[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]





   LIGHTS OUT: HOW EPA REGULATIONS THREATEN AFFORDABLE POWER AND JOB 
                                CREATION

=======================================================================

                                HEARING

                               before the

                  SUBCOMMITTEE ON REGULATORY AFFAIRS,
               STIMULUS OVERSIGHT AND GOVERNMENT SPENDING

                                 of the

                         COMMITTEE ON OVERSIGHT
                         AND GOVERNMENT REFORM

                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                               __________

                             JULY 26, 2011

                               __________

                           Serial No. 112-74

                               __________

Printed for the use of the Committee on Oversight and Government Reform








         Available via the World Wide Web: http://www.fdsys.gov
                      http://www.house.gov/reform




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              COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM

                 DARRELL E. ISSA, California, Chairman
DAN BURTON, Indiana                  ELIJAH E. CUMMINGS, Maryland, 
JOHN L. MICA, Florida                    Ranking Minority Member
TODD RUSSELL PLATTS, Pennsylvania    EDOLPHUS TOWNS, New York
MICHAEL R. TURNER, Ohio              CAROLYN B. MALONEY, New York
PATRICK T. McHENRY, North Carolina   ELEANOR HOLMES NORTON, District of 
JIM JORDAN, Ohio                         Columbia
JASON CHAFFETZ, Utah                 DENNIS J. KUCINICH, Ohio
CONNIE MACK, Florida                 JOHN F. TIERNEY, Massachusetts
TIM WALBERG, Michigan                WM. LACY CLAY, Missouri
JAMES LANKFORD, Oklahoma             STEPHEN F. LYNCH, Massachusetts
JUSTIN AMASH, Michigan               JIM COOPER, Tennessee
ANN MARIE BUERKLE, New York          GERALD E. CONNOLLY, Virginia
PAUL A. GOSAR, Arizona               MIKE QUIGLEY, Illinois
RAUL R. LABRADOR, Idaho              DANNY K. DAVIS, Illinois
PATRICK MEEHAN, Pennsylvania         BRUCE L. BRALEY, Iowa
SCOTT DesJARLAIS, Tennessee          PETER WELCH, Vermont
JOE WALSH, Illinois                  JOHN A. YARMUTH, Kentucky
TREY GOWDY, South Carolina           CHRISTOPHER S. MURPHY, Connecticut
DENNIS A. ROSS, Florida              JACKIE SPEIER, California
FRANK C. GUINTA, New Hampshire
BLAKE FARENTHOLD, Texas
MIKE KELLY, Pennsylvania

                   Lawrence J. Brady, Staff Director
                John D. Cuaderes, Deputy Staff Director
                     Robert Borden, General Counsel
                       Linda A. Good, Chief Clerk
                 David Rapallo, Minority Staff Director

 Subcommittee on Regulatory Affairs, Stimulus Oversight and Government 
                                Spending

                       JIM JORDAN, Ohio, Chairman
ANN MARIE BUERKLE, New York, Vice    DENNIS J. KUCINICH, Ohio, Ranking 
    Chairwoman                           Minority Member
CONNIE MACK, Florida                 JIM COOPER, Tennessee
RAUL R. LABRADOR, Idaho              JACKIE SPEIER, California
SCOTT DesJARLAIS, Tennessee          BRUCE L. BRALEY, Iowa
FRANK C. GUINTA, New Hampshire
MIKE KELLY, Pennsylvania















                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on July 26, 2011....................................     1
Statement of:
    Henry, Janet, deputy general counsel, American Electric 
      Power; Joel Schwartz, professor of environmental 
      epidemiology, Harvard School of Public Health; and Mike 
      Carey, president, Ohio Coal Association....................    28
        Carey, Mike..............................................    47
        Henry, Janet.............................................    28
        Schwartz, Joel...........................................    52
    Perciasepe, Robert, Deputy Administrator, Environmental 
      Protection Agency..........................................     6
Letters, statements, etc., submitted for the record by:
    Carey, Mike, president, Ohio Coal Association, prepared 
      statement of...............................................    49
    Henry, Janet, deputy general counsel, American Electric 
      Power, prepared statement of...............................    30
    Jordan, Hon. Jim, a Representative in Congress from the State 
      of Ohio, prepared statement of.............................     4
    Kucinich, Hon. Dennis J., a Representative in Congress from 
      the State of Ohio, letter dated August 16, 2011............    79
    Perciasepe, Robert, Deputy Administrator, Environmental 
      Protection Agency, prepared statement of...................     9
    Schwartz, Joel, professor of environmental epidemiology, 
      Harvard School of Public Health, prepared statement of.....    54

 
   LIGHTS OUT: HOW EPA REGULATIONS THREATEN AFFORDABLE POWER AND JOB 
                                CREATION

                              ----------                              


                         TUESDAY, JULY 26, 2011

                  House of Representatives,
      Subcommittee on Regulatory Affairs, Stimulus 
                 Oversight and Government Spending,
              Committee on Oversight and Government Reform,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 3:20 p.m., in 
room 2154, Rayburn House Office Building, Hon. Jim Jordan 
(chairman of the subcommittee) presiding.
    Present: Representatives Jordan, Buerkle, Labrador, and 
Kucinich.
    Staff present: Ali Ahmad, communications advisor; Michael 
R. Bebeau, assistant clerk; Joseph A. Brazauskas, counsel; Drew 
Colliatie, staff assistant; Adam P. Fromm, director of Member 
services and committee operations; Linda Good, chief clerk; 
Ryan M. Hambleton, professional staff member; Christopher 
Hixon, deputy chief counsel, oversight; Mark D. Marin, senior 
professional staff member; Kristina M. Moore, senior counsel; 
Michael Whatley, professional staff member; Ronald Allen, 
minority staff assistant; Claire Coleman, minority counsel; and 
Carla Hultberg, minority chief clerk.
    Mr. Jordan. The Subcommittee on Regulatory Affairs will get 
rolling here. I will start with an opening statement, and then, 
obviously, the ranking member will have an opening statement, 
and then we will get right to our witness. We want to thank the 
deputy for being here today.
    Earlier this month, we learned that the unemployment rate 
rose to 9.2 percent. Americans are struggling because there 
just aren't enough jobs. As I have said many times before in 
this subcommittee, one reason explaining the stagnant jobs 
numbers is the administration's stubborn determination to issue 
multiple onerous regulations all at once. The cumulative 
impacts of these regulations are preventing American job 
creators from putting people back to work.
    As part of the committee's ongoing commitment to promote 
job creation, today's hearing continues our examination into 
Federal regulations that are holding back economic growth and 
keeping employers from getting Americans back employed, back to 
work.
    At the last hearing, this subcommittee focused on EPA's 
permatorium on Appalachian coal and the impact it is having on 
jobs in that region. Today's hearing will examine the 
cumulative effect of a series of EPA regulations that will 
impact the Nation's power supply and will hit particularly hard 
the areas of the country that rely on coal for energy.
    I am especially concerned about my home State of Ohio, 
which is the Nation's fourth largest consumer of coal, and 
depends on it to provide power for its manufacturing base. 
These regulations have been collectively referred to as EPA's 
train wreck. They include changing the standards of Cooling 
Water Intake Structures, altering the mercury and air toxic 
standards for power plants, known as utility MATS, and the 
Cross-State Air Pollution Rule, also known as the Transport 
Rule, the new regulations of coal ash, and finally lowering the 
national ambient air quality standard for ozone, among other 
rules. We have a chart that shows how all this is coming 
together in the next few years. We will seek to get at the 
impact this is going to have on employers.
    The job-killing threat posed by these regulations comes 
from the timing and expense of the various mandates. By EPA's 
own analysis, these are some of the most expensive rules on 
record. For example, EPA estimates that the Utility MACT Rule 
is projected to cost $10.9 billion in 2016, and the Cooling 
Water Intake Rule could cost as much as $4.8 billion a year. 
NAAQS for ozone is projected to cost a staggering $1 trillion 
in costs to manufacturers and, according to the National 
Association of Manufacturers, lead to 7.3 million jobs lost 
between 2020 and 2030.
    The committee is deeply concerned as EPA developed these 
regulations, it never took into account the cumulative impact 
of its actions. The North American Electric Reliability Corp., 
an organization charged with ensuring the reliability of 
America's bulk power system, warns that the EPA's regulations 
will remove as much as 76 gigawatts of electrical capacity by 
2018. To put this in perspective, this is enough electricity to 
power approximately 23 million homes forever.
    Moreover, according to another study, just the Utility MACT 
and Clean Air Transport Rules alone will eliminate 1.44 million 
jobs from 2013 to 2020 due to the rising costs of energy. In 
fact, this same study estimates that nationwide electricity 
costs will increase by 11.5 percent. Our State of Ohio and 
other Midwestern States will be hit even harder.
    EPA should have considered the cumulative impact of these 
rules before acting in order to minimize these negative 
impacts.
    Let's make one thing clear: No one wants dirty air. That is 
not what this hearing is about. However, we do need to be smart 
about the regulations that we as a country issue. It appears 
from the lack of analysis on cumulative regulatory effects 
conducted by the EPA that there is a high chance the left hand 
doesn't know what the right one is doing at the Environmental 
Protection Agency.
    The testimony we hear today will help us examine what can 
be done better to avoid these regulatory train wreck 
situations. Our economy has been in trouble for a long time 
now. And the least we can do here in Washington is make sure 
the government is not causing the problem. Americans want to 
get back to work, and we need to be certain that we are not 
stopping them. I thank the witnesses for appearing. I look 
forward to hearing from our all witnesses today.
    With that, I will now recognize my good friend and 
distinguished Member from Ohio, Mr. Kucinich.
    [The prepared statement of Hon. Jim Jordan follows:]



    
    Mr. Kucinich. Thank you very much, Mr. Chairman.
    I want to thank all the witnesses who will be testifying 
today about a critical issue facing America, the protection of 
clean air and clean water, on which we depend every single day.
    Today, we will once again take a look at the role the EPA 
plays in supporting these goals. Air toxics from coal-fired 
power plants cause or contribute to devastating health 
problems, ranging from asthma attacks to premature death from 
cardiovascular disease, stroke, and cancer. One air toxic, 
mercury, damages the developing brains of fetuses, infants, and 
small children, robbing them of the opportunity to fully 
develop intellectually and physically.
    Coal-burning emissions of sulfur oxides and nitrogen oxides 
help fuel our Nation's asthma problem and can increase heart 
attacks. The burning of coal is also a major contributor to the 
environmental, national security, and economic crisis that is 
global climate change. The combustion of coal produces a 
tremendous amount of carbon dioxide, a greenhouse gas that 
contributes to increased trapping of heat in our atmosphere.
    In fact, coal accounts for approximately 20 percent of all 
our greenhouse gas emissions. It would be difficult to 
underestimate the urgency of shutting down coal power plants 
immediately for this reason alone.
    These health and environmental consequences from toxic 
pollution are why the EPA is developing tougher safeguards to 
protect Americans. One proposed rule on mercury and air toxics 
alone would be estimated to save as many as 17,000 lives every 
year by 2015, to prevent up to 120,000 cases of childhood 
asthma.
    One of the witnesses here to testify today represents the 
American Electric Power Co., which is headquartered in 
Columbus, Ohio. AEP is also one of our Nation's biggest 
polluters. Another one of Ohio's polluters, First Energy Corp., 
which owns the Lakeshore Plant in Cleveland, near my own 
district, is identified as the Nation's sixth most harmful 
plant for low-income communities and communities of color.
    Thanks in part to AEP and First Energy, the State of Ohio 
has more coal-fired generating capacity than any other State in 
the Nation.
    Ohio's electric sector also has the dubious honor of 
ranking first in the amount of toxic air pollution emitted in 
2009, emitting more than 44.5 million tons of harmful 
chemicals, which accounted for 65 percent of the State's 
pollution and 12 percent of toxic pollution from all U.S. power 
plants.
    Ohio also ranked third among all States in mercury air 
pollution from power plants, with about 3,980 pounds emitted in 
2009, which accounted for 76 percent of the State's mercury air 
pollution and 6 percent of the U.S. electric sector pollution.
    AEP has also lobbied against the Environmental Protection 
Agency's current efforts to regulate power plant pollution and 
is pushing legislation to weaken and delay these regulations.
    I look forward to hearing from AEP today about how they can 
justify the tragic and destructive side effects that coal-fired 
power plants wreak upon us, as well as what steps they are 
taking to curb emissions of toxic air pollution.
    While it is consistent with the history of big business to 
kick and scream about having to minimize social and 
environmental harms they cause, we should not underestimate the 
entrepreneurial ability of America's electric sector to invest, 
retrofit, and construct clean energy generation while 
maintaining system reliability.
    In fact, when they upgrade our Nation's electric generation 
infrastructure to comply with new regulations, their capital 
investments will help drive economic growth and create jobs. 
According to a study by the Political Economy Research 
Institute at the University of Massachusetts, two of the 
proposed EPA regulations, Clean Air Transport Rule and the new 
Mercury and Air Toxic Standards, could stimulate the creation 
of 1.4 million jobs over the next 5 years in the pollution 
controls, engineering, and construction fields.
    Congress passed the Clean Air Act and the Clean Water Act 
because the American public demanded it. The American people 
demanded it because they didn't like their children to inhale 
and drink and die from toxic compounds from which even the most 
diligent parent can't protect his or her child. Nothing about 
this equation has changed.
    We must allow the EPA to continue to fulfill its mandate to 
protect our water and the air. And I look forward to hearing 
from the EPA today about how it continues to fulfill its 
promise.
    We can't get into a position where it is either jobs or a 
clean environment. We have to insist that we have to have both. 
And the approach of the 21st century that is going to be 
economically viable and economically successful and that will 
help grow our economy is to be able to catch the wave of new 
technologies that can help use the resources we have now and do 
it in such a way that we protect the quality of the air and the 
water.
    With that, I want to thank the chair, and I yield back.
    Mr. Jordan. I thank the gentleman.
    Members have 7 days to submit opening statements.
    We now welcome our first witness, Mr. Bob Perciasepe.
    Great name to say, like saying Sheboygan, or one of those 
names you like to say.
    Mr. Kucinich. Like Kucinich.
    Mr. Jordan. Like Kucinich. Exactly.
    He is the deputy administrator of the Environmental 
Protection Agency.
    We feel privileged to have you here today, Mr. Perciasepe.
    And pursuant to the rules of the committee, all witnesses 
are sworn in. So please rise and raise your right hand.
    [Witness sworn.]
    Mr. Jordan. Answer in the affirmative. Let the record show 
that the witness has answered in the affirmative.
    And the floor is yours, Mr. Administrator. Go ahead.

     STATEMENT OF ROBERT PERCIASEPE, DEPUTY ADMINISTRATOR, 
                ENVIRONMENTAL PROTECTION AGENCY

    Mr. Perciasepe. Thank you, Mr. Chairman, and Ranking Member 
Kucinich.
    Mr. Kucinich. Would the gentleman please speak directly 
into the mic? That would be helpful.
    Mr. Perciasepe. Yes, sir. I will get a little closer there. 
I see what you are talking about. I want to thank you for 
inviting me today. And I appreciate the opportunity to appear 
before you.
    When you ask whether EPA regulations will cause the lights 
to go out, I want to be able to assure you that the answer is 
no. We do not have to choose between breathing clean air and 
running an air conditioner or turning on the lights at night.
    The power plant rules that EPA is developing are necessary 
to protect public health and the environment from pollution 
produced by these plants, especially the oldest, dirtiest, and 
least efficient of them.
    We are not the first administration to recognize the need 
to clean up power plants and to issue rules to address that 
need. In fact, since 1989, when President George H.W. Bush 
proposed what became the Clean Air Act amendments of 1990, 
power plant cleanup has been the continuous policy of the U.S. 
Government under two Democratic and two Republican Presidents.
    While past EPA rules have made progress in reducing the 
harmful effects of pollution, more remains to be done to ensure 
that all Americans have the clean environment to which they are 
entitled.
    EPA's recent and upcoming actions to control pollution from 
power plants will achieve major public health benefits for 
Americans that are significantly greater than the costs. These 
pollution-reducing rules are affordable, and they are 
technologically achievable.
    There is tremendous public support for moving forward with 
these rules. For instance, since March, we have received over 
800,000 comments from across the country in support of 
regulatory mercury emission controls from power plants.
    The Cross-State Air Pollution Rule finalized earlier this 
month illustrates significant health benefits from reducing 
power plant pollution. In a single year, 2014, this rule is 
projected to produce benefits valued at over $120 billion to up 
to $280 billion and to avoid up to 34,000 premature deaths.
    Our analysis and past experience indicate that warnings 
from some of dire economic consequences of moving forward with 
these important rules are exaggerated at best. A publicly 
available analysis shows that these rules are affordable. This 
is corroborated by other outside groups and by some in industry 
who recognize that issuing the rules in the same timeframe 
helps provide power companies with the certainty they need to 
make smart and cost-effective investments.
    As we did more than two decades ago, we are also hearing 
claims that our rules will lead to potential adverse effects on 
electric reliability. EPA's analysis projects that the agency's 
rules will result in only a modest level of retirements and 
that these retirements are not expected to have adverse impact 
on electric generation and resource adequacy.
    Our rules will not cause the lights to go out.
    These studies are often based on incorrect assumptions 
about the requirements of EPA rules and are inconsistent with 
the actual proposals that come out. In most cases, the analyses 
were performed before many of the regulations were even 
proposed. Simply put, many of these studies are not based on 
the reality of what the agency is actually proposing to do.
    In closing, I would like to suggest that the subcommittee 
should be clear about what is at stake here, as those who have 
stalled in cleaning up their pollution for further delays. 
Delay encourages companies to keep cash on the sidelines 
instead of spending it and putting people to work modernizing 
their facilities. And most importantly, delay means public 
health benefits of reducing harmful pollution are not realized.
    Thank you for allowing this opening comment. I look forward 
to your questions.
    [The prepared statement of Mr. Perciasepe follows:]



    
    Mr. Jordan. Thank you, Mr. Deputy.
    Let me just start with one of the things that the ranking 
member referenced in his opening statement, and I think you 
alluded to it as well, was the jobs that can be created when 
you have to refit and retool and make changes.
    But what do you say--and did you look at this, this idea 
that there can also be job loss? As I pointed out in my opening 
statement, the National Association of Manufacturers, they cite 
the number 7.3 million jobs they believe that can be lost 
between 2020 and 2030. So did EPA look at all at the other 
side?
    Obviously, we know if you have to retool something, there 
has to be someone to come in and go to work, putting that 
structure together in a different way, retrofitting, doing what 
needs to be done. Obviously, that is pretty easy to calculate. 
But did you look at the other side of the ledger?
    Mr. Perciasepe. Yes. When we look at the cost of rules, we 
look at all the different aspects of it under the OMB 
regulations that we are required to use. And I might say that 
American industry and in particular the American power industry 
has been becoming more and more efficient. Over the last 10 
years, even without these rules, the amount of megawatts that 
are produced continues to go up.
    Mr. Jordan. Every business has been doing that.
    Mr. Perciasepe. Every business is doing this. Oil 
refineries, power plants, the amount of output continues to go 
up, but the number of employees continues to go down as they 
become more and more efficient over time with more efficient 
plants. And some of the transition that takes place when we 
enact these rules is creating a more efficient fleet of power-
generating units.
    Mr. Jordan. But I just want to be clear, did you do what 
the executive order requires you to do, which is a cumulative 
impact study on--I mean, I am reading right here from the 
executive order, each agency shall tailor its regulations to 
impose the least burden on society, including businesses and 
individuals, including businesses of differing sizes. Did you 
comply with the Executive order?
    Mr. Perciasepe. Yes. Yes. Excuse me.
    When we propose a rule, like let's say the Mercury and Air 
Toxics Rule, we start from the base that includes the rules 
that have already been done. And then we want to be able to 
make sure we specify what the current rule that we are 
proposing is actually going to do for transparency purposes so 
we can look at how that builds on the cumulative impact of what 
has gone before.
    Mr. Jordan. Can you look at the statement then on the 
screen? It should be in front of you there on your screen.
    Mr. Perciasepe. Which RIA are we talking about?
    Mr. Jordan. Coal ash. The coal ash rule.
    Mr. Perciasepe. I see at the bottom. I am sorry. That 
proposal is out--has been out, and we have put out some 
additional requests for information on that. That is quite a 
ways away from being finalized.
    Mr. Jordan. Okay. Let me ask you this. Do you think, 
though, that, a more general question, do you think that there 
is ever a point where regulation can in fact be a strong 
impediment to job growth, and actually be--actually cost jobs, 
actually result in the reduction of jobs? Do you think that is 
something that should be kept clear in mind as we are proposing 
new regulations?
    Mr. Perciasepe. Well, I think we have to look at the 
economic impact of rules under the executive order, as you have 
pointed out. And that is what we do. And we also try to do it 
based on the foundation of what has already gone by.
    But EPA also goes beyond that, particularly under the Clean 
Air Act. We look at the cumulative benefits and costs of the 
rule--of all the rules all together since the Clean Air Act--
the amendments at least of 1990. So let's say going back 20 
years. Under section 812, I think it is, of the Clean Air Act, 
we do a cumulative benefit and cost analysis on the entire 
implementation of the Clean Air Act. And the cost and benefits 
so far, since 1990, are about ahead by about 30 to 1.
    Mr. Jordan. Can you take a look at this statement? Because 
of these complexities, as well as the limited time and 
resources within the expedited schedule, we are limited in our 
ability to quantify the cost and benefits of obtaining separate 
secondary NAAQS for ozone for this proposal. So that would seem 
to indicate to me that you did not do a full cumulative impact 
study because you say right in your statement, cost and 
benefits. That is what we are looking at. That is the whole 
cumulative issue there. You seem to say you are not complying 
with it in that statement there.
    Mr. Perciasepe. Yes. So the National Ambient Air Quality 
Standard is a standard. It is not self-implementing. What it 
does is it sets in motion a planning process that goes on for a 
number of years to identify where those areas are in the 
country that would not be meeting that standard, and then, what 
are the implementation mechanisms that are used to implement or 
to achieve that standard? Each one of those requires that kind 
of detailed analysis once we get to that point. But the 
standard itself is a science-based standard based on what----
    Mr. Jordan. And does the EPA have any idea what that 
standard is going to cost when implemented? That is the point.
    Mr. Perciasepe. We do a regulatory impact analysis that 
looks at the best estimate we could make, because all the 
implementation comes years later. We look at the best----
    Mr. Jordan. And what was your best estimate for this, for 
the NAAQS?
    Mr. Perciasepe. Our estimates of benefits and cost went, 
depending on all the different standards that were proposed by 
the----
    Mr. Jordan. Can you give us a number? On one hand, you are 
saying you are going to create jobs for retrofitting the 
facilities, but we want to know overall if you did an estimate, 
what was the estimate on what it was going to do to job 
creation or job loss?
    Mr. Perciasepe. We did the overall cost of the rule. And 
the overall cost of the rule, I will have to look it up for you 
what the----
    Mr. Jordan. And obviously cost means----
    Mr. Perciasepe. We did the costs and the benefits in our 
proposal.
    Mr. Jordan. But additional costs to business means it is 
going to be tougher to create jobs. You would agree with that 
statement, wouldn't you? Particularly if it is a big number, 
which you can't give me.
    Mr. Perciasepe. Well, it depends on what the final standard 
is, which we haven't yet decided on. We haven't yet promulgated 
the final.
    Mr. Jordan. One last question and then I want to yield to 
our ranking member. Wouldn't you agree, though, that all this 
coming at once--I mean you think about over the next several 
years we have Cooling Water Intake Structures, Utility MACT, 
the Transport Rule, Coal Combustion Residuals, the ozone, I 
mean all these different things, some starting now but some 
more coming online soon, don't you think that's a real cause 
for concern and that it is critical that you be able to provide 
an estimate and do the full cumulative? I mean, you can 
obviously see the concern that folks in this industry and this 
business, which is so crucial to manufacturing and a host of 
others, you can obviously see their concern.
    Mr. Perciasepe. Yeah. Many of these rules you just 
mentioned were actually proposed in the past, and they were 
sent back to EPA by the courts. The Air Transport Rule that you 
mentioned, the air toxics--Utility Air Toxic Rule, those were 
proposed in the past in the last decade, and now they have been 
coming back and having to be reproposed. Things like the ozone 
standard you mentioned get implemented over a long period of 
time into the future. And some of them, like the water intake--
the water intake rules under the Clean Water Act or the coal 
combustion rules under the Resource Conservation Act, those 
haven't been finalized yet.
    Mr. Jordan. But the point is it is all coming and it is 
coming pretty quickly. Even if they may have been proposed and 
they are gradual, they are phasing in and phasing in at 
different levels or higher levels, that's a concern.
    Mr. Perciasepe. Well, I will just respectfully say I 
probably don't agree with that chart that you just had up 
there.
    Mr. Jordan. I will yield to the gentleman from Ohio.
    Mr. Kucinich. Thank you very much, Mr. Chairman.
    I think it is fair to say that the utility industry is 
hysterical with claims that the new EPA regulations are job 
killing. In contrast, as the slide I would like to put up on 
the screen shows, a report from the University of Massachusetts 
entitled New Jobs, Cleaner Air, says the home States of each 
member of the Subcommittee on the Eastern Power Grid would fare 
very well with respect to jobs created by the new investment 
and capital improvements. Our own State of Ohio will gain as 
many as 76,240 jobs to build the capacity to implement the new 
regulations in the first 5 years. So I would like to ask Mr. 
Perciasepe how does the EPA's own risk assessment analysis 
square up with these findings from the University of 
Massachusetts?
    Mr. Perciasepe. I have to say I haven't looked at this 
particular report.
    Mr. Kucinich. Okay. You don't have to comment on it. Will 
your regulations destroy more jobs or create more jobs?
    Mr. Perciasepe. Our analysis shows, particularly on these 
utility rules, that it will create jobs.
    Mr. Kucinich. Okay. We are going to hear from industry 
representatives in the next panel that claim that compliance 
with the new Mercury and Air Toxic Standards and the Transport 
Rule is not achievable and not cost-effective. These industry 
advocates are making claims of dire economic consequences if we 
move forward with these rules. Some of our witnesses today will 
say that environmental protections will cost too much money, 
kill too many jobs, end their competitiveness. This is 
familiar. Industry always claims the sky will fall if they have 
to minimize the health and environmental harms their business 
practices cause. We heard the same thing from the auto industry 
when air bags were required. We heard the same hysteria when 
the Clean Air Act rules were passed in 1990.
    Ford Motor Co. said in 1990, we just don't have the 
technology to comply with, ``the tailpipe requirement set forth 
in the amendments.'' And yet they started making cars that 
complied with the tailpipe requirements in 1993.
    Now, Mr. Perciasepe, can you talk about how industry fared 
after the 1990 amendments? Are there any lessons to be drawn 
here with the new proposed rules? From your perspective, is 
industry exaggerating the detrimental impacts of the 
regulations?
    Mr. Perciasepe. Well, some of the studies that we have been 
able to review have a number of--that they have done that 
demonstrate these impacts have some significant flaws to them. 
First of all, and I mentioned this in my opening comments, they 
make assumptions about rules that we haven't finalized yet. For 
instance, on the cooling water regulation that we have been 
talking about, some of those studies have assumed that every 
power plant would have to install a closed loop cooling system 
or a cooling tower.
    That is not what we proposed, and we still haven't even 
finalized that rule. So these end up causing exaggerated 
estimates of what the costs of the rule would be. They don't 
differentiate between plants that are getting old and need to 
close or for economic and business reasons, need to be phased 
out as new generating capacity comes out versus ones that might 
be associated with a rule that EPA is proposing. They also 
don't include the flexibilities that are in the Clean Air Act 
that when you get--when you actually implement these rules, 
there are certain flexibilities that are included in the Clean 
Air Act that are not considered in these studies. So, by 
definition, then, they come up with an exaggerated estimate of 
what the impact would be.
    Mr. Kucinich. On July 20, 2011, the Washington Times ran an 
op-ed by Steve Milloy, the publisher of junkscience.com titled 
``Show Us the Bodies, EPA.'' The subtitle reads, ``Green agency 
uses phony death statistics to justify job killing rules.''
    The op-ed described a TV ad run by the Environmental 
Defense Fund, saying, the TV ad for this theme features a young 
girl in a hospital bed supposedly having an asthma attack. 
She's wearing a nebulizer face mask and chest compression 
device that is rhythmically but disturbingly squeezing the 
child, giving the appearance that she is in severe respiratory 
distress, by implication from air pollution. But like the EPA's 
17,000-lives-saved statistical fabrication, the ad's a fake.
    Now, Mr. Perciasepe, I would like to give you a chance to 
respond to this op-ed. It is apparently aimed at EPA's proposed 
air toxics rule. Are EPA's estimated benefits from the proposed 
rule a statistical fabrication?
    Mr. Perciasepe. They are based on peer-reviewed science. 
They are not a statistical fabrication. And you are not going 
to see on somebody's death certificate, they died of air 
pollution. They are going to die of the diseases that air 
pollution exacerbates and causes premature impacts. Even 
healthy people are impacted. But people who are more 
vulnerable, like retired folks, are going to be even more 
vulnerable to these things, so the impact of the damage on the 
lungs and the cardiovascular system.
    So I know you have other witnesses that will go into the 
science of this in more detail, but these are not fabricated. 
They are based on peer-reviewed science, both clinical and 
epidemiological studies.
    Mr. Kucinich. Mr. Milloy's op-ed also questioned the public 
health impacts of mercury pollution. He wrote, ``but there is 
no evidence that ambient levels of mercury or mercury emissions 
from U.S. power plants have harmed anyone.'' Now, Mr. 
Perciasepe, isn't there clear evidence showing that mercury 
impairs the brain development of infants and children?
    Mr. Perciasepe. There are mercury warnings in every State 
for fish contaminated with mercury. Mercury causes damage to 
developing brains in children and fetuses.
    Mr. Kucinich. So is that a yes?
    Mr. Perciasepe. So yes.
    Mr. Kucinich. Okay. Can you describe why it is important to 
control mercury pollution from domestic power plants? Isn't 
there a disproportionate impact on communities near plants that 
emit mercury pollution?
    Mr. Perciasepe. The mercury emissions from the power plants 
in the United States are the largest remaining source in the 
United States of mercury emissions. And they are--they affect 
the water. And the mercury bio-accumulates in fish. And then 
fish get eaten by humans.
    But I want to point out one last thing on this point. The 
mercury and toxics rule is not just mercury. It includes acid 
gases, arsenic, nickel, cadmium, all these other metals and 
acid gases that also have health effects are included, which is 
why you have to look at the broad impact of all those different 
toxics, not just mercury, although mercury is very important.
    Mr. Kucinich. Thank you very much. Mr. Chairman, yield 
back.
    Mr. Jordan. Thank the gentleman.
    Mr. Deputy, do you think your rules could result in a 
higher cost for energy?
    Mr. Perciasepe. When we analyzed the cost of our rules, and 
let's just use the air toxics, the Utility MACT as you call it 
here, of the Mercury and Air Toxics Rule, we do estimate that 
it will have an increase in electric rates and an increase in 
natural gas rates. Those increases are expected to be in the 
variability of historic levels of these----
    Mr. Jordan. I just want to be clear. So the U.S. 
Environmental Protection Agency admits that the rule changes 
will result in higher electricity costs.
    Mr. Perciasepe. A very small increase in electric costs. 
But actually, the electric costs even with this rule----
    Mr. Jordan. Let me be clear. You say there is going to be 
an increase in cost for energy.
    Mr. Perciasepe. The increase in costs will still--the cost 
of electricity will be less----
    Mr. Jordan. Is the answer yes or no to increased energy?
    Mr. Perciasepe. If I could just answer it, to answer your 
first question, it will be--the costs of electricity will still 
be less than it was in 2009, even with the increase.
    Mr. Jordan. Then if there is going to be increased energy 
costs, do you think that can also translate into lost jobs or 
maybe not as many jobs being created as otherwise would have 
been?
    Mr. Perciasepe. I say----
    Mr. Jordan. And we are talking, obviously, we are talking 
people who use the energy.
    Mr. Perciasepe. I understand that. And I want to be really 
clear, the baseline that people currently pay for electricity 
is less than it was several years ago. And this increase will 
keep it, it still will be less than it was several years ago. 
We do not see it having an impact----
    Mr. Jordan. Maybe you are missing the point. What they are 
paying now, are your rules going to make it--I am not worried 
about 2009. I am worried about now. We have 9.2 percent 
unemployment now. So what they are paying now, are the rules 
you are proposing going to mean energy costs more? I thought 
the answer was yes. Is that what you are saying? So, 
furthermore, if the answer is yes, which it is, then there 
could be some other results or ramifications down the road for 
job creators and businesses across the country at a time we 
have 9.2 percent unemployment.
    Mr. Perciasepe. We do not see the small increase in the 
price of electricity from this rule, which is not different 
than the normal variation in the prices over the last decade, 
to have any significant impact.
    Mr. Jordan. You may not, but my guess is small business 
owners, my guess is manufacturers probably do. When they are 
faced with the tough decision can I keep these families, these 
individuals employed who their families are relying on this, 
and I got to make decisions, look at my bottom line, look at my 
fixed costs, look at everything else, they probably do see it 
as important. You may see it as not important and negligible, 
but they probably do. Let me ask you another question here.
    Mr. Kucinich had the jobs created to retrofit and retool. 
And you pointed to that, too. But I guess I want to ask, this 
is the old basic economics principle opportunity costs. If you 
are not spending those dollars to retrofit and retool your 
facility, you are probably using them some other way, maybe to 
create jobs, maybe to do other things. So would you agree that 
while, sure, they are going to have to--there might be some 
jobs that are created to retool and refit, that is money that 
they could have used somewhere else but for the fact that you 
are making them retool and refit.
    Mr. Perciasepe. Well, first, it creates jobs and permanent 
jobs, and second, it creates all those health benefits I just 
mentioned. It is hard to get that double benefit from other 
investments.
    Mr. Jordan. But you would also agree with the opportunity 
costs. When money is spent one place, it can't be spent 
someplace else.
    Mr. Perciasepe. The cost-benefit ratio of this kind of 
expenditure is more than 5 to 1, 10 to 1. Small businesses who 
could in theory be impacted from small prices increase, this is 
such a small increase, that it could be well within their 
ability to make energy-efficiency controls.
    Mr. Jordan. Again, it is always easy for government to say 
that. It is much tougher for the individual or the family or 
the business owners that actually have to implement it.
    Mr. Perciasepe. They would actually save money and be able 
to invest it in their business.
    Mr. Jordan. So wait a minute. So now you are saying 
increased energy costs are actually going to be a savings? How 
does that work?
    Mr. Perciasepe. Well, if they implement certain very simple 
energy efficiency measures in their own business that most 
business people are looking at----
    Mr. Jordan. I am sure they are doing that if it makes sense 
on their own. They don't need the government to tell them that 
to do that.
    Mr. Perciasepe. That is right. I am just saying that this 
is what normally would happen in the normal business world.
    Mr. Jordan. I didn't expect to take 5 minutes. I will be 
happy to yield back to the ranking member. I am good on time. I 
can go to you or I can go to the vice chair of the committee. 
Okay. I thank the gentleman. We will now yield to the vice 
chair of the committee, who is actually going to take over for 
the chairman. Thank you.
    Ms. Buerkle. Thank you, Mr. Chairman.
    And I apologize for missing the first round of questions. 
Thank you for being here today and your willingness to testify. 
In your analysis for Utility MACT, you estimated that it could 
lead to pollution control-related capital investment of $45 
billion to $50 billion and that this could create 35,000 jobs 
per year by 2015.
    Mr. Perciasepe. I think our estimate is, it is about $10 
billion, I am sorry, in our final rule. And our estimate is $10 
billion, and our estimate is about 31,000 temporary jobs and 
about 9,000 permanent jobs.
    I think I am right on that. I want to make sure.
    Total annual cost is $10.9 billion. The annual benefits are 
about $59 billion to $140 billion. So it is a 5 to 1 cost-
benefit ratio or 13 to 1 cost-benefit ratio. I think I have the 
job analysis right. I am sorry. I wanted to make sure I gave 
the numbers that we had there.
    Ms. Buerkle [presiding]. Okay. So you are saying----
    Mr. Perciasepe. This could have been in the proposal. But I 
am happy to dig into this here for you, if I can.
    Ms. Buerkle. Well, if you would like to elaborate or 
explain, because that is the information we had. And you can 
see the cost per job----
    Mr. Perciasepe. I see that.
    Ms. Buerkle [continuing]. Is ridiculous.
    Mr. Perciasepe. I would like to be able to provide some 
information for you on that.
    Ms. Buerkle. Okay. Can you provide that information today, 
or would you like to provide it----
    Mr. Perciasepe. I have to--I have to go look at the 
technical support document and see where--but what I just gave 
you are the numbers in the final proposal, $10.9 million--I am 
sorry, billion a year; 31,000 temporary jobs; 9,000 permanent 
jobs. Benefits of $50 billion to $100 billion, including 7,000 
to 17,000 premature deaths avoided, 11,000 nonfatal heart 
attacks avoided. I am not going to read them all. But this is 
what was the in the final rule. The cost-benefit of this is 
about 5 to 1, or at the high end of the range 13 to 1.
    Ms. Buerkle. So what is your estimate that the cost is per 
job?
    Mr. Perciasepe. The annual cost of the rule is $10.9 
billion, with ultimately around 9,000 permanent jobs.
    Ms. Buerkle. What does that cost per job?
    Mr. Perciasepe. Well, the purpose of the rule is to achieve 
17--avoid premature deaths for 17,000 adults, 11,000 nonfatal 
heart attacks, 5,300 hospital admissions, 6,900 emergency room 
admissions, 4,500 cases of chronic bronchitis, 11,000 cases of 
acute bronchitis. Those are the things that we add as the 
benefit side.
    Ms. Buerkle. I understand all that. But if you are using it 
as a justification because it creates jobs, we have to look at 
the cost per job and say, does that even make sense?
    Mr. Perciasepe. Well, we are looking at the benefits of all 
these health benefits.
    Ms. Buerkle. I want to get onto just a different topic 
here.
    Recently, the EPA announced that it is going to reconsider 
the ozone NAAQS standards established in 2007. Can you explain 
or tell me why the EPA decided to review and actually on an 
expedited schedule? They are not really ready; the 2012 would 
be the appropriate time.
    Mr. Perciasepe. The ozone standard was last proposed in 
2008. And it was--there was litigation about it. And the 
standard that was proposed was outside the range of the Clean 
Air Act Scientific Advisory Committee that was set up by the 
Clean Air Act. We saw that as legally vulnerable, and so it was 
remanded back to EPA by the court back in that timeframe. We 
have been working on it ever since. We have proposed it, but we 
haven't yet finalized it. It is in agency review right now. But 
we haven't finalized the reconsideration of the ozone standard.
    Ms. Buerkle. Are you under court order to expedite the 
review?
    Mr. Perciasepe. There is a stay on the litigation that 
eventually probably will be lifted by the judge. But right now, 
we are acting under a stay on the litigation, and with the 
understanding that we would propose it by the end of July. We 
have told the litigants as early as this week that we are not 
going to be able to make that July 29th deadline, and that we 
are still in the interagency review process. We are going to do 
it as soon as possible, but it is still going to take some 
time.
    Ms. Buerkle. My concern with that is that the 
environmentalists, rather than EPA and the appropriate branches 
of government, are establishing our environmental policy.
    Mr. Perciasepe. Well, we were sued by all different 
litigants.
    Ms. Buerkle. My time has expired.
    I yield 5 minutes to the ranking member, Mr. Kucinich.
    Mr. Kucinich. Thank you very much, Madam Chair.
    Mr. Perciasepe, the House is currently debating H.R. 2584, 
an appropriations act that included a rider that blocks the EPA 
from implementing its rule to control air toxic emissions, as 
well as the Cross-State Air Pollution Rule, controlling 
interstate transportation of nitrogen oxides and particulate 
matter emissions from power plants.
    Sir, if this legislation became law, what impact would it 
have on EPA's ability to fulfill its mandateunder the Clean Air 
Act and implement the air pollution rules covering pollution 
from power plants?
    Mr. Perciasepe. Well, if you make the assumption that those 
riders would not allow us to spend funds in the budget on 
finishing the work under those rules, it will delay further--it 
has already been delayed almost a decade--the health benefits 
and the certainty that industry has said that they want.
    Mr. Kucinich. Can you quantify what those health benefits 
were?
    Mr. Perciasepe. I just listed the ones for the--which I 
think is already in the record in the answer to the vice chair. 
I will get here in a minute from my able assistant the actual 
numbers for the--I probably have some of them.
    Mr. Kucinich. While your able assistant is gathering those 
numbers----
    Mr. Perciasepe. From the Cross-State Air Pollution----
    Mr. Kucinich. Right. I would just like to go over those 
numbers. Here we go. Number, please.
    Mr. Perciasepe. Thank you. It is 13,000 to 34,000 premature 
mortalities; 15,000 nonfatal heart attacks; 19,000 hospital 
emergency department visits; 19,000 acute bronchitis events; 
420,000 upper and lower respiratory symptoms; 400,000 
aggravated asthma; and 1.8 million days when people will miss 
work or school. Those are the benefits that will be delayed, 
along with the ones that----
    Mr. Kucinich. Is that delayed on an annual basis, or is 
that delayed on a 10-year basis, or what?
    Mr. Perciasepe. Annual. Annual. Yes.
    Mr. Kucinich. Has EPA ever done a quantification of that in 
terms of the dollar cost to the economy then if people are 
sick? You know, it is expensive.
    Mr. Perciasepe. Well, the monetized benefits from those 
annualized health benefits I just listed, and that was for the 
Cross-State Rule, are $120 billion to $280 billion a year.
    Mr. Kucinich. So what is the monetized cost to public 
health? So you are saying that that is the cost of the benefit 
if you have the rule and the rule goes into place; people's 
health is protected. And on the other side, if you don't have 
the rule, that represents a loss or a cost that is being 
absorbed by people in terms of an attack on their health. So in 
a way--and that is what you are saying, right?
    Mr. Perciasepe. Yes.
    Mr. Kucinich. Okay. So let's look at it this way. I mean, 
this is the way I look at it anyway. If these rules don't go 
into place, $128 billion, is it, annually?
    Mr. Perciasepe. That is the low end.
    Mr. Kucinich. The low end, $128 billion annually, is the 
cost in terms of human health. Or as you said, if it is correct 
that it is a benefit. But it is a cost now because the rules 
aren't in place. So these companies are making profits. And 
here is the point. If you have environmental conditions that 
are aggravating human health, and the EPA is trying to mitigate 
those conditions with a rule, and those conditions are not 
resolved and the industry keeps building their profit margins 
while having not to make any investments at all in cleaning up 
the environment so there wouldn't be these untoward health 
effects, what you actually have is a direct transfer of wealth 
in terms of the cost of human health from the mass of people to 
the utilities.
    This, I think, is one of the underlying problems that I 
have with the fact that utilities refuse to abide by rules that 
protect human health. Because people pay for it. People 
actually subsidize the profits of the utilities with the 
public's health. So that $128 million--or billion ends up a 
payment that people make with their health. And in a sense, it 
is a transfer of wealth to the utilities. That is just not 
fair. It just isn't. And it is manifestly unjust. I find it 
morally offensive. And while I am with my colleagues in being 
concerned about jobs, look, how many people and their families 
have to spend so much of their time taking care of the illness 
of a loved one who may have their illness exacerbated because 
of air pollution?
    I yield back.
    Ms. Buerkle. Thank you, Ranking Member Mr. Kucinich.
    I have a couple more questions. And I just want to say 
something about what the ranking member just brought up. And I 
think, you know, I have spent my whole life in the health--I am 
a nurse. I was a health care attorney. So I am very concerned 
about health, public health. And I don't think anyone on either 
side of the aisle is saying we don't need regulations.
    But what we need is reasonable regulations, regulations 
that encourage people to be entrepreneurial, encourage people 
to take a risk, not thinking that they will be beat down, and 
when they do comply with regulations that, you know, around the 
next corner, those regulations are changed, so then they have 
to retrofit and they have to recomply.
    The cost of compliance, as I talk to small businesses 
throughout the district, it is exorbitant. And it really is a 
deterrent for people to take the risk and to go into business. 
So I think all we are talking about here and we are asking the 
EPA is to be reasonable, to understand that every one of those 
new regulations, every one of those regulations that get put 
into a book have an effect. They filter down to some poor small 
business owner whose bottom line and his profit margin is very 
slim. And one more change or one more law to comply with, or 
one more regulation may be what puts him over.
    And I think that is more--and if we look at it that way, we 
are talking about public health, but we are also balancing it 
with a 9.2 unemployment rate in this country. We have to look 
at this thing in its entirety. You look like you wanted to 
comment.
    Mr. Perciasepe. You know, those are very reasonable words. 
And I think we share the desire to make sure these rules are 
implemented in an appropriate way. We are trying to provide 
time in the rules, flexibility with trading, allowance trading. 
EPA has other flexibilities if things get tight on a 
reliability front.
    The other side of the coin is also trying to make sure that 
there is a clear path. These rules have been lingering for a 
decade. And we are in this parallel universe of people saying 
we need certainty so we can make investments, but if we create 
the certainty, then there is too much that we think we might 
have to do.
    And the truth of the matter is you need know where you--you 
need have that path of where to go, but at the same time, we 
need to have the flexibilities that are available in the Clean 
Air Act.
    And I think this country can do it. It has been able to do 
it. GDP has gone up 205 percent since the Clean Air Act was 
enacted, while pollution has gone down almost 60--over 60 
percent. These last increments are really going to pay 
dividends in public health. And we need to make sure we do use 
the flexibilities that are in the Clean Air Act.
    Ms. Buerkle. Thank you.
    I only have 2 minutes left, so I have one more question 
here.
    The Assistant Secretary of Energy James Wood stated that, 
number one, electric rates are going to go up. And I would like 
you to comment on that. I mean, do you agree with him that 
electric rates are going to go up? And I will enter Mr. Wood's 
article into the record, without any objection.
    Mr. Perciasepe. Well, our regulatory impact analysis that 
we have done on let's just say these two rules indicate that 
electric rates will go up from a base that is lower than it was 
in the last decade. So the variability in the electric rates 
are going to be small compared to the variability of the 
electric rates we had before these rules were out there.
    That said, when we do--when we did work on some of these 
rules, we definitely used the small business panels to help us 
look at the impact on small business, how the rule--how small 
business could accommodate the rule. So we have looked at those 
things as well. But there is a slight increase in the electric 
rates on an average across the country. And we have identified 
that in our regulatory impact. We are not hiding that fact. We 
are trying to put it in context.
    Ms. Buerkle. I don't mean to interrupt, but my time is 
clicking away here.
    I will say your estimate came in the lowest of anyone's 
estimate as to what their electrical rates will do. And again, 
that goes back to jobs and job creation and small businesses. I 
mean, it may be a few pennies, but it may not be a few pennies. 
It may be more than that. And that may be the one single factor 
that pushes--either deters someone from going into business, 
the cost of doing business, or worse yet, it forces them out of 
business because they can't meet their bottom line.
    With that, my time has expired.
    We are going to do another round of questions.
    I yield 5 minutes to the ranking member.
    Mr. Kucinich. Mr. Perciasepe, American Electric Power 
claims the cost of complying with the regulations affecting 
power plants will result in an increase in electricity prices 
of 10 to 35 percent. According to EPA's own regulatory impact 
analysis for the final Transport Rule, the agency's economic 
model suggests an average national price increase for energy is 
0.16 percent, just a fraction of 1 percent.
    Under the Toxics Rule, the agency's economic model suggests 
the average national price increase for energy is 0.8 percent. 
This is a long way off from 10 to 35 percent. Can you explain 
the discrepancy between AEP's figures and your own?
    Mr. Perciasepe. I haven't studied how they came up with 
those estimates.
    But I would say that EPA has been historically able to 
estimate impacts of our rules, and we are even conservative in 
our impacts on how we estimate our impacts on rules. So it 
could have been any number of things that they have included in 
their assumptions that we would have to look at.
    Mr. Kucinich. Well, why don't you obtain the information 
and get back to this subcommittee so that we can make an 
evaluation of their claim?
    Thank you. I yield back.
    Ms. Buerkle. Thank you.
    With that, we will all our second panel to the witness 
table. And thank you very much for being here today and for 
offering your testimony and your information to us.
    Mr. Perciasepe. Thank you both, and thank the chairman.
    Ms. Buerkle. Good afternoon.
    Thank you for being here. Our second panel consists of Ms. 
Janet Henry, who is the deputy general counsel for American 
Electric Power; Dr. Joel Schwartz, professor of environmental 
epidemiology, Harvard School of Public Health; and Mr. Mike 
Carey, president of the Ohio Coal Association.
    Good afternoon and welcome to all of you. Pursuant to the 
rules of the Oversight and Government Reform Committee, if I 
could ask you to stand and please raise your right hands.
    [Witnesses sworn.]
    Ms. Buerkle. Let the record reflect that the witnesses 
answered in the affirmative.
    Thank you very much.
    I would ask that each of our witnesses if you could limit 
your opening statements to 5 minutes. I know that the ranking 
member has an amendment to offer on the floor, and I would like 
to give him the opportunity to lead off the first round of 
questions before he has to leave.
    So, Ms. Henry, if you would proceed, I would appreciate it.

  STATEMENTS OF JANET HENRY, DEPUTY GENERAL COUNSEL, AMERICAN 
   ELECTRIC POWER; JOEL SCHWARTZ, PROFESSOR OF ENVIRONMENTAL 
EPIDEMIOLOGY, HARVARD SCHOOL OF PUBLIC HEALTH; AND MIKE CAREY, 
                PRESIDENT, OHIO COAL ASSOCIATION

                    STATEMENT OF JANET HENRY

    Ms. Henry. Thank you Vice Chairman Buerkle, Ranking Member 
Kucinich and members of the subcommittee. Thank you for giving 
me the opportunity to testify regarding the impacts of EPA's 
suite of new regulatory requirements for the public utility 
sector.
    AEP is one of the Nation's largest generators with nearly 
38,000 megawatts of generating capacity and serves more than 5 
million retail customers in 11 States. We employ diverse kinds 
of generating of energy sources, including coal, nuclear, 
hydroelectric, natural gas, oil and wind power. But coal is 
important in our States, and approximately two-thirds of our 
generating capacity utilizes coal to generate electricity.
    We believe that the current regulatory track being pursued 
by the EPA will have damaging impacts on our Nation's 
electricity system, as well as broader negative employment and 
economic implications. Together they will require very large 
capital utility investments on a very short timeframe.
    AEP has already achieved substantial SO50 and 
NO120 reductions over the past two decades beginning 
with the acid rain program in the 1990's and continuing with 
the NO120 SIP Call in the Clean Air Interstate Rule. 
AEP's SO50 emissions have been reduced by over 1.1 
million tons. That's about a 73 percent reduction in emissions. 
And our NO120 emissions have been reduced by 80 
percent over that same time period.
    In just the past 10 years, AEP has invested over $5 billion 
in emissions control equipment on our coal units to reduce 
SO50 and NO120 . About two-thirds of our 
fleet is currently equipped with the most efficient 
SO50 controls and about three-quarters of the fleet 
in the eastern system has the most advanced NO120 
controls.
    Two projects were completed in the last 18 months at our 
Amos power plant, and we are preparing to submit applications 
for regulatory approvals to install additional controls in 
Indiana. We expect this transformation to continue and our 
emissions to continue to decline.
    We are committed to working with EPA in the development of 
future control requirements, but we have concerns about EPA's 
proposals. They include the infeasibility of the compliance 
deadlines. The Cross-State Air Pollution Rule will take effect 
in less than 6 months, and the reductions in several States 
required by 2012 represent more than a 30 percent reduction in 
emissions over 2010 emission levels. Multiple regulatory 
programs are going to be taking effect in a very compressed 
timeframe, resulting in unprecedented capital expenditures, 
mostly before 2015. There would be two to three times as much 
capital spent in the United States to comply with these new EPA 
rules by 2020 as has been spent over the past 20 years.
    Abrupt and significant power plant retirements are likely 
to occur due to high costs and infeasible compliance deadlines. 
We expect that between 50 and 110 gigawatts of coal-fired 
generating capacity will retire due to the proposed EPA rules. 
And with those retirements come increased risks of 
unanticipated electric grid reliability problems, particularly 
during the 2014 to 2016 period.
    The greatest capacity reductions are anticipated to occur 
in the PJM region, which recently experienced an all-time high 
peak, and the SERC region, which is in the southeastern portion 
of the country.
    But both ERCOT and SPP have also expressed concerns about 
the localized effects on the electric grid. There will be very 
high electricity rate increases, as has been observed by the 
committee members, and significant job losses associated with 
the implementation of these rules.
    According to a recent study by NERA, the Cross-State Rule 
and the Utility MACT rule will result in over 1.4 million net 
job losses in the United States.
    There's a better way. We would like to see more holistic 
analysis of EPA's regulatory programs in an effort to 
coordinate the implementation of these requirements that can be 
phased in reasonably over a slightly more extended period of 
time and achieve the same environmental outcomes. That time 
will reduce the impact on our customers and the economy. Thank 
you.
    [The prepared statement of Ms. Henry follows:]



    Ms. Buerkle. Thank you, Ms. Henry.
    Mr. Carey.

                    STATEMENT OF MIKE CAREY

    Mr. Carey. Chairman Jordan, Ranking Member Kucinich, 
members of the committee, good afternoon. Thank you for 
inviting me to testify today at this very important hearing.
    The effects the EPA's pending and planned proposals will 
have on electricity prices, employers, domestic workers will be 
devastating. My name is Mike Carey. I am president of the Ohio 
Coal Association. We are an association that provides a voice 
for the many thousands of citizens working in Ohio's coal 
sector. Cheap affordable coal is what powers the manufacturing 
base and maintains our families across the Midwest and other 
regions of America.
    The companies we represent, both large and small, are proud 
to directly employ over 3,000 individuals as well as the 30,000 
additional secondary jobs that depend on our sector. These jobs 
and hundreds of more or thousands more are at risk directly 
because of the decisions under way by the EPA.
    In particular, it is my hope that this committee will 
undertake a serious review of the work being conducted by the 
EPA as it relates to the following proposals: The Cross-State 
Air Pollution Rule, formerly known as the Clean Air Transport 
Rule; the Air Toxic Standards for Utilities or Utility MACT; 
the New Source Performance Standard Changes, the New Ozone 
Particular Matter Standards; Regulation for Coal Combustion 
Residuals; and the Power Plant Cooling Water Intake Structure 
Rule.
    Members of this body have probably heard this grouping of 
proposals called the EPA Train Wreck. The regulatory wave 
embodied in these new mandates and rules above stands to cause 
great harm not only to Ohio but to the rest of the American 
economy. Today coal is mined in over 27 States across the 
Nation and is consumed in over 48 as reliable and affordable 
power.
    I will focus my time today on the two most harmful EPA 
proposals. The first the Cross-State Air Pollution Rule. The 
underlying assumption of this proposal, Mr. Chairman, is that 
our customers, the electric utilities, like American Electric 
Power, like First Energy and Duke Energy, will simply move to a 
lower sulfur content coal. That assumes that companies will 
even continue to use coal in the first place. They could fuel 
switch to natural gas. This ultimately could disrupt the 
natural gas markets.
    This administration proposes to sacrifice these 33,000 
primary and secondary jobs that we create, and that is as 
simple as it gets. EPA's complex rule creates a system of 
allowances and trading that is much less flexible than the 
current regulatory framework. Winners and losers are thus 
clearly chosen, and Ohio is a loser. The only option for those 
producing electricity in our state, as we have already seen in 
many cases, is to shut down or potentially shut down their 
plants.
    The second most harmful proposal in our view is the Utility 
MACT Rule. When the proposals are both finalized the national 
and regional impacts will be devastating. Ohio alone will lose 
53,000 jobs, and electricity prices could certainly spur and 
hurt the middle and lower class Americans, which already pay 
almost 16 to 22 percent of their annual after-tax income on 
energy costs annually.
    The future of Midwestern jobs and access to affordable 
energy depends on demanding that the EPA examine the cumulative 
impacts of their regulatory proposals. Oversight for how these 
flawed proposals are costly, unworkable and harmful to the U.S. 
economy should continue. In the interim, Congress must seek to 
enact policies that address the flaws in the EPA's proposals 
that I have outlined.
    EPA's war on coal will also be harmful to the homeowners 
across the country. As the studies have shown, in the Train 
Wreck will result in electricity prices that would increase 13 
percent in Ohio, 23 percent in Tennessee and 17 percent in 
Pennsylvania. Now, I understand that this week the House will 
take up the spending measures that will reduce the EPA's 
funding by 18 percent. My concern is that the EPA will simply 
find a way to shuffle around the funds, and such a cut will not 
stop their plans to move forward with the Train Wreck.
    It is the belief of the Ohio Coal Association that Congress 
must be bolder, delay these rules immediately. It is critical, 
and the House must then act to write legislation that makes 
these rules more reasonable. Without a clear direction from 
Congress in this fashion, EPA will continue its toward pace of 
piling on new job crushing policies. I want to thank you for 
the opportunity to testify, and I stand ready to answer any 
questions the committee may have.
    [The prepared statement of Mr. Carey follows:]



    
    Ms. Buerkle. Thank you, Mr. Carey.
    Dr. Schwartz, if you would proceed.

                   STATEMENT OF JOEL SCHWARTZ

    Mr. Schwartz. Thank you, Madam Chairman, Mr. Kucinich.
    Certainly the regulations that we have heard about, like 
the Transport Rule, will impose significant costs on industry, 
but they will also produce significant health benefits, and I 
would like to talk a bit about that.
    Particulate matter is one of the largest avoidable causes 
of death in the United States. To put that in perspective, 
particulate matter kills more people each year in the United 
States than AIDS, breast cancer and prostate cancer put 
together. That is a big number. And the difference is we don't 
know how to cure AIDS, breast cancer and prostate cancer, but 
we do know how to put scrubbers on coal-burning power plants. 
And so it is important to think about it in that respect.
    And this is not just my opinion, this is a worldwide 
scientific consensus. In 2005, the World Health Organization 
said that particulate matter killed 800,000 people a year in 
the world's cities alone. The American Medical Association has 
endorsed these conclusions, as has the American Thoracic 
Society, the American Cancer Society, the American Heart 
Association.
    The Clean Air Scientific Advisory Committee has extensively 
reviewed EPA's science assessment for particles over the last 
several years and concluded that the association with mortality 
was causal, that the risk assessment was sound, except they 
said that what EPA cited as their high estimate was actually a 
mid-range estimate because there were lots of studies that 
showed bigger effects. The National Academy of Sciences in the 
United States has endorsed this conclusion in two separate 
reports.
    In 2005, the European Union proposed the strategy to reduce 
particles because their scientific review concluded it killed a 
lot of people, and their strategy was to impose an 82 percent 
reduction in SO50 emissions, primarily by 
retrofitting scrubbers on coal-burning power plants.
    So this is really a consensus view of the worldwide 
scientific community. And the reasons they believe that are 
simple. We have lots of studies in the scientific literature to 
support this. We have studies that compare death rates in more 
polluted towns and less polluted towns, and they are higher in 
more polluted towns.
    We have studies that have looked at changes in particle 
concentrations in cities and changes in their death rates. And 
the more the particle concentrations drop, the more the death 
rates drop in those locations. We have studies that have then 
said, well, let's forget about those downward trends and let's 
look at just year-to-year fluctuations around the downward 
trend in particles, and year-to-year fluctuations in death 
rates went with those changes in particles. We have studies 
that looked at strikes and found that death rates fell when 
major industries that were important sources of air pollution 
were shut down, and went back up when they were turned on 
again.
    And then buttressing all of this we have studies from 
animals that show that if you expose animals over a period of 
months to particles compared to filtered air, that they develop 
much more atherosclerosis and the atherosclerotic plaques 
become much less stable and more likely to rupture, and it has 
been done in multiple studies. We have animal studies showing 
that if you produce ischemia in animals and expose them to 
particles, the blood flow to the heart is reduced further 
compared to one's breathing filtered air. We have studies 
showing that you can produce arrhythmias in animals by exposing 
them to particles.
    So, in addition to all of the human studies, we have a 
great deal of toxicology that backs this up. And this is why 
review committee after review committee and scientific body and 
medical body after medical body have all come to the conclusion 
that this is really happening. And the numbers that we are 
talking about are quite large. So the mid-range number from 
EPA's expert elicitation or from what Case Act said, says that 
the Transport Rule will save 34,000 early deaths per year. That 
is a really big deal. And yes, it costs money, but actually, 
the cost per life saved is about $100,000 a life, and that is 
actually pretty cheap among public health interventions that 
are available to us.
    So I think that these are important issues, but it is 
important to realize that there are very important public 
health benefits that will result from putting these controls 
on. Thank you.
    [The prepared statement of Mr. Schwartz follows:]



    Ms. Buerkle. Thank you, Dr. Schwartz.
    I am going to yield the ranking member 5 minutes for 
questions.
    Mr. Kucinich. I want to thank the gentlelady for her 
indulgence. I am going to have to leave as soon as I am through 
with the questions. I am offering an amendment on the floor. I 
am very grateful for your kindness.
    At a June 1, 2011, meeting with investors when discussing 
the risk of closures to plants as a result of EPA rules, the 
chairman of AEP Michael Morris told investors the following: As 
you know, those are high-cost plants. Throughout almost all of 
2009 those plants probably didn't run 5 percent of the time 
because of natural gas prices. When we shut those down, there 
will be some cost savings as well, and on balance, we think 
that is the appropriate way to go.
    That is the sum and substance of what was said. Now, what 
CEO Morris is saying is that AEP has already had to shut down 
certain coal-burning power plants due to competitive pressure 
from lower cost natural gas. These are the same plants that 
would have to be retrofitted or shut down to comply with EPA 
regulations.
    Now, Ms. Henry, if AEP is already shutting down these same 
plants because they are high cost and are uncompetitive in the 
market, how can you come here today and portray EPA's rules as 
infeasible and blame the EPA for forcing a large number of 
premature power plant requirements?
    Ms. Henry. Thank you, Ranking Member Kucinich.
    The plants referred to in the chairman's remarks and the 
plants referred to in the studies that have been conducted as a 
result of EPA's rules are not necessarily the same plants. I 
think that we will need to go back and look at the plants that 
the chairman was referring to.
    Mr. Kucinich. So you are saying you really don't know which 
plants he is talking about, is that right?
    Ms. Henry. I am not certain of the universe of plants he's 
talking about.
    Mr. Kucinich. Okay. We would like you to provide that 
information to this committee.
    Ms. Henry. If I could respond.
    Mr. Kucinich. No. You don't know the answer, so I am going 
to ask my next question.
    If the price of natural gas relative to coal stays where it 
was at the time your CEO is explaining his decision to close 
certain plants and that price stays the same through 2014, 
isn't it a fact that AEP will keep those plants closed through 
2014?
    Ms. Henry. If the price of natural gas stays at the current 
rates----
    Mr. Kucinich. Right. At the time--right.
    Ms. Henry. As the time the chairman was making----
    Mr. Kucinich. Will those plants stay closed?
    Ms. Henry. The plants were running at low-capacity factors; 
they were not closed. And those plants run during times of peak 
energy demand and are used to respond to needs for additional 
power on days like we experienced this past week. Having those 
plants available to respond to those peak demands is critical 
to the integrity of the electrical grid.
    Mr. Kucinich. So what you are saying is that those plants 
are specifically part of meeting peak demands and they are 
otherwise totally efficient and not subject to market 
fluctuations that would come about as a result of natural gas 
competition?
    Ms. Henry. Certainly if the price of natural gas were to 
increase significantly, their capacity factors might go up 
because their dispatch might be more economic than the gas 
plants that run also at peak periods of time. But I think that 
the critical point is that the plants provide both that peak 
capacity reserve and also supply----
    Mr. Kucinich. Well, if natural gas costs more. But what if 
natural gas costs less? Would it likely be that those plants 
would be out of capacity because they are not able to compete 
with natural gas?
    Ms. Henry. That would depend upon the availability of those 
plants and other plants on the system to respond to that peak.
    Mr. Kucinich. Did AEP lay off those workers at the plants 
that had to close due to lower-priced natural gas, or did you 
find other assignments for them?
    Ms. Henry. Some of the workers were part of a voluntary 
severance program that we conducted last year in response----
    Mr. Kucinich. So they were voluntarily separated, they 
weren't laid off, is that what you are saying?
    Ms. Henry. That is right.
    Mr. Kucinich. So they lost their jobs?
    Ms. Henry. There will be an additional 600 jobs lost when 
those plants are finally closed.
    Mr. Kucinich. Ms. Henry, AEP is the author of a bill 
entitled Electric Power Regulatory Coordination Act of 2011, is 
that correct?
    Ms. Henry. I don't think there is----
    Mr. Kucinich. You haven't heard that? Okay. Are you 
familiar with a bill by that name?
    Ms. Henry. I am not familiar with a bill by that name.
    Mr. Kucinich. Madam Chair, I am going to ask unanimous 
consent to put this report by the NACP and other groups in 
about the situation in Ohio with respect to coal and electric 
utilities.
    Ms. Buerkle. Without objection.
    Mr. Kucinich. Are you familiar Ms. Henry with a draft, 
discussion draft circulated that has been dubbed the Electric 
Power Regulatory Coordination Act of 2011, that would halt 
implementation of the Nation's clean air laws?
    Ms. Henry. I am not familiar with the specific draft that 
you are referring to.
    Mr. Kucinich. You never heard of that?
    Ms. Henry. No.
    Mr. Kucinich. You have no knowledge whatsoever of any kind 
of discussion draft that relates to a bill by that name?
    Ms. Henry. I know that AEP assisted in the preparation of 
some suggested language for legislation that might have had 
that impact.
    Mr. Kucinich. That is what I am talking about. This bill 
proposes to wait another 6 years before we limit toxic mercury 
from some power plants as well as delaying limits on a host of 
other dangerous pollutants, is that not correct?
    Ms. Henry. That would be an incorrect characterization.
    Mr. Kucinich. Pardon?
    Ms. Henry. That would be an incorrect characterization of 
the language that AEP proposed.
    Mr. Kucinich. Wait. You just told me--are you familiar with 
this bill or not? Do you know the bill or don't you? You are 
just giving me a response that it is an incorrect 
characterization of a bill that you weren't really sure about.
    Ms. Henry. I said I am not familiar with whatever----
    Mr. Kucinich. Okay. I withdraw my question, Madam Chair.
    I am going to submit questions in writing so that Ms. Henry 
can become familiar with the questions that we are concerned 
about. And also she can familiarize herself with her own 
understanding of this draft discussion that I am asking about. 
I appreciate it. Thank you.
    Ms. Buerkle. Without objection.
    [The information referred to follows:]



    Ms. Buerkle. Okay. I will yield myself 5 minutes for 
questions.
    First of all, Ms. Henry, I want to give you the 
opportunity, it seemed to me you had an answer to the ranking 
member's question that you weren't allowed to give. If you 
wanted to--early in his line of questioning, he was speaking to 
you.
    Ms. Henry. If I could continue my response, I would 
appreciate it. Thank you.
    The legislation that AEP was discussing with certain 
Members of Congress would have provided for a phased-in program 
to allow sufficient time in order for all of the controls that 
are required by the various EPA proposals to be phased in over 
a slightly longer period of time than is proposed under the 
Cross-State Air Pollution Rule and the Utility MACT Rule.
    Instead of having all of the requirements become final and 
effective in 2014, there would have been an extension through 
2020 and a phased-in program with specific levels of control 
required to be achieved throughout that time period.
    Ms. Buerkle. Thank you.
    And this question is for Ms. Henry, as well as Mr. Carey. 
The EPA time lines to comply with these regulations, is it 
realistic or unrealistic?
    Ms. Henry. Based on our experience, it is an unrealistic 
timeframe for the installation of the very sophisticated 
controls that are necessary to control the types of coals that 
are produced in many of our States, including Ohio. FGD 
systems, flue gas desulfurization systems, and SCR systems are 
required to achieve the levels that are set forth in the EPA 
regulations for SO50 and NO120 and also 
to achieve the co-benefits of mercury reductions from those 
same power plants.
    Ms. Buerkle. Thank you.
    Ms. Henry. And those require about 4 and a half to 5 years 
to complete.
    Ms. Buerkle. Mr. Carey.
    Mr. Carey. I would agree with--I would agree with her 
analysis of how that would affect the power-producing 
facilities. And what that actually would do for the coal 
producers of the State would be a removal of us from the 
marketplace because they simply could not meet the timeframes, 
as I mentioned, go to a lower sulfur coal and/or possibly 
switching to natural gas.
    Ms. Buerkle. Can each of you comment just briefly, because 
I want to get to this line of questioning with regards to these 
compliance timelines, how many jobs can you estimate would be 
lost?
    Ms. Henry. Based on the comprehensive analysis that was 
done by NERA, we estimate that about 1.4 million net job losses 
would occur in the United States through the time period 2020 
as a result of these regulations. And the two regulations we 
are talking about are the Cross-State Air Pollution Rule and 
the Utility MACT Rule. The impacts are probably more severe 
than that based on the final rule because NERA did its analysis 
on the proposed rule and not the final rule.
    Ms. Buerkle. And if you had more time to comply, would that 
affect the number of jobs lost?
    Ms. Henry. Yes, it would because we would be able to 
moderate the electricity rate increases associated with the 
installation of the controls and spread that over a longer 
period of time.
    Ms. Buerkle. Thank you.
    And the same two questions to you, Mr. Carey.
    Mr. Carey. According--Madam Chair, according to the NERA 
study, it alone, that loss of those jobs just because of those 
two proposals, would be 53,000 direct jobs in the State, of 
which many of those jobs would come from the Appalachian coal 
fields because of the direct jobs in the mining industry and 
the up to 11 spin-off jobs that occur from one coal mining job, 
so the numbers would be significant in that region.
    Ms. Buerkle. And again, if there is longer time for 
compliance, will that affect the number of jobs lost?
    Mr. Carey. Madam Chair, I think certainly that could affect 
ultimately the amount of coal that we could continue to put 
into those power producing facilities, so yes.
    Ms. Buerkle. Thank you.
    Now, can either or both of you actually comment on what 
this will do to electricity rates? You heard in the previous 
panel of the testimony that it will raise slightly, but I would 
like to hear your thoughts about what it will do to the 
electricity rates.
    Ms. Henry. Well, the EPA analysis has been done on an 
average basis nationwide and not on an individual company 
basis. Obviously, those companies that are most dramatically 
impacted by the rules bear the highest cost of compliance, and 
their rates increase the most.
    For the AEP companies, the rate increases we have estimated 
range from 10 percent at the lowest end of the range to almost 
35 percent in those areas most highly impacted.
    Ms. Buerkle. Thank you.
    Mr. Carey.
    Mr. Carey. Madam Chair, I think if you look at--in my 
testimony, I outline what NERA also said, was that if you break 
it down by State, the average cost for electric rates for 
certain States across the country, in particular, Ohio is at 13 
percent; 23 percent in Tennessee; and 17 percent in 
Pennsylvania. So you can just go down the list and all of the 
States would see there will be regional variances in the cost 
of the electricity increase, but definitely all increasing.
    Ms. Buerkle. Thank you.
    I want to ask one more question of the two of you, and then 
Dr. Schwartz, I don't want you to feel left out here this 
afternoon.
    The EPA is a singular regulatory body and yet we see so 
many regulations coming out of it from so many various agencies 
and departments. I would like for you to comment--and Mr. 
Carey, I can start with you, and then Ms. Henry--have you seen 
any signs that there is a coordination of or a look at how all 
of these regulations affect businesses? I mean one regulation 
by itself may not be bad, but cumulatively, they may devastate 
businesses, and that is why we are here today, our concern for 
what this cumulative effect is doing for jobs and job creation. 
So if you could comment on that, I would appreciate it.
    Mr. Carey. Certainly, Madam Chair. I don't think there is 
any doubt that we are seeing in the coal fields of not just 
Ohio, but I think West Virginia, Pennsylvania, Illinois, 
Kentucky, you are seeing a coordinated attack because the new 
restrictions on certain coal permits, the fact that the U.S. 
EPA is getting involved in a lot of the processes that normally 
would have taken place under the State EPA--or the State 
permitting program. You are seeing that Federal, that Federal 
go into the States, start revoking permits, as happened in the 
State of West Virginia. So what you have is systematically, you 
have the U.S. EPA not allowing for coal to be permitted to get 
out of the ground and then ultimately trying to take away the 
market that the coal could go to. So I guess you could say that 
the EPA believes that they can control both the laws of supply 
and demand ultimately to the detriment of the entire country.
    Ms. Buerkle. Thank you.
    Ms. Henry.
    Ms. Henry. The EPA regulations are analyzed in a silo.
    Each individual requirement is analyzed only for its 
individual cost and benefits, and there is no comprehensive 
analysis undertaken. That results in a failure to consider the 
cumulative impacts at any individual facility, let alone across 
an industrial sector.
    And for an example, the suite of regulations that are 
currently before us include not only the air pollution 
regulations, but also the cooling tower requirements and the 
coal combustion residuals rulemaking. Each of those rules has 
its own costs, and all of them would be considered by a utility 
before any investment would be made to determine whether the 
long-term viability of the facility is justified. So it is 
essential that EPA not only do cumulative analyses within an 
individual office or division, like the air division, but that 
it take a holistic view of all of the regulatory programs that 
are coming out of the various offices within EPA.
    Ms. Buerkle. Thank you very much.
    Dr. Schwartz, in your testimony, you talk a lot about the 
negative health effects of particulate matter. And I want to 
clarify if primarily particulate matter is regulated by MACTs? 
Is that correct?
    Mr. Schwartz. Well, there is a MACT for particulate matter, 
but then there are also new source performance standards and, 
you know, best available control technology and a bunch of 
other regulations as well.
    The transport rule is primarily being put out to help 
States come into attainment with the MACTs because we know that 
particles don't actually stop at State borders. And so the 
Clean Air Interstate Rule that was originally proposed was for 
the purpose of doing that. The MACT, I think, is an entirely 
different thing that has nothing to do with the ambient air 
quality standard.
    Ms. Buerkle. Well, the concern is that there was a 
duplication in the count of particulate matter, you know, to 
make the case, you know.
    Mr. Schwartz. Oh. So, I mean, I haven't read every document 
that EPA has produced, but certainly when EPA did the 
regulatory impact analysis for the ongoing round of revision of 
the ambient air quality standards for particles, they said, 
what if we got particle levels down to some point and what 
might be the costs and the benefits of that in their risk 
assessment.
    They didn't specifically propose rules that would 
accomplish that, but they implicitly assumed that one of the 
rules that was going to be providing a lot of the help was the 
transport rule. So if you looked at the benefits of those two 
things and added them up, that would be incorrect. It would 
also be incorrect if you looked at the cost of those two things 
and added it up. The transport rule is one of the strategies 
that EPA is proposing to help come into attainment with the 
current MACTs and with any future MACTs. And so it should be a 
sub category under there for both costs and benefits.
    Ms. Buerkle. Thank you.
    Ms. Henry, I want you to comment if you could on whether it 
is fair that the EPA essentially double counted the benefits.
    Ms. Henry. Madam Vice Chair, I think that the primary 
objection that we have to EPA's benefits analysis is that for 
the Cross-State Air Pollution Rule, EPA assumed that current 
requirements that apply to our facilities under the Clean Air 
Interstate Rule don't exist, so they started from an artificial 
baseline and overstated the benefits that would be achieved 
through the Cross-State Rule.
    With respect to the Utility MACT Rule the benefits that are 
affiliated with reducing the hazardous and toxics air emissions 
under that rule amount to negligible benefits compared to the 
costs. The costs are, as I think the chairman stated 
previously, about $10.7 billion per year, and the benefits are 
around $50 million associated with reductions in mercury.
    EPA claimed it could not quantify any benefits associated 
with any other individual hazardous air pollutant, but they did 
quantify benefits associated with reductions in particulate 
matter, and those are the benefits that they claim are achieved 
through the reductions of the Utility MACT Rule.
    Ms. Buerkle. Thank you. Mr. Carey would you like to comment 
on that.
    Well, with that, since there are no other members here for 
questioning, I would like to thank all three of you for being 
here this afternoon for being willing to answer our questions 
and to testify.
    I think the chairman called this committee. Our concern is 
always that regulations are putting such burdens on businesses 
in our country. And given the unemployment rate, we have a 
responsibility to act responsibly.
    And as I mentioned to the previous panel, that no one is 
saying we don't need regulations, but we need reasonable 
regulations that don't put companies out of business, that 
create barriers to their success, that you know, we see 
compliance and then we see new regulations that require 
retrofitting. So I thank you all for being here today.
    And with that, this hearing is adjourned. Thank you.
    [Whereupon, at 4:58 p.m., the subcommittee was adjourned.]