.This analysis estimated that the regulation would forcepowerplantstobearcostsof$9.6billionperyear.Id.,at9306. TheAgencycouldnotfullyquantifythebenefitsofreducing power plants emissions of hazardous air pollu-tants;totheextentitcould,itestimatedthatthesebene-fitswereworth$4to$6millionperyear.Ibid. Thecoststopowerplantswerethusbetween1,600and2,400timesas great as the quantifiable benefits from reduced emis-sionsofhazardousairpollutants. TheAgency continuedthat its regulations would have ancillary benefitsincluding cutting power plants emissions of particulatematterandsulfurdioxide,substancesthatarenotcoveredby the hazardous-air-pollutants program. Although theAgencysappropriate-and-necessaryfindingdidnotrestontheseancillaryeffects,id.,at9320,theregulatoryimpactanalysis took them into account, increasing theAgencysestimate of the quantifiable benefits of its regulation to$37 to $90 billion per year, id., at 9306. EPA concedesthattheregulatoryimpactanalysisplayednoroleinitsappropriate-and-necessary finding. Brief for FederalRespondents14.Petitioners (who include 23 States) sought review of

EPAs rule in theCourt ofAppeals for theD.C.Circuit.As relevanthere, they challenged theAgencys refusal toconsider cost when deciding whether to regulate powerplants. TheCourtofAppealsupheldtheAgencysdecisionnottoconsidercost,withJudgeKavanaughconcurringinpartanddissentinginpart.White Stallion Energy Center, LLC v. EPA, 748 F.3d 1222 (2014) (per curiam). Wegrantedcertiorari. 574U.S.___(2014).

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II Federaladministrativeagenciesarerequiredtoengage

in reasoned decisionmaking. Allentown Mack Sales & Service, Inc.v.NLRB,522U.S.359,374(1998)(internalquotation marks omitted). Not only must an agencysdecreedresultbewithinthescopeof its lawfulauthority,but the process by which it reaches that result must belogicalandrational. Ibid.Itfollowsthatagencyactionislawful only if it rests on a consideration of the relevantfactors. Motor Vehicle Mfrs. Assn. of United States, Inc.v.State Farm Mut. Automobile Ins. Co., 463 U.S. 29, 43(1983)(internalquotationmarksomitted).EPAs decision to regulate power plants under 7412

allowed the Agency to reduce power plants emissions ofhazardous air pollutants and thus to improve publichealthand theenvironment. But thedecisionalsoulti-mately cost power plants, according to the Agencys ownestimate, nearly $10billion a year. EPA refused to con-sider whether the costs of its decision outweighed thebenefits. The Agency gave cost no thought at all, be-causeitconsideredcostirrelevanttoitsinitialdecisiontoregulate.EPAs disregard of cost rested on its interpretation of

7412(n)(1)(A), which, to repeat, directs the Agency toregulatepowerplantsifitfindssuchregulationisappro-priate andnecessary. TheAgency accepts that it could have interpreted thisprovision tomean that cost is rele-vant to thedecision toaddpowerplants to theprogram.Tr. of Oral Arg. 44. But it chose to read the statute tomeanthatcostmakesnodifferencetotheinitialdecisionto regulate. See 76Fed.Reg. 24988 (2011) (We furtherinterpret the term appropriate to not allow for the con-sideration of costs); 77 Fed. Reg. 9327 (Cost does nothavetobereadintothedefinitionofappropriate ).We review this interpretation under the standard set

out inChevron U. S. A. Inc.v.Natural Resources Defense

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Council, Inc.,467U.S.837(1984).Chevrondirectscourtstoacceptanagencysreasonableresolutionofanambigu-ityinastatutethattheagencyadministers.Id.,at842843. Even under this deferential standard, however,agencies must operate within the bounds of reasonableinterpretation. Utility Air Regulatory Groupv.EPA,573U.S. ___, ___ (2014) (slip op., at 16) (internal quotationmarks omitted). EPA strayed far beyond those boundswhenitread7412(n)(1)tomeanthatitcouldignorecostwhendecidingwhethertoregulatepowerplants.

ATheCleanAirAct treatspowerplantsdifferently from

othersourcesforpurposesofthehazardous-air-pollutantsprogram. Elsewhere in 7412,Congress established cab-ined criteria forEPA to applywhen decidingwhether toincludesourcesintheprogram.ItrequiredtheAgencytoregulatesourceswhoseemissionsexceedspecifiednumeri-calthresholds(majorsources).ItalsorequiredtheAgencyto regulate sources whose emissions fall short of thesethresholds (area sources) if they presen[t] a threat ofadverse effects to human health or the environment ...warranting regulation. 7412(c)(3). In stark contrast,Congress instructedEPAtoaddpowerplants to thepro-gram if (but only if) the Agency finds regulation appro-priateandnecessary. 7412(n)(1)(A).Onedoesnotneedtoopenupadictionary inorder to realize the capacious-ness of this phrase. In particular, appropriate is theclassic broad and all-encompassing term that naturallyandtraditionallyincludesconsiderationofalltherelevantfactors. 748 F.3d, at 1266 (opinion of Kavanaugh, J.).Although this term leaves agencies with flexibility, anagency may not entirely fai[l] to consider an importantaspectof theproblemwhendecidingwhether regulationisappropriate. State Farm,supra,at43.Read naturally in the present context, the phrase ap-

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propriateandnecessaryrequiresat leastsomeattentiontocost. Onewouldnotsaythatitisevenrational,nevermind appropriate, to impose billions of dollars in eco-nomic costs in return fora fewdollars inhealthor envi-ronmentalbenefits.Inaddition,costincludesmorethanthe expense of complying with regulations; any disad-vantage could be termed a cost. EPAs interpretationprecludestheAgency fromconsideringany typeofcostincluding,forinstance,harmsthatregulationmightdotohuman health or the environment. The Governmentconcedes that if the Agency were to find that emissionsfrompowerplantsdodamage tohumanhealth, but thatthe technologies needed to eliminate these emissions doevenmore damage to human health, it would still deemregulationappropriate.SeeTr.ofOralArg.70.Noregu-lation is appropriate if it does significantlymore harmthangood.There are undoubtedly settings in which the phrase

appropriateandnecessarydoesnotencompasscost.Butthisisnotoneofthem. Section7412(n)(1)(A)directsEPAtodeterminewhether regulation isappropriateandnec-essary. (Emphasis added.) Agencies have long treatedcostasacentrallyrelevantfactorwhendecidingwhethertoregulate. Considerationofcostreflectstheunderstand-ing that reasonable regulationordinarily requirespayingattention to the advantages and the disadvantages ofagency decisions. It also reflects the reality that toomuch wasteful expenditure devoted to one problemmaywellmean considerably fewer resources available to dealeffectively with other (perhaps more serious) problems.Entergy Corp. v. Riverkeeper, Inc., 556 U.S. 208, 233(2009) (BREYER, J., concurring in part and dissenting inpart). Against the backdrop of this established adminis-trativepractice, it isunreasonable to readan instructiontoanadministrativeagencytodeterminewhetherregula-tion is appropriate and necessary as an invitation to

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ignorecost.Statutory context reinforces the relevanceof cost. The

proceduresgoverningpowerplantsthatweconsidertodayappear in 7412(n)(1), which bears the caption Electricutilitysteamgeneratingunits. Insubparagraph(A),thepart of the law that has occupied our attention so far,Congress required EPA to study the hazards to publichealth posed by power plants and to determine whetherregulationisappropriateandnecessary. Butinsubpara-graphs (B) and (C), Congress called for two additionalstudies. One of them, a study into mercury emissionsfrompowerplants and other sources,must consider thehealthandenvironmentaleffectsofsuchemissions, tech-nologies which are available to control such emissions,and the costs of such technologies. 7412(n)(1)(B) (em-phasis added). This directive to EPA to study cost is afurtherindicationoftherelevanceofcosttothedecisiontoregulate.In an effort tominimize this express reference to cost,

EPAnowarguesthat7412(n)(1)(A)requiresittoconsideronly thestudymandatedbythatprovision,not thesepa-rate mercury study, before deciding whether to regulatepower plants. Butwhen adopting the regulations beforeus,theAgencyinsistedthattheprovisionsconcerningallthreestudiesprovideaframeworkfor[EPAs]determina-tionofwhethertoregulate[powerplants]. 76Fed.Reg.24987. It thereforedecidedto interpret thescopeof theappropriate and necessary finding in the context of all three studies. 77Fed.Reg.9325 (emphasisadded). Forexample:

x EPAconsideredenvironmentaleffectsrelevanttotheappropriate-and-necessary finding. It deemed themercury studys reference to this factor direct evi-dencethatCongresswasconcernedwithenvironmen-taleffects. 76Fed.Reg.24987.

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x EPAconsideredavailabilityofcontrolsrelevanttotheappropriate-and-necessary finding. It thought thatdoing so was consistent with the mercury studysreferencetoavailabilityofcontrols. Id., at24989.

x EPAconcludedthatregulationofpowerplantswouldbe appropriate and necessary even if a single pollu-tantemittedbythemposedahazardtohealthortheenvironment. Itbelieved that Congress focusonasingle pollutant in the mercury study support[ed]thisinterpretation.Ibid.

EPA has not explainedwhy 7412(n)(1)(B)s reference toenvironmental effects ... and ... costs provides directevidencethatCongresswasconcernedwithenvironmentaleffects, but not direct evidence that it was concernedwithcost. Chevronallowsagenciestochooseamongcom-petingreasonable interpretationsofastatute; itdoesnotlicenseinterpretivegerrymandersunderwhichanagencykeeps parts of statutory context it likes while throwingawaypartsitdoesnot.

BEPA identifies a handful of reasons to interpret

7412(n)(1)(A)tomeanthatcostisirrelevanttotheinitialdecisiontoregulate.Wefindthosereasonsunpersuasive.EPA points out that other parts of the Clean Air Act

expresslymentioncost,while7412(n)(1)(A)doesnot.Butthis observation shows only that 7412(n)(1)(A)s broadreference to appropriateness encompasses multiple rele-vant factors (which include but are not limited to cost);otherprovisionsspecificreferencestocostencompassjustcost. Itisunreasonabletoinferthat,byexpresslymakingcost relevant to other decisions, theAct implicitlymakescostirrelevanttotheappropriatenessofregulatingpowerplants. (By way of analogy, the Fourth AmendmentsReasonableness Clause requires searches to be

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[r]easonable, while its Warrant Clause requires war-rantstobesupportedbyprobablecause.Nobodywouldarguethat,byexpresslymakinglevelofsuspicionrelevantto the validity of awarrant, the FourthAmendment im-plicitlymakeslevelofsuspicioncategoricallyirrelevanttothereasonablenessofasearch.Tothecontrary,allwouldagree that the expansiveword reasonable encompassesdegreeofsuspicionalongsideotherrelevantcircumstances.)Other parts of the Clean Air Act also expressly men-tionenvironmental effects,while 7412(n)(1)(A)doesnot.Yet that did not stop EPA from deeming environmentaleffectsrelevanttotheappropriatenessofregulatingpowerplants.Along similar lines, EPA seeks support in this Courts

decision in Whitman v. American Trucking Assns., Inc.,531U.S.457(2001).There,theCourtaddressedaprovi-sionoftheCleanAirActrequiringEPAtosetambientairqualitystandardsatlevelsrequisitetoprotectthepublichealthwithan adequatemarginof safety. 42U.S.C.7409(b). Readnaturally,thatdiscretecriteriondoesnotencompass cost; it encompasses health and safety. TheCourtrefusedtoreadthatprovisionascarryingwithitanimplicit authorization to consider cost, in part becauseauthority to consider cost had elsewhere, and so often,been expressly granted. 531 U.S., at 467. American Trucking thusestablishesthemodestprinciplethatwheretheCleanAirActexpresslydirectsEPAtoregulateonthebasisofafactorthatonitsfacedoesnotincludecost,theActnormallyshouldnotbereadasimplicitlyallowingtheAgency to consider cost anyway. That principle has noapplication here. Appropriate and necessary is a farmore comprehensive criterion than requisite to protectthepublichealth;readfairlyandincontext,aswehaveexplained, the term plainly subsumes consideration ofcost.Turning to the mechanics of the hazardous-air-

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pollutantsprogram,EPAarguesthatitneednotconsidercostwhenfirstdecidingwhethertoregulatepowerplantsbecauseitcanconsidercostlaterwhendecidinghow much toregulatethem. Thequestionbeforeus,however,isthemeaningoftheappropriateandnecessarystandardthatgoverns the initial decision to regulate. Andaswehavediscussed, context establishes that this expansive stand-ardencompassescost. Costmaybecomerelevantagainatalaterstageoftheregulatoryprocess,butthatpossibilitydoes not establish its irrelevance at this stage. In addi-tion,oncetheAgencydecidestoregulatepowerplants, itmust promulgate certainminimum or floor standards nomatter the cost (here, nearly $10 billion a year); theAgencymayconsidercostonlywhenimposingregulationsbeyondtheseminimumstandards. ByEPAs logic,some-onecoulddecidewhetheritisappropriatetobuyaFer-rariwithoutthinkingaboutcost,becauseheplanstothinkabout cost later when deciding whether to upgrade thesoundsystem.EPA argues that the Clean Air Actmakes cost irrele-

vanttotheinitialdecisiontoregulatesourcesotherthanpowerplants. TheAgencyclaimsthat it isreasonabletointerpret 7412(n)(1)(A) in a way that harmonizes theprogramstreatmentofpowerplantswithitstreatmentofothersources. Thislineofreasoningoverlooksthewholepoint of having a separate provision about power plants:treating power plants differently from other stationarysources. Congress crafted narrow standards for EPA toapplywhendecidingwhethertoregulateothersources;ingeneral, these standards concern the volume of pollutionemittedbythesource,7412(c)(1),andthethreatposedbythe source to human health or the environment,7412(c)(3). But Congress wrote the provision before usmoreexpansively,directingtheAgencytoregulatepowerplantsifappropriateandnecessary.Thatcongressionalelection settles this case. [The Agencys] preference for

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symmetry cannot trump an asymmetrical statute. CSX Transp., Inc.v.Alabama Dept. of Revenue,562U.S.277,296(2011).EPApersiststhatCongresstreatedpowerplantsdiffer-

ently from other sources because of uncertainty aboutwhetherregulationofpowerplantswouldstillbeneededaftertheapplicationoftherestoftheActsrequirements.That is undoubtedly one of the reasonsCongress treatedpower plants differently; hence 7412(n)(1)(A)s require-ment to study hazards posed by power plants emissionsafter imposition of the requirements of [the rest of theAct]. But if uncertainty about the need for regulationwere the only reason to treat power plants differently,Congresswould have required theAgency to decide onlywhether regulation remains necessary, not whetherregulation is appropriateand necessary. Inany event,EPA statedwhen it adopted the rule that Congress didnot limit [the] appropriate and necessary inquiry to [thestudymentioned in 7412(n)(1)(A)]. 77 Fed. Reg. 9325.The Agency instead decided that the appropriate-and-necessaryfindingshouldbeunderstoodinlightofallthreestudiesrequiredby7412(n)(1),andaswehavediscussed,oneofthosethreestudiesreflectsconcernaboutcost.

CThedissentdoesnotembraceEPAs far-reachingclaim

that Congress made costs altogether irrelevant to thedecision to regulate power plants. Instead, itmaintainsthatEPAneednotexplicitlyanalyzecostsbeforedeem-ing regulation appropriate, because other features of theregulatory program will on their own ensure the cost-effectivenessof regulation. Post, at2 (opinionofKAGAN,J.). This line of reasoning contradicts the foundationalprinciple of administrative law that a court may upholdagencyactiononlyonthegroundsthattheagencyinvokedwhenittooktheaction. SECv.Chenery Corp.,318U.S.

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80,87(1943).Whenitdeemedregulationofpowerplantsappropriate, EPA said that cost was irrelevant to thatdeterminationnot that cost-benefit analysis would bedeferreduntillater. Muchless diditsay(whatthedissentnow concludes) that the consideration of cost at subse-quentstageswillensurethatthecostsarenotdispropor-tionatetothebenefits.Whatitsaidisthatcostisirrele-vanttothedecisiontoregulate.Thatisenoughtodecidethesecases.Butforwhatitis

worth,thedissentvastlyoverstatestheinfluenceofcostatlater stages of the regulatory process. For example, thedissent claims that the floor standardswhich the Actcalibratestoreflectemissionslimitationsalreadyachievedby the best-performing sources in the industryreflectcost considerations, because the best-performing powerplants must have considered costs in arriving at theiremissionsoutputs.Post, at10. EPAdidnotrelyonthisargument,anditisnotobviousthatitiscorrect.Becausepowerplantsareregulatedunderother federalandstatelaws, thebest-performingpowerplants emissions limita-tionsmightreflectcost-blindregulationrather thancost-conscious decisions. Similarly, the dissent suggests thatEPAmayconsidercostwhendividingsourcesintocatego-riesandsubcategories. Post, at1112. Yetaccording toEPA,itisnotappropriatetopremisesubcategorizationoncosts. 77Fed.Reg.9395 (emphasisadded). Thatstate-ment presumably explains the dissents carefullywordedobservationthatEPAconsideredtechnological,geographic,and other factors when drawing categories, post, at 13,n.4,whichfactorswereinturnrelatedtocostsinsomeway, post, at 11. Attenuated connections such as thesehardlysupporttheassertionthatEPAsregulatoryprocessfeaturedexhaustiveconsiderationofcosts,post,at2.All in all, the dissent has at most shown that some

elementsoftheregulatoryschememitigatecostinlimitedways; it has not shown that these elements ensure cost-

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effectiveness. If(totakeahypotheticalexample)regulat-ing power plants would yield $5 million in benefits, theprospectofmitigating cost from$11billion to$10billionat later stages of the program would not by itself makeregulationappropriate.Inallevents,weneednotpursuethesepoints,becauseEPAdidnotsaythatthepartsoftheregulatoryprogrammentionedbythedissentpreventtheimposition of costs far in excess of benefits. [EPAs]actionmustbemeasuredbywhat [it]did,notbywhat itmighthavedone. Chenery,supra,at9394.

DOurreasoningsofarestablishesthatitwasunreasona-

ble for EPA to read 7412(n)(1)(A) to mean that cost isirrelevanttotheinitialdecisiontoregulatepowerplants.The Agency must consider costincluding, most im-portantly, cost of compliancebefore deciding whetherregulationisappropriateandnecessary. Weneednotanddo not hold that the law unambiguously required theAgency, whenmaking this preliminary estimate, to con-duct a formal cost-benefit analysis in which each ad-vantage and disadvantage is assigned amonetary value.ItwillbeuptotheAgencytodecide(asalways,withinthelimits of reasonable interpretation) how to account forcost.Some of the respondents supporting EPA ask us to

upholdEPAsactionbecausetheaccompanyingregulatoryimpactanalysisshowsthat,oncetherulesancillarybene-fits are considered, benefits plainly outweigh costs. Thedissent similarly relies on these ancillary benefits wheninsistingthattheoutcomehere[was]arulewhosebene-fits exceed its costs. Post, at 16. As we have just ex-plained,however,wemayupholdagencyactiononlyuponthegroundsonwhichtheagencyacted. EveniftheAgen-cycouldhaveconsideredancillarybenefitswhendecidingwhetherregulationisappropriateandnecessaryapoint

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weneednotaddressitplainlydidnotdosohere.IntheAgencys own words, the administrative record utterlyrefutes [the] assertion that [ancillary benefits] form thebasisfortheappropriateandnecessaryfinding. 77Fed.Reg. 9323. The Government concedes, moreover, thatEPA did not rely on the [regulatory impact analysis]whendecidingtoregulatepowerplants,andthat[e]venifEPAhadconsideredcosts,itwouldnotnecessarilyhaveadopted ... the approach set forth in [that analysis].BriefforFederalRespondents5354.

* * *WeholdthatEPAinterpreted7412(n)(1)(A)unreason-

ably when it deemed cost irrelevant to the decision toregulate power plants. We reverse the judgment of theCourt of Appeals for the D.C. Circuit and remand thecasesforfurtherproceedingsconsistentwiththisopinion.

It is so ordered.

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THOMAS,J.,concurring









[June29,2015]

JUSTICETHOMAS,concurring.The Environmental Protection Agency (EPA) asks the

Court to defer to its interpretation of the phrase appro-priate and necessary in 112(n)(1)(A) of the Clean AirAct, 42U.S.C. 7412. JUSTICE SCALIAs opinion for theCourtdemonstrateswhyEPAsinterpretationdeservesnodeferenceunderourprecedents. Iwriteseparatelytonotethat its request for deference raises serious questionsabout the constitutionality of our broader practice of de-ferring toagency interpretationsof federal statutes. SeeChevron U. S. A. Inc.v.Natural Resources Defense Coun-cil, Inc.,467U.S.837(1984).

Chevron deference is premised on a presumption thatCongress, when it left ambiguity in a statute meant for

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implementationbyanagency,understood that theambi-guitywouldberesolved,firstandforemost,bytheagency,anddesiredtheagency(ratherthanthecourts)topossesswhatever degree of discretion the ambiguity allows.Smiley v.Citibank (South Dakota), N. A., 517U.S. 735,740741 (1996). We most often describe Congress sup-posed choice to leavematters to agency discretion as anallocation of interpretive authority. See, e.g., National Cable & Telecommunications Assn. v. Brand X Internet Services,545U.S.967,983(2005)(referringtotheagencyas the authoritative interpreter (within the limits ofreason)of[ambiguous]statutes).Butwesometimestreatthat discretion as though it were a form of legislativepower. See, e.g., United States v.Mead Corp., 533U.S.218,229(2001)(notingthattheagencyspeak[s]withtheforceoflawwhenitaddressesambiguityinthestatuteorfillsaspaceintheenactedlawevenwhen Congressdidnot actually have an intent as to a particular result).Eitherway,Chevron deference raises serious separation-of-powersquestions.AsIhaveexplainedelsewhere,[T]hejudicialpower,as

originally understood, requires a court to exercise itsindependent judgment in interpreting and expoundingupon the laws. Perez v. Mortgage Bankers Assn., 575U.S.___,___(2015)(opinionconcurringinjudgment)(slipop.,at8). Interpretingfederalstatutesincludingambig-uous ones administered by an agencycalls for thatexerciseofindependentjudgment.Id.,at___(slipop.,at12). Chevron deference precludes judges from exercisingthatjudgment,forcingthemtoabandonwhattheybelieveisthebestreadingofanambiguousstatuteinfavorofanagencys construction. Brand X, supra, at 983. It thuswrests fromCourts the ultimate interpretative authorityto saywhat the law is,Marbury v.Madison, 1Cranch137,177 (1803),andhands itover to theExecutive. SeeBrand X,supra,at983(notingthatthejudicialconstruc-

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tionofanambiguousstatuteisnotauthoritative).Sucha transfer is in tensionwithArticle IIIsVestingClause,which vests the judicial power exclusively in Article IIIcourts,notadministrativeagencies.U.S.Const.,Art.III,1.In reality,as theCourt illustrates in the courseofdis-

mantling EPAs interpretation of 112(n)(1)(A), agenciesinterpreting ambiguous statutes typically are not en-gagedinactsofinterpretationatall.See,e.g., ante,at9.Instead,asChevronitselfacknowledged,theyareengagedinthe formulationofpolicy. 467U.S.,at843. Statu-toryambiguitythusbecomesanimplicitdelegationofrule-making authority, and that authority is used not to findthe best meaning of the text, but to formulate legallybinding rules to fill in gaps based on policy judgmentsmadebytheagencyratherthanCongress.Although acknowledging this fact might allow us to

escape the jaws of Article IIIs Vesting Clause, it runsheadlong into the teeth of Article Is, which vests [a]lllegislative Powers herein granted in Congress. U.S.Const.,ArtI.,1.Forifwegivetheforceoflawtoagencypronouncements on matters of private conduct as towhich Congressdidnotactuallyhaveanintent, Mead,supra, at 229, we permit a body other than Congress toperformafunctionthatrequiresanexerciseofthelegisla-tivepower. SeeDepartment of Transportationv.Associa-tion of American Railroads,575U.S.___,______ (2015)(THOMAS,J.,concurringinjudgment)(slipop.,at2122).Thesecasesbringintoboldreliefthescopeofthepoten-

tiallyunconstitutionaldelegationswehavecometocoun-tenance in the name of Chevron deference. What EPAclaims for itself here is not the power to make politicaljudgments in implementing Congress policies, nor eventhe power to make tradeoffs between competing policygoalssetbyCongress,American Railroads,supra,at______(opinionofTHOMAS,J.) (slipop.,at2021) (collecting

4 MICHIGANv.EPA


cases involving statutes that delegated this legislativeauthority). Itisthepowertodecidewithoutanyparticu-lar fidelitytothetextwhichpolicygoalsEPAwishestopursue. Should EPA wield its vast powers over electricutilitiestoprotectpublichealth?Apristineenvironment?Economic security? We are told that the breadth of thewordappropriateauthorizesEPAtodecideforitselfhowto answer that question. Compare 77 Fed. Reg. 9327(2012) ([N]othing about the definition [of appropriate]compels a consideration of costs (emphasis added))withTr.ofOralArg.42 ([T]hephraseappropriateandneces-sarydoesnt,byitsterms,precludetheEPAfromconsider-ingcost(emphasisadded)).1Perhapsthereissomeuniquehistoricaljustificationfor

deferring to federal agencies, see Mead, supra, at 243(SCALIA,J.,dissenting),butthesecasesrevealhowpaltryan effort we have made to understand it or to confineourselvestoitsboundaries. AlthoughweholdtodaythatEPA exceeded even the extremely permissive limits onagencypowersetbyourprecedents,weshouldbealarmedthatitfeltsufficientlyemboldenedbythoseprecedentstomakethebid fordeferencethat itdidhere.2 As inother areas of our jurisprudence concerning administrativeagencies, see, e.g., B&B Hardware, Inc. v.Hargis Indus-tries, Inc., 575 U.S. ___, ______ (2015) (THOMAS, J.,dissenting) (slip op., at 1014), we seem to be straying

1Icanthinkofnonameforsuchpowerotherthanlegislativepower.HadwedeferredtoEPAsinterpretationinthesecases,then,wemighthaveviolatedanotherconstitutionalcommandbyabdicatingourcheckonthepoliticalbranchesnamely,ourdutytoenforce theruleof lawthroughanexerciseof the judicialpower. Perez v.Mortgage Bankers Assn., 575 U.S. ___, ______ (2015) (THOMAS, J., concurring in judg-ment)(slipop.,at1416).

2This is not the first time an agency has exploited our practice ofdeferringtoagencyinterpretationsofstatutes.See,e.g., Texas Dept. of Housing and Community Affairs v.Inclusive Communities Project, Inc., ante, at67(THOMAS,J.,dissenting).

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furtherandfurtherfromtheConstitutionwithoutsomuchas pausing to askwhy. We should stop to consider thatdocument before blithely giving the force of law to anyotheragencyinterpretationsoffederalstatutes.

_________________

_________________

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KAGAN,J.,dissenting









[June29,2015]

JUSTICE KAGAN, with whom JUSTICE GINSBURG,JUSTICE BREYER, and JUSTICE SOTOMAYOR join,dissenting.TheEnvironmentalProtectionAgencyplacedemissions

limits on coal and oil power plants following a lengthyregulatory process during which the Agency carefullyconsidered costs. At the outset, EPA determined thatregulatingplantsemissionsofhazardousairpollutantsisappropriate and necessary given the harm they cause,and explained that it would take costs into account indeveloping suitable emissions standards. Next, EPAdivided power plants into groups based on technologicaland other characteristics bearing significantly on theircoststructures.Itrequiredplantsineachgrouptomatch

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the emissions levels already achieved by the best-performing members of the same groupbenchmarksnecessarily reflecting those plants own cost analyses.EPA then adopted a host ofmeasures designed tomakecompliancewith its proposed emissions limits less costlyforplantsthatneededtocatchupwiththeircleanerpeers.Andwithonly onenarrowexception,EPAdecidednot toimposeanymorestringentstandards (beyondwhatsomeplantshadalreadyachievedontheirown)becauseitfoundthat doing sowould not be cost-effective. After all that,EPA conducted a formal cost-benefit study which foundthat the quantifiable benefits of its regulation wouldexceedthecostsuptoninetimesoverbyasmuchas$80billion each year. Those benefits include as many as11,000fewerprematuredeathsannually,alongwithafargreaternumberofavoidedillnesses.Despitethatexhaustiveconsiderationofcosts,theCourt

strikes down EPAs rule on the ground that the Agencyunreasonably ... deemed cost irrelevant. Ante, at 15.Onthemajoritystheory,theruleis invalidbecauseEPAdid not explicitly analyze costs at the very first stage oftheregulatoryprocess,whenmakingitsappropriateandnecessaryfinding. AndthatissoeventhoughEPAlatertookcostsintoaccountagainandagainand...soon.Themajority thinks entirely immaterial, and so entirely ig-nores,allthesubsequenttimesandwaysEPAconsideredcostsindecidingwhatanyregulationwouldlooklike.Thatisapeculiarlyblinkeredwayforacourttoassess

the lawfulness of an agencys rulemaking. I agree withthemajoritylettherebenodoubtaboutthisthatEPAspower plant regulation would be unreasonable if [t]heAgencygavecostnothoughtat all. Ante,at5(emphasisin original). But that is just not what happened here.Overmorethanadecade,EPAtookcosts intoaccountatmultiple stages and through multiple means as it setemissions limits forpowerplants. Andwhenmaking its

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initial appropriate and necessary finding, EPA knew itwoulddoexactlythatknewitwouldthoroughlyconsiderthe cost-effectiveness of emissions standards later on.That contextmatters. The Agency actedwell within itsauthorityindecliningtoconsidercostsattheopeningbelloftheregulatoryprocessgiventhatitwoulddosoineveryround thereafterand given that the emissions limitsfinally issued would depend crucially on those ac-countings. Indeed,EPAcouldnothavemeasuredcostsatthe processs initial stage with any accuracy. And theregulatorypathEPAchoseparallelstheoneithastrodinsetting emissions limits, at Congresss explicit direction,foreveryothersourceofhazardousairpollutantsovertwodecades. ThemajoritysdecisionthatEPAcannottakethesame approach hereits micromanagement of EPAsrulemaking,basedonlittlemorethanthewordappropri-ateruns counter to Congresss allocation of authoritybetweentheAgencyandthecourts.BecauseEPAreason-ablyfoundthatitwasappropriatetodeclinetoanalyzecostsatasinglestageofaregulatoryproceedingotherwiseimbuedwithcostconcerns,Irespectfullydissent

I A

TheCleanAirActAmendmentsof1990,asthemajoritydescribes, obligateEPA to regulate emissions ofmercuryand other hazardous air pollutants from stationarysources discharging those substances in large quantities.Seeante,at2. Formostindustries,thestatuteprescribesthe same multi-step regulatory process. At the initialstage, EPA must decide whether to regulate a source,based solely on the quantity of pollutants it emits andtheir health and environmental effects. See 42 U.S.C.7412(a)(1),(a)(2),(c)(1),(c)(3);ante,at2. Costsentertheequationafterthat,affectingtheemissionslimitsthattheeventualregulationwillrequire. Underthestatute,EPA

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mustdividesourcesintocategoriesandsubcategoriesandthen set floor standards that reflect the average emis-sionslevelalreadyachievedbythebest-performing12%ofsources within each group. See 7412(d)(3); ante, at 3.Every 12% floor has cost concerns built right into it be-cause the top sources, as successful actors in a marketeconomy,havehadtoconsidercostsinchoosingtheirownemissionslevels.Moreover,inestablishingcategoriesandsubcategories at this first stage, EPA can (significantly)raise or lower the costs of regulation for each source,because different classification schemes will alter thegroupandsotheemissionslevelthatthesourcehastomatch.1Oncethefloorisset,EPAhastodecidewhetherto impose any stricter (beyond-the-floor) standards,taking intoconsideration,amongotherthings, thecostof achieving such emissions reduction. 7412(d)(2); seeante,at3. Finally,byvirtueofalongstandingExecutiveOrderapplyingtosignificantrulesissuedundertheCleanAirAct (aswell as other statutes), theAgencymust sys-tematicallyassesstheregulationscostsandbenefits.SeeExec.OrderNo.12866,58Fed.Reg.51735,51738,51741(1993) (applying to all rules with an annual economiceffectofatleast$100million).Congress modified that regulatory scheme for power

plants. It did so because the 1990 amendments estab-lished a separate program to control power plant emis-sions contributing to acid rain, and many thought thatjust by complyingwith those requirements, plantsmight

1Consider it this way: Floor standards equal the top 12% of some-thing, butuntil youknow the something, you cantknowwhat itwilltaketoattainthatlevel.Totakeaprosaicexample,thestrongest12%of NFL players can lift a lotmore weight than the strongest 12% ofhumanbeingsgenerally.Tomatchtheformer,youwillhavetospendmanymore hours in the gym than tomatch the latterand youwillprobablystillcomeupshort.Soeverythingdependsonthecomparisongroup.

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reduce their emissions of hazardous air pollutants toacceptablelevels. Seeante,at2. Thatprospectcounseleda wait and see approach, underwhichEPAwould givetheActsacidrainprovisionsachancetoachievethatsidebenefit before imposing any further regulation. Accord-ingly,CongressinstructedEPAtoperformastudyofthehazardstopublichealthreasonablyanticipatedtoresultfrompowerplantsemissionsafterthe1990amendmentshadtakeneffect. 7412(n)(1)(A). AndCongressprovidedthat EPA shall regulate those emissions only if theAgency finds such regulation is appropriate and neces-sary after considering the results of the [public health]study. Ibid.Uponmakingsuchafinding,however,EPAistoregulatepowerplantsasitdoeseveryotherstation-ary source: first, by categorizing plants and setting floorstandards for the different groups; then by decidingwhether to regulate beyond the floors; and finally, byconductingthecost-benefitanalysisrequiredbyExecutiveOrder.EPAcompletedthemandatedhealthstudyin1998,and

the results gave much cause for concern. The Agencyconcludedthatimplementationoftheacidrainprovisionshadfailedtocurbpowerplantsemissionsofhazardousairpollutants. Indeed,EPAfound,coalplantswereontrackto increase those emissions by asmuch as 30% over thenext decade. See 1EPA, Study ofHazardousAir Pollu-tant Emissions from Electric Utility Steam GeneratingUnitsFinal Report to Congress, p. ES25 (1998). AndEPAdetermined,focusingespeciallyonmercury,thatthesubstances released from power plants cause substantialhealth harms. Noting that those plants are the largest[non-natural] source of mercury emissions, id., 1.2.5.1,at 17, EPA found that children of mothers exposed tohighdosesofmercuryduringpregnancyhaveexhibitedavariety of developmental neurological abnormalities,including delayed walking and talking, altered muscles,

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andcerebralpalsy.Id.,7.2.2,at717to718;seealso7EPA,Mercury Study Report to Congress, p. 631 (1997)(Mercury Study) (estimating that 7% of women ofchildbearing age are exposed tomercury in amounts ex-ceedingasafelevel).Informedbyitspublichealthstudyandadditionaldata,

EPAfoundin2000that it isappropriateandnecessaryto regulatepowerplants emissionsofmercuryandotherhazardous air pollutants. 65 Fed. Reg. 79830.2 Pullingapart those two adjectives, the Agency first stated thatsuch regulation is appropriate because thosepollutantspresent[] significant hazards to public health and theenvironment and because a number of control optionscan effectively reduce their emission. Ibid. EPA thendetermined that regulation is necessary because otherparts of the 1990 amendmentsmost notably, the acidrainprovisionswillnotadequatelyaddress thosehaz-ards. Ibid.Inlessbureaucraticterms,EPAdecidedthatitmadesensetokickofftheregulatoryprocessgiventhatpower plants emissions pose a serious health problem,that solutions to theproblemareavailable, and that theproblemwillremainunlessactionistaken.

BIftheregulatoryprocessendedaswellasstartedthere,

I would agree with the majoritys conclusion that EPAfailedtoadequatelyconsidercosts. Costisalmostalwaysa relevantand usually, a highly importantfactor inregulation.UnlessCongressprovidesotherwise,anagencyactsunreasonablyinestablishingastandard-settingproc-ess that ignore[s] economic considerations. Industrial

2EPAreaffirmeditsappropriateandnecessaryfindingin2011and2012whenitissuedaproposedruleandafinalrule.See76Fed.Reg.24980 (2011) (The Agencys appropriate and necessary finding wascorrect in 2000, and it remains correct today); accord, 77 Fed. Reg.93109311(2012).

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Union Dept., AFLCIO v. American Petroleum Institute,448U.S. 607, 670 (1980) (Powell, J., concurring in partand concurring in judgment). At a minimum, that isbecausesuchaprocesswould threaten[] to imposemas-sive costs far in excess of anybenefit. Entergy Corp. v.Riverkeeper, Inc., 556U. S. 208, 234 (2009) (BREYER, J.,concurring inpartanddissenting inpart). Andaccount-ingforcostsisparticularlyimportantinanageoflimitedresources available to deal with grave environmentalproblems,wheretoomuchwastefulexpendituredevotedtooneproblemmaywellmeanconsiderablyfewerresourcesavailable to deal effectively with other (perhaps moreserious) problems. Id., at 233; see ante, at 7. As the Courtnotes,thatdoesnotrequireanagencytoconductaformalcost-benefitanalysisofeveryadministrativeaction.See ante, at 14. But (absent contrary indication fromCongress)anagencymusttakecostsintoaccountinsomemannerbeforeimposingsignificantregulatoryburdens.That proposition, however, does not decide the issue

beforeusbecausetheappropriateandnecessaryfindingwasonlythebeginning. Atthatstage,EPAknewthatalengthyrulemakingprocesslayaheadofit;thedetermina-tion of emissions limits was still years away. And theAgency,inmakingitskick-offfinding,explicitlynotedthatconsiderationofcostswouldfollow:Asapartofdevelop-ing a regulation that would impose those limits, theeffectiveness and costs of controlswill be examined. 65Fed. Reg. 79830. Likewise, EPA explained that, in thecourse of writing its regulation, it would explore regula-toryapproachesallowingforleast-costsolutions.Id.,at7983079831. Thatmeans theAgency,whenmaking itsappropriate and necessary finding, did not decline toconsidercostsaspartoftheregulatoryprocess. Rather,itdeclinedtoconsidercostsatasinglestageofthatprocess,knowingthattheywouldcomeinlateron.The only issue in these cases, then, is whether EPA

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KAGAN,J.,dissenting

acted reasonably in structuring its regulatory process inthatwayinmakingitsappropriateandnecessaryfind-ing based on pollutions harmful effects and channelingcost considerations tophases of the rulemaking inwhichemissionlevelsareactuallyset.Saidotherwise,theques-tionisnotwhetherEPAcanreasonablyfinditappropri-atetoregulatewithoutthinkingaboutcosts,fullstop.Itcannot, and it did not. Rather, the question is whetherEPA can reasonably find it appropriate to trigger theregulatory process based on harms (and technologicalfeasibility) alone, given that costswill come into play, inmultiplewaysandatmultiplestages,beforeanyemissionlimitgoesintoeffect.In considering that question, the very nature of the

word appropriate matters. [T]he word appropriate, this Court has recognized, is inherently context-dependent:Givingitcontentrequirespayingattentiontothe surrounding circumstances. Sossamon v.Texas, 563U.S.277,___(2011)(slipop.,at7). (Thatistrue,too,ofthe word necessary, although the majority spends lesstimeonit. SeeArmour & Co.v.Wantock,323U.S.126,129130 (1944) ([T]he word necessary . . . has alwaysbeenrecognizedasawordtobeharmonizedwithitscon-text).)Andherethatmeansconsideringtheplaceoftheappropriateandnecessaryfindinginthebroaderregula-toryschemeasatriggeringmechanismthatgetsacom-plex rulemaking going. The interpretive task is thus atoddswith themajoritys insistence on staring fixedly atthis stage. Ante,at11 (emphasis inoriginal). Thetaskinstead demands taking account of the entire regulatoryprocessinthinkingaboutwhatisappropriateinitsfirstphase. The statutory language, in other words, is a di-rectivetoremoveonesblindersandviewthingswholetoconsider what it is fitting to do at the threshold stagegivenwhatwillhappenateveryother.And that instruction is primarily given toEPA, not to

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courts: Judgesmay interfere only if the Agencys way ofordering its regulatory process is unreasonablei.e.,somethingCongresswouldneverhaveallowed. Theques-tionhere,asinourseminalcasedirectingcourtstodefertoagencyinterpretationsoftheirownstatutes,arisesnotin a sterile textual vacuum, but in the context of imple-mentingpolicydecisionsinatechnicalandcomplexarena.Chevron U. S. A. Inc. v. Natural Resources Defense Council, Inc.,467U.S.837,863(1984).EPAsexperienceand expertise in that arenaand courts lack of thoseattributesdemand that judicial review proceed withcaution and care. The majority actually phrases thisprinciplewell,thoughhonorsitonlyinthebreach:Withinwidebounds, it is upto theAgencytodecide ...howtoaccount for cost. Ante, at 14. That judgesmight havemadedifferentregulatorychoicesmighthaveconsideredcostsindifferentwaysatdifferenttimeswillnotsufficeto overturnEPAs actionwhereCongress, as here, chosenottospeakdirectlytothosematters,buttoleavethemtotheAgencytodecide.All of that means our decision here properly rests on

somethingthemajoritythinksirrelevant:anunderstand-ingofthefullregulatoryprocessrelatingtopowerplantsandofEPAsreasonsforconsideringcostsonlyaftermak-ingitsinitialappropriateandnecessaryfinding.Ithere-foreturntothoseissues,todemonstratethesimplepointthat should resolve these cases: that EPA, in regulatingpower plants emissions of hazardous air pollutants, ac-countedforcostsinareasonableway.

II A

In theyearsafter its appropriateandnecessary find-ing, EPA made good on its promise to account for costs[a]s a part of developing a regulation. 65 Fed. Reg.79830;seesupra,at7. Formore thanadecade,asEPA

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KAGAN,J.,dissenting

deliberated on and then set emissions limits, costs cameinto the calculus at nearly every turn. Reflecting thatconsideration, EPAs final rule noted that steps takenduringtheregulatoryprocesshadfocusedonflexib[ility]andcost-effective[ness]andhadsucceededinmakingtherulelesscostlyandcompliancemorereadilymanageable.77 Fed. Reg. 9306, 9376. And the regulation concludedthat the benefits of th[e] rule to public health and theenvironmentfaroutweighthecosts.Id.,at9306.Consistentwiththestatutoryframework,EPAinitially

calculated floor standards: emissions levels of the best-performing 12% of power plants in a given category orsubcategory. Themajoritymisperceives this part of therulemakingprocess. ItinsiststhatEPAmustpromulgatecertain ... floor standards nomatter the cost. Ante, at11. But that ignores two crucial features of the top-12%limits:first,thewayinwhichanysuchstandardintrinsi-callyaccountsforcosts,andsecond,thewayinwhichtheAgencyscategorizationdecisionsyielddifferentstandardsforplantswithdifferentcoststructures.The initial point is a fact of life in amarket economy:

Costs necessarily play a role in any standard that usespower plants existing emissions levels as a benchmark.After all, the best-performing 12% of power plantsmusthave considered costs in arriving at their emissions out-puts; that is how profit-seeking enterprises make deci-sions.Andindoingso,theymusthaveselectedachievablelevels; else, theywould have gone out of business. (Thesame would be true even if other regulations influencedsomeofthosechoices,asthemajoritycasuallyspeculates.See ante, at 13.) Indeed, this automatic accounting forcosts is why Congress adopted a market-leader-basedstandard. As the SenateReport accompanying the 1990amendmentsexplained:Costconsiderationsarereflectedin theselectionof emissions limitationswhichhavebeenachieved inpractice (rather than thosewhicharemerely

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theoretical) by sources of a similar type or character.S.Rep.No.101228,pp.168169(1989). Ofcourse,sucha standard remains technology-forcing: It requires lag-gardsintheindustrytocatchupwithfrontrunners,some-times at significant expense. But the benchmark is, bydefinition, one that some power plants have achievedeconomically. AndwhenEPAmade its appropriateandnecessary finding, itknewthat factknewthatthecon-sequenceofdoingsowastogeneratefloorstandardswithcostconsiderationsbakedrightin.Still more, EPA recognized that inmaking categoriza-

tion decisions, it could take account of multiple factorsrelatedtocostsofcomplianceandsoavoidimpracticableregulatory burdens. Suppose, to use a simple example,that curbing emissions ismore technologically difficultand therefore more costlyfor plants burning coal thanforplantsburningoil.EPAcanthenplacethosetwotypesof plants in different categories, so that coal plants needonlymatchother coalplants rather thanhaving to incurtheaddedcostsofmeetingthetopoilplantslevels. Nowmultiply and complexify that example many times over.As the Agency noted when making its appropriate andnecessary finding, EPA build[s] flexibility into theregulatory regime by bas[ing] subcategorization on ...the size ofa facility; the typeof fuelusedat the facility;andtheplanttype,andalsomayconsiderotherrelevantfactors such as geographic conditions. 65 Fed. Reg.79830; see S. Rep. No. 101228, at 166 (listing similarfactorsandnoting that [t]heproperdefinition of catego-ries ...will assuremaximumprotection of public healthand the environmentwhileminimizing costs imposed ontheregulatedcommunity). Usingthatclassificationtool,EPAcanensurethatplantshavetoattainonlytheemis-sions levelspreviouslyachievedbypeers facingcompara-ble cost constraints, so as to further protect plants fromunrealisticfloorstandards.

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AndthatisexactlywhatEPAdidoverthecourseofitsrulemakingprocess,insistingonapples-to-applescompar-isons that bring floor standards within reach of diversekinds of power plants. Even inmaking its appropriateand necessary finding, the Agency announced it woulddivide plants into the two categories mentioned above:coal-firedandoil-fired.65Fed.Reg.79830.3Then,asthe rulemaking progressed, EPA went further. Notingthat different technologies significantly affect the ease ofattaining a given emissions level, the Agencys proposedrulesubdividedthosetwoclassesintofive:plantsdesignedtoburnhigh-rankcoal;plantsdesigned toburn low-rankvirgin coal; plants that run ona technology termed inte-grated gasification combined cycle; liquid oil units; andsolid oilunits. See76Fed.Reg. 2503625037. EPAex-plainedthatbysubcategorizinginthatway,ithadsparedmanyplantstheneedtoretrofit[],redesign[],ormakeotherextensivechangestotheirfacilities.Id.,at25036.Andinitsfinalrule,EPAfurtherrefineditsgroupingsinways that eased compliance. Most notably, the Agencyestablished a separate subcategory, and attendant (lessstringent) floor, forplants inHawaii,PuertoRico,Guam,andtheVirginIslandsonthegroundthatplantsinthoseplaceshaveminimalcontroloverthequalityofavailablefuel[] and disproportionately high operational andmaintenancecosts. 77Fed.Reg.9401.4

3EPA also determined at that stage that it is not appropriate ornecessary to regulate natural gas plants emissions of hazardous airpollutants because they have only negligible impacts. 65Fed.Reg.79831.Thatdecisionmeantthatotherplantswouldnothavetomatchtheircleanernaturalgascounterparts,thusmakingthefloorstandardsEPAestablishedthatmuchlesscostlytoachieve.

4ThemajorityinsistsondisregardinghowEPAscategorizationdeci-sions made floor standards less costly for various power plants toachieve, citing the Agencys statement that it is not appropriate topremisesubcategorizationoncosts.77Fed.Reg.9395(quotedante,at13). ButthatmisunderstandsEPAspoint. It isquite truethatEPA

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Even after establishing multiple floor standards thatfactored in costs, EPA adopted additional complianceoptions to minimize costs associated with attaining agiven floorjust as its appropriate and necessary find-ing explicitly contemplated. Id., at 9306; 76 Fed. Reg.25057;see65Fed.Reg.79830. Forexample, theAgencycalculated each floor as both an input-based standard(based on emissions per unit of energy used) and anoutput-basedstandard(basedonemissionsperunitofuse-fulenergyproduced),andallowedplants tochoosewhichstandard theywouldmeet. That option,EPA explained,canresultin...reducedcompliancecosts.76Fed.Reg.25063. Similarly,EPAallowedplantstomeetagiven12%floorbyaveragingemissionsacrossallunitsat thesamesite,insteadofhavingtomeetthefloorateachunit.Someplants,EPAunderstood,wouldfindsuchaveragingalesscostly alternative. 77 Fed. Reg. 9385. Yet again: EPApermitted limited use plantsthose primarily burningdid not consider costs separate and apart from all other factors incraftingcategoriesandsubcategories.SeeS.Rep.No.101128,p.166(1989)(notingthatEPAmaynotmakeclassificationsdecisionsbasedwhollyoneconomicgrounds);77Fed.Reg.9395(citingSenateReport).That approach couldhave subverted the statutory scheme:Touse anextreme example, it would have allowed EPA, citing costs of compli-ance,toplacethetopfewplantsinonecategory,thenextfewinanothercategory, the third ina third, andall thewaydown the line, therebyinsulating every plant from having to make an appreciable effort tocatch up with cleaner facilities. But in setting up categories andsubcategories, EPA did consider technological, geographic, and otherfactors directly relevant to the costs that diverse power plantswouldbearintryingtoattainagivenemissionslevel.(Forsomereason,themajoritycallsthisacarefullywordedobservation,ante,at13,butitisnothingotherthanthefactofthematter.)TheAgencyscategorizationdecisions (among several other measures, see supra, at 1011; infra thispageand14)thusrefutethemajorityssuggestion,seeante,at11,that the appropriate and necessary finding automatically generatesfloor standardswithno relation to cost. To the contrary, theAgencyused its categorizationauthority to establishdifferent floor standardsfordifferenttypesofplantswithdifferentcoststructures.

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natural gas but sometimes switching to oilto complywith the final rule bymeeting qualitative work practicestandards rather thannumeric emissions limits. Id., at94009401. EPAexplainedthatitwouldbeeconomicallyimpracticableforthoseplantstodemonstratecompliancethroughemissionstesting,andthatanalternativestand-ard, focused on their adoption of pollution control tech-niques, would allow them to both reduce emissions andavoidextracost.Id.,at9401.Andthelistgoeson.See,e.g., id., at 94099410 (allowing extra year for plants tocomply with emissions limits where source-specific con-struction, permitting, or labor, procurement or resourcechallenges arise); id., at 9417 (describing additionalcomplianceoptions).Withallthatcost-considerationunderitsbelt,EPAnext

assessed whether to set beyond-the-floor standards, andhere too, as it knew itwould, theAgency took costs intoaccount. Forthevastmajorityofcoalandoilplants,EPAdecided that beyond-the-floor standards would not bereasonable after considering costs. Id., at 9331. TheAgencysetsuchastandardforonlyasinglekindofplant,andonlyafterdeterminingthatthetechnologyneededtomeet themore lenient limitwouldalsoachieve themorestringentone. Seeid.,at9393;76Fed.Reg.2504625047.Otherwise, EPA determined, the market-leader-basedstandardswereenough.Finally, as required by ExecutiveOrder and as antici-

patedatthetimeoftheappropriateandnecessaryfind-ing, EPA conducted a formal cost-benefit analysis of itsnewemissionsstandardsand incorporated those findingsintoitsproposedandfinalrules. Seeid.,at2507225078;77Fed.Reg. 93059306, 94249432. That analysis esti-matedthattheregulationsyearlycostswouldcomeinatunder $10 billion, while its annualmeasureable benefitswould total many times morebetween $37 and $90billion. See id., at 93059306; ante, at 4. On the costs

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side,EPAacknowledgedthatplantscompliancewiththerulewould likely cause electricity prices to rise by about3%, but projected that those prices would remain lowerthantheyhadbeenasrecentlyas2010.See77Fed.Reg.94139414. EPA also thought the rules impact on jobswould be about a wash, with jobs lost at some high-emittingplants but gainedbothat cleanerplants and inthepollutioncontrol industry. See ibid. Onthebenefitsside, EPA noted that it could not quantify many of thehealth gains that would result from reduced mercuryexposure. Seeid.,at9306.Butevenputtingthoseaside,the rules annual benefits would include between 4,200and11,000 fewerprematuredeaths fromrespiratoryandcardiovascularcauses,3,100feweremergencyroomvisitsfor asthmatic children, 4,700 fewer non-fatal heart at-tacks, and 540,000 fewer days of lost work. See id., at9429.Those concrete findings matter to these caseswhich,

afterall,turnonwhetherEPAreasonablytookcostsintoaccount in regulating plants emissions of hazardous airpollutants. ThemajorityinsiststhatitmayignoreEPAscost-benefit analysis because EPA did not rely on itwhen issuing the initial appropriate and necessaryfinding. Ante, at 15 (quotingSolicitorGeneral); see alsoSECv.Chenery Corp.,318U.S.80,87,9394(1943).Atone level, thatdescription is trueindeed,asimple func-tionofchronology:Thekick-off findingprecededthecost-benefitanalysisbyyearsandsocouldnothavetaken itsconclusions into account. But more fundamentally, themajoritysaccountisoff,becauseEPAknewwhenitmadethat finding that it would consider costs at every subse-quent stage, culminating in a formal cost-benefit study.And EPA knew that, absent unusual circumstances, therulewouldneedtopassthatcost-benefitreviewinordertoissue. See Exec. Order No. 12866, 58 Fed. Reg. 51736(Each agency shall ... adopt a regulation only upon a

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reasoneddetermination that the benefits of the intendedregulation justify its costs). The reasonableness of theAgencysdecisiontoconsideronlytheharmsofemissionsat thethresholdstagemustbeevaluated in thatbroadercontext. And in thinking about that issue, it is well toremembertheoutcomehere:arulewhosebenefitsexceeditscostsbythreetoninetimes. Inmakingitsappropri-ate and necessary finding, EPA had committed to as-sessing and mitigating costs throughout the rest of itsrulemaking; if nothing else, the findings of the Agencyscost-benefit analysismaking clear that the final emis-sions standards were cost-effectiveshow that EPA didjustthat.

BSuppose you were in charge of designing a regulatory

process. The subjectmatteran industrys emissions ofhazardousmaterialwas highly complex, involvingmul-tivarious factors demanding years of study. Would younecessarilytrytodoeverythingatonce?Ormightyoutryto break down this lengthy and complicated process intodiscretestages? Andmightyouconsiderdifferentfactors,indifferentways,ateachofthosejunctures? Ithinkyoumight. You know that everythingmust get done in theendevery relevant factor considered. But you tend tothinkthatintheenddoesnotmeaninthebeginning.And you structure your rulemaking process accordingly,starting with a threshold determination that does notmirror your end-stage analysis. Would that be at least(which is all it must be) a reasonable policy choice?Chevron,467U.S.,at845.That is the question presented here, and it nearly an-

swers itself. Setting emissions levels for hazardous airpollutants is necessarily a lengthy and complicated pro-cess, demanding analysis of many considerations overmanyyears. Costsareakey factor in thatprocess:As I

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havesaid,sensibleregulationrequirescarefulscrutinyoftheburdensthatpotentialrulesimpose. Seesupra,at67. But in ordering its regulatory process, EPA knew itwouldhavetheopportunity toconsidercosts inoneafteranotherofthatrulemakingsstagesinsettingtheleveloffloorstandards,inprovidingarangeofoptionsforplantsto meet them, in deciding whether or where to requirelimitsbeyondthefloor,andinfinallycompletingaformalcost-benefit analysis. See 65 Fed. Reg. 7983079831;supra, at 915. Given that context, EPA reasonably de-cided that it was appropriateonce again, the onlystatutoryrequirementrelevantheretotriggertheregu-latory process based on the twin findings that the emis-sions inquestioncauseprofoundhealthandenvironmen-talharmsandthatavailablepollutioncontroltechnologiescan reduce those emissions. By making that decision,EPAdidnomorethancommititselftodevelopingarealis-tic and cost-effective regulationa rule that would takeaccount of every relevant factor, costs andbenefits alike.And indeed, particular features of the statutory schemehereindicatethatEPAspolicychoicewasnotjustamin-imallyreasonableoptionbutaneminentlyreasonableone.To start, that decision brought EPAs regulation of

power plants into syncwith its regulation of every othersignificantsourceofhazardouspollutantsundertheCleanAirAct.Forallthosetypesofsources(totalingover100),theAct instructs EPA tomake the threshold decision toregulatebasedsolelyonthequantityandeffectsofpollu-tantsdischarged;costsenterthepictureafterward,whenthe Agency takes up the task of actually establishingemissionslimits.Seesupra,at34.Industryafterindus-try, year after year, EPA has followed that approach tostandard-setting,justasCongresscontemplated.See,e.g.,58Fed.Reg.49354(1993)(drycleaningfacilities);59Fed.Reg. 64303 (1994) (gasoline distributors); 60 Fed. Reg.45948(1995)(aerospacemanufacturers). Andapparently

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with considerable success. At any rate, neither thosechallengingthisrulenortheCourtremotelysuggeststhatthese regulatory regimes have done significantly moreharmthangood.Ante,at7. Sowhenmakingitsappro-priate andnecessary finding for power plants,EPAhadgoodreasontocontinueinthesamevein.See,e.g., Entergy,556U.S.,at236 (opinionofBREYER,J.) (notingthat thereasonableness of an agencys approach to consideringcosts rests in part on whether that tack has met withapparent success in the past). And that is exactly howEPAexplained its choice. Stating that itwould considerthecostsofcontrolswhendevelopingaregulation,theAgency noted that such an approach has helped buildflexibility in meeting environmental objectives in thepast,therebypreventingtheimpositionofdisproportion-ate costs. 65 Fed. Reg. 79830. Indeed, as EPA furthercommentedinissuingitsrule,itwouldseeminequitabletoimposearegulatoryregimeoneveryindustryinAmer-icaandthentoexemptonecategoryafterfindingitrepre-sented a significant part of the air toxics problem. 77Fed. Reg. 9322 (quoting 136 Cong. Rec. 36062 (1990)(statementofSen.Durenberger)).Themajoritysattempttoanswerthispointfounderson

evenitsownstatementoffacts. Themajorityobjectsthatthe whole point of having a separate provision aboutpower plants is to treat[] power plantsdifferently fromotherstationarysources. Ante,at11(emphasisinorigi-nal). But turn back about 10 pages, and readwhat themajority says about why Congress treated power plantsdifferently:because,asallpartiesagree,separateregula-tory requirements involving acid rain were expected tohave the collateral effect of reducing power plants emis-sions of hazardous air pollutants, although the extent ofthereductionwasunclear.Ante,at2;seesupra,at45.For that reason alone (the majority does not offer anyother), Congress diverted EPA from its usual regulatory

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path, instructingtheAgency,asapreliminarymatter, tocompleteandconsiderastudyabouttheresidualharmstopublichealtharisingfromthoseemissions.Seeante,at23; supra,at5. ButonceEPAfoundin itsstudythattheacid rain provisions would not significantly affect powerplants emissions of hazardous pollutants, any rationalefor treating power plants differently from other sourcesdischarging thesamesubstanceswentup in smoke. See65Fed.Reg.79830. Atthatpoint,theAgencywouldhavehad farmore explaining to do if, rather than followingawell-testedmodel,ithaddevisedanewschemeofregula-tionforpowerplantsonly.Stillmore,EPAcouldnothaveaccuratelyassessedcosts

atthetimeofitsappropriateandnecessaryfinding.See8MercuryStudy,at62(notingthemanyuncertaintiesin any early-stage analysis of pollution control costs).Under the statutory scheme, that finding comesbeforeyears beforethe Agency designs emissions standards.AnduntilEPAknowswhatstandards itwillestablish, itcannotknowwhatcosts theywill impose. Norcanthosestandards even be reasonably guesstimated at such anearlystage. Considerwhatittakestosetfloorstandardsalone. First,EPAmust divide power plants into catego-riesandsubcategories;asexplainedearlier,thoseclassifi-cationdecisionssignificantlyaffectwhat floorsareestab-lished. Seesupra,at4,andn.1,1112. Andthen,EPAmust figure out the average emissions level alreadyachievedbythetop12%ineachclasssoastosetthenewstandards. Noneofthatcanrealisticallybeaccomplishedin advance of the Agencys regulatory process: Indeed,those steps are the very stuff of the rulemaking. Simi-larly, untilEPA knowswhat compliance options itwilldevelop, it cannot knowhow theywillmitigate the costsplantsmustincurtomeetthefloorstandards.Seesupra,at 1314. And again, deciding on those options takessubstantial time. So there is good reason for different

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considerations to go into the threshold finding than intothe final rule. Simplyput, calculatingcostsbeforestart-ing to write a regulation would put the cart before thehorse.

IIIThe central flaw of the majority opinion is that it ig-

nores everything but one thingEPA did. It forgets thatEPAsappropriateandnecessaryfindingwasonlyafirststepwhichgottherestoftheregulatoryprocessrolling. Itnarrowsitsfieldofvisiontothatfindinginisolation,withbarely a glance at all theways inwhichEPA later tookcosts into account. See supra, at 1011 (in establishingfloorstandards);supra,at1314 (inadoptingcomplianceoptions); supra, at 14 (in deciding whether to regulatebeyondthefloor);supra,at1415(inconductingaformalcost-benefitanalysisasafinalcheck). Insum,themajor-itydisregardshowconsiderationofcostsinfusedtheregu-latory process, resulting not only in EPAs adoption ofmitigation measures, ante, at 1314, but also in EPAscraftingofemissionsstandardsthatsucceedinproducingbenefitsmanytimestheirprice.Thatmistakeaccountsforthemajoritysprimaryargu-

ment that the word appropriate, as used in7412(n)(1)(A),demandsconsiderationofcosts. Seeante,at67. AsIhavenoted,thatwouldbetrueiftheappro-priate and necessary finding were the only step beforeimposingregulationsonpowerplants.Seesupra,at67.But,asshouldbemorethanclearbynow,itwasjustthefirst of many: Under the Clean Air Act, a long road layahead in which the Agency would have moreand farbetteropportunities to evaluate the costs of diverseemissionsstandardsonpowerplants, justasitdidonallothersources. Seesupra,at4,7,915.EPAwellunder-stood that fact: Weevaluate the terms appropriate andnecessary, it explained, in light of their statutory con-

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text. 76Fed.Reg.24986. AndEPAstructureditsregula-toryprocessaccordingly,with considerationof costs com-ing(multipletimes)afterthethresholdfinding. Theonlyway the majority can cast that choice as unreasonable,given thedeference thisCourt owes to suchagencydeci-sions,istoblinditselftothebroaderrulemakingscheme.The same fault inheres in the majoritys secondary

argument that EPA engaged in an interpretive gerry-mander[] by considering environmental effects but notcosts in making its appropriate and necessary finding.Ante, at 89. The majority notesquite rightlythatCongress called for EPA to examine both subjects in astudy of mercury emissions from all sources (separatefromthestudyrelatingtopowerplantsemissionsalone).Seeante,at8. Andthemajoritystatesagain,rightlythat Congresss demand for that study provides directevidence that Congress was concerned with [both] envi-ronmentaleffects [and] cost. Ante, at9 (internalquota-tionmarks omitted). Butnothing follows from that fact,becauseEPAtoowasconcernedwithboth. Trueenough,EPA assessed the two at different times: environmentalharms (along with health harms) at the threshold, costsafterward. But thatwas for thevery reasonsearlierde-scribed: because EPA wanted to treat power plants likeothersourcesandbecauseitthoughtharms,butnotcosts,could be accurately measured at that early stage. Seesupra,at1720.Congressssimplerequestforastudyofmercuryemissionsinnowayconflictswiththatchoiceofwhen and how to consider both harms and costs. Oncemore, the majority perceives a conflict only because ittakessopartialaviewoftheregulatoryprocess.And the identical blind spot causes the majoritys

sports-car metaphor to run off the road. The majoritylikensEPAtoahypotheticaldriverwhodecidesthatitisappropriatetobuyaFerrariwithoutthinkingaboutcost,becauseheplans to thinkaboutcost laterwhendeciding

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whethertoupgradethesoundsystem.Ante,at11.Thecomparison is witty but wholly inapt. To begin with,emissions limitsarenota luxurygood:Theyareasafetymeasure, designed to curtail the significant health andenvironmental harms caused by power plants spewinghazardous pollutants. Andmore: EPA knows from pastexperienceandexpertisealikethatitwillhavetheoppor-tunity to purchase that good in a cost-effective way. Abetteranalogymightbetoacarownerwhodecideswith-outfirstcheckingpricesthatitisappropriateandneces-sary to replace her worn-out brake-pads, aware fromprior experience that she has ample time to comparison-shop and bring that purchasewithin her budget. Facedwith a serious hazard and an available remedy, EPAmovedforwardlikethatsensiblecarowner,withaprom-ise that it would, and well-grounded confidence that itcould,takecostsintoaccountdowntheline.Thataboutdoesitforthemajoritysopinion,saveforits

final appeal to Cheneryand Chenery cannot save itsholding. Seeante, at14. Of coursea courtmaynotup-hold agency action on grounds different from those theagencygave. SeeChenery,318U.S.,at87.Butequally,acourtmaynotstrikedownagencyactionwithoutconsider-ingthereasonstheagencygave. Id.,at95. Andthat iswhat the majority does. Indeed, it is difficult to knowwhatagencydocumentthemajorityisreading. Itdeniesthat EPA said ... that cost-benefit analysis would bedeferreduntil later. Ante, at13. ButEPAsaidexactlythat:Thecostsofcontrols,theAgencypromised,willbeexaminedasapartofdevelopingaregulation.65Fed.Reg.79830. Tellingly,thesewordsappearnowhereinthemajoritysopinion.Butwhataretheyotherthanastate-ment that cost concerns, contra the majority, are not irrelevant,ante, at 13 (without citation)that they aresimplygoingtocomeinlater?And for goodmeasure, EPA added still extra explana-

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tion. Initsappropriateandnecessaryfinding,theAgencycommitted to exploring least-cost solutions in devel-opingastandard forutilities. 65Fed.Reg.79830. TheAgency explained that such an approachparticularlymentioning theuse of averaging and subcategorizationhad offered opportunit[ies] for lower cost solutions andhelped build flexibility in meeting environmental objec-tives in the past. Ibid.; see supra, at 7, 18. Then, inissuingitsproposedandfinalrules,EPAaffirmedthat ithaddonejustwhatitsaid. EPArecognizedthatstandard-setting must allow the industry to make practical in-vestment decisions that minimize costs. 76 Fed. Reg.25057. Accordingly, the Agency said, it had provid[ed]flexibilityandcomplianceoptionssoastomaketheruleless costly for regulated parties. 77 Fed. Reg. 9306.EPAaddedthatithadrejectedbeyond-the-floorstandardsfor almost all power plants because they would not bereasonableafterconsideringcosts. Id.,at9331. Anditshowed the results of a formal analysis finding that therules costs paled in comparison to its benefits. In sum,EPA concluded, it had made the final standards cost-efficient. Id., at 9434. What more would the majorityhaveEPAsay?

IVCostsmatterinregulation. ButwhenCongressdoesnot

say how to take costs into account, agencies have broaddiscretion to make that judgment. Accord, ante, at 14(noting that it is up to theAgency todecide (asalways,within the limits of reasonable interpretation) how toaccount for cost). Farmore than courts, agencies havethe expertise and experience necessary to design regula-toryprocesses suited to a technical and complexarena.Chevron, 467U.S., at 863. And in any event, Congresshasentrustedsuchmatterstothem,nottous.EPA exercised that authority reasonably and responsi-

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bly insettingemissionsstandards forpowerplants. TheAgencytreatedthoseplantsjustasithadmorethan100other industrial sources of hazardous air pollutants, atCongresssdirectionandwithsignificantsuccess.Itmadea threshold finding that regulationwas appropriateandnecessary based on the harm caused by power plantsemissions and the availability of technology to reducethem. In making that finding, EPA knew that when itdecided what a regulation would look likewhat emis-sions standards the rule would actually setthe Agencywouldconsidercosts. Indeed,EPAexpresslypromisedtodo so. And it fulfilled that promise. The Agency tookaccount of costs in setting floor standards as well as inthinkingaboutbeyond-the-floorstandards.Ituseditsfullkitoftoolstominimizetheexpenseofcomplyingwithitsproposedemissionslimits. Itcappedtheregulatoryproc-esswith a formal analysis demonstrating that the bene-fitsofitsrulewouldexceedthecostsmanytimesover.Insum,EPAconsideredcostsallovertheregulatoryprocess,exceptinmakingitsthresholdfindingwhenitcouldnothavemeasured themaccurately anyway. That approachiswhollyconsonantwiththestatutoryscheme.Itsadop-tionwasuptotheAgencytodecide.Ante,at14.The majority arrives at a different conclusion only by

disregardingmostofEPAs regulatoryprocess. It insiststhat EPAmust consider costswhen EPA did just that,overandoverandoveragain. Itconcedestheimportanceof context in determining what the appropriate andnecessary standardmeans, seeante, at 7, 10and thenignores every aspect of the rulemaking context in whichthatstandardplaysapart. Theresult isadecision thatdeprives the Agency of the latitude Congress gave it todesign an emissions-setting process sensibly accountingfor costs andbenefitsalike. And the result is adecisionthatdeprivestheAmericanpublicofthepollutioncontrolmeasuresthattheresponsibleAgency,actingwellwithin

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its delegated authority, found would save many, manylives. Irespectfullydissent.

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Michigan v. EPA

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