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



 
 LIGHTS OUT II: SHOULD EPA TAKE A STEP BACK TO FULLY CONSIDER UTILITY 

                     MACT'S IMPACT ON JOB CREATION

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



                                HEARING

                               before the

                         COMMITTEE ON OVERSIGHT

                         AND GOVERNMENT REFORM

                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                               __________

                           NOVEMBER 01, 2011

                               __________

                           Serial No. 112-133

                               __________

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




                  U.S. GOVERNMENT PRINTING OFFICE
74-039                    WASHINGTON : 2012
-----------------------------------------------------------------------
For sale by the Superintendent of Documents, U.S. Government Printing 
Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; DC 
area (202) 512-1800 Fax: (202) 512-2104  Mail: Stop IDCC, Washington, DC 
20402-0001



              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



                            C O N T E N T S

                              ----------                              

                               WITNESSES

Cuccinelli, Hon. Kenneth, II, Attorney General, Commonwealth of 
  Virginia
        Oral Statement...........................................     5
        Written statement........................................     7
Perciasepe, Hon. Robert, Deputy Administrator, U.S. Environmental 
  Protection Agency
        Oral Statement...........................................   159
        Written Statement........................................   161
Bivens, Josh, Ph.D., Economist, Economic Policy Institute
        Oral Statement...........................................   177
        Written Statement........................................   180

                                APPENDIX

Gansler, Douglas F., Maryland Attorney General and Summers, 
  Robert M., Secretary of the Maryland Department of the 
  Environment Committee on Oversight and Government Reform,
        Joint Statement of.......................................   189
Banig, Bill, Director, Government Affairs, United Mine Workers of 
  America, and President, UJAE; and Hunter, Jim, Director, 
  Utility Department, International Brotherhood of Electrical 
  Workers, and Vice President, UJAE,
        Joint Statement of.......................................   194
Virginia DEQ-List of orders issued between January 1, 2010 and 
  November 1, 2011,
        Information provided for the record by Mr. Cuccinelli....   195


 LIGHTS OUT II: SHOULD EPA TAKE A STEP BACK TO FULLY CONSIDER UTILITY 
                     MACT'S IMPACT ON JOB CREATION

                              ----------                              


                       Tuesday, November 1, 2011

                  House of Representatives,
              Committee on Oversight and Government Reform,
                                                   Washington, D.C.
    The committee met, pursuant to call, at 1:03 p.m., in 2154, 
Rayburn House Office Building, Hon. Darrell E. Issa [chairman 
of the committee] presiding.
    Present: Representatives Issa, Lankford, Amash, Gowdy, 
Cummings, Towns, Norton, Kucinich, and Connolly.
    Staff Present: Ali Ahmad, Communications Advisor; Kurt 
Bardella, Senior Policy Advisor; Robert Borden, General 
Counsel; Molly Boyl, Parliamentarian; Lawrence Brady, Staff 
Director; Joseph A. Brazauskas, Counsel; John Cuaderes, Deputy 
Staff Director; Linda Good, Chief Clerk; Ryan M. Hambleton, 
Professional Staff Member; Christopher Hixon, Deputy Chief 
Counsel, Oversight; Ryan Little, Professional Staff Member; 
Justin LoFranco, Deputy Director of Digital Strategy; Mark D. 
Marin, Director of Oversight; Kristina M. Moore, Senior 
Counsel; Jeff Solsby, Senior Communications Advisor; Rebecca 
Watkins, Press Secretary; Nadia A. Zahran, Staff Assistant; 
Beverly Fraser Britton, Minority Counsel; Claire Coleman, 
Minority Counsel; Kevin Corbin, Minority Deputy Clerk; Lucinda 
Lessley, Minority Policy Director Steven Rangel, Minority 
Senior Counsel; Dave Rapallo, Minority Staff Director; and 
Ellen Zeng, Minority Counsel.
    Chairman Issa. The committee will come to order.
    The Oversight Committee exists to secure two fundamental 
principles. First, Americans have a right to know that the 
money Washington takes from them is well spent. And second, 
Americans deserve an efficient, effective government that works 
for them. Our duty on the Oversight and Government Reform 
Committee is to protect these rights. Our solemn responsibility 
is to hold government accountable to taxpayers because 
taxpayers have a right to know what they get from their 
government. We will work tirelessly in partnership with citizen 
watchdogs to deliver the facts to the American people and bring 
genuine reform to the Federal bureaucracy. This is the mission 
of the Oversight and Government Reform Committee.
    Today, a debate is unfolding in America that comes down to 
two fundamental questions about how much government do we need 
in our lives. From this side of Capitol Hill all the way to 
Pennsylvania Avenue, there are hearings every day and listening 
sessions every day about the creation of jobs.
    Today, we are going to listen about whether or not a 
tsunami of regulations, some well intended, some expedited, 
some perhaps in conflict with each other, are creating an 
environment in which the economic downturn will be prolonged. 
On one hand, the Obama administration has been stubborn in its 
determination to issue costly regulations and paid little 
regard to the impact these mandates will have on the broader 
economy. On the other hand, the administration has admitted 
that there are at least 500 regulations that need to be 
withdrawn. They have talked in terms of duplicate regulations. 
They have talked in terms of relieving regulatory burdens on 
job creators. So much so that the Gallup Poll of job creators, 
of entrepreneurs, considers the number one impediment to job 
creation to be, in fact, regulatory excess.
    Today, we are going to hear about Utility MACT, the 
Environmental Protection Agency--EPA's--proposed issue of this 
rule, which is clearly by its own terms an $11 billion rule, 
but in fact by most of the people on both sides of the aisle 
who are looking at the high end of what it could cost being ten 
times that, or more. Anything which causes the price of energy 
and its availability to suddenly change will disrupt markets, 
will change the balance of cost effectiveness here in America, 
because after all, if you increase the price of an essential 
fuel like electricity, you will by definition increase the cost 
of doing business, and particularly for manufacturing jobs, 
which often depend on a high volume of electricity in order to 
create efficiencies to offset advantages Third World countries 
have in less expensive labor.
    Whether you're in Florida or--as our first witness today, 
Virginia--whether you're a donor of the fuel of greatest 
choice, that being coal; or in fact you're a recipient of that 
to power your power plants, you know that in fact the grid 
depends, at least 51 percent, on reliable power that today 
comes from coal.
    We applaud the EPA for continuing a tradition to try to 
find ways to continually clean up all of our energy sources, to 
reduce particulates, and particularly to set a standard for 
reducing mercury. We have no objections to the attempt to, on 
an ongoing basis, increase the reliability of our power plants 
to deliver clean energy. At the same time, 24 Attorneys 
General, both Democrats and Republicans, have requested the EPA 
to postpone issuance of its rule for 1 year.
    Today, we will hear from one of those Attorney Generals, 
along with the EPA and a think-tank individual, giving three 
different views from three different perspectives. This is not 
the last hearing we will have on the speed with which we can 
make air and water cleaner and the cost that it will have.
    In no case do we want anyone to misunderstand. If this rule 
does not take place, air and water will be as clean tomorrow as 
it is today. If this rule takes place a year from now and it is 
different and better, it will only increase the cleanliness and 
the reliability that comes with good clean energy here in 
America.
    The goal today is to hear: Is this the right time, is this 
the right speed, is the science ready, and most importantly, 
what will be the impact to the various States?
    Chairman Issa. With that, I would like to recognize the 
ranking member for his opening statement.
    Mr. Cummings. Mr. Chairman, I'd yield to the gentleman from 
Virginia, Mr. Connolly.
    Mr. Connolly. I thank the ranking member.
    It's a shame that the committee majority shows so little 
interest in legislation that might promote technological 
innovation and improve management of Federal information 
technology. Instead, we are conducting another partisan hearing 
that isn't really related to our committee's primary 
jurisdiction.
    Now the committee is holding a hearing to attack 
commonsense EPA limits on mercury, arsenic, dioxin, and other 
pollution. Consider the pressing technology related topics in 
which this committee has not held a hearing: cloud computing, 
data consolidation; an update to FISMA; implementation of the 
Chief Information Office's 25-point plan; or improvements to 
the acquisition workforce. We have not held hearings on filling 
the gaping holes in our acquisition workforce or about how to 
improve training for acquisition personnel. We have held 
markups and legislation to create new unfunded mandates and 
private sector relations--the DATA Act--but not on legislation 
to streamline or expedite data center consolidation or the 
shift to cloud-based data storage and processing.
    The Republican leadership of this committee has abandoned 
the most important issues in Federal technology and management 
issues, which are of vital importance to one of the most 
important job-creating sectors of our economy--technology. 
Instead of focusing on these important topics, the committee 
majority has decided to attack limits on mercury and other 
toxic pollution.
    The EPA is updating standards to regulate toxic mercury 
pollution because the courts found that a prior rule issued 
under the Bush administration on behalf of the polluters 
violated law. Under the Obama administration, the EPA actually 
is trying to do its job and reduce toxic pollution, as Congress 
directed in 1990. As the EPA attempts to administer the Clean 
Air Act, it is worth recalling that the Clean Air Act used to 
have bipartisan support. It was signed into law by a Republican 
President 40 years ago and strengthened substantially by a 
Republican President in 1990.
    By any empirical measure, the Clean Air Act is a wild 
success. It saves 160,000 lives annually by preventing deaths 
that would otherwise be caused by air pollution. Major 
regulations implemented in the Clean Air Act have saved far 
more money than they have cost to be implemented.
    Since the Clean Air Act was passed, the U.S. economy has 
grown by 200 percent and we have fostered a vibrant, new, 
clean-energy industry that creates jobs without creating 
diseases associated with fossil fuel production. The regulation 
this committee majority is attacking today is typical of the 
Clean Air Act regulations that will save lives and money. 
According to CRS, the Utility MACT rule would save 6,800 to 
17,000 lives per year, with a net savings of at least $48 
billion.
    The Republicans claim to be concerned that this lifesaving 
public health standard will threaten the reliability of 
electricity supply. Once again, we are presented with a false 
chase: in this case, a false choice between electricity and 
clear air. Those of us that have been outside today breathe 
cleaner air right here in the Nation's Capitol as a direct 
result of the Clean Air Act. And yes, there are far more cars 
on the road and kilowatts of electricity being produced than 
when Congress passed the Clean Air Act in 1970.
    The primary Republican witness, Virginia's Attorney General 
Ken Cuccinelli, has used his office to focus on narrow 
ideological issues that in my view squander taxpayer 
investment. He subpoenaed, for example, former UVA Professor 
Michael Mann in 2010 because he believed that Mann's well-
regarded climate research might qualify as fraud under Virginia 
law. Not surprisingly, a circuit court disagreed. Now, Attorney 
General Cuccinelli is appealing to the Virginia Supreme Court.
    The witch hunt has drawn condemnation from 800 Virginia 
scientists, the conservative Richmond Times Dispatch and almost 
every other major newspaper in the Commonwealth, the American 
Association of the Advancement of Science, and so many others. 
It is appalling that taxpayer money would be squandered in a 
vain attempt to discredit a single climate scientist.
    In addition, litigating against his own State's premier 
university, founded by Thomas Jefferson, he filed a lawsuit 
against the Federal Government for the EPA's finding that 
greenhouse gas pollution poses a danger to human health and 
welfare. Unfortunately, as a caricature for the modern 
Republican Party, Attorney General Cuccinelli has fulfilled the 
predictions of the Washington Post's editorial board, 
suggesting that given his bizarre ideas, he would very likely 
become an embarrassment to the Commonwealth.
    I regret that we are holding this hearing instead of going 
into other topics that I think would be more productive and 
would in fact create jobs.
    With that, I yield back.
    Chairman Issa. I thank the gentleman.
    Chairman Issa. Members will have 6 days to submit opening 
statements and extraneous material for the record.
    We will now recognize our first witness, the distinguished 
Attorney General of the Commonwealth of Virginia, the Honorable 
Ken Cuccinelli. Pursuant to the committee rules, all witnesses 
here will be sworn in. Would you please rise to take the oath.
    Do you solemnly swear or affirm the testimony you are about 
to give will be the truth, the whole truth, and nothing but the 
truth?
    Let the record indicate the witness answered in the 
affirmative.
    Chairman Issa. I am going to take a point of privilege, 
very briefly. I appreciate your being here today. I'm going to 
regret that there were some levels of the previous opening 
statement that may have seemed personal, and I apologize to the 
extent that you were offended. We appreciate your being here. 
We recognize you're one of many Attorney Generals that is 
involved in this. And I think on an overall committee basis, I 
would say that we are very pleased to have you here as a 
representative and hope that you will take the spirit of the 
full committee without any questions that you may have from 
other opening statements.
    With that, you're recognized.

            STATEMENT OF HON. KENNETH CUCCINELLI, II

    Mr. Cuccinelli. Thank you, Mr. Chairman. Chairman Issa, 
Ranking Member Cummings, members of the committee, I am Ken 
Cuccinelli, Attorney General for the Commonwealth of Virginia. 
I want to thank you for the invitation to speak about the MACT 
rule today. One of my duties as Attorney General, as is common 
among Attorneys General, is to serve as the attorney for 
utility customers in my State, advocating for fair rates for 
customers when electric utilities seek rate increases from the 
commission that approves them.
    As you know, public utilities that have their rates set by 
State commissions are entitled under the U.S. Constitution to 
recover from customers the necessary expenses they incur to 
provide utilities. That includes expenses to comply with 
Federal laws and regulations. That means every time new 
environmental regulations are placed on electric utilities, it 
is actually the customers that I represent who pay the cost. 
This isn't to say that environmental regulations should 
automatically be rejected because they impose some costs, but 
it does mean the EPA should follow the proper procedures to 
ensure the alleged benefits of the regulation outweigh the 
real-world cost.
    Unfortunately, the EPA hasn't been following normal 
procedures. In its regulatory impact analysis for the MACT 
rule, the EPA conceded that the result would increase 
electricity prices and would cost jobs in certain sectors. Yet 
the EPA admitted that it did not have sufficient information to 
quantify those losses. In fact, the rule will have a huge 
economic impact on this Nation. First, it will increase 
electricity prices over the course of the next 5 to 10 years of 
between 10 and 35 percent. That will vary, depending on where 
you are and what the conditions particularly of your generation 
and transmission are in your region. That can be a financial 
debt blow for businesses struggling to meet payroll and 
families on fixed incomes.
    Second, retrofitting power plants to meet the standards 
will, as you all know, be prohibitively expensive. So there's 
no question that certain plants will close and the Nation's 
electricity supply will decrease, leading to upward pressure on 
prices and likely brownouts and possibly blackouts in strained 
periods of use. The EPA even concedes that at least 10 
gigawatts of electricity will be lost from the Nation's power 
grid. Of course, FERC's initial analysis says over 80. That is 
a pretty dramatic difference between the EPA and the people who 
you would expect to know better.
    Third, while the EPA says it can't quantify the number, it 
acknowledges that jobs will be lost. Their estimates are 
180,000 jobs per year between 2013 and 2020.
    For Virginia, the situation is even bleaker than for the 
rest of the Nation, though not Mr. Connolly's part of Virginia, 
which is where I live. A majority of the electricity for 
southside and southwest Virginia is generated from coal. Since 
the MACT rule will significantly increase prices for 
electricity produced from coal, the poorest part of my State 
will face the largest price increases, including part of 
Appalachia, one of the poorest parts of America.
    But it gets even worse. The most important industry in 
southwest Virginia is coal mining. These regulations make coal 
more expensive and less desirable to use, which means the 
economy of southwest Virginia--again, including Appalachia--
will be devastated by the destruction of the coal industry and 
the jobs lost along with it.
    Whatever you think of the benefits of the MACT rule, a 
decision about whether it's prudent policy simply can't be made 
without considering these other impacts--and not just for 
Virginia, but for the entire country. What's even worse is that 
for regulation this important, the EPA set just 104 days, 
recently extended to 134, to review the more than 960,000 
public comments on the impact of the rule, if you compare this 
to other significant rules where the EPA has set review periods 
of more than a year, with less comments. This abbreviated 
review period occurred because groups that support the EPA's 
position sued the EPA and then, in a very friendly settlement, 
the EPA agreed to the short review period.
    This kind of gaming of the system is an affront to proper 
procedure and the rule of law and it really should concern 
people across the spectrum. This obvious attempt to rush the 
rule through was so outrageous that, as you noted, Mr. 
Chairman, I, along with 23 other Republican and Democrat States 
attorney general, the Governor of Iowa, and the Territory of 
Guam, filed an amicus brief asking the court not to approve the 
consent decree's short time period. Given these major economic 
issues, it's not good enough for the EPA to say that it lacks 
sufficient information to quantify the negative effects of its 
regulations. It needs to collect that information before 
imposing the rule, to make sure the benefits in fact outweigh 
the costs. If the EPA needs more time, then it should take it, 
instead of gaming the system by entering into a consent degree 
that shortens the time for review.
    Thank you again for the opportunity to address these 
issues.
    Chairman Issa. Thank you.
    [Prepared statement of Mr. Cuccinelli follows:]
    [GRAPHIC] [TIFF OMITTED] 74039.001
    
    [GRAPHIC] [TIFF OMITTED] 74039.002
    
    [GRAPHIC] [TIFF OMITTED] 74039.003
    
    [GRAPHIC] [TIFF OMITTED] 74039.004
    
    Chairman Issa. And even though I didn't limit you to 5 
minutes, you were perfectly prepared to deliver for 5 minutes.
    I will now recognize myself for 5 minutes.
    The chart up there, I think you are probably familiar with 
it, Attorney General. It is a little deceiving, though, for 
anyone watching it here. That large blue line represents that 
nearly million comments. The two others--I'll read them because 
they look like they're not there, but there's actually lines 
there--represent 214 comments; in the case of the middle one, 
for which there was 344 days of intervening period to evaluate; 
and then in the case of Casper, 3,907, in which there were 278.
    Is there any logical reason from your experience both as an 
attorney and as a representative of your State, that you 
wouldn't have, for nearly a million, at least as much time as 
you had for 214 comments?
    Mr. Cuccinelli. No, not a logical reason. No.
    Chairman Issa. Then what do you think the reason is?
    Mr. Cuccinelli. Well, it's hard to escape that this is 
being crammed forward. And I understand there's policy goals. 
But given the impact--and I would venture to guess, having not 
read all 960,000 comments----
    Chairman Issa. I'm sure no one has yet.
    Mr. Cuccinelli. I'm sure that, even combined, no team has; 
that they probably relate primarily not to mercury, even though 
that's where this all begins because of the massive impact 
across the economy and across the industries that are affected.
    Chairman Issa. I'm going to put up another piece on this. 
This one baffled me a little bit. Perhaps you could help 
explain it. When we're looking at health-related items in this 
new standard, if I read correctly, that little sliver of red 
there, that's the mercury that's going to be affected. All of 
the blue area represents particulates. Is that your 
understanding of basically what we're dealing with here?
    Mr. Cuccinelli. My understanding is that nearly all--and 
that's consistent with this graph--of any alleged health 
benefits are going to come from the non-mercury elements of 
this rule.
    Chairman Issa. So most of the technology that has to be 
developed and implemented almost overnight and most of the cost 
is going to come from, if you will, the comparatively not 
harmless--but particulate--not in fact mercury, as so many 
people are alleging.
    Mr. Cuccinelli. That's correct. The technology necessary to 
achieve the mercury benefits, if left to stand alone, is a lot 
simpler and cheaper to utilize than what's necessary for the 
whole package. I'm sure that's no surprise. But it also would 
cut dramatically, though it hasn't been quantified, into the 
shutdowns of plants.
    Chairman Issa. Let me ask one more question because you've 
looked at the regulatory impact much more than anyone on the 
dais has. My understanding is that EPA's mandate to regulate 
particulates comes under NAAQS, a whole different discipline.
    Mr. Cuccinelli. Right.
    Chairman Issa. Doesn't it appear here as though they're 
combining 99 point-some percent of this bill's effect under a 
section and a review process that isn't appropriate?
    Mr. Cuccinelli. Absolutely. None of this is beyond EPA's 
reach through more explicit authority that they have elsewhere 
in the Act. And yet it has been put in--I know there's often in 
legislation there's sort of catch-all phrases--and whatever 
else you think might be unhealthy kind of language. But when 
what gets crammed in there, along with the mercury, is 
explicitly addressed somewhere else, it seems highly 
inappropriate to address it this way.
    Chairman Issa. A couple of quick followups. One of the 
ranking members from Virginia mentioned the 160,000 lives that 
the Clean Air Act saves each year, by EPA figures. Many of the 
estimates appear that at least 280,000 jobs will be lost as a 
result of this legislation in its current form. How does that 
impact your State of Virginia?
    Mr. Cuccinelli. Well, again, I'd point to Virginia will be 
affected differently in different parts of the Commonwealth. If 
you go to Martinsville, where we have over 20 percent 
unemployment, there's a lot of lost manufacturing there from 
the NAFTA era that we are rather hopeful if we can get an 
economic uptick and keep stable and relatively cost-effective 
energy prices, will become a manufacturing area again. This 
forecloses or makes it much more difficult for that to happen 
in that poor swath of Virginia where unemployment is 
particularly high. I already mentioned what happens in 
southwest Virginia, which is not a rich area either.
    Chairman Issa. You're known for clean coal, but this would 
still be coal that would be offset.
    Mr. Cuccinelli. Yes.
    Chairman Issa. Back to manufacturing. I wanted to focus on 
this because I'm a former manufacturer myself. The nature of 
American manufacturing, as I understand it, is we take 
affordable energy and we leverage it to compete against less 
expensive labor in Third World countries. And this essentially 
would take your maybe 2-cent a kilowatt an hour power and 
increase it by maybe three or four times. It's a huge increase 
if your base fuel is coal and it becomes natural gas. Isn't 
that correct?
    Mr. Cuccinelli. It certainly is. I can't speak to the exact 
degrees of increase, but there's no question the state we're 
in, it's much more marginal for us to become economics 
competitive. Anything close to the types of change that you've 
described takes us--makes us uncompetitive with large swaths of 
the world.
    Chairman Issa. Thank you. My time is more than expired. I 
yield to the ranking member.
    Mr. Cummings. Thank you very much.
    Mr. Attorney General, it is good for you to be here. I 
would like to put into the record--have entered a joint 
statement from the Attorney General of the State of Maryland, 
my State, Doug Gansler, and Robert M. Summers, the secretary of 
the Maryland Department of Environment. The statement asserts 
that Maryland has successfully implemented a law that required 
major reduction in mercury emissions from coal-burning power 
plants. Maryland power plants have already reduced mercury 
emissions by 88 percent without affecting reliability. And in 
doing so, has created jobs in Maryland.
    I ask that that be a part of the record.
    Chairman Issa. Without objection, so ordered.
    Mr. Cummings. Thank you, Mr. Chairman.
    Mr. Attorney General, it's been documented that exposure to 
toxic pollution from power plants, such as hydraulic acid, the 
mercury, arsenic, and other metals, causes a wide variety of 
health conditions. These include asthma, which I suffer from, 
and other respiratory ailments, developmental disorders, 
neurological damage, birth defects, cancer, and death. Do you 
disagree with any of those findings?
    Mr. Cuccinelli. I'm really not in a position to give you a 
medical assessment. I'm just here to talk about the legal side.
    Mr. Cummings. I understand that. But you are sworn to 
protect the people of your great State, are you not?
    Mr. Cuccinelli. Sure am.
    Mr. Cummings. I would think you would take into 
consideration anything that might cause deaths, particularly 
from all of these different things. That's why I asked you. I'm 
not trying to take you out of your purview.
    Mr. Cuccinelli. We certainly take those into consideration, 
always looking for a balance
    Mr. Cummings. Sure. It has also been reported that among 
industrial sources in the United States, coal and oil-fired 
power plants emit the most toxic air pollution and accounted 
for nearly 50 percent of all pollutants in 2009. Do you 
disagree with that?
    Mr. Cuccinelli. I'm not in a position to disagree. I would 
note that we have some co-located among our utilities, oil and 
coal. One thing we'd love to have seen, because we use the oil 
very infrequently--only when we have peak demand--if those had 
been excluded from this rule, that's one way they might have 
provided more flexibility for peak demand while still achieving 
many of the pollution reduction goals that they've set here. 
But there was no exception made for that.
    Mr. Cummings. It has been estimated that the proposed air 
toxic rule would save up to 53,000 lives by 2016. Have you 
heard that? Are you familiar with that?
    Mr. Cuccinelli. I've have heard that, yes.
    Mr. Cummings. Do you have any reason to disagree with that 
estimate?
    Mr. Cuccinelli. It strikes me as quite optimistic, yes. But 
I don't--it's such a large number, but I haven't done any 
independent research on that, no.
    Mr. Cummings. Mr. Attorney General, I understand that you 
asked a Federal judge--and you testified to this--to delay the 
final Air Toxic Rule for 1 year, making many of the same 
arguments you made here today. Was that in the form of a brief?
    Mr. Cuccinelli. It was, yes.
    Mr. Cummings. And are you aware that the Air Toxic Rules 
have been legally required by the Clean Air Act since 1990, 21 
years ago?
    Mr. Cuccinelli. I am aware of that, yes.
    Mr. Cummings. I'd like to enter into the record the order 
of the judge denying this request. The same arguments we are 
hearing today have failed legal scrutiny, and Congress 
shouldn't give them but so much weight. I would ask they be 
admitted in the record.
    Chairman Issa. Without objection, though I would note that 
it went hand-in-hand with the 30-day extension and may not be 
germane 30 days from now.
    Mr. Cummings. I understand.
    These are basically the same arguments. Is that right?
    Mr. Cuccinelli. That same judge told the EPA that if they 
need more time, they could come back and she'd grant it. So it 
is not, from our perspective, a closed question.
    Mr. Cummings. I understand.
    With that, I yield back.
    Chairman Issa. I thank the gentleman.
    We now go to the gentleman from the coal-producing 
alternate capitol, Cleveland, Ohio, Mr. Kucinich.
    Mr. Kucinich. Happy birthday, Mr. Chairman.
    Chairman Issa. Thanks, Dennis.
    Mr. Kucinich. Mr. Attorney General, welcome to this 
committee.
    As Attorney General, isn't part of your responsibility to 
protect the residents of Virginia and not put them at greater 
risk for illness or even premature death due to air pollution?
    Mr. Cuccinelli. Certainly protecting the people of Virginia 
is an important part of my job, yes.
    Mr. Kucinich. Is it your responsibility to protect the 
people of Virginia from air pollution-related illnesses that 
could cause premature death?
    Mr. Cuccinelli. Part of what we do in my office is enforce 
environmental laws. And we are aggressive about doing that. So, 
yes.
    Mr. Kucinich. How many prosecutions have you had of 
environmental polluters since you've been in office?
    Mr. Cuccinelli. Ordinarily, the way those are resolved is 
with joint decrees that involve the EPA. I don't know how many. 
I know that we have had a regular flow of them.
    Mr. Kucinich. Have you recommended prosecution for 
polluters; and how many have you recommended? Can you be quite 
specific?
    Mr. Cuccinelli. We have resolved all of them with consent 
decrees, meaning those who are defendants----
    Mr. Kucinich. ``We,'' meaning who, Mr. Attorney General?
    Mr. Cuccinelli. Inevitably, it is our Department of 
Environmental Quality which we typically are negotiating on 
behalf of, and the EPA, with polluters----
    Mr. Kucinich. Have you ever been involved personally in any 
of the negotiations related to resolving pollution--complaints 
over air pollution?
    Mr. Cuccinelli. My personal involvement has related to 
approving those resolutions negotiated by the attorneys in my 
office and with the EPA and with the defendants in question.
    Mr. Kucinich. And do you know what the outcome of those 
have been? Have they been consent agreements on behalf of 
communities that have had complaints about pollution?
    Mr. Cuccinelli. Yes, that's exactly how they've been 
resolved, with typically fines and requirements going forward, 
enforced by court order, for additional care to be taken, 
specific steps to be taken.
    Mr. Kucinich. So your office has been instrumental, you're 
saying, in causing polluters to be fined.
    Mr. Cuccinelli. Yes.
    Mr. Kucinich. Do you have any information you can present 
to this committee right now about specific cases?
    Mr. Cuccinelli. I did not bring specific cases.
    Mr. Kucinich. But you could produce--will you produce--for 
this committee a list of such cases?
    Mr. Cuccinelli. I'd be glad to.
    Mr. Kucinich. Could you tell members of this committee--and 
I was particularly interested in some of the equations you were 
talking about. You said that clean air standards--I'll 
paraphrase it--that they can cost jobs. Is that your position?
    Mr. Cuccinelli. Sure.
    Mr. Kucinich. What kind of jobs do they cost? Can you be 
specific as to the types of occupations?
    Mr. Cuccinelli. For starters, the most obvious is, since we 
are a coal State, southwest Virginia and the coal industry is 
affected, and unlike, say, the part of Virginia where I am 
from, northern Virginia, which has a fairly diverse economy, 
there's not an economic alternative in southwest Virginia. So 
there is that challenge, which is the most overt. Then comes 
the industries and businesses reliant on energy as a major 
component of their costs. Certainly, any manufacturing that 
would take place which we have in Virginia, primarily though 
not at all exclusively, in the southern part of Virginia and up 
the western part of the State, though again it is scattered, 
those would be----
    Mr. Kucinich. Thank you. You're saying that they cost jobs, 
by definition, in the coal industry. That's your position.
    Mr. Cuccinelli. Sure. I assume that's----
    Mr. Kucinich. Is it possible if you don't have clean air 
standards, that it could also create health problems for 
people?
    Mr. Cuccinelli. Sure. That's the tradeoff here. That's the 
tradeoff.
    Mr. Kucinich. Now, is dirty air good for poor people?
    Mr. Cuccinelli. Dirty air is not good for anybody.
    Mr. Kucinich. Because there would be less poor people if 
the air is dirty; or is it good for poor people because there 
will be less poor people if there is dirty air?
    Mr. Cuccinelli. Dirty air isn't good for anybody. Jobs are 
good for everybody.
    Mr. Kucinich. Can you tell me--if you're looking at job 
calculations--about the jobs that are created by poor air 
standards? Can you think of jobs that are created by poor air 
standards?
    Mr. Cuccinelli. The comparison that we are looking at--and 
it isn't our own, we are sort of swallowing all the studies, or 
as many of them being done--is compared to where we are now 
versus what is proposed. We are not suggesting anything ought 
to be undone, though I do think it would be far more 
appropriate for EPA to decouple some of the elements of the 
rule they're now proceeding on.
    Mr. Kucinich. Thank you, Mr. Chairman. I just wondered if 
the gentleman was including in his advocacy the jobs that are 
created for undertakers when people don't survive as a result 
of poor air standards.
    Mr. Cuccinelli. No.
    Chairman Issa. The gentleman may respond, if you would 
like.
    Mr. Cuccinelli. Sarcastically, or in general?
    Chairman Issa. You're the witness.
    Mr. Cuccinelli. No. We're trying to look at this in the 
aggregate. As I said, the one overt industry that can really be 
addressed from a Virginia standpoint is the coal industry and 
the spinoffs there. After that, it becomes the energy costs 
associated with the gradual rise in costs as those are 
incorporated through the utilities. Because the utilities pay 
none of this. It is the ratepayers who pay for all of this.
    Mr. Kucinich. Mr. Chairman, I appreciate you giving the 
gentleman a chance to respond, because he talked about the 
aggregate, which is what we've been talking about, because 
we're saying that 17,000 lives a year are on the line with 
respect to these regulations.
    Thank you, Mr. Chairman.
    Chairman Issa. I thank you both.
    We now recognize the gentleman from Virginia, Mr. Connolly, 
for 5 minutes.
    Mr. Connolly. Thank you, Mr. Chairman. And welcome, again, 
Mr. Attorney General.
    The National Capital Region, including northern Virginia, 
is classified as a non-attainment region in terms of air 
pollution. Do you know what percentage of that air pollution is 
migrating pollution from coal-fired power plants?
    Mr. Cuccinelli. I do not.
    Mr. Connolly. Would it surprise you to learn that about a 
third of the air pollution in this region is attributed to 
those migrating pollution sources from coal-fired power plants 
not in this region?
    Mr. Cuccinelli. Well, I certainly wouldn't expect 
everything we deal with this in region to have started here. I 
grant you that. But the specific numbers, I can't really 
suggest.
    Mr. Connolly. But certainly as the Attorney General of 
Virginia, representing, as you point out, all of Virginia, you 
can understand some of the anxiety and concern in the northern 
part of the State with respect to pollution caused by coal-
fired power plants.
    Mr. Cuccinelli. I don't think that concern is quarantined 
to northern Virginia. I think it's shared across Virginia.
    Mr. Connolly. A point well taken.
    Mr. Cuccinelli. What is additionally shared is just a 
desire for balance to be achieved as we gradually try to keep 
our air cleaner and improve the standard of living in this 
country.
    Mr. Connolly. Mr. Attorney General, the proposition here is 
that, should this regulation go into effect, it would have 
devastating effects both on sources of electricity and on jobs. 
In 1990, with the Clean Air Act amendments, similar arguments 
were made. Do you know what happened to the price of 
electricity in the Commonwealth of Virginia?
    Mr. Cuccinelli. Not in 1990, no.
    Mr. Connolly. No. In the intervening 21 years, did it go up 
or down?
    Mr. Cuccinelli. I can speak to you back to the last decade 
or so but I can't go back to 1990.
    Mr. Connolly. Would it surprise you to learn that actually 
electricity rates in the Commonwealth of Virginia in that time 
period have actually fallen by 35.6 percent?
    Mr. Cuccinelli. It would not entirely surprise me.
    Mr. Connolly. Well, does that not call into question 
perhaps, then, the claims that in this particular case, that 
won't work and in fact electricity rates are going to go up? 
Given the experience we've had in the last 21 years, why should 
we put credence in such an argument?
    Mr. Cuccinelli. Certainly it would be a lot easier to 
analyze that argument if there were more than 134 days to look 
at 960,000 comments, presumably not all of which are 
substantive, but if you just compare them to other rules. You 
all had your own here from this committee. I would look at some 
others, like the chemical recovery combustion was 2\1/2\ years; 
reciprocating internal combustion engine, a year and a half. 
For cement, the Portland cement manufacturing. We're looking at 
4\1/2\ months to consider the very questions you all are 
lobbing this way with assumed answers.
    Mr. Connolly. Mr. Cuccinelli, unfortunately, my time is 
limited. Certainly, the Clean Air Act amendments of 1990 were 
far more sweeping than what's in front of us now. What happened 
to electricity rates, for example, in other States with coal-
fired power plants--and I'll list them: West Virginia, North 
Carolina, Pennsylvania, Ohio, Kentucky, and Alabama. Are their 
electricity rates in the intervening 21 years since that 
sweeping set of amendments, are they higher or lower relative 
to 1990?
    Mr. Cuccinelli. I don't study other States' electricity, 
specifically. I study the national and compare it to Virginia, 
unless something borders Virginia and we have a rate case where 
that's relevant.
    Mr. Connolly. Would it surprise you to learn they're also 
cheaper?
    Mr. Cuccinelli. No, I wouldn't be surprised either way, not 
knowing it.
    Mr. Connolly. Mr. Cuccinelli, correct me if I'm wrong, I 
was under the impression that, for example, under the Health 
Care Reform Act, the Affordable Care Act, you were an advocate 
for nullification. You supported legislation in the General 
Assembly of Virginia that made universal mandates illegal under 
the Commonwealth of Virginia. Is that not correct?
    Mr. Cuccinelli. ``Nullification'' is an incorrect term and 
it suggests you don't know history. ``Nullification'' is when a 
State says we're not going to obey your Federal law. That isn't 
what happened in Virginia. The General Assembly on a bipartisan 
basis passed a law. Two weeks later, the President signed 
PPACA, and those two were in conflict. As our constitutional 
structure provides, we went to court to resolve the disputes of 
authority related to those two laws. That is not 
``nullification,'' Congressman.
    Chairman Issa. If the gentleman would suspend.
    Attorney General Cuccinelli, you can answer any question 
you choose to answer. However, you're only bound to answer 
questions that are within the germaneness of the subject for 
which you were brought here.
    You may continue.
    Mr. Connolly. Mr. Chairman, if I may--The purpose of my 
question was not to focus on health care. I wanted to give the 
opportunity to the Attorney General to explain his position, 
because my question has to do with whether--you don't like 
``nullification.'' I'll call it preemption. Does the 
Commonwealth of Virginia have a similar preemption right, if 
you don't want to use the word ``nullification,'' with respect 
to this regulation, in your view as the Attorney General of 
Virginia?
    Mr. Cuccinelli. I think the commerce clause very clearly 
gives the Congress, and therefore the Federal Government, the 
broad power to address something like pollution across State 
lines. Whereas, if you compare that to the health care example, 
ordering a particular individual to go buy a product; not 
regulating them once they're in commerce, but ordering them 
into commerce, is a completely different comparison. I have no 
constitutional complaints with what is going on in terms of the 
exercise of Federal authority here. My concerns are policy 
concerns and legal process concerns.
    Mr. Connolly. So you see the two as different.
    Mr. Cuccinelli. Oh, absolutely. We put those processes in 
place to protect not only the rights but to achieve the best 
policy outcomes. And I know, regardless of the opinions here, 
everyone would like to achieve the best possible outcomes for 
this country. I think that we are more likely to do that if we 
actually take a legitimate amount of time to consider the 
material that is now before us that is simply it is not humanly 
possible to consider all the comments that are now before us on 
this rule in the incredibly short time frame.
    Mr. Connolly. Thank you, Mr. Attorney General.
    Chairman Issa. I'd now ask unanimous consent that we be 
able to place in the record the details of the 1990 Clean Air 
Act, showing a 5-year period for rulemaking exception. 
Additionally, I'd ask unanimous consent that the statement by 
the Unions for Jobs and the Environment--these are all union 
organizations combining--that says EPA data implied that no 
coal unit in the United States meets all the proposed new 
sources, HAPS standards, regardless of the type of coal 
consumed or the effectiveness of its pollution control devices.
    Again, that's Unions for Jobs and the Environment public 
comments.
    [The information follows:]
    [GRAPHIC] [TIFF OMITTED] 74039.034
    
    [GRAPHIC] [TIFF OMITTED] 74039.035
    
    [GRAPHIC] [TIFF OMITTED] 74039.036
    
    [GRAPHIC] [TIFF OMITTED] 74039.037
    
    [GRAPHIC] [TIFF OMITTED] 74039.038
    
    [GRAPHIC] [TIFF OMITTED] 74039.039
    
    [GRAPHIC] [TIFF OMITTED] 74039.040
    
    [GRAPHIC] [TIFF OMITTED] 74039.041
    
    [GRAPHIC] [TIFF OMITTED] 74039.042
    
    [GRAPHIC] [TIFF OMITTED] 74039.043
    
    [GRAPHIC] [TIFF OMITTED] 74039.044
    
    [GRAPHIC] [TIFF OMITTED] 74039.045
    
    [GRAPHIC] [TIFF OMITTED] 74039.046
    
    [GRAPHIC] [TIFF OMITTED] 74039.047
    
    [GRAPHIC] [TIFF OMITTED] 74039.048
    
    [GRAPHIC] [TIFF OMITTED] 74039.049
    
    [GRAPHIC] [TIFF OMITTED] 74039.050
    
    [GRAPHIC] [TIFF OMITTED] 74039.051
    
    [GRAPHIC] [TIFF OMITTED] 74039.052
    
    [GRAPHIC] [TIFF OMITTED] 74039.053
    
    [GRAPHIC] [TIFF OMITTED] 74039.054
    
    [GRAPHIC] [TIFF OMITTED] 74039.055
    
    [GRAPHIC] [TIFF OMITTED] 74039.056
    
    [GRAPHIC] [TIFF OMITTED] 74039.057
    
    [GRAPHIC] [TIFF OMITTED] 74039.058
    
    [GRAPHIC] [TIFF OMITTED] 74039.059
    
    [GRAPHIC] [TIFF OMITTED] 74039.060
    
    [GRAPHIC] [TIFF OMITTED] 74039.061
    
    [GRAPHIC] [TIFF OMITTED] 74039.062
    
    [GRAPHIC] [TIFF OMITTED] 74039.063
    
    [GRAPHIC] [TIFF OMITTED] 74039.064
    
    [GRAPHIC] [TIFF OMITTED] 74039.065
    
    [GRAPHIC] [TIFF OMITTED] 74039.066
    
    [GRAPHIC] [TIFF OMITTED] 74039.067
    
    [GRAPHIC] [TIFF OMITTED] 74039.068
    
    [GRAPHIC] [TIFF OMITTED] 74039.069
    
    [GRAPHIC] [TIFF OMITTED] 74039.070
    
    [GRAPHIC] [TIFF OMITTED] 74039.071
    
    [GRAPHIC] [TIFF OMITTED] 74039.072
    
    [GRAPHIC] [TIFF OMITTED] 74039.073
    
    [GRAPHIC] [TIFF OMITTED] 74039.074
    
    [GRAPHIC] [TIFF OMITTED] 74039.075
    
    [GRAPHIC] [TIFF OMITTED] 74039.076
    
    [GRAPHIC] [TIFF OMITTED] 74039.077
    
    [GRAPHIC] [TIFF OMITTED] 74039.078
    
    [GRAPHIC] [TIFF OMITTED] 74039.079
    
    [GRAPHIC] [TIFF OMITTED] 74039.080
    
    [GRAPHIC] [TIFF OMITTED] 74039.081
    
    [GRAPHIC] [TIFF OMITTED] 74039.082
    
    [GRAPHIC] [TIFF OMITTED] 74039.083
    
    [GRAPHIC] [TIFF OMITTED] 74039.084
    
    [GRAPHIC] [TIFF OMITTED] 74039.085
    
    [GRAPHIC] [TIFF OMITTED] 74039.086
    
    [GRAPHIC] [TIFF OMITTED] 74039.087
    
    [GRAPHIC] [TIFF OMITTED] 74039.088
    
    [GRAPHIC] [TIFF OMITTED] 74039.089
    
    [GRAPHIC] [TIFF OMITTED] 74039.090
    
    [GRAPHIC] [TIFF OMITTED] 74039.091
    
    [GRAPHIC] [TIFF OMITTED] 74039.092
    
    [GRAPHIC] [TIFF OMITTED] 74039.093
    
    [GRAPHIC] [TIFF OMITTED] 74039.094
    
    [GRAPHIC] [TIFF OMITTED] 74039.095
    
    [GRAPHIC] [TIFF OMITTED] 74039.096
    
    [GRAPHIC] [TIFF OMITTED] 74039.097
    
    [GRAPHIC] [TIFF OMITTED] 74039.098
    
    [GRAPHIC] [TIFF OMITTED] 74039.099
    
    [GRAPHIC] [TIFF OMITTED] 74039.100
    
    [GRAPHIC] [TIFF OMITTED] 74039.101
    
    [GRAPHIC] [TIFF OMITTED] 74039.102
    
    [GRAPHIC] [TIFF OMITTED] 74039.103
    
    [GRAPHIC] [TIFF OMITTED] 74039.104
    
    [GRAPHIC] [TIFF OMITTED] 74039.105
    
    [GRAPHIC] [TIFF OMITTED] 74039.106
    
    [GRAPHIC] [TIFF OMITTED] 74039.107
    
    [GRAPHIC] [TIFF OMITTED] 74039.108
    
    [GRAPHIC] [TIFF OMITTED] 74039.109
    
    [GRAPHIC] [TIFF OMITTED] 74039.110
    
    [GRAPHIC] [TIFF OMITTED] 74039.111
    
    [GRAPHIC] [TIFF OMITTED] 74039.112
    
    [GRAPHIC] [TIFF OMITTED] 74039.113
    
    [GRAPHIC] [TIFF OMITTED] 74039.114
    
    [GRAPHIC] [TIFF OMITTED] 74039.115
    
    [GRAPHIC] [TIFF OMITTED] 74039.116
    
    [GRAPHIC] [TIFF OMITTED] 74039.117
    
    [GRAPHIC] [TIFF OMITTED] 74039.118
    
    [GRAPHIC] [TIFF OMITTED] 74039.119
    
    [GRAPHIC] [TIFF OMITTED] 74039.120
    
    [GRAPHIC] [TIFF OMITTED] 74039.121
    
    [GRAPHIC] [TIFF OMITTED] 74039.122
    
    [GRAPHIC] [TIFF OMITTED] 74039.123
    
    [GRAPHIC] [TIFF OMITTED] 74039.124
    
    [GRAPHIC] [TIFF OMITTED] 74039.125
    
    [GRAPHIC] [TIFF OMITTED] 74039.126
    
    [GRAPHIC] [TIFF OMITTED] 74039.127
    
    [GRAPHIC] [TIFF OMITTED] 74039.128
    
    [GRAPHIC] [TIFF OMITTED] 74039.129
    
    [GRAPHIC] [TIFF OMITTED] 74039.130
    
    [GRAPHIC] [TIFF OMITTED] 74039.131
    
    [GRAPHIC] [TIFF OMITTED] 74039.132
    
    [GRAPHIC] [TIFF OMITTED] 74039.133
    
    [GRAPHIC] [TIFF OMITTED] 74039.134
    
    Chairman Issa. With that, I would now recognize the former 
chairman of the committee, Mr. Towns.
    I apologize. I now recognize the distinguished lady from 
the District of Columbia, Ms. Norton.
    Ms. Norton. That's all right, Mr. Chairman. I thank you.
    Welcome, Mr. Attorney General.
    There appear to be two separate forks to your complaint. 
One is the process; the time for the process. I'd like to get 
to the substance, because it would appear that some States 
already implement stringent mercury emission limits that are 
even more stringent mercury emission limits than EPA is now 
proposing. So I went to a set of States close by, by the way: 
Connecticut, New Jersey, New Hampshire, Massachusetts, and New 
York.
    Now, here is what the Massachusetts Department of 
Environmental Protection said: Experience in Massachusetts in 
imposing stringent emission limits for mercury and other 
pollutants clearly shows that EPA's proposed limits are 
achievable and effective. For example, although Massachusetts' 
mercury emission limits for existing coal-fired power plants 
are considerably more stringent than those proposed by EPA, 
Massachusetts facilities have been able to install control 
equipment with no impact on reliability of electric power and 
have demonstrated consistent compliance with the limits.
    Mr. Attorney General, aren't those the same technologies 
available to the State of Virginia, for example?
    Mr. Cuccinelli. Well, presumably they're available 
everywhere, Congresswoman.
    Ms. Norton. Well, have you considered the possibility of 
using those very same technologies to achieve the results in 
Virginia that have been achieved even beyond those that the EPA 
is proposing by nearby States?
    Mr. Cuccinelli. Congresswoman, I think you're focusing on 
what amounts to less than 1 percent of what the EPA is doing--
and that is the mercury piece of this. The mercury piece is a 
lot more achievable with a lot less damage than if you pile 
everything else on top of it. All of your statements with 
respect to mercury, I'd just accept them as stated and would 
suggest that it wouldn't cause nearly, not on an order of 
magnitude, the kind of challenge that the whole rule that EPA 
is advancing.
    Ms. Norton. But, Mr. Attorney General, the Northeast States 
for Coordinated Air Use says of EPA's proposed rule--and here's 
what they say of the rule itself: The successful track record 
demonstrates that there are no unsurmountable technology 
costs--emphasis on cost, or at least I put the emphasis there, 
as you appear to--or timing barriers to achieving EPA's 
proposed mercury and air toxic standards.
    They are speaking beyond the mercury standards. Do you 
disagree with that statement?
    Mr. Cuccinelli. I'm not quite sure what they mean by the 
air toxics. I assume they mean the acid gases. You've got the 
mercury acid gasses, you've got the particulate matter. So if 
you take the----
    Ms. Norton. They say ``air toxics,'' so I assume they're 
talking about all the air toxics.
    Mr. Cuccinelli. Well, if they're talking about all of them, 
then no, I would not agree with that statement. If they were 
strictly speaking of the mercury piece----
    Ms. Norton. Well, they're not strictly speaking of that.
    Mr. Cuccinelli. I do think the mercury piece is probably 
within reach.
    Ms. Norton. And you think Virginia, in fact, could move 
forward on the mercury piece.
    Mr. Cuccinelli. If you strip the other stuff out and----
    Ms. Norton. These people went ahead on their own, Mr. 
Attorney General, because they care about the health and 
welfare of their people. And they are beyond what EPA is now 
proposing. So you're going to wait for EPA?
    Mr. Cuccinelli. No, ma'am, they are not. They are beyond 
what EPA is proposing in the area of mercury, and mercury 
alone.
    Ms. Norton. So they are beyond what they are proposing in 
mercury alone.
    Mr. Cuccinelli. Yes.
    Ms. Norton. They went ahead before EPA proposed. I'm asking 
you, don't you think Virginia might go ahead on mercury alone, 
since you think that is achievable?
    Mr. Cuccinelli. Virginia could do that, but it obviously 
has made the policy decision not to do that. I would note that 
this all has, as I said before, the balancing consequences. We 
have a much lower unemployment rate than any State you just 
named. We have a higher economic growth rate than any State you 
just named. Despite the economic challenges----
    Ms. Norton. Mr. Attorney General, I don't know if that is 
the case. And I will not accept that until I look at those 
figures. Let's look at your concern with the process----
    Chairman Issa. I ask the gentlelady have an additional 30 
seconds.
    Ms. Norton. I thank the gentleman.
    Are you aware that the rule finalized--apparently, to be 
finalized in December, you'd not have to comply with until 
2015, and then extensions could be gotten after that if you 
demonstrated that an extension was necessary?
    Mr. Cuccinelli. I'm aware that if the rule goes into 
effect--or is approved in mid-December, it would go into effect 
in January and have a 3-year implementation timeline. I also 
know what it takes to replace, to permit, to do all the steps 
necessary for the utilities in my State to replace certain 
power generation that will have to be withdrawn in that time 
period. And we can't match the two up. We can get kind of 
close, but not match them up.
    Ms. Norton. In which case an extension, it seems to me, 
would be justified.
    Thank you, Mr. Chairman.
    Mr. Cuccinelli. The extensions would undoubtedly be 
helpful. That is always true. However, there is a limit on the 
EPA's authority to just extend. And relying on that from a 
business planning standpoint is not something that I can argue 
before my State Corporation Commission when the utilities come 
in and say we have to meet this. They don't have to rely on the 
extension. And the law of Virginia, as dictated by the U.S. 
Constitution, because they are granted a right of return, is 
that those rates will pass through to all of our citizens--
poorest, richest, and everyone in between.
    Chairman Issa. I thank the gentlelady. And I thank the 
Attorney General.
    With that I recognize the former chairman of the full 
committee--I'm sorry, Mr. Chairman, you're going to have to 
wait 5 more minutes. With that, I recognize the gentleman from 
Oklahoma for 5 minutes, Mr. Lankford.
    Mr. Lankford. Thank you Mr. Chairman. I do apologize for 
taking a little bit of the former chairman's time.
    Chairman Issa. We'll make it up to him.
    Mr. Lankford. That would be great.
    Thank you for being here, Attorney General. Glad for you to 
be able to be here.
    My concern is that if I went back 35 years ago, Congress 
was conducting hearings and conversations about pushing power 
generation out of natural gas into coal and into nuclear 
because we were ``running out'' of natural gas. And so, no more 
natural gas power plants out there. Folks that were using that 
need to go into coal.
    Now, plus 35 years, now the Federal Government is saying, 
no, coal might not be a good idea; let's try natural gas and 
see how that works and see if that's better. Or, see if we can 
use wind. As we continue to adjust the preferences to the 
Federal Government and now use a series of studies to be able 
to justify how we want companies to be able to move, that is 
very difficult on power generation, who can't just plan for 
next year, they have to plan on the next decade for what they 
are going to construct. My concern is the cumulative effect of 
all those regulations and if that has been evaluated.
    Is it your opinion, of all the things that are coming 
down--and I've got 3 pages worth of different regs that are 
coming down right now out of EPA on power generation, whether 
it be 316(b), whether it be the cross-State rules, whatever it 
may be from coal--and there's a whole litany of different 
issues from coal, from the time it comes out of the ground, all 
the way until it's fly ash at that point at the end--do you 
feel like that has been adequately studied in this hurry to be 
able to get through this almost a million different comments 
that have been made? Was the cumulative effects also evaluated 
in this?
    Mr. Cuccinelli. If you're asking if I think it was done 
adequately, absolutely not. This hasn't even gone to OMB yet 
and they are still setting a finalization date in the middle of 
December. That's normally itself a 90-day process. Of course, 
it's November now. So that isn't going to happen if they're 
going to keep to the schedule they've laid out. That has 
absolutely not been looked at.
    You mentioned something that triggered a thought, and my 
Congressman had mentioned it earlier, with respect to 
greenhouse gases. I think of the switching of fuels. The fact 
that we had sued EPA over their improper process over the 
greenhouse endangerment finding was raised earlier. And what's 
interesting about this is if that's so important, this makes it 
worse. That hasn't been looked at either in any serious way. Or 
maybe it's buried in those 960,000 comments. But it seems the 
timeline has been set up so that they won't be reviewed, not so 
that they will.
    Mr. Lankford. That is my concern is there has not been 
enough time to able to go through this. The President has been 
very urgent to say we need to look at cumulative effects of 
regulations, if that has not occurred, to be able to gather 
cumulative effects of all these different regs that are coming 
down and the speed that they're coming down, and the size of 
them.
    One of the statements that was made by EPA was that this 
may have a potential of, what is it, $10.9 billion in annual 
costs on the economy. Just that one regulation alone, $10.9 
billion. Then you start adding to it all the different areas of 
316(b) and everything else that's coming down on it. It's 
fairly significant, what's happening.
    And I understand previous comments that have been made to 
say we continue to add regulations to the power industry but 
the power continues to go down. I would presuppose at some 
point that doesn't work anymore. You can't just throw in a 
thousand regulations and say, We're going to continue to drive 
the costs down by adding more regulations. It doesn't work that 
way. At some point, you've got to have some common sense. Agree 
or disagree with that comment?
    Mr. Cuccinelli. I would certainly agree with that. And I 
would also note that Executive Order 13-563 requires EPA and 
other regulators, ``to tailor its regulations to impose the 
least burden on society consistent with attaining regulatory 
objectives, taking into account the costs of cumulative 
regulations.'' And EPA has not performed a cumulative 
regulation cost analysis for the Utility MACT.
    Mr. Lankford. What about the effect on reliability of power 
in the days to come?
    Mr. Cuccinelli. I understand that is widely debated here. 
It's not much debated in Virginia. We're looking at, just for 
one of our utilities, probably $250 million of transmission 
infrastructure costs. Again, those by law pass right through to 
the ratepayers. On top of that, from a public policy 
standpoint, I was in the State senate. These are the ones 
people scream about. This is where power lines are going to be 
built across 50, 60 miles of people's backyards that do not now 
exist, and are going to be necessary to provide the flexibility 
in the grid to meet the reliability requirements that you'd 
expect of a modern electrical grid. So we're also looking at 
that challenge. We haven't talked about that at all.
    Mr. Lankford. I would say again, if we're going to make a 
major decision that is going affect billions of dollars and 
it's going to affect future planning, we better make it right. 
You go back 35 years ago when we said, Let's go to coal, 
because that's more abundant than it is for natural gas. Now 
we're trying to reverse that. Obviously, we should have done 
more studies 35 years ago instead of doing a knee-jerk 
reaction. If we do the same knee-jerk reaction again, we're 
going to have the same kind of consequence if we don't do this 
right.
    So with that, I yield back.
    Chairman Issa. I thank the gentleman from a major natural 
gas-producing State.
    Mr. Lankford. Absolutely.
    Chairman Issa. With that, we recognize the former chairman 
of the full committee, whose picture adorns the area just 
behind us, Mr. Towns, for 5 minutes.
    Mr. Towns. That only means I've been here a long time.
    Chairman Issa. Okay. We'll make it 6 minutes.
    Mr. Towns. Mr. Attorney General, you testified today that 
one of the impacts of the Air Toxic Rule would be closure of 
coal-fired power plants, which will in turn cause job loss. Is 
that correct?
    Mr. Cuccinelli. And with the increased electricity costs 
that come with it, yes.
    Mr. Towns. But evidence from our previous hearings on this 
subject before the Subcommittee on Regulatory Affairs suggests 
that many of these coal-fired power plants are older and would 
have gone out of business anyway. What's your answer to that?
    Mr. Cuccinelli. I think that you are certainly accelerating 
the retirement of part of the coal fleet I don't think in a way 
that the utilities envision, necessarily. But certainly that 
will be where they try to sacrifice some of their generation. 
That's just logic.
    Mr. Towns. Let me ask you this. At a meeting on June 1 with 
investors, the chairman of American Electric Power, a gentleman 
by the name of Michael Morris, told investors the following: 
``As you know, those are high-cost plans. 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 saving as well, and on balance we think that 
that is the appropriate way to go.''
    What is your response to that? Do you agree or disagree?
    Mr. Cuccinelli. Our second biggest utility is one of their 
subsidiaries. APCO is an AEP subsidiary.
    The 5 percent comment. We have some plants that fit in the 
category he described. I use the oil-fired as an example. Mind 
you, there is some value to keeping fuel flexibility. Even if 
they are dirtier plants, even if they aren't what you'd want 
run all the time, to have them available for peak time in the 
winter and summer is, I would suggest, of great value on both a 
cost basis and a reliability basis that far outweighs the 
benefits you might get by shutting them down permanently, which 
is, as his comments suggest, what is going to happen.
    I think when you--moving them perhaps from a run 24/7/365 
position to using them as peak power would be a great 
alternative for America. It would achieve, even if you just 
accept all the health claims, everything, without disputing any 
of that, just moving them from one position to the other would 
be a huge boon, with tremendous cost savings from an 
opportunity cost perspective that aren't dropped on ratepayers 
because you move them over instead of shutting them down. But 
that is not an option under this rule, it is not an option 
under this rule. It is in fact the opposite, where you'd have 
to put in all the upgrades whether you use them 100 percent of 
the time or five, for a 5 percent plan, so of course you're 
going to shut it down.
    Mr. Towns. AEP plans to close two plants in Virginia, I 
think Clinch River and Glen Lyn; is that true?
    Mr. Cuccinelli. Well, I can't speak for AEP, but I 
certainly would expect that they are on the block, yes, for 
this.
    Mr. Towns. And AEP agreed to retire those plants under a 
2007 consent decree over violations of environmental laws; 
isn't that right?
    Mr. Cuccinelli. I don't know that shutting them down was 
part of any consent decree.
    Mr. Towns. I know my time is about to expire. Mr. Attorney 
General, it seems to me that your testimony before us today is 
a transparent attempt to blame the government for the fact that 
many high-cost, dirty coal plants could not compete in today's 
market even before the air toxins rule goes into effect.
    Mr. Cuccinelli. Then they'd be shut down of their own 
course.
    Mr. Towns. You know, I know your answer has been that you 
only represent Virginia, but when you--actually in the position 
of Attorney General, you have to look at what happens in other 
States as well, and then you make an opinion--actually to 
evaluate was it good, bad, or indifferent, you have to compare 
it with something. So I want you to know you have to look at 
other States; you can't just look at Virginia.
    Mr. Cuccinelli. Yeah. My comment to that effect was only 
with respect to the specific data from those particular States. 
I agree with you that you have to draw from the experiences of 
other parts of the country and other States, and I do do that 
in trying do what's best for Virginia.
    Mr. Towns. I yield back and thank you very much for coming 
to testify.
    Mr. Lankford. Let me make just a quick comment as well. I 
will just take a quick moment, and I will yield to Mr. Connolly 
a quick moment, and then we are going to conclude this panel so 
we can make a transition as well.
    Just a comment. There are 25 other States, obviously, that 
are represented in this brief. It is not just Virginia we're 
talking about at this point. So this is not just a single State 
issue, this is a national issue on all that is happening, and 
that currently what is in place on this is not just dealing 
with a small group of plants that are very out of date, but 
there are no coal plants that can abide by this nationwide; no 
one is at that standard at this point. So that is the 
challenge, to try to figure out what do we do with this that no 
single utility will not be affected by this process on it.
    A quick question for the Attorney General on it as well, 
and that is dealing with the combined regulations. As we talked 
a little bit before about the cumulative effects of this, the 
American Coalition for Clean Coal Electricity estimated that 
some of the combinations here we're talking about an increase 
of electricity somewhere between 12 and 23 percent. I know we 
were guessing earlier on some figures. Twelve to 23 percent 
hits the poor pretty tough, especially. What numbers have you 
seen, what estimates would you----
    Mr. Cuccinelli. In our last round of utility rate cases, 
and I'm in--we're now awaiting orders in what is the sound 
round since I've been Attorney General. In the last round, we 
actually analyzed the rate increases as it related to Federal, 
not State, just the Federal environmental regulation, and about 
35 to 40 percent of the base rate increases were a pass-through 
of these environmental costs.
    In Virginia unlike, say, North Carolina, our utilities can 
absorb these costs as they incur them on a rolling basis. In 
North Carolina, utilities can't incur them until they flip the 
switch and throw the new plant on line, which of course builds 
up cost and it keeps their rates a little lower for a while and 
then they spike. So it happens a variety of different ways but 
it goes up.
    I've only had to have a couple of town hall meetings as 
Attorney General and they were both on utility rates in the 
poorer parts of our State, because it is hard to describe from 
people who are not from poor parts of the State what utility 
rates mean to the people in these households. When you talk 
about 10 bucks a month or 20 bucks a month more, it's real 
money. It's real money in a small house that's pulling maybe 
1250 kilowatts, which is an APFO average. That's big dollars to 
them. It hurts when they are on fixed incomes, as a large swath 
of that portion of Virginia is relative to the rest of 
Virginia. We see that a lot, again in the poorest parts of 
Virginia.
    And make no mistake about it. There are going to be 
economic consequences. There's always a trade-off. You all make 
these decisions all the time about where thee trade-offs should 
land. But make no mistake about this: The people hurt first and 
the people hurt worst economically are the poor. They are the 
poor. That's who you're going to hurt first and that's you're 
going to hurt the worst.
    Thank you, Mr. Chairman.
    Mr. Lankford. Thank you. With that I yield 3 minutes to Mr. 
Connolly.
    Mr. Connolly. Thank you, Mr. Chairman. I would note that 
the Attorney General's view of history and mine might be 
slightly different with respect to utility rates in even the 
poorer parts of Virginia. Many of the rate increases he's 
referring to occurred subsequent to the reregulation 
legislation passed by the General Assembly of Virginia, highly 
favorable to industry, not particularly favorable to consumers.
    Mr. Attorney General, let me ask you just one question. You 
talked about utilities. The largest utility in the Commonwealth 
of Virginia is Dominion Resources. Has Dominion Resources 
requested that you challenge the air toxic rule legally or that 
legislation be introduced to try to prevent it from being 
implemented?
    Mr. Cuccinelli. No. As I mentioned earlier on your 
mischaracterization of nullification, Virginia isn't in a 
constitutional position to step in on Federal environmental 
regulation of this type, with a constitutional objection. Even 
if we had legislation, the supremacy clause of the Constitution 
has Federal law trumping State law. The health care case you 
asked about earlier, the supremacy cause contains an exception 
when the Federal law is not constitutional. No one I'm aware of 
is alleging that what EPA here is doing here is 
unconstitutional. Inappropriate, incredibly unique in terms of 
the speed, particularly in light of the volume of the comments 
and the potential impacts which, even if you accept the EPA's 
perspective, are still wildly in dispute.
    Mr. Connolly. So the answer is that so far that largest 
utility in the Commonwealth has not asked you to seek to 
overturn the rule? I mean in the Federal level?
    Mr. Cuccinelli. I'm sorry, you mean in the what?
    Mr. Connolly. At the Federal level. I'm not referring to 
nullification. Have you received as the Attorney General of 
Virginia any communication or indication from the largest 
utility in the Commonwealth that it would like you or others to 
in fact try to seek to overturn this pending rule?
    Mr. Cuccinelli. No. My concern is more with the ratepayers 
than it is with the utilities.
    Mr. Connolly. Thank you. Mr. Chairman, I would just end--my 
colleague from Virginia and I do disagree in terms of 
interpretation and history. Frankly, when a State seeks to 
preempt Federal law and to argue on its own that that law is, 
in advance, unconstitutional, is ``nullification'' by any other 
sense of the word.
    Mr. Cuccinelli. Not if you know what you're talking about.
    Mr. Connolly. I think I do know what I'm talking about and 
I think you have an agenda, Mr. Attorney General. It is just 
one I happen to disagree with. With that, I yield back.
    Chairman Issa. Mr. Chairman?
    Mr. Lankford. Yes.
    Chairman Issa. Before you end the hearing or recess the 
hearing, I wanted to take just a moment if I may.
    Mr. Lankford. Certainly may. We had 3 minutes going all the 
way around so.
    Chairman Issa. Thank you.
    Mr. Attorney General, I want to thank you for your presence 
here. I want to thank you for working for the interest, like 
nearly half of all Attorneys General have, to try to make sure 
that we get this new regulation right. I appreciate your being 
calm and deliberative in explaining what your goal is, what 
Virginia could do more expeditiously, and, quite frankly, the 
need to have nearly a million public comments evaluated in the 
way that it is appropriate before we set a regulation that 
people may ask for extensions on, but which may in fact be a 
different regulation than if all these comments are properly 
viewed in a public way.
    So your attention here, your willingness to come on short 
notice, we very much appreciate. And, again, I appreciate 
people willing to come before this committee. It is not always 
pleasant, but your testimony was essential. I yield back.
    Mr. Lankford. Thank you, Mr. Chairman. With that we will 
take a short recess so we can shift to the next panel.
    [Recess.]
    Chairman Issa. [Presiding.] The hearing will reconvene. We 
now recognize the Honorable Robert Perciasepe. He's the deputy 
administrator of the United States Environmental Protection 
Agency, and it's an honor and a pleasure to have you here 
today.
    Pursuant to the committee rules all witnesses are to be 
sworn. Would you please rise to take the oath. Would you raise 
your right hand.
    Do you solemnly swear or affirm that the testimony you are 
about to give will be the truth, the whole truth, and nothing 
but the truth?
    Thank you. Let the record reflect the witness answered in 
the affirmative. Pursuant to the normal routine, I know you 
have 5 minutes or more to give, your entire statement will be 
placed in the record. You may read off of it or you may 
summarize it, and we'd only ask that you try to remain fairly 
close to the 5 minutes to allow time for questions. And with 
that, you're recognized for 5 minutes.

              STATEMENT OF HON. ROBERT PERCIASEPE

    Mr. Perciasepe. Thank you, Mr. Chairman and Representative 
Connolly and members of the committee. I appreciate the 
opportunity to appear before you today on the mercury and air 
toxic standards.
    Chairman Issa. Is your microphone on? Can you hear?
    Mr. Perciasepe. I'll move in a little closer.
    EPA's clean air power plant rules are necessary to protect 
public health and the environment from pollution produced by 
these plants, especially the oldest and dirtiest and least 
efficient of them all. The EPA will issue a final mercury and 
air toxic standard, which is the topic of today's hearing, on 
December 16, 2011.
    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 
United States 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 
all Americans have the clean environment to which they are 
entitled.
    The two clean air power plant rules, the mercury and air 
toxic standard and the cross-State air pollution rule, 
finalized earlier this summer, will achieve major public health 
benefits for Americans that are significantly greater than the 
cost. These pollution reducing rules are affordable and they 
are technologically achievable.
    There's tremendous public support for moving forward with 
these rules. Since March, we have received hundreds of 
thousands, as has already been mentioned, of comments from the 
public urging us to reduce mercury emissions from power plants.
    The mercury and air toxic rule have a significant public 
health benefit. For example, it will reduce mercury, which can 
cause neurological damage in children who are exposed before 
birth. The rule, as proposed, also is protective to avoid 
thousands of premature deaths, thousands of nonfatal heart 
attacks, and hundreds of thousands of asthma attacks. This rule 
would provide Americans with 5- to $13 in health benefits for 
each dollar it costs.
    Our analysis and past experience indicate that warnings 
from some of dire economic consequences of moving forward with 
these important rules are exaggerated. While not as focused, 
the mercury and air toxic standard rule has the potential to 
improve productivity and provide jobs. We estimate that the 
proposed rule would result in 850,000 fewer workdays missed due 
to illness, and could support 31,000 job years of short-term 
construction work, the net of $9,000 of long-term utility jobs.
    Monies spent on pollution control at power plants provide 
high-quality American jobs in manufacturing steel, cement, and 
other materials needed to build the pollution-control 
equipment, installing the equipment, and in operating and 
maintaining the equipment. And many of these jobs are jobs that 
will not be and cannot be shipped overseas. In fact, the United 
States is the leading exporter of pollution-control equipment.
    Our publicly available analysis shows that the EPA rules 
affecting power plants are affordable. This is corroborated by 
other outside groups and some in industry who recognize that 
issuing the rules in the same time frame helps provide power 
companies with the certainty they need to make smart and cost-
effective decisions.
    As we did more than 2 decades ago, we are also hearing 
claims that our rules will lead to potential adverse impacts on 
electric reliability. EPA's analysis projects that the agency's 
rules will result in only a modest level of retirements that 
are not expected to have an adverse impact on electric 
generation resource adequacy. Our rules will not cause the 
lights to go out.
    While there are some industry studies suggesting that these 
rules will result in substantial power plant retirements, in 
general they share a number of serious flaws. Most notably, as 
the Congressional Research Service emphasized in August, these 
studies often make assumptions about requirements of the rule 
that are inconsistent with and dramatically more expensive than 
the EPA's actual proposals. In some cases, the analyses were 
performed before many of the regulations in question were even 
proposed.
    In closing, I would like to suggest that the committee 
should be clear about what is at stake here, and those who have 
stalled in cleaning up their pollution--those who have stalled 
in cleaning up their pollution call for further delays. Delay 
encourages companies to avoid upgrading America's 
infrastructure and putting people to work modernizing their 
facilities. And, most importantly, delay means the public 
health benefits of reducing harmful pollution are not realized.
    Thank you and I look forward to answering your questions.
    Chairman Issa. Thank you.
    [Prepared statement of Mr. Perciasepe follows:]
    [GRAPHIC] [TIFF OMITTED] 74039.135
    
    [GRAPHIC] [TIFF OMITTED] 74039.136
    
    [GRAPHIC] [TIFF OMITTED] 74039.137
    
    [GRAPHIC] [TIFF OMITTED] 74039.138
    
    [GRAPHIC] [TIFF OMITTED] 74039.139
    
    [GRAPHIC] [TIFF OMITTED] 74039.140
    
    [GRAPHIC] [TIFF OMITTED] 74039.141
    
    [GRAPHIC] [TIFF OMITTED] 74039.142
    
    [GRAPHIC] [TIFF OMITTED] 74039.143
    
    Chairman Issa. I want to recognize myself for the first 5 
minutes.
    I will take your opening statement in reverse order. If I 
understand the nature of every time there is one of these 
pollutant standards, I just want to understand, you really 
don't usually do much to the overall facility. It's normally a 
bolt on some additional cleaning equipment. Isn't that true in 
this case?
    Mr. Perciasepe. Yes, but obviously from an engineering 
perspective, it has to be integrated into the operation of the 
facility.
    Chairman Issa. That begs the bigger question. Isn't it true 
that today there is no utility that you can show us that is 
able to implement this entire standard today? I know there are 
pieces of it in various places, but no utility is currently 
able to implement it; isn't that true?
    Mr. Perciasepe. I don't believe that that is correct. I 
believe we look at the best performing plants around the 
country----
    Chairman Issa. But we looked at that, and you looked at 
each plant and you put together various plants and said, If you 
do this and this and this, like Frankenstein, you can get one 
person. But you make the assumption that you can put together 
the best of all these plants. Some of these plants have 
different non-combinable operations at the current time; isn't 
that true?
    Mr. Perciasepe. I believe that the plants can meet these 
standards, and some do. But I would like----
    Chairman Issa. Is there any plant that meets this standard 
today? You said some do.
    Mr. Perciasepe. I believe they do.
    Chairman Issa. If you would answer for the record of a 
single plant that meets this standard today, we would be 
thrilled to hear that. Because we just had an Attorney General, 
one of 25--24, I'm sorry, who have asked for a delay, as you 
know, in order to get public comment; but most importantly, 
have asserted as does--and I'll put it into the record--the 
Unions for Jobs and the Environment Public Comments, a union--a 
combined trade union organization who believe that today there 
are--there is no standard.
    Isn't it not uncommon that the EPA believes that a standard 
will be--- compliance for the standard can be achieved within 
the time parameter and that it might be--and I want to give the 
benefit of the doubt--it might be that they could achieve it by 
2015. Isn't that part of the assumption? Not that it exists 
today, but if you take all of the analysis, that they could 
achieve it by 2015?
    Mr. Perciasepe. The air toxic standards that we are 
proposing for power plants has to be based on available 
technology that is currently performing at the level that we 
are proposing.
    Chairman Issa. Okay. So if you will, for the record, have 
the EPA deliver us one power plant of, let's just say, a 
megawatt or above, that uses coal that currently meets the 
standard, we would appreciate having that for the record. We 
will hold the record open.
    Mr. Perciasepe. Thank you.
    Chairman Issa. Now, if we could put back up the pie chart. 
Earlier we had one of those 24 Attorneys General who said, 
although he's not a scientist skilled in this area, but that he 
believed that when it came to the area that would be under this 
normal regulatory process, which is the mercury, that 
incredibly small sliver of pink, that if this standard were 
only affecting mercury, he believed that a shorter comment 
period with a great likelihood of achievement was possible.
    Do you agree with that, that mercury is not what's driving 
most of the objections, from what you can tell?
    Mr. Perciasepe. That is the--that chart is correct, the 
best I can tell, Mr. Chairman.
    Chairman Issa. Okay. I mean from your analysis, but we 
couldn't resist using your own figures because they seem 
compelling.
    So isn't it disingenuous, a term we like to use here in 
Washington more often than maybe we should, but isn't it 
disingenuous for the EPA to talk endlessly about mercury and 
its effects, all of which we're very concerned about, when in 
fact the vast majority of this regulation has to do with 
particulates and, if not 920 out of 960,000 comments, the vast 
majority of those comments are about the mercury portion, a 
portion which is probably achievable well within the time 
parameter.
    Mr. Perciasepe. The effects of mercury on children affects 
their neurological----
    Chairman Issa. No, no, no. My question is very narrow. It's 
not about the effects of mercury. It's if, in fact, the 
technology exists today, or can predictably exist in time to 
meet the 2015 as to mercury, isn't the combining of 
particulate, normally covered by another part of your 
authority, a fairly disingenuous use of the benefits? Because 
the benefits of reducing the mercury and the technology to 
reduce the mercury appears not to be in widespread conflict. In 
fact, if this was a mercury-only standard, you might likely 
have much quicker--much greater support for a much quicker 
implementation.
    Mr. Perciasepe. You have to let me try a little bit here to 
answer that question.
    Chairman Issa. Of course.
    Mr. Perciasepe. First of all, we can't quantify all those 
benefits from those neurological impacts on children. Those are 
not completely quantifiable as we are able to quantify some of 
the fine-particle co-benefits. And the reason we have co-
benefits is because the pollution-control equipment that you 
would use for mercury, for arsenic, for nickel, chromium, and 
the acid gases, which are all regulated under the air toxic 
program, all of which have public health implications--we think 
having co-benefits is a good thing and that those co-benefits 
also have substantial public health benefits.
    So it is those same pollution-control--it is that same 
pollution-control equipment that is making those reductions in 
fine particles. It isn't like we have asked for a separate 
control for fine particles. These are the controls that will 
reduce those other emissions.
    Chairman Issa. With that, I recognize the ranking member 
from Virginia, Mr. Connolly.
    Mr. Connolly. Thank you, Mr. Chairman. If you want to 
continue, I would certainly yield to the chairman.
    Chairman Issa. Very quickly. I just want to run one 
followup. I thank the gentleman.
    As I understand it, roughly 90 percent of the benefits that 
you're claiming under this regulation would already occur under 
particulate reduction under MACTs; isn't that true? In other 
words you're double-counting. You have another regulation that 
would cover 90 percent of this. You're counting 100 percent of 
the reduction in particulate when, in fact, 90 percent is going 
to occur--and most of the benefit.
    So I guess for the record, would you tell us what that 
last--the differential between the two standards, that last 10 
percent on particulate, what portion of the co-benefit would 
actually occur? In other words, the numbers for what is the 
last little fraction of reduction?
    Mr. Perciasepe. Did you say MACTs?
    Chairman Issa. By the MACTs program. In other words, the 
amount of reduction here, and the cost, my understanding is 
that about 90 percent of the particulate reduction under that 
part of the regulatory authority is already ordered, basically.
    Mr. Perciasepe. All I can--what I have to answer here is 
this rule is aimed at reducing the toxic--air toxic emissions. 
Those air toxic emissions that I mentioned, those metals and 
acid gases are--associate the same control technologies are 
used----
    Chairman Issa. No, I understand that. But here's the point. 
Much of this standard for particulate is below what you say is 
safe by your own figures. So under NAAQS, when you say you get 
down to this level, you now have clean air. You've defined 
``clean'' and ``safe.'' And yet in this regulation, you're 
regulating a standard lower than what you say is necessary. In 
a nutshell, isn't it true that your regulatory authority ends 
at the point in which air is safe?
    Mr. Perciasepe. We are----
    Chairman Issa. Now, wait a second. Your staff is shaking 
``no'' behind you. So if you can answer that you think you have 
a regulatory authority beneath a threshold which is safe by 
your own standard, I would like to hear it.
    Mr. Perciasepe. Two quick points. We are regulating air 
toxics here, and it's a technology standard that's looking at 
the best available technology, the maximum available control 
technology--that's what the MACT stands for--those air toxics. 
It gets those benefits, it gets those co-benefits of reducing 
fine-particle pollution which we think is great, and there are 
health benefits even below the standards.
    Chairman Issa. The ranking member has been very generous. 
Then why is it you have 15 milligrams per cubic meter per 
billion, et cetera, et cetera. You have this 15-milligram 
standard, and yet you're your new standard, you're now 
setting--that's what you considered safe on one hand. And then 
you come in below 11.5 milligrams, M3. I can't think in terms 
of that small, but I agree that particulates, even in these 
small amounts, are important to look at. But why wouldn't you 
change your standard, support it with science, change your 
standard to an amount below 11.5 before regulating before 11.5 
and claiming benefits below 11.5.? Doesn't it seem like you 
declared clean as 15, and you're regulating below that and 
taking credit for cleaner--I'm not a scientist, and I will not 
claim to have any expertise in this. I can just look and say 
there is an inconsistency, like a set of books that don't 
balance, you may not know where the missing money is, but if 
they don't balance, you go looking for it. Why not have a 
standard that is adjusted based on science to match this 
greater regulatory request you're making?
    Mr. Perciasepe. We are regulating the air toxics here, the 
nickel, the arsenic, the mercury, the acid gases. The control 
technologies that we use----
    Chairman Issa. But you're claiming the benefits from the 
particulate.
    Mr. Perciasepe. But those benefits are real. Those benefits 
will accrue to the American public.
    Chairman Issa. Then why not lower the standard to 11.5 or 
below, so that you're consistent in what you say you want to 
reduce the particulate level?
    Mr. Perciasepe. The National Ambient Air Quality Standard 
is set under a science process where we have science advisors 
that advise us on what level is adequate--adequate for the 
protection of public health. It doesn't mean that there aren't 
public health benefits below that level, and that's what we are 
looking at here. These are co-benefits from controlling the air 
toxics. That is the objective of this particular rulemaking.
    Chairman Issa. Well, it's clear as mud, but I thank you for 
your efforts. I now recognize the ranking member.
    Mr. Connolly. I thank the chair. Mr. Perciasepe.
    Mr. Perciasepe. Perciasepe.
    Mr. Connolly. I'm sorry, Perciasepe.
    The chairman asked you the question of whether any coal-
fired power plants in the United States could possibly be 
compliant with the proposed new rule. I have a list in front of 
me of existing coal-fired power plants--it's a partial list--
that are already fully compliant with EPA's proposed rule, 
including four in my native State of Virginia. Despite the 
testimony of the previous witness that nobody in Virginia could 
be compliant, I have got four coal-fired power plants that are 
fully compliant today. Are you aware of this list?
    Mr. Perciasepe. I know there are some that are in 
compliance with the rules. I just don't----
    Mr. Connolly. I would ask, without objection, this list be 
entered----
    Mr. Perciasepe. I do know there is a new one under 
construction in your State at Virginia City.
    Mr. Connolly. Mr. Chairman, I'd ask unanimous consent that, 
to the extent it exists, it be provided for the record.
    Mr. Gowdy. [presiding.] Without objection.
    Mr. Connolly. I thank the chair.
    Is it not also true that nearly 60 percent of all coal-
fired power plants that report emissions to EPA are compliant 
currently with EPA's proposed limit for mercury?
    Mr. Perciasepe. I don't know the exact number. Perhaps my 
staff behind me have an exact number.
    Mr. Connolly. Again, I would ask that this be entered into 
the record.
    Mr. Perciasepe. To be clear, we can't base the standard on 
something that hasn't been met by an existing----
    Mr. Connolly. Correct. My point in asking you this question 
is that this notion that the hobnail-booted government is going 
to destroy industry and consumers and cut off the source of 
electricity in the United States is a false premise, given the 
fact that 60 percent are already compliant on the mercury 
standard. Is it not further true that 73 percent of all 
reporting units are already compliant with the proposed limit 
for HCI?
    Mr. Perciasepe. It's likely.
    Mr. Connolly. I would ask that be entered into the record, 
too.
    Mr. Connolly. And almost 70 percent of all units comply 
with the EPA'S proposed limit for PM, particulate matter?
    Mr. Perciasepe. True.
    Mr. Connolly. So what we're trying to do is make at the 
margin an improvement for those not compliant, some of which, 
as we already heard in previous testimony, are all the plants 
that are probably on the chopping block anyhow, and would serve 
both consumers and the breathing public if they sort of used 
this occasion to perhaps move on.
    We also heard from the chairman concerns about, well, why 
didn't you just take a lower level? Didn't the previous 
administration try that tack, and wasn't there a court ruling 
that it was--it required more rigorous enforcement?
    Mr. Perciasepe. On fine particles? I think it was on ozone 
that there might have been a court ruling or court activity, 
but I don't know about fine particles. The bottom line is that 
there are health benefits, you're talking about this rule?
    Mr. Connolly. Yes, this rule.
    Mr. Perciasepe. Yes. The previous administration--first of 
all, there's a 20-year----
    Mr. Connolly. Please finish your sentence.
    Mr. Perciasepe. There is a 20-year history here.
    Mr. Connolly. You were about to say, ``The previous 
administration''----
    Mr. Perciasepe. The previous administration proposed 
controls for mercury in 2004.
    Mr. Connolly. And what did a court of law----
    Mr. Perciasepe. The court threw those out because they did 
not comply.
    Mr. Connolly. Yes,, that is the answer to the chairman's 
question. Why are you doing this? It is not unique to the Obama 
administration. The previous administration tried doing what 
the chairman suggested: Why not just settle for a lower level? 
And a court of law said ``not good enough,'' and it told EPA in 
a court suit, you have to come up with new regulations that are 
tougher than that; is that not correct?
    Mr. Perciasepe. The court said that the--yes, that's 
correct.
    Mr. Connolly. Yes.
    Mr. Perciasepe. It had to be regulated under a different 
part of the Clean Air.
    Mr. Connolly. Thank you. So that's the answer to why you 
are doing what you are doing today. A court told you you had 
to. And throughout the Bush administration attempt to look to 
have a lower standard.
    It isn't because you just in some lab somewhere decided to 
just be a pain in everyone's side by coming up with tough, 
hard-to-reach regulations, and as the data shows, they aren't, 
since the majority of units reporting already meet one or more 
of the regulations.
    Was this standard on toxic pollutants envisioned or 
incorporated in the 1990 Clean Air Act amendments?
    Mr. Perciasepe. Yes.
    Mr. Connolly. Why did it take 21 years, then, to implement 
the law passed in 1990, signed into law by a Republican 
President?
    Mr. Perciasepe. Well, it's hard to imagine that it has 
taken 21 years to get to this particular point, which obviously 
flies in the face that we're going too fast. It has been looked 
at numerous times by EPA. There have been proposed regulations 
that were not properly completed. And we are in the situation 
now in this administration of having to be guided by the 
judicial branch toward the end that we are now aiming at.
    Mr. Connolly. Thank you, Mr. Perciasepe. Thank you, Mr. 
Chairman.
    Mr. Gowdy. I thank the gentleman.
    Social studies was a long time ago for me, civics. I'm 
familiar with the legislative branch, I'm familiar with the 
executive branch, and even occasional executive branch 
overreach. ``Sue and settle'' was new to me until I got here. 
Does EPA ever encourage groups to sue them?
    Mr. Perciasepe. No. In fact, usually we get sued when we're 
not doing what Congress asks us to do, and that usually is what 
results in us getting on a schedule that's different than the 
schedule that Congress set.
    Mr. Gowdy. So you never invite lawsuits?
    Mr. Perciasepe. No.
    Mr. Gowdy. And there would never be anything to indicate 
that you had suggested that someone sue? A friendly lawsuit, 
shall we say?
    Mr. Perciasepe. No.
    Mr. Gowdy. Never?
    Mr. Perciasepe. Not that I know of.
    Mr. Gowdy. What is so talismanic about December 2011?
    Mr. Perciasepe. Twenty-one years waiting, health benefits 
denied, the----
    Mr. Gowdy. If we waited 21 years and we have almost a 
million comments, wouldn't you think we ought to wait maybe 22 
so we can fully digest all 1 million comments?
    Mr. Perciasepe. It might be good to say something about 
those million comments since they've come up, if you would 
appreciate that. Of those million comments, 960,000, the vast 
majority are in favor of the rule. And of those million 
comments, as you know, as some people have systems that they 
can reply, only about 22,000 are unique as opposed to 
duplicates of comments.
    Mr. Gowdy. Well, 22,000 is still a lot. It's not a million. 
Twenty-two thousand seems like a lot to digest between now and 
Christmas.
    Mr. Perciasepe. It is a lot, but it's not between now and 
Christmas. Again, we've been working on this rule for a long 
time. The comment period, we left the comment period open 
longer than we normally do so that we would--we expected to get 
a lot of comments.
    Mr. Gowdy. Have you asked the court for more time?
    Mr. Perciasepe. Pardon?
    Mr. Gowdy. Have you asked the court for more time?
    This is a court decree, I assume.
    Mr. Perciasepe. That's correct.
    Mr. Gowdy. A judgment?
    Mr. Perciasepe. And we recently asked the court for another 
30 days to finish the work. We have read every one of those 
comments, and we will be replying to every one of those 
comments in the Response to Comments document that we are 
currently working on. We knew that we would get a lot of 
comments, because we left the comment period open longer than 
we normally do, and therefore we put the staff to task that we 
would need to be able to review those comments.
    Mr. Gowdy. Did you have an opportunity to listen or watch 
the President's joint address to Congress several weeks ago?
    Mr. Perciasepe. I did.
    Mr. Gowdy. He mentioned regulations and he mentioned some 
that are having a deleterious, pernicious effect on industry. 
Then he said we should have no more regulation than is 
necessary for the health, safety, and security of the American 
people. I think he's identified 500 that--at least 500 that can 
be done away with.
    It strikes me as curious--let me ask before I say it 
strikes me as curious. Are you arguing that the imposition of 
this regulation is actually going to create jobs?
    Mr. Perciasepe. We believe that construction jobs and then 
the operation and maintenance jobs will be a net positive in 
this sector.
    Mr. Gowdy. How many coal jobs do you think will be lost?
    Mr. Perciasepe. You know, we expect--you know, one of the 
things you have to realize, we're investing in--we, the 
country, not me, EPA--we are investing with this rule in coal-
fired power plants. We are going to make a major capital 
investment----
    Mr. Gowdy. I probably didn't ask my question artfully. How 
many coal jobs do you think we'll lose? You think we're going 
to add some construction jobs. How many jobs will be lost? 
Because neither one of us are naive enough to believe there 
aren't going to be jobs lost.
    Mr. Perciasepe. I expect that the amount of coal that is 
used will be roughly flat. The plants that we will invest in 
here, which will be many----
    Mr. Gowdy. What analysis----
    Mr. Perciasepe. --will then lock in the fact that we're 
going to be using coal for many, many years.
    Mr. Gowdy. What analysis did EPA do with respect to job 
loss?
    Mr. Perciasepe. We have a range that we've identified; 
9,000 permanent job gains is in the middle of the range. There 
are some that go just slightly below zero----
    Mr. Gowdy. I am just asking about job loss. I haven't 
gotten a jobs gain. What analysis did EPA do about job loss?
    Mr. Perciasepe. Best estimate of the net gain is 9,000.
    Mr. Gowdy. So EPA did factor in the losses to the coal 
industry and others?
    Mr. Perciasepe. Yes.
    Mr. Gowdy. Okay. My time's up, sorry. We want to thank you 
on behalf of Mr. Connolly and myself. Give me one second.
    Thank you, and we will be briefly in recess as the third 
panel approaches.
    Mr. Perciasepe. We will provide the information, as I 
suggested to the chairman, in followup. And, of course, every 
question that you all have we'll follow up with as quickly as 
possible. Thank you for your time and I appreciate the 
questions.
    Mr. Gowdy. Very well, thank you.
    We will be in recess for 5 minutes.
    [Recess.]
    Chairman Issa. [Presiding.] The hearing will now reconvene. 
We now welcome Mr. Josh Bivens, he's an economist at the 
Economic Policy Institute. Mr. Bivens, I noticed that you were 
here for the previous panel, so you recognize that pursuant to 
our rules all witness are sworn. Would you please rise to take 
the oath. Raise your right hand.
    Do you solemnly swear or affirm that the testimony you are 
to give will be the truth, the whole truth, and nothing but the 
truth?
    Once again, let the record reflect the witness answered in 
the affirmative. And once again, the witness is recognized for 
5 minutes for his opening statement.

  STATEMENT OF JOSH BIVENS, PH.D., ECONOMIST, ECONOMIC POLICY 
                           INSTITUTE

    Dr. Bivens. I thank the committee for the invitation to 
testify today. My name is Josh Bivens. I'm an economist at the 
Economic Policy Institute in Washington, D.C.
    My professional, peer-reviewed research standard for the 
ratio of benefits to costs of the EPA's air toxics rule are 
very large. But somewhere along the way the debate moved on to 
the grounds of job creation, which is a little odd, because 
regulatory changes just aren't big drivers of job growth.
    But in my testimony, and especially in my written 
testimony, I sketch out how regulatory change in general and 
the air toxics rule specifically can affect job creation and 
unemployment. I conclude that the air toxics rule, like almost 
all related regulatory changes, will have trivial effects on 
job growth over the longer run, but that over the next couple 
of years, particularly if the unemployment rate remains high, 
the rule will actually on net create jobs and lower the 
unemployment rate.
    Further, it's precisely because the unemployment rate is 
high today that the rule, as implemented, as planned, would 
have clearly positive impacts on job creation. So in short, 
calls to delay implementation of the rule based on vague 
appeals to wider economic weakness, have the case entirely 
backward. There is no better time than now, from a job creation 
perspective, to move forward with these rules.
    My research which I summarize in my written testimony 
indicates the adoption of the air toxics rule would lead to the 
net creation of about 28,000 to 158,000 jobs between now and 
2015. The primary economic impact of these rules will be in 
significantly boosting health and quality of life, leading to 
benefits that are at least five to ten times larger than the 
cost. But since we are here to talk about jobs, or at least 
that's why I've been asked here today is to talk about jobs, 
let me just say a couple of words on it.
    The job impacts of regulatory changes depend on the wider 
macroeconomic context. When the economy is functioning well, 
job impacts from regulatory changes are going to be quite small 
for two main reasons. The most important reason is just that in 
a well-functioning economy, the Federal Reserve can neutralize 
any boost or drag on overall employment growth that may result 
from regulatory changes through their conventional monetary 
policy measures. They can raise or lower short-term interest 
rates.
    We may criticize the specific targets that the Fed adopts 
at given times. But in a well-functioning economy they will be 
able to hit these targets. Moreover, the direct first-round 
impact of regulatory change on employment growth are going to 
be modest anyway, because they carry offsetting influences. So 
the Fed won't even have to do that much to counterbalance them: 
On the one hand, employment, because of regulatory changes, 
boosted because of the extra investments needed to bring 
producers into compliance, so power plants, purchasing and 
installing scrubbers; on the other hand, a rise in the price 
level of energy because of the regulatory change may be 
transmitted to the overall economy by causing a slight rise in 
overall prices, and this may cause a reduction in spending.
    But it is clear that the first-round impacts, before the 
Federal Reserve decides to neutralize them, of regulatory 
change are indeterminate. It's important to note that even 
regulations that have large measured compliance costs are no 
more likely to lead to job losses than those with smaller 
compliance costs. Compliance costs go on both sides of the job 
creation ledger. They represent both the scales, investments 
needed to bring firms into compliance, and they represent sort 
of the potential increase in prices that may result from them.
    When the economy is not functioning well, especially at a 
time like today when unemployment is high, even as the short-
term policy interest rate controlled by the Fed sits at zero, 
this analysis changes. The most important way it changes is 
that the Fed can no longer neutralize any effect of regulatory 
changes on employment growth. So instead of the Fed 
counterbalancing any change, these changes are actually likely 
to have multiplier effects so they will ripple through the 
economy.
    The briefing paper that my written testimony is based on 
assesses the positive and negative first-round effects as well 
as the effect of the likely multipliers to the economy. And it 
comes to the finding that positive effects dominate. I just 
want to point out quickly that estimates are awfully 
conservative. Basically they are conservative because the only 
real adjustment to the results I make is the assumption that 
the Fed can't or won't lean against whatever happens to 
employment because of regulatory changes. But actually there's 
plenty of reason to think that there will be very little scope 
for the overall price level to actually rise, given how much 
slack demand is in the economy today. Basically the idea that 
the capacity utilization rate of utilities is at the lowest 
rate on record, that regulatory changes will lead to large 
price spikes, is a very hard thing to believe.
    And second, when you have economies with high rates of 
unemployment, chronic excess supply, they often see rapid 
disinflation. That's what the U.S. economy is seeing, basically 
since what we now call the ``Great Recession'' started. And 
this disinflation actually leads to real interest rates rising, 
even while the Federal Reserve is trying to keep them down, and 
this provides a break on economic growth. So even if the price 
increase and the power generating sector is passed on to the 
overall general price level, this will actually arrest the 
upper pressure on real interest rates and this would be as 
likely as not to be positive for overall demand. I don't 
include this latter consideration an effect in my paper.
    So in short, I think my estimates of the likely job impacts 
of the air toxics rule by 2015 actually allow the widest scope 
possible for the negative impacts to run free. So I think they 
are very conservative.
    To conclude, I want to be clear, this is not a major jobs 
program. It's something that should be done because it will 
help Americans' health, but it will not reduce job growth.
    [Prepared statement of Dr. Bivens follows:]
    [GRAPHIC] [TIFF OMITTED] 74039.144
    
    [GRAPHIC] [TIFF OMITTED] 74039.145
    
    [GRAPHIC] [TIFF OMITTED] 74039.146
    
    [GRAPHIC] [TIFF OMITTED] 74039.147
    
    [GRAPHIC] [TIFF OMITTED] 74039.148
    
    [GRAPHIC] [TIFF OMITTED] 74039.149
    
    [GRAPHIC] [TIFF OMITTED] 74039.150
    
    [GRAPHIC] [TIFF OMITTED] 74039.151
    
    [GRAPHIC] [TIFF OMITTED] 74039.152
    
    [GRAPHIC] [TIFF OMITTED] 74039.153
    
    [GRAPHIC] [TIFF OMITTED] 74039.154
    
    [GRAPHIC] [TIFF OMITTED] 74039.155
    
    [GRAPHIC] [TIFF OMITTED] 74039.156
    
    [GRAPHIC] [TIFF OMITTED] 74039.157
    
    [GRAPHIC] [TIFF OMITTED] 74039.158
    
    [GRAPHIC] [TIFF OMITTED] 74039.159
    
    Chairman Issa. I thank the gentleman and yield myself 5 
minutes. First of all, I want to compliment you. I have never 
seen an economist with so many ``ands.'' I tried to listen to 
your opening statement and it was pretty amazing, because it 
did balance so many but, but, but, but--so I will look forward 
to going through your conclusions once again after the hearing 
and see if I can't reconcile them.
    But let me go through a few things that I think are 
appropriate to your presence here today. First of all you're 
here, funded by the Blue-Green Alliance; is that right?
    Dr. Bivens. No.
    Chairman Issa. No.
    Dr. Bivens. I'm an employee of the Economic Policy 
Institute.
    Chairman Issa. Do you work with the Blue-Green Alliance?
    Dr. Bivens. Yes, I have.
    Chairman Issa. Would you say it is fair to say that a 
coalition of unions and environmentalists are essentially the 
people that you work with closely?
    Dr. Bivens. I have worked with closely, yes.
    Chairman Issa. Would it surprise you to know that the 
International Brotherhood of Electric Workers, the AFL-CIO, 
opposed the implementation of this standard at this time?
    Dr. Bivens. I did know that.
    Chairman Issa. Without objection, I would like to enter 
that letter into the record. Without objection, so ordered.
    Chairman Issa. I'm not an economist. I don't have a Ph.D., 
So I'm going to try and make everyone who looks at the record 
of this hearing a little bit simpler. And I appreciate the 
breadth of your knowledge and capability to balance it. I'm not 
taking away from it, but I just think that most of us have to 
understand this a little differently.
    This standard does not create new, less expensive energy; 
is that correct?
    Dr. Bivens. No, it does not do that.
    Chairman Issa. It does, however, when fully implemented in 
2015, reduce pollutants and thus has positive health benefits; 
is that right?
    Dr. Bivens. That's my understanding.
    Chairman Issa. Okay. And although there are some jobs 
created as a result of implementing this standard, those jobs 
are by definition either temporary, the 37,000 or so, or 
permanent. The permanent ones are, by definition, greater 
ongoing costs to producing the same amount of electricity; is 
that correct?
    Dr. Bivens. Yeah, I think that's correct.
    Chairman Issa. Okay. So to put it in terms that my 
economist--economics professor at Kent State would have said, 
those are rocks in the knapsack. The benefit is you get cleaner 
air, and whatever you get from that is fine. But your ability 
to walk long distances are impeded by the rock in the knapsack. 
And this is an additional burden, an additional ongoing costs 
to producing the same amount of electricity. Would you say 
that's correct?
    Dr. Bivens. With one caveat. We're using more labor to 
produce the same amount of energy, but we are producing cleaner 
energy than we would have without that layer.
    Chairman Issa. And the benefit of cleaner energy would be 
the health care benefits clearly, and we all agree to that. So 
on one hand you have got a rock in a knapsack; you've got this 
cost, and the cost is at least 9,000 permanent greater jobs, 
estimated to be about $1 billion by what we might call the low 
side, the EPA's own estimate of best case. We will forget about 
the dollars. Just understand that you will have 9,000 more jobs 
to produce the same amount of electricity, and those jobs will 
add forever to the cost of producing that energy.
    So with that assumption, as we look at the speed with which 
they want to implement this, 3 years after only basically a 3-
month look-see period, now extended by about a month, what if 
100 percent of the mercury and 90 percent of the particulate 
worked out to be an answer which could be implemented with more 
available technology today?
    In other words, what if you could get 99 percent of the 
benefit, all of the mercury reduction, and 90 percent--and I'm 
using that as a hypothetical figure--of the particulate 
reduction, you could get that for a fraction of the cost. Let's 
say $1 billion in additional costs, representing only hundreds 
of additional workers, hypothetically. If that were the case, 
as an economist wouldn't you want that cost-benefit looked at, 
vast majority of the savings perhaps in health benefits, 100 
percent, because at some point as you reduce particulates, you 
have a drop-off in the health care benefit improvement. I grew 
up in Cleveland, a place that all the walls were black, you 
could see the air when I was a young man. So I'm very aware of 
improvements made since the sixties.
    So my question to you is: Wouldn't you as an economist want 
to have that information at your disposal to make a calculation 
of cost-benefit to the economy on a long-term basis?
    Dr. Bivens. Yes. Basically what you're saying is could we 
achieve the same goals more productively, less labor needed. I 
would say in the long run that sounds exactly right. I would 
say in the short run we have a jobs crisis in the country, 
everyone agrees with that. And actually those compliance costs 
over the next 4 years represent job-creating investments that 
will be made, that the corporate sector is showing no sign of 
making any other way. Instead they are showing signs of sitting 
on massive amounts of savings without seeing any need to do 
those job-creating investments.
    And so that to me is why now is the time, assuming we have 
done all the due diligence about whether or not these rules 
should be done, and if that is the case, and it strikes me it 
is the case, now is the time to do them. It is what will help 
solve the job crisis we have over the next couple of years.
    Chairman Issa. I don't if you were here earlier, but in the 
earlier testimony, what we had explained to us is it was 5 
years of rulemaking and implementation after the passage of the 
Clean Air Act in 1990. There has been as much as a full year 
for less controversial, less expensive proposed rules, while 
this one enjoyed roughly 3 months, now extended by a month.
    So the question would be, not as an economist, but from a 
standpoint of wanting to know, if going through nearly a 
million comments and evaluating those and evaluating the cost-
benefit that comes from those suggestions, if that would get 
you 90 percent for 10 percent, and of course allow additional 
technology to get the rest, wouldn't that be advisable for your 
finding the optimum benefit to the economy in the way of 
affordable energy, cleaner air, and, of course, job creation, 
on both sides?
    Dr. Bivens. Yes, it would be useful to know if that was a 
possible scenario.
    Chairman Issa. Well, we hope it is. With that, I recognize 
the ranking member.
    Mr. Connolly. I thank the chairman. By the way, Mr. 
Chairman, you had asked earlier whether there were any coal-
fired power plants that might meet this new standard. I think 
maybe you were out of the room when I entered into the record a 
list of coal-fired power plants right now that would in fact 
fully meet the standard, including four in my native Virginia, 
which contradicts the previous testimony.
    I now have been corrected. There are actually at least six. 
The Chesterfield power station and the Virginia City plant, 
both run by Dominion Resource, would be fully compliant today.
    Chairman Issa. Well, hopefully the EPA will take and codify 
that list as exactly that. And I appreciate the gentleman.
    Mr. Connolly. I thank the chairman, and I would also point 
out for the record that all of the at least six coal-fired 
power plants in the Commonwealth of Virginia that would be 
compliant are south of Rappahannock. They are not in Northern 
Virginia.
    Chairman Issa. You don't get to represent them?
    Mr. Connolly. I don't get to represent them, but our first 
witness does. You may recall his concern for poor communities 
bearing this brunt.
    Dr. Bivens, following up on the chairman's question about 
trying to follow testimony, you're now our third witness, and 
we've had actually three different sets of data in terms of job 
numbers.
    Our first witness cited an industry-funded study that 
claimed that perhaps as many as 180,000 jobs could be lost. Our 
second witness from EPA said that the midpoint in their 
analysis was 9,000 jobs would be created. And you just 
indicated, if I heard you correctly, somewhere between 28,000 
and as many as 150,000 net positive jobs created between now 
and 2015 if this rule were to go into effect.
    To what do you attribute the variance in these estimates? 
It is awfully hard as a Member of Congress to sort of make the 
right decision policy-wise with such a wide array of job loss 
or creation estimates.
    Mr. Bivens. I can speak pretty clearly between the 
difference between my estimates and EPA. The industry-funded 
study is pretty opaque, so I can only guess what is driving it. 
The difference between mine and EPA's is EPA restricted itself 
to looking only at the likely job impact within the utility 
sector itself, and with one supplying industry--steel--that is 
going to supply the scrubbers. I think they're missing a good 
chunk of the likely job impacts by not looking at the full 
range of jobs created by the investment spurred by the need to 
meet the regulatory change. So that is what my study tries to 
do. It tries to look at, both within the utility sector and 
outside it, looking at both the positive and the negative.
    The industry studies that I've seen that have chalked up 
big losses regarding this rule I think make two big common 
problems, generally. Each one is a little different. The first 
one is there seems to be a big discordance between their 
compliance costs and their price implications. So basically 
they have compliance costs that look relatively vague; say, two 
times as large as the EPA. But then they have price spikes that 
are like four times as large.
    Given that the compliance costs, that dollar value, is the 
scale of investments that actually support jobs, those should 
actually move pretty much in tandem with the price increases. 
Because the only reason you have to raise prices in response to 
regulatory change is if you have to hire new people in order to 
do the stuff you have to do to comply with the new regulatory 
regime. And so I think that they have consistently had price 
increases that are well out of line with what the rest of the 
study looks at.
    The other thing they don't do, I think, is properly account 
for the very different macroeconomic environment we're in right 
now. They basically assume it's kind of what would these 
investments do, dropped into the U.S. economy at a normal point 
in time. We're not at a normal point in time. We've had 9 
percent unemployment for 3 years, even while the Fed short-term 
interest rates are stuck at zero. In the jargon that's called a 
liquidity trap. It's a really important context for how the 
U.S. economy is operating right now.
    Mr.Connolly. My time is limited. So let me ask you this 
question. Thank you.
    We've heard assertions made that this kind of regulation is 
a job killer, going to crush industry, going to actually pass 
on significant costs to consumers. And yet when one looks at 
the data of the record of implementation of the Clean Air Act 
since 1970, and the Clean Air Act amendments since 1990, the 
data suggests the opposite. I wonder, as an economist, would 
you comment?
    Dr. Bivens. I agree with that characterization. I would 
urge people to look at a paper my Institute did by Isaac 
Shapiro and John Irons. They looked exactly at that; sort of 
forecast for what regulatory changes were going to do to jobs, 
price increases, things like that; and consistently, in the 
end, the cost of the regulation was almost always much smaller 
than what was forecast ahead of time.
    Mr. Connolly. And the price of electricity?
    Dr. Bivens. I'm not sure if they looked at the price of 
electricity. I would say I think the best estimate for what's 
going to happen to the price of electricity is the EPA's--and I 
see a lot of the other studies out there--that look far out of 
line.
    Mr. Connolly. Just for the record, I'd repeat, in my native 
State, the Commonwealth of Virginia, since 1990 the net cost of 
electricity has actually gone down by 35.6 percent.
    With that, I yield back, Mr. Chairman.
    Chairman Issa. I thank the gentleman. But if I can ask the 
gentleman a question about your State. In Virginia, for those 
to go down, I'm presuming that since it's a rate base on their 
cost, that in fact that's a matter of efficiency. In order to 
reduce costs over that same period of time, they produced more 
electricity at lower cost, where they're getting a return on 
their capital--a regulated return on their capital. So in this 
case, where the EPA, by its own estimates, has a cost of 
implementation, those costs would be passed on. So there would 
be at least a temporary spike in what otherwise is a cost-
benefit reduction that they have been achieving for that period 
of time.
    Mr. Connolly. I think the chairman makes a fair point that 
obviously that could happen. I would only point out, though, 
that contrary to our first witness' testimony, the reason for 
price spikes in especially rural parts of Virginia, has to do 
with the reregulation of the industry, a bill that was written 
by the industry, in the General Assembly of Virginia. It had 
nothing to do with Federal regulation.
    Chairman Issa. I appreciate that explanation. I will tell 
you that as somebody who's seen our State go through 
deregulation, dramatic reduction in cost, and then blackouts, 
and we have partial reregulation, although not complete, it is 
one of the challenges--do we give the regulated utilities--and 
this is what I'm going to ask one last question to the 
witness--regulated utilities, when they're given a cost-plus 
situation, they love cost. They often do not complain about 
cost drivers because they can pass it on, which essentially 
grows the benefit to their stockholders, while at the same time 
they will say they want a free market system, but not unless it 
gives them greater profit margins.
    I think the gentleman has a good point in your State, as I 
do in mine.
    Mr. Connolly. I agree with the chairman.
    Chairman Issa. At this point, I should adjourn. But I want 
to thank the witness. Dr. Bivens, you were very helpful. Your 
entire statement will be there.
    Additionally, because you had not as many witnesses but you 
had some questions related to some economic hypothetical that 
may be beyond what even in your thorough comments you provided, 
any additional for the next, let's say, 7 days, and if you need 
longer, let us know, we'll keep the record open so that 
anything you believe are missing analyses, either on the upside 
or the downside, we'd appreciate having.
    Additionally, if you could do me a personal favor, or the 
committee a personal favor, to the extent that you could try to 
deliver us a timeline cost of money; in other words, the cost 
of a delay as they just had of 30 days in the implementation, 
and the benefit that is potentially there from slight 
adjustments in the final standard, how you think the parameters 
of best case of a slight change and worst case of a slight 
change; because delay has a cost to cleaner air. Well, getting 
it right may have a benefit to lower cost and ultimately 
greater affordability. I didn't see that in your earlier stuff. 
It is kind of esoteric. But I think for all of us who want to 
weigh--not just on this bill but in future hearings--do we 
delay to get it right? What is the cost of delay? Something 
that since we are talking about 1990 until today, I think we 
have to put in that perspective.
    I would yield to the ranking member.
    Mr. Connolly. Mr. Chairman, I support your request. And I 
think in the endeavor to try to better understand the economics 
of that, that would be helpful.
    I wonder if the chairman would also entertain asking Dr. 
Bivens to provide a little more analysis on his answer to the 
question about the job number variation we've heard in this 
hearing, because we've heard three different sets of numbers. I 
certainly would welcome Dr. Bivens taking some time to help us 
better understand the different methodologies that led to those 
different sets of numbers.
    Chairman Issa. Absolutely, to the extent that you could.
    The ranking member said it maybe more artfully than I did, 
because we do see where one side is looking at the costs of 
jobs--higher utility costs, and so on--and the other side, 
self-servingly and rightfully so, is looking at the jobs 
created. And obviously we want to look at the balance, 
particularly in regulated utility States. I think the doctor's 
comments were exactly right on. In a free-market regulatory 
State, much of this could be a compression of profits of the 
utilities. Well, in those States that are cost-plus or 
regulated, it is going to be passed on. I think that is one of 
the things the ranking member made such a good point of.
    With an affirmative yes, we stand adjourned.
    [Whereupon, at 3:15 p.m., the committee was adjourned.]
    [GRAPHIC] [TIFF OMITTED] 74039.160
    
    [GRAPHIC] [TIFF OMITTED] 74039.161
    
    [GRAPHIC] [TIFF OMITTED] 74039.162
    
    [GRAPHIC] [TIFF OMITTED] 74039.163
    
    [GRAPHIC] [TIFF OMITTED] 74039.164
    
    [GRAPHIC] [TIFF OMITTED] 74039.165
    
    [GRAPHIC] [TIFF OMITTED] 74039.166
    
    [GRAPHIC] [TIFF OMITTED] 74039.167
    
    [GRAPHIC] [TIFF OMITTED] 74039.168
    
    [GRAPHIC] [TIFF OMITTED] 74039.169
    
    [GRAPHIC] [TIFF OMITTED] 74039.170
    
    [GRAPHIC] [TIFF OMITTED] 74039.171
    
    [GRAPHIC] [TIFF OMITTED] 74039.172
    
    [GRAPHIC] [TIFF OMITTED] 74039.173
    
    [GRAPHIC] [TIFF OMITTED] 74039.174
    
    [GRAPHIC] [TIFF OMITTED] 74039.175
    
    [GRAPHIC] [TIFF OMITTED] 74039.176
    
    [GRAPHIC] [TIFF OMITTED] 74039.177
    
    [GRAPHIC] [TIFF OMITTED] 74039.005
    
    [GRAPHIC] [TIFF OMITTED] 74039.006
    
    [GRAPHIC] [TIFF OMITTED] 74039.007
    
    [GRAPHIC] [TIFF OMITTED] 74039.008
    
    [GRAPHIC] [TIFF OMITTED] 74039.009
    
    [GRAPHIC] [TIFF OMITTED] 74039.033
    
    [GRAPHIC] [TIFF OMITTED] 74039.010
    
    [GRAPHIC] [TIFF OMITTED] 74039.011
    
    [GRAPHIC] [TIFF OMITTED] 74039.012
    
    [GRAPHIC] [TIFF OMITTED] 74039.013
    
    [GRAPHIC] [TIFF OMITTED] 74039.014
    
    [GRAPHIC] [TIFF OMITTED] 74039.015
    
    [GRAPHIC] [TIFF OMITTED] 74039.016
    
    [GRAPHIC] [TIFF OMITTED] 74039.017
    
    [GRAPHIC] [TIFF OMITTED] 74039.018
    
    [GRAPHIC] [TIFF OMITTED] 74039.019
    
    [GRAPHIC] [TIFF OMITTED] 74039.020
    
    [GRAPHIC] [TIFF OMITTED] 74039.021
    
    [GRAPHIC] [TIFF OMITTED] 74039.022
    
    [GRAPHIC] [TIFF OMITTED] 74039.023
    
    [GRAPHIC] [TIFF OMITTED] 74039.024
    
    [GRAPHIC] [TIFF OMITTED] 74039.025
    
    [GRAPHIC] [TIFF OMITTED] 74039.026
    
    [GRAPHIC] [TIFF OMITTED] 74039.027
    
    [GRAPHIC] [TIFF OMITTED] 74039.028
    
    [GRAPHIC] [TIFF OMITTED] 74039.029
    
    [GRAPHIC] [TIFF OMITTED] 74039.030
    
    [GRAPHIC] [TIFF OMITTED] 74039.031
    
    [GRAPHIC] [TIFF OMITTED] 74039.032
    
