Full opinion text
Opinion for the Court filed by Circuit Judge WALD. WALD, Circuit Judge. The petitions in these consolidated cases require us to interpret section 325 of the Energy Policy and Conservation Act (EPCA or the Act), 42 U.S.C. § 6295, which was enacted in 1975 as part of a “comprehensive national energy policy.” S.Rep. No. 516, 95th Cong., 1st Sess. 116 (1975), U.S.Code Cong. & Admin.News 1975, p. 1762 (conference report). In its initial version, section 325 required the Federal Energy Administrator to prescribe energy efficiency improvement targets for thirteen named household appliances, called “covered products.” See EPCA § 325(a)(1)-(2), Pub.L. No. 94-163, 89 Stat. 871, 923-24 (1975). If the Administrator determined that manufacturers of any of the covered products were not likely to achieve the aggregate gain in efficiency specified in the target by 1980, he was directed to begin a proceeding to prescribe a mandatory “energy efficiency standard” for that appliance. See id. § 325(a)(4)(A)-(B), 89 Stat. at 924. In 1978, however, Congress amended EPCA to “eliminate[ ] the target approach and improve[ ] the procedures for establishing standards to ensure that efficiency improvements will be made expeditiously.” H.R.Rep. No. 496, Pt. 4, 95th Cong., 1st Sess. 46 (1977), U.S.Code Cong. & Admin. News 1978, pp. 7659, 8493; see National Energy Conservation Policy Act (NECPA) § 422, Pub.L. No. 95-619, 92 Stat. 3206, 3259 (1978). The amended version of section 325(a) orders the Secretary of Energy to prescribe energy efficiency standards for the thirteen covered products without first establishing industry targets. Under the Act, “[e]nergy efficiency standards for each type (or class) of covered products ... shall be designed to achieve the maximum improvement in energy efficiency which the Secretary determines is technologically feasible and economically justified.” EPCA § 325(c). If the Secretary prescribes a standard at a level lower than the maximum technologically feasible level, the Secretary must explain why that lower level was chosen. Id. § 325(i)(3). The Act also declares that if, for any type or class of covered product, a standard would not result in significant conservation of energy or would not be technologically feasible or economically justified, the Secretary shall not prescribe a standard. Id. § 325(b). A determination that no standard is warranted for a particular appliance, like the issuance of a mandatory standard, preempts any state-law efficiency requirements for the appliance, although the state may then apply to the Secretary for an exemption from the preemption provision. Id. §§ 325(b), 327. The Secretary was further instructed to give priority in formulating standards to nine of the covered products. Id. § 325(g). The final rules challenged here apply to eight of the nine covered products given priority under EPCA. The Department of Energy (DOE) determined that for seven of those eight products, a mandatory standard would not result in significant conservation of energy. DOE also determined that for all eight products, a mandatory standard would not be economically justified. See 48 Fed.Reg. 39,376, 39,376 (1983); 47 Fed.Reg. 57,198, 57,198 (1982). These “no-standard standards” terminated the rulemaking for the eight products considered, and thus preempted state regulation without imposing any federal regulation at all. The petitioners are the Natural Resources Defense Council (NRDC), Consumers Union of the United States, Representative Richard Ottinger, the California State Energy Resources Conservation and Development Commission, the State of Minnesota, and the State of New York. The State of Texas, the Northwest Power Planning Council, the Florida Department of Community Affairs, the Oregon Department of Energy, and the Iowa Commerce Commission have intervened in support of the broad attack on the rules mounted by petitioners. Various appliance manufacturers and trade associations have intervened in support of the Secretary of Energy. We agree with the petitioners that in important respects DOE’s determinations are unsupported by substantial evidence and are contrary to law. See EPCA § 336(b)(2). We also find that DOE violated section 336(a)(2) of EPCA by refusing to allow interested persons a meaningful opportunity to question DOE employees who participated in the rulemaking. Finally, we find that DOE did not adequately evaluate the environmental consequences of these rules, as section 102(2)(C) of the National Environmental Policy Act of 1969, 42 U.S.C. § 4332(2)(C), requires. We therefore grant the petitions and hold the rules under review to be unlawful. I. Background EPCA was originally enacted in the aftermath of the oil embargo imposed against the United States in 1973 and 1974 by certain petroleum-producing countries. As the House Report commented: The 1973-74 Arab embargo resulted in a 2.2-miIlion-barrel-per-day reduction on imports of crude oil and petroleum products — an interruption equal to about one third of the United States’ imports and [to] about 12 percent of overall petroleum supplies. The embargo was accompanied by a 7 percent decrease in real Gross National Product for the first quarter of 1974, and an increase of unemployment of approximately 425,000 persons for that quarter. Dependence of the United States on petroleum products has risen since September, 1973, from 33 percent to approximately 36 percent in December, 1974____ Continuing dependence on foreign petroleum, and the economic consequences of another embargo, require that the United States take steps to effectively reduce its vulnerability to future import interruptions. H.R.Rep. No. 340, 94th Cong., 1st Sess. 20 (1975), U.S.Code Cong. & Admin.News 1975, p. 1782. This emergency vividly illustrated the serious long-term economic and national security problems that continuing dependence on foreign sources of energy would create. To meet these challenges, President Ford called for “the strongest and most far-reaching energy conservation program we have ever had.” 11 Weekly Comp.Pres.Doc. 40, 41 (Jan. 20, 1975). Congress responded by enacting EPCA, a wide-ranging statute establishing a comprehensive national energy policy. According to the conference report, EPCA was designed to: (1) maximize domestic production of energy and provide for strategic storage reserves of crude oil, residual fuel oil and refined petroleum products; (2) ... minimize the impact of disruptions in energy supplies by providing for emergency standing measures; (3) provide for domestic crude oil prices that will encourage domestic production in a manner consistent with economic recovery; and (4) reduce domestic energy consumption through the operation of specific voluntary and mandatory energy conservation programs. S.Rep. No. 516, 94th Cong., 1st Sess. 116-17 (1975) U.S.Code Cong. & Admin.News 1975, p. 1957. The energy conservation programs alone included separate provisions designed to: Establish mandatory average fuel economy performance standards for any passenger automobiles and other light duty highway vehicles; Require energy labeling of major home appliances and certain other consumer products, and authorize energy efficiency standards for major appliances; Authorize block grants-in-aid for States to assist in the development and implementation of state-administered energy conservation programs; and Establish a program to encourage increased efficiency of energy use by American industry; Establish a program for energy conservation within the Federal Government; and Promote the use of recycled oil. Id. at 118-19, U.S.Code Cong. & Admin. News 1975, p. 1959. The EPCA appliance program had four elements. First, the Federal Energy Administrator was required to prescribe test procedures for measuring the energy efficiency and operating costs of thirteen named products. See EPCA § 323, Pub.L. No. 94-163, 89 Stat. 871, 919 (1975). Second, the Administrator was required to promulgate rules compelling manufacturers of covered products to label those products with information developed from the test procedures. Id. § 324, 89 Stat. at 920. Third, the Administrator was required to prescribe voluntary energy efficiency improvement targets, set at the highest efficiency that was economically and technologically feasible, for each of the thirteen covered products. Id. § 325(a)(1)(A), (a)(2), 89 Stat. at 923, 924. Targets for ten of those products were given priority. See id. § 325(a)(1)(A), 89 Stat. at 923. Targets for priority covered products were to be fixed so that the aggregate efficiency of all appliances belonging to those product types manufactured in 1980 would exceed the efficiency of the same appliances manufactured in 1972 by at least 20 percent. Id. § 325(a)(1)(B), 89 Stat. at 924. Finally, if the Administrator determined that any target for a product type was not likely to be achieved, he was directed to begin a proceeding to prescribe a mandatory energy efficiency standard. Id. § 325(a)(4)(B). If, in that proceeding, the Administrator found that for the product type or for product classes within that type (a) improvements in energy efficiency were technologically feasible and economically justified, and (b) an unregulated market, as influenced by the labeling program, would not result in the production and purchase of products at the maximum technologically feasible and economically justified efficiency, EPCA required the Administrator to prescribe a mandatory energy efficiency standard. Id. § 325(a)(4)(C). EPCA also set specific deadlines for the Administrator in carrying out the provisions of the Act. In 1978, President Carter proposed a series of bills aimed at a complete overhaul of national energy policy. Among the major initiatives suggested were nationwide programs to encourage conservation and efficiency planning in transportation, buildings, appliances, and industry; cogeneration, district heating, and utility reform measures; price control and tax measures for oil and natural gas; incentives to stimulate production of Alaskan oil, oil from the outer continental shelf, shale oil, liquified natural gas, and synthetic fuels; and development programs for coal, nuclear, hydroelectric, solar, and geothermal energy. These proposals were, in various forms, enacted in five statutes: the Public Utility Regulatory Policies Act of 1978, Pub.L. No. 95-617, 92 Stat. 3117; the Energy Tax Act of 1978, Pub.L. No. 95-618, 92 Stat. 3174; the Powerplant and Industrial Fuel Use Act of 1978, Pub.L. No. 95-620, 92 Stat. 3289; the Natural Gas Policy Act of 1978, Pub.L. No. 95-621, 92 Stat. 3350; and NECPA, Pub.L. No. 95-619, 92 Stat. 3206 (1978). Together, these statutes were known as the National Energy Act. NECPA, though only part of a mammoth legislative program, itself sought to strengthen and expand energy conservation programs in a number of ways. Title II of the Act inaugurated various programs involving public utilities in efforts to conserve the residential use of energy and authorized certain grants to low-income families for energy-saving improvements in housing; Title III created energy conservation programs for schools, hospitals, and other buildings owned by local governments and public institutions; Title IV established conservation programs for automobiles, appliances, and industrial equipment; Title V set forth energy conservation measures for the federal government, including the use of solar heating and cooling and a photovoltaic energy program; and Title VI contained miscellaneous conservation and reporting measures. The Carter administration’s National Energy Plan, which announced the details of this legislative package, declared that: Most [major home appliances] could achieve significant reductions in energy use with relatively small increases in cost. Current legislation relies mainly on voluntary efforts to meet industry-wide average target, and permits the establishment of mandatory standards only after long delays. New legislation is proposed to streamline the regulatory process. The present voluntary program will be replaced by mandatory minimum standards on certain major home appliances as soon as possible. Executive Office of the President, The National Energy Plan 43 (1977). In keeping with these views, the administration proposed a radical revision of the EPCA appliance program. Specifically, the administration’s proposal would have required DOE to prescribe energy efficiency standards for seven of the thirteen covered products named in EPCA. See National Energy Act: Communication from the President of the United States, H.R.Doc. No. 138, 95th Cong., 1st Sess. 30 (1977) [hereinafter cited as H.R.Doc. No. 138]. Those seven products were selected because they consumed relatively large amounts of electricity — together, about 80 percent of the energy used in American households. See S.Rep. No. 409, 95th Cong., 1st Sess. 38 (1977). The proposal permitted but did not compel DOE to prescribe standards for the six lower-consumption covered products. See H.R.Doc. No. 138 at 30. Under certain conditions, DOE could also prescribe standards for further appliances not named in EPCA or in the new legislation. The proposal did not require “significant” conservation; it simply demanded that standards be technologically feasible and economically justified. See id. at 30-35. The House amended this proposal to require that DOE prescribe standards for all thirteen named products. The House bill retained discretionary standards only for appliances not named in the Act that DOE voluntarily designated for coverage. Having mandated standards even for the six low-consumption covered products, the House also decided DOE should not prescribe standards that would not result in “significant” energy conservation. See H.R.Rep. No. 496, Pt. 4, 95th Cong., 1st Sess. 46-47 (1977). The Senate Bill required DOE to prescribe standards for nine of the covered products and authorized discretionary standards for the remaining four covered products and for other appliances designated by DOE. See S.Rep. No. 409, 95th Cong., 1st Sess. 32, 77 (1977). Like the administration proposal, the Senate bill contained no significance provision. See S. 2057, 95th Cong., 1st Sess. § 201(a), reprinted in S.Rep. No. 409, 95th Cong., 1st Sess. 13-14 (1977). The conference report combined the two versions. Congress accepted the House provision requiring standards for all thirteen covered products, along with the significance provision, but standards for the nine appliances singled out in the Senate bill were given priority. See H.R.Rep. No. 1751, 95th Cong., 2d Sess. 114-15 (1978). The President signed NECPA into law on November 9, 1978. See 14 Weekly Comp. Pres.Doe. 1,978 (Nov. 9, 1978). As the Act required, DOE proceeded to develop final test procedures for the thirteen covered products. See 10 C.F.R. § 430.22-.23 & apps. A-O (1985) (codifying current test procedures); 44 Fed.Reg. 49, 51 (1979) (tabulating Federal Register citations for test procedure notices). After issuing an advance notice of proposed rule-making, see id., DOE published proposed rules on June 30, 1980 that set forth minimum efficiency standards for all eight of the products considered in the rulemaking. See 45 Fed.Reg. 43,976 (1980); see also infra note 15. DOE’s general approach was to consider standards based on the most efficient combination of those design options commercially available in 1980. DOE did not consider standards based on prototype technologies or other advanced designs not yet on the market. DOE then developed several different possible standards at different efficiency levels for each product type or class, and evaluated those possible standards to decide if they were economically justified. See 45 Fed.Reg. at 43,983-85. Following that path of analysis, DOE concluded that standards for all eight covered products would result in significant conservation and were, on balance, economically justified. See id. at 43,976. DOE also prepared a lengthy environmental assessment of the proposed rules, although it did not prepare a full-scale environmental impact statement. See U.S. Department of Energy, Environmental Assessment: Energy Efficiency Standards for Consumer Products (1980) [hereinafter cited as 1980 Environmental Assessment], J.A. at 225. EPCA required DOE to promulgate final rules by January 2, 1981. In January of 1981, the outgoing administration informed a congressional committee that except for “fine-tuning,” work on the standards was nearly complete. However, in February of 1981 the incoming administration announced that it would seek repeal of the mandatory appliance program and in any event intended to undertake a comprehensive reassessment of the data supporting the proposed rules. See 46 Fed.Reg. 13,-517 (1981). In October of 1981 — over eight months after the statutory deadline — NRDC and Consumers Union of the United States filed suit to compel promulgation of appliance efficiency standards. See Natural Resources Defense Council, Inc. v. Edwards, Civ. No. 81-2546 (D.D.C.). On April 2, 1982, DOE issued a new notice of proposed rulemaking, which proposed a completely new and vastly higher definition of “significant” conservation of energy, entirely new views about the benefits and burdens of mandatory standards, and tentative determinations that no standard would be issued for any of the eight products involved in this rulemaking. See 47 Fed.Reg. 14,424 (1982). DOE’s notice did not state when final rules would be prescribed, and NRDC and Consumers Union accordingly pressed forward with their litigation. DOE settled the suit by agreeing to promulgate rules no later than October 29,1982, unless prevented by good cause. See 47 Fed.Reg. 57,198, 57,200 (1982). DOE failed to meet that deadline. On December 22, 1982, DOE published final rules determining that standards for kitchen ranges and ovens and for clothes dryers would not result in significant conservation of energy and in any event would not be economically justified. See id. at 57,198. The December rulemaking also finally adopted a slightly revised version of the new definition of significant conservation proposed in the April notice. See id. at 57,202-09. On August 30, 1983, DOE announced its refusal to prescribe mandatory standards for the six remaining priority products involved in this case. See 48 Fed.Reg. 39,376 (1983). DOE concluded that for seven of the eight appliances considered in the December 1982 and August 1983 rules, standards would not result in significant conservation and would not be economically justified. See id. at 39,376. For the eighth, central air conditioners, DOE concluded that a standard would result in significant conservation but would not be economically justified. See id. at 39,402, 39,-406. DOE’s decisions were based only on technology available for appliances commercially sold in the United States by November of 1980. For reasons discussed below, DOE declined to assess prototypes and other advanced technologies, foreign models, or models that had appeared in the domestic market between 1980 and the issuance of final rules in 1982 and 1983. See id. at 39,379-80; see also infra at 76-100. These final rules ended federal consideration of standards for the eight appliances and preempted state efficiency regulation of those appliances. See supra note 7. DOE also decided that it was not required to prepare an environmental assessment or environmental impact statement for its “no-standard standard” determinations. See 48 Fed.Reg. at 39,407-08; 47 Fed.Reg. 57,198, 57,216-17 (1982). In Parts II-V, we consider petitioners’ arguments that the final rules are in violation of EPCA and unsupported by substantial evidence. Parts VI and VII discuss whether DOE allowed petitioners a reasonable opportunity to question DOE employees, and whether DOE was required to consider more thoroughly the environmental consequences of the final rules. In reviewing DOE’s construction of EPCA, we first determine whether Congress “has directly spoken to the precise question at issue,” Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., — U.S. -, 104 S.Ct. 2778, 2781, 81 L.Ed.2d 694 (1984); if so, we “must give effect to the unambiguously expressed intent of Congress,” id. 104 S.Ct. at 2781-82 (footnote omitted). “If Congress’ intent is not clear, however, the court ‘must conduct the “narrower inquiry into whether the [agency’s] construction was ‘sufficiently reasonable’ to be accepted by a reviewing court.” ’ ” Eagle-Picher Indus., Inc. v. United States Envtl. Protection Agency, 759 F.2d 922, 927 n. 5 (D.C.Cir.1985) (quoting General Motors Corp. v. Ruckelshaus, 742 F.2d 1561, 1567 (D.C.Cir.1984) (en banc)) (further citations omitted). Although DOE developed the rules under review through informal rulemaking, EPCA expressly provides that the substantial evidence standard guides our review of factual findings. See EPCA § 336(b)(2). “When reviewing the policy judgments made by the Secretary, including those predictive and difficult judgment calls the Secretary is called upon to make, we will subject them to searching scrutiny to ensure that they are neither arbitrary nor irrational — in other words, we must determine whether ‘the decision is based on a consideration of the relevant factors and whether there has been a clear error of judgment.’ ” California v. Watt, 668 F.2d 1290, 1302 (D.C.Cir.1981) (quoting Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 416, 91 S.Ct. 814, 824, 28 L.Ed.2d 136 (1971)); see Industrial Union Dep’t, AFL-CIO v. Hodgson, 499 F.2d 467, 472-76 (D.C.Cir.1974); cf. Weyerhaeuser Co. v. Costle, 590 F.2d 1011, 1024-28 (D.C.Cir.1978). II. DOE’s Definition of “Significant Conservation of Energy” A. The Development of DOE’s Definition EPCA instructs the Secretary not to issue standards for a type or class of covered product if he “determines, by rule, that the establishment of such standard will not result in significant conservation of energy.” EPCA § 325(b)(2). In the June 1980 proposed rules, DOE announced a two-part definition of significant conservation, both parts of which had to be met for a proposed standard to pass the test. First, a standard governing a product type or product classes within that type would have been required to result in national energy savings for the product type exceeding 840,000,000 kilowatt hours (2.867 X 1012 Btu) per year. Second, a standard would have been required to result in energy savings per unit over the product class involved exceeding 30 kilowatt hours (102,-390 Btu) per year. See 45 Fed.Reg. 43,976, 44,031-32 (1980); U.S. Department of Energy, Economic Analysis: Energy Efficiency Standards for Consumer Products § 6.3 (1980) [hereinafter cited as 1980 Economic Analysis Document], J.A. at 612-15. DOE explained that this definition was drawn from figures in EPCA itself. Under EPCA as it was first enacted, the Federal Energy Administrator was required to prescribe energy efficiency improvement targets for the same thirteen products that under NECPA became subject to mandatory standards. See EPCA § 325(a)(1)(A), (a)(2), Pub.L. No. 94-163, 89 Stat. 871, 920, 924 (1975). Of those products, ten were given priority. See id. Congress demanded that the targets for those priority products be designed to achieve an overall improvement in efficiency of at least 20 percent, measured by comparing the aggregate efficiency of all models of the ten priority products manufactured in 1972 against the same figure for models manufactured in 1980. See EPCA § 325(a)(1)(B), 89 Stat. at 924. DOE also noted that section 325(a)(2) of EPCA, as amended by NECPA, authorized DOE to prescribe energy efficiency standards for appliances not named in section 322(a) if, among other conditions, (A) the average per household energy use within the United States by products of such type (or class) exceeded 150 kilowatt hours (or its Btu equivalent) for any 12-calendar-month period ending before such determination [and] (B) the aggregate household energy use within the United States by products of such type (or class) exceeded 4,200,-000,000 kilowatt-hours (or its Btu equivalent) for any such 12-calendar-month period EPCA § 325(a)(2)(AMB). DOE evidently reasoned that Congress must have thought significant conservation of energy was possible from standards governing appliances that consumed energy at the minimum levels specified in section 325(a)(2), or Congress would not have authorized DOE to consider standards for those appliances. Cf. 1980 Economic Analysis § 6.3 at 6.4, J.A. at 613. In light of former section 325(a)(1)(B), DOE settled on a 20 percent reduction in energy consumption for an appliance that just met the minimum consumption levels as a reasonable definition of “significant” savings. A 20 percent reduction in energy consumption for an appliance that consumes 4,200,000,-000 kilowatt hours nationally per year yields a savings of 840,000,000 kilowatt hours (2.867 X 1012 Btu) per year — the amount specified in the first part of the 1980 definition of significance. A 20 percent reduction in energy consumption for an appliance unit that consumes 150 kilowatt hours per year yields a savings of 30 kilowatt hours (102,390 Btu) per year — the amount specified in the second part of the definition. See 45 Fed.Reg. at 44,031-32. These levels, DOE announced, would screen out standards that produced only “marginal conservation,” id. at 44,032, and so fulfill the purposes of the significance requirement. On April 2, 1982, the new administration issued proposed rules that completely repudiated the 1980 approach to defining significance. See 47 Fed.Reg. 14,424, 14,429-31 (1982). DOE first announced that savings would be assessed as significant or insignificant over the 19-year period 1987 to 2005, see id. at 14,426-27, rather than on the annual basis proposed in 1980. DOE’s basic approach was to compare, for each product, three measures of the difference between projected energy consumption during that period if standards were not imposed and if they were imposed. DOE then examined those figures, which it viewed as gauging the savings attributable to standards, for “significance.” DOE’s notice set forth its three measures of energy consumption and the level at which savings under each measure would be deemed significant. DOE argued that the overall goal of NECPA’s conservation programs was to reduce national dependence on imported oil. For this reason, a saving for each of the thirteen product types would be deemed significant only if that saving made “a significant contribution to reducing this Nation’s energy dependence on foreign nations.” Id. at 14,-429. According to DOE, the definition proposed in 1980 recognized as significant “savings so low as to be non-measurable in national reports,” id. at 14,429 n. 14, and was therefore not rigorous enough under DOE’s new approach. In place of the 1980 definition, DOE proposed three alternative tests for significant savings. Under the first of these tests, savings were significant if they amounted to at least 10,000 barrels per day (bpd) of oil or an equivalent amount of natural gas. DOE later explained that this test was not satisfied if the combined savings of oil and gas equaled the equivalent of 10,000 bpd, but required that the full figure be met for one or the other of the two commodities separately. See 47 Fed.Reg. 57,198, 57,208 (1982). DOE’s second test for significance was based on its finding that conservation of energy would also be “significant” if the electricity saved “would have a significant impact on the environment or significantly reduce the need for additional generating capacity.” 47 Fed.Reg. 14,424, 14,430 (1982). DOE noted that according to the environmental assessment accompanying the June 1980 proposed rules, those rules would not have had a significant effect on the environment. Id. at 14,430; see 1980 Environmental Assessment at 5-11, J.A. at 241. It concluded that “[b]ecause the standards proposed in the June 30 proposal were predicted to create greater energy savings than the standards analyzed in this proposal, DOE believes that no single standard considered in today’s proposal could have a significant effect on the environment.” 47 Fed.Reg. at 14,430. DOE further decided that to have an effect on the need for new generating capacity, a national saving of electricity would have to exceed 1 percent of national usage. See id. That figure was therefore chosen as the second threshold level for significance. Finally, DOE recognized that the first two proposed tests had “a built-in bias towards products that use a great deal of energy in the first instance.” Id. In particular, DOE noted that those tests demanded an annual savings greater than the total annual consumption of some covered products. Standards for these products could not have resulted in significant savings even if the standard reduced energy consumption by the product to zero. DOE therefore proposed a third test, purportedly based on former EPCA section 325, under which savings would be significant if “the energy saved as a result of the standard, as measured by the ORNL Model, [would] be 20 percent of the energy that would be used by the product in the no-standard case.” Id. These tests were hotly debated in the comments on the proposed rules, and DOE responded in its December 22, 1982 notice of final rules by making several changes. Specifically, DOE abandoned its earlier decision to calculate energy savings over the 19-year period from 1987 to 2005, on the ground that many of the covered products had very different useful lives. Covered products with different useful lives necessarily have different “penetration rates”— that is, the shorter the useful life of a covered product, the more quickly new appliances of that type will tend to account for a large proportion of all such appliances in use. The penetration rate of a covered product in turn affects how quickly more efficient models will influence national energy consumption. DOE therefore adopted the average life of a product, beginning in 1987, as the appropriate period for analyzing savings for that product under the first two tests for significance. See 47 Fed.Reg. 57,198, 57,203 (1982). The third proposed test presented a special timing problem because, as several commenters informed DOE, [S]ome products would not meet the test even if a standard required every new product sold to use no energy at all. This anomalous result occurred because so much of the energy being measured in the standards case would be energy consumed by products purchased before the standards were put into effect. Id. at 57,208. For this reason, DOE settled on the “one-year period following the year of the retirement of the average product purchased immediately preceding the application of a standard,” id., as the year during which the third test was to be applied. For example, if standards were put into effect in 1987, the measuring year for an appliance with an average life of 18 years would be 2005. Products purchased in 1986 — the last year before standards were imposed — would on average wear out in 2004. Thus in 2005, according to DOE, relatively few pre-standard models would remain to skew the calculation. Finally, DOE noted that former section 325 of EPCA referred to a 20 percent improvement in efficiency, while DOE’s definition required a 20 percent decrease in energy use. In fact, however, a 20 percent improvement in efficiency mathematically results in only a 16.67 percent decrease in fuel use, and accordingly DOE substituted that lower percentage in its test. See id. Although commenters voiced numerous other criticisms of DOE’s proposed definition of significance, DOE adhered to that definition with the revisions described above. Under DOE’s final definition, energy savings from a proposed standard were significant only if they met at least one of the following three tests: (1) “the standard would result in the saving of 10,000 bpd of oil or the saving of natural gas equivalent to 10,000 bpd of oil over the period of the average life of the product in question beginning with the year 1987,” id. at 57,209; (2) “the standard would result in the saving of one percent of national electricity use over the period of the average life of the product in question beginning with the year 1987,” id.; or (3) “the savings attributable to a standard for a product were equal to 16.67 percent of the energy that would be used by that product in the absence of a standard measured over the one year period following the period of the average life of the product purchased in the last year before the standard would be imposed,” id. at 57,209. B. The Validity of DOE’s Definition EPCA does not define “significant conservation of energy,” and DOE maintains that its interpretation of this statutory term is entitled to great deference. We agree that Congress left DOE with substantial discretion to set specific levels of significance, but no one disputes that the levels selected must be consistent with the express terms and underlying congressional intention of the Act. We must, as the Supreme Court has directed, decide whether EPCA’s definition is “a reasonable choice within a gap left by Congress.” Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., — U.S. -, 104 S.Ct. 2778, 2793, 81 L.Ed.2d 694 (1984). Answering that question requires us to determine whether, as DOE thought in 1980, Congress meant to exclude only “marginal” savings as insignificant, or as DOE thought in 1983, Congress licensed DOE to create so formidable an obstacle that it blocked standards for seven of the eight priority products at issue here. To conduct that inquiry, we first look to the structure and text of the Act and then examine the rationale DOE offered for its most recent position. We conclude that DOE’s definition of significant conservation is inconsistent with the congressional design reflected in NECPA. We think the basic decisionmaking structure of the Act suggests that DOE has made a fundamental mistake. First, the elaborate NECPA provisions governing standards and their legislative history leave no doubt that Congress expected DOE to prescribe mandatory efficiency standards. Congress apparently intended the threshold significance determination only to weed out standards promising such negligible benefits that they were not worth the trouble of further examination. We note that DOE may not issue a standard it has disqualified under the significance provision even if that standard imposes absolutely no burdens at all. Consequently, even an efficiency standard with no technological or economic drawbacks whatever — one that offers a completely painless way to energy conservation — will be discarded if it fails to achieve “significant” conservation. If, on the other hand, the standard under consideration survives this first look, DOE must still decide whether the standard would be economically justified. In reaching that decision, DOE is explicitly directed to weigh “the total projected amount of energy savings likely to result directly from the imposition of the standard.” EPCA § 325(d)(3). Thus, a finding that a proposed standard results in significant conservation is far from a prologue to inevitable promulgation of a mandatory standard; instead, that finding simply triggers a much more thorough review in which the amount of energy a standard would save is assessed in light of any other benefits and countervailing burdens of the standard. We think it unlikely that the Congress that enacted NECPA and its four related energy statutes intended DOE to throw away a cost-free chance to save energy unless the amount of energy saved was genuinely trivial. Moreover, that general view is bolstered by the few specific figures Congress included in the sections of NECPA that created the appliance program. In particular, review of the energy consumption level at which DOE was authorized to prescribe discretionary standards for an appliance is revealing. As we note above, section 325(a) of EPCA permits DOE to prescribe an energy efficiency standard for an appliance if its average per-household energy consumption exceeds 150 kilowatt hours, and its aggregate national household use during one year exceeds 4,200,000,000 kilowatt hours, or .014335 quadrillion Btu (Quads). Congress plainly thought that saving some part of the energy consumed by an appliance operating at those levels would be significant, or it would not have authorized DOE to prescribe mandatory standards for such an appliance. Our review of DOE’s figures suggests that standards for three of the appliances DOE considered in this rulemaking would have saved more energy per year than the total annual energy consumption necessary to qualify an appliance for discretionary standards. These standards, in other words, would have saved more energy than would have been saved if a standard instantly reduced to zero the total energy consumption of an appliance operating at the minimum level for discretionary standards. Yet for two of those three appliances, DOE branded the savings from standards insignificant, and thus rejected savings that exceeded 100 percent of consumption for appliances Congress was willing to regulate. We must briefly sketch some technical background in order to illustrate this anomalous result. The consumption figures in section 325(a) measure energy use at the site of consumption, i.e., the energy actually consumed by an appliance in the household. However, the ORNL model calculates the energy a standard would save in terms of source consumption, or the energy used as input to powerplants that in turn generate electricity used in the household. Because of inefficiencies in the generation and transmission of electricity, a given number of Quads in site savings yield a substantially larger number of Quads in source savings. Under section 325(a), DOE may prescribe a discretionary standard for an appliance if, among other criteria, its national energy consumption exceeds .014335 Quads. According to DOE’s figures, an appliance that consumes that amount of electricity at the site of use consumes approximately .0483 Quads annually at the source of generation. The table below compares DOE’s estimate of savings from standards for the six covered products considered in the 1983 final rules, calculated over the average lifetime of an appliance purchased in 1987, with the total consumption of an electrical appliance during that same period. Table 1 Source: EPCA § 325(a)(2)(B); 48 Fed. Reg. 39,376, 39,385, 39,390, 39,392, 39,394, 39,396, 39,398, 39,402 (1983). Thus, DOE’s definition does not recognize as significant energy savings equal to the total annual consumption of an electrical appliance that in the view of Congress might appropriately be subject to a mandatory standard, even when that savings is calculated according to DOE’s own figures and over the periods DOE itself selected for analysis. We think that such a high definition of significance is inconsistent with the congressional decision to authorize discretionary standards for appliances consuming the amounts of energy Congress specifically designated. Congress determined that discretionary standards for such appliances might be appropriate if they would result in “substantial” conservation of energy. Congress plainly thought that substantial conservation was possible for an appliance operating at the minimum level stipulated in the statute; and it therefore could not have thought that the total energy consumption of such an appliance might reasonably be considered an insignificant amount to save. In the December 1982 notice, DOE responded to a somewhat different version of the argument we have presented in the following way: DOE does not believe that because the oil or gas and the electricity savings tests would require greater savings of energy by the eight products subject to this rule than is required to be used by some other products in order to be possibly considered for standards means that these tests are unlawful or precluded by the statute. As indicated above, the oil or gas and electricity savings tests were designed with a bias to products that use large amounts of energy. 47 Fed.Reg. 57,198, 57,204 n. 11 (1982). DOE’s comment, however, is directed only to the first two of its three tests. It does not acknowledge that, as we have shown, a standard might save an amount of energy equal to the total consumption necessary for a discretionary standard and nonetheless fail all three tests. More importantly, we think that DOE’s approach is inadequately sensitive to the relationship between different passages in section 325 of EPCA. In effect, DOE points out that a fixed amount in energy savings might be a very small percentage of total use for a high-consumption appliance and a much larger percentage for a low-consumption appliance. DOE concludes that it may therefore reasonably regard energy savings as insignificant for a high-consumption appliance, even if the same amount would be significant for a low-consumption appliance. In the abstract, we have no occasion to disagree with that idea. For example, we do not hold that the Act forbids DOE to set levels of significance for each product type as a percentage of the energy consumed by that product type, provided that the levels selected reasonably accommodate the policies of the Act. Our point is simply that DOE’s definition of significance must show some awareness of the range of energy savings Congress thought worth pursuing. Congress unmistakably believed that savings for an appliance that just qualified for discretionary standards might be worth pursuing, even though the absolute amount of energy saved would be small. Perhaps DOE need not say that precisely the same amount of energy such a standard might realistically save would be significant if saved by a high-consumption appliance. However, DOE has gone much further than that. Obviously, the total consumption of an appliance subject to discretionary standards is much higher than the amount of energy Congress could have expected such a discretionary standard to save. Yet DOE has rejected as insignificant savings equal to the total minimum consumption of an appliance subject to discretionary standards. As we have discussed, a determination that a standard does not result in “significant” savings means that DOE must discard the standard at a preliminary stage of decisionmaking as unworthy of detailed study. Moreover, DOE must reject the standard even if it imposes absolutely no costs on manufacturers, consumers, or anyone else. In our view, DOE’s definition rejects savings that, judged against figures Congress included in the text of the Act, must be regarded as significant. At least in the absence of strong countervailing evidence of congressional intent, we think the anomalous and disproportionate results of DOE’s definition are a powerful sign that DOE has passed beyond the limits of its statutory discretion. We turn, then, to the specific rationales DOE offers for its three tests to determine if they satisfactorily explain the strange consequences of those tests. C. DOE’s Rationale for Its Definition DOE claimed that the definition of significance announced in its December 1982 notice was based on congressional intent, although it had previously made the same argument for the radically different definition of significance advanced in June of 1980. In support of its first two tests, DOE cited the general findings in NECPA that stressed the importance of reducing national dependence on oil imports. See NECPA § 102(a), Pub.L. No. 95-619, 92 Stat. 8206, 3208 (1978); 47 Fed.Reg. 57,198, 57,205 (1982); 47 Fed.Reg. 14,424, 14,429 (1982). These broadly stated findings, however, describe overall goals for the national energy program from “all sectors of our Nation’s economy,” NECPA § 102(a)(3), 92 Stat. at 3209, to be “approached progressively in a step-by-step pattern to produce savings of a significant proportion.” National Energy Act, Part I: Hearings Before the Subcommittee on Energy and Power of the House Committee on Interstate and Foreign Commerce, 95th Cong., 1st Sess. 2 (1977) (statement of Rep. Dingell). DOE could reasonably decide that a standard must make some progress towards the goals of the Act to be considered significant, but those general goals furnish little support for the specific tests DOE has adopted. Moreover, the appliance program is, of course, merely one program in a vast plan encompassing five statutes and scores of initiatives. Yet DOE steadfastly refused to consider that fact in deciding how great a contribution each standard must make to national conservation efforts in order to be deemed significant. Commenters echoed the view of Representative Dingell, Chairman of the House Sub-Committee on Energy and Power and a member of both of the House Ad Hoc Committee on Energy and the NECPA Conference Committee, that “conservation must be approached on a nickel and dime basis” and that “the cumulative impact of a series of conservation initiatives, which in themselves might appear insignificant, could be enormous,” id., but DOE was unmoved. It merely replied that the statute “makes clear that the determination of whether a standard will save significant energy is to be made on an individual product type basis, not on the basis that standards for all products together would save significant energy.” 47 Fed.Reg. 57,198, 57,203 (1982). DOE is right to think that under section 325, standards for each product type must result in significant conservation. But DOE is plainly wrong to think that the overall conservation possible under the appliance program, and indeed under other aspects of the 1978 national energy program, has no relevance at all to what qualifies as a reasonable definition of significant conservation. DOE itself relied heavily on the ultimate end Congress declared for its program: a gradual end to massive dependence on foreign sources of energy. But DOE cannot isolate that end from the means Congress selected — namely, a massive plan involving numerous programs. No single program was expected to be decisive in achieving Congress’ ultimate goal, let alone a single standard within the appliance program. In this sense, the cumulative savings possible from the appliance program as a whole is certainly relevant to whether the conservation that standards for a particular product type might achieve should be deemed significant. By rejecting that linkage, DOE has plucked the general goals Congress set for NECPA from their place in the statutory scheme, and failed to consider important evidence of how far standards for one product type should be expected to go towards achieving those goals. DOE also relied on 1979 decisions by two congressional committees rejecting a contingency plan for restricting the use of lighting for advertising during energy shortages. See 47 Fed.Reg. 14,424, 14,429 (1982). The committees found that the plan would save only 4,400 barrels of oil per day, which they regarded as inadequate to justify enactment of the program. See S.Rep. No. 98, 96th Cong., 1st Sess. 10-11 (1979); H.R.Rep. No. 122, 96th Cong., 1st Sess. 4 (1979). An unfavorable recommendation by two congressional committees on a substantially different proposal after passage of the legislation at issue is weak support indeed for DOE’s test. Congress might well have thought that a single nation-wide emergency program should produce higher savings than the savings demanded for a standard governing any one of thirteen covered products, particularly since the appliance program was itself only part of the large-scale national conservation program embodied in the 1978 energy acts. Moreover, DOE set its first test at 10,000 barrels of oil per day, or more than double the 4,400 barrels of oil per day that the rejected program would have saved. If stronger support for DOE’s definition cannot be found in congressional intent, this isolated, unrelated, and post-enactment example of legislative inaction cannot rescue it. In addition, more direct evidence of congressional intent casts further doubt on the relevance of these committee decisions. The report on NECPA by the House Ad Hoc Committee on Energy predicted that the Act would result in the following savings: Table 2 H.R.Rep. No. 543, 95th Cong., 1st Sess. 80 (1977) (footnotes omitted). The House Report commented that the NECPA conservation programs, considered as a bundle, would “provide[] a solid start” toward reducing oil imports and “changpng] the way we use energy.” Id. Of those programs, Congress expected the lowest immediate return from appliance regulation, which was expected to save 50,000 barrels per day of imported oil in 1985 — less than one-half the benefit projected from the program with the next smallest return and less than 2 percent of the total oil import savings projected from NECPA during that year. Similarly, the minority members of the House Committee on Interstate and Foreign Commerce commented that “appliances consume only 2.7 percent of the energy consumed annually in the United States.” H.R.Rep. No. 496, Pt. 4, 95th Cong., 1st Sess. 291 (1977) (minority views), U.S.Code Cong. & Admin.News 1977, p. 8679. Yet those members supported the program. See id. Congress, in short, had a realistic notion of the relatively small energy savings to be expected from the appliance program, but nonetheless decided to regulate appliance efficiency as part of a national assault on unnecessary energy use. DOE’s first test for significance, in contrast, requires that standards for each of the eight covered products considered in the rulemaking save 10,000 barrels of oil a day or an equivalent amount of natural gas, even though Congress projected a 1985 saving from standards for all thirteen appliances of only 50,000 barrels a day. That congressional estimate, moreover, describes the saving Congress thought probable, and not the smallest saving that justified detailed evaluation of proposed standards. In light of these statistics, we think DOE’s reliance on the obscure fate of quite a different program in committees of a later Congress is misplaced. DOE justified its second test for significance on the ground that “a national savings of electricity would at least have to exceed 1 percent of national usage over the period of analysis in order to have an effect on the need for new generating capacity.” 47 Fed.Reg. 14,424, 14,430 (1982). DOE followed its statement of this test with the following table: Table 3 Id. (citing as source ORNL Residential Energy End Use Model) (footnotes omitted). According to this table, each of the eight covered products identified in the table accounts for small percentages of national electricity consumption. Only a very dramatic drop in electricity consumption by a product would enable even the high-consumption covered products to meet DOE’s test, and evidently some of the low-consumption appliances could not meet the test at all. We view as suspect a test that demands a fixed amount of energy savings greater than the savings that low-consumption covered products could ever possibly achieve. By including low-consumption appliances in the mandatory standards program, Congress showed that it believed improved efficiency for those products could result in significant conservation. A test for significance that demands far higher savings than standards for low-consumption covered products could realistically ever produce is thus out of scale with the congressional view that these products should be included in the Act. Moreover, our dubiousness about this test is heightened by DOE’s equivocal response to comments submitted during the rulemaking. DOE summarized those comments by noting that: [S]everal commenters attempted to translate the aggregate electricity savings for all products using electricity, if standards were adopted for all those products, into additional new capacity that could be avoided. These estimates ranged from 16.8 GWe [gigawatts] ... to 17.6 ... GWe in the year 2005. Each of these commenters also reflected these estimated avoided capacities in terms of powerplant equivalents, which ranged from 17 1000 MW [megawatt] plants to 22 800 MW plants. 47 Fed.Reg. 57,198, 57,207 (1982) (citations and footnote omitted). DOE first complained that the commenters had impermissibly aggregated total savings from standards covering all covered products. When these aggregations were broken down into the savings attributable to standards for each product type, DOE maintained that: Under even [the] methodology [of commenter American Council for an Energy-Efficient Economy (ACEEE),] the largest reduction in need for new, incremental capacity attributable to one standard (electric water heaters) would be only 36 percent of the aggregate figure presented [for total electricity saved as a result of standards]. Under DOE’s base case projection, the largest reduction would be only 17 percent of the aggregate figure presented, or approximately 3 GWe or three 1000 MW powerplant equivalents nationwide. As discussed earlier, Section 325(b) requires DOE to make a determination of significant savings on an individual product type basis, not on the basis of the aggregate savings if standards were imposed on all products. Id. As we have explained, we agree that savings for standards must be evaluated separately by product type, but DOE may not therefore close its eyes to the cumulative effect of imposing standards. We thus cannot agree that DOE’s first reason supports its rejection of the comments submitted. DOE also argued that: [I]t is not at all clear that even a 17 to 18 GWe theoretical reduction of additional new capacity is significant in terms of actually affecting potential new, incremental capacity. The 17 to 18 GWe capacity savings projected by the commenters would be less than 2 percent of the approximate forecast capacity for the year 2005, and these savings would for the most part be spread over large parts, if not all, of the Nation. The reuslt of this is that in some utility services areas, the level at which decisions are made as to the need for new, incremental capacity, these marginal savings could be so small compared to other factors, e.g., demographic changes, that they would have no impact on actual construction decisions. Thus, one cannot reliably assume that whatever number of gigawatts one may mathematically back out as a result of reduced kilowatt hours attributable to a standard represents the actual gigawatts of capacity construction foregone. Id. (footnote omitted). Part of this passage relies on the demographic uncertainty that is inevitably involved in projecting electricity use long into the future. However, that uncertainty results mostly from the lengthy period for analysis DOE itself chose, and characterizes many of DOE’s own predictions. The quoted passage also argues that the savings in question would be spread out over the entire nation, and consequently those savings might not affect the need for additional generating capacity in any area. Petitioners maintain that the market in electricity is essentially a national one, and that incremental savings achieved across the nation really do diminish the need for new generating facilities. See Oral Comments of Angelo F. Orazio at 9 (May 20, 1982), J.A. at 3116. DOE did not details its reasons for rejecting that argument, and we therefore have some difficulty in assessing the reasonableness of the opposing views in this subsidiary controversy. However, we are not now considering whether DOE’s general doubts about the effect of savings on the need for new generating facilities would, if DOE’s basic approach to significance were sound, support the particular quantities of energy DOE specified in its test. As we have discussed, DOE’s definition of significant savings produces incongruous results in light of other EPCA provisions, and we are now searching for an agency explanation that might prop up this faltering definition. DOE’s argument does not persuade us that DOE has, after all, acted within the discretion Congress allowed it. Finally, DOE argued that its third test is grounded in former section 325 of EPCA. That section required the Federal Energy Administrator to set target figures for appliance efficiency improvement so that the ten priority appliances named in the Act would register an aggregate efficiency improvement of 20 percent between 1972 and 1980. Thus, unlike DOE’s third test, section 325 established a target, not a threshold figure below which regulation would be abandoned as not worth the trouble. That target required an aggregate improvement for all ten appliances of 20 percent, thus recognizing that standards for some covered products might fall short of that level. In addition, the 20 percent target was based on a comparison of 1972 efficiency to 1980 efficiency and so is quite unlike DOE’s comparison of its standards case with a projected no-standards base case. Given these major differences, we are unconvinced by DOE’s argument. We think DOE’s argument is also at odds with other signs of legislative intent. The Senate Report on NECPA, for example, set forth the following table: Table 4 S.Rep. No. 409, 95th Cong., 1st Sess. 147 (1977). The first column of the table indicates the improvement in efficiency the administration expected between 1972 and 1985 under EPCA as originally enacted. Id. The second column indicates the improvement in efficiency the administration expected during the same period under its proposal for mandatory standards, which in somewhat modified form became NECPA. These projections were submitted to Congress by the Deputy Administrator of the Federal Energy Administration. He commented that under the administration proposal, [mjinimum efficiency standards shall be prescribed as soon as possible for refrigerators/refrigerator-freezers, freezers, water heaters, room air-conditioners, kitchen ranges and ovens, central air-conditioners, and furnaces. These products account for about 80 percent of the energy used in American households. Standards for these products would be required because significant improvements in the energy efficiency of each is [sic] possible and a substantial national savings would result. Id. at 132 (statement of David J. Bardin) (emphasis added). Because the table shows energy efficiency improvements as a comparison between 1972 statistics and 1985 projections, the figures it states are not directly comparable to those DOE used in calculating its 16.67 percent test. Nonetheless, the range in the table is instructive. For example, the table predicts that with standards, clothes washers would be 20 percent more efficient in 1985 than in 1972; without standards, the difference would be 15 percent. For electric clothes dryers, the figures are 8 and 5 percent; for gas clothes dryers, 18 and 20 percent. As these numbers show, Congress knew that standards for some covered products would produce quite modest incremental gains in efficiency and consequently in energy conserved. Congress was also authoritatively informed by the Federal Energy Administration — the predecessor agency to DOE in administering the appliance program — that the savings revealed by the table for each of the covered products were significant. On that understanding, Congress enacted the program. We emphasize once again that we do not view the table we have reprinted above or any of the other legislative history we have discussed as absolutely binding DOE to any particular definition of significance. “[Ajn agency to which Congress has delegated policy-making res