[Senate Hearing 112-952]
[From the U.S. Government Publishing Office]




                                                        S. Hrg. 112-952

                  OVERSIGHT: REVIEW OF EPA REGULATIONS
                REPLACING THE CLEAN AIR INTERSTATE RULE
              (CAIR) AND THE CLEAN AIR MERCURY RULE (CAMR)

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

                                HEARING

                               before the

                       SUBCOMMITTEE ON CLEAN AIR 
                           AND NUCLEAR SAFETY

                                 of the

                              COMMITTEE ON
                      ENVIRONMENT AND PUBLIC WORKS
                          UNITED STATES SENATE

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                               ----------                              

                             JUNE 30, 2011

                               ----------                              

  Printed for the use of the Committee on Environment and Public Works



[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]






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


































                                                        S. Hrg. 112-952

                  OVERSIGHT: REVIEW OF EPA REGULATIONS
                REPLACING THE CLEAN AIR INTERSTATE RULE
              (CAIR) AND THE CLEAN AIR MERCURY RULE (CAMR)

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

                                HEARING

                               before the


                       SUBCOMMITTEE ON CLEAN AIR 
                           AND NUCLEAR SAFETY

                                 of the

                              COMMITTEE ON
                      ENVIRONMENT AND PUBLIC WORKS
                          UNITED STATES SENATE

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                               __________

                             JUNE 30, 2011

                               __________

  Printed for the use of the Committee on Environment and Public Works


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


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

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               COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS

                      ONE HUNDRED TWELFTH CONGRESS
                             FIRST SESSION

                  BARBARA BOXER, California, Chairman
MAX BAUCUS, Montana                  JAMES M. INHOFE, Oklahoma
THOMAS R. CARPER, Delaware           DAVID VITTER, Louisiana
FRANK R. LAUTENBERG, New Jersey      JOHN BARRASSO, Wyoming
BENJAMIN L. CARDIN, Maryland         JEFF SESSIONS, Alabama
BERNARD SANDERS, Vermont             MIKE CRAPO, Idaho
SHELDON WHITEHOUSE, Rhode Island     LAMAR ALEXANDER, Tennessee
TOM UDALL, New Mexico                MIKE JOHANNS, Nebraska
JEFF MERKLEY, Oregon                 JOHN BOOZMAN, Arkansas
KIRSTEN GILLIBRAND, New York

       Bettina Poirier, Majority Staff Director and Chief Counsel
                 Ruth Van Mark, Minority Staff Director
                              ----------                              

              Subcommittee on Clean Air and Nuclear Safety

                  THOMAS R. CARPER, Delaware, Chairman
MAX BAUCUS, Montana                  JOHN BARRASSO, Wyoming
FRANK R. LAUTENBERG, New Jersey      DAVID VITTER, Louisiana
BENJAMIN L. CARDIN, Maryland         JEFF SESSIONS, Alabama
BERNARD SANDERS, Vermont             LAMAR ALEXANDER, Tennessee
JEFF MERKLEY, Oregon                 MIKE JOHANNS, Nebraska
BARBARA BOXER, California, (ex       JAMES M. INHOFE, Oklahoma, (ex 
    officio)                             officio)

       Bettina Poirier, Majority Staff Director and Chief Counsel
                 Ruth Van Mark, Minority Staff Director




















                            C O N T E N T S

                              ----------                              
                                                                   Page

                             JUNE 30, 2011
                           OPENING STATEMENTS

Carper, Hon. Thomas, U.S. Senator from the State of Delaware.....     1
Barrasso, Hon. John, U.S. Senator from the State of Wyoming......     4
Cardin, Hon. Benjamin L., U.S. Senator from the State of Maryland     6
Sessions, Hon. Jeff, U.S. Senator from the State of Alabama......     8
Lautenberg, Hon. Frank R., U.S. Senator from the State of New 
  Jersey.........................................................     9
Cornyn, Hon. John, U.S. Senator from the State of Texas..........    11
Inhofe, Hon. James M., U.S. Senator from the State of Oklahoma, 
  prepared statement.............................................   447

                               WITNESSES

McCarthy, Hon. Gina, Assistant Administrator for the Office of 
  Air and Radiation, U.S. Environmental Protection Agency........    13
    Prepared statement...........................................    15
Responses to additional questions from:
    Senator Carper...............................................    20
    Senator Inhofe...............................................    23
O'mara, Collin P., Secretary, Department of Natural Resources and 
  Environmental Control for the State of Delaware................    98
    Prepared statement...........................................   101
Shaw, Chairman Bryan W., Ph.D., Texas Commission on Environmental 
  Quality........................................................   109
    Prepared statement...........................................   111
Tierney, Sue, Managing Principal, Analysis Group, Inc............   126
    Prepared statement...........................................   128
    Responses to additional questions from Senator Carper........   151
Walz, Barbara, Senior Vice President Policy and Environmental, 
  Tri-State Generation and Transmission Association, Inc.........   307
    Prepared statement...........................................   309
Carpenter, David O., M.D., Director, Institute for Health and 
  Environment, University of Albany..............................   321
    Prepared statement...........................................   323
    Responses to additional questions from Senator Boxer.........   331

                          ADDITIONAL MATERIAL

Statements:
    Building and Construction Trades Department..................   449
    American Electric Power (AEP)................................   451
    Institute of Clean Air Companies (ICAC)......................   455
    Department of Natural Resources and Environmental Control....   462
    Office of the Governor, State of Delaware....................   477
    Department of Natural Resources & Environmental Control, 
      Division of Air Quality, State of Delaware.................   483

 
OVERSIGHT: REVIEW OF EPA REGULATIONS REPLACING THE CLEAN AIR INTERSTATE 
           RULE (CAIR) AND THE CLEAN AIR MERCURY RULE (CAMR)

                              ----------                              


                         TUESDAY, JUNE 30, 2011

                                U.S. SENATE
         Committee on Environment and Public Works,
    Subcommittee on Clean Air and Nuclear Safety
                                                    Washington, DC.
    The committee met, pursuant to notice, at 10 a.m. in room 
406, Dirksen Senate Office Building, Hon. Thomas Carper 
(chairman of the committee) presiding.
    Present: Senators Carper, Lautenberg, Cardin, Merkley, 
Barrasso, and Sessions.
    Also present: Senator Cornyn.

           OPENING STATEMENT OF HON. THOMAS CARPER, 
            U.S. SENATOR FROM THE STATE OF DELAWARE

    Senator Carper. The hearing will come to order. Good 
morning, one and all.
    Senator Cornyn, nice to see you. We are together in the gym 
at the Y in the Senate gym earlier today, and they have a 
couple of guys here who work hard to stay in shape, trying to 
keep up with them.
    We are going to kick this off, and we welcome, certainly, 
Senator Cornyn, who is going to introduce one of our witnesses 
and make some comments.
    We welcome our witnesses.
    I will speak for a few minutes and then recognize Senator 
Barrasso and other Senators that are here to make an opening 
statement, and then call on Senator Cornyn to, in fact, I think 
we will ask questions of Senator Cornyn. We are going to flip 
things here. He probably is ready.
    Today's Subcommittee hearing will review the proposed 
replacements of the Clean Air InterState Rule, affectionately 
known as CAIR, and the Clean Air Mercury Rule, CAMR, and their 
economic, environmental, and health impacts.
    Senators, again, will have 5 minutes for opening statements 
and I will recognize our panel of witnesses. Each witness will 
have about 5 minutes for his or her opening statement, and 
following each panel statements we will have one round of 
questions.
    Since coming to the U.S. Senate a decade or so ago, I have 
made it my mission to work with our colleagues to ensure that 
EPA has the right tools to clean our air. As some of you may 
know, I have worked diligently across the aisle, even with guys 
like this guy, on clean air legislation to reduce deadly 
emissions of sulfur dioxide, nitrogen oxide, mercury, and other 
air toxics in our Country.
    Oftentimes, I have been asked why I am so passionate about 
clean air and usually start off by giving a couple of reasons. 
First of all, I believe most of us in the room believe we ought 
to try to treat other people the way we want to be treated, and 
as many of you know, air pollution knows no State boundaries. 
As Governor of my State in the 1990's, I quickly realized that 
one State could do everything in its power to reduce its own 
air pollution, but could still itself with dirty air because of 
bad neighbors.
    Many of you have heard me say that Delaware is at the end 
of America's tailpipe. It is not just Delaware, it is Maryland, 
it is New Jersey, it is Virginia, it is Pennsylvania. Other 
States to the north are less. We are at the end of America's 
tailpipe. In fact, our Secretary of Natural Resources and 
Environmental Control, who is here today, Collin O'Mara, has 
said that up to 90 percent of Delaware's pollution, at least 
air pollution, comes from other States.
    As Governor, I think I could have just about shut down 
every source of pollution in our State and Delaware would have 
still been in non-attainment. Think about that. We pretty much 
shut down our State and we still would have been in non-
attainment. Christy Whitman, my neighbor in New Jersey, was 
mindful of the same thing and equally unhappy about being in 
that situation. She and I quickly learned that our neighbors' 
dirty air meant higher health care costs for our own States. My 
neighbors' dirty air meant difficulty in attracting businesses 
to our State of Delaware and my neighbors' dirty air meant that 
we were paying the full price for their dirty energy.
    And that is when I realized that we had to have a national 
solution to address our air quality problems. States can't do 
it alone; couldn't do it then and can't do it now. We are all 
in this together. We have to work together and we need to work 
with the EPA to continue cleaning up our air.
    Second, I believe it is critical for us to achieve better 
health care results in America for less money. In fact, across 
the board, we need to achieve better results in just about 
everything, including health care, for less money, too. But 
over the 1990 to 2020 time period the EPA estimates that our 
Country will see over $12 trillion of health and economic 
benefits in the form of longer lives, healthier kids, and 
greater work force productivity from the implementation of the 
Clean Air Act. Clean Air Act benefits outweigh its costs by 
some 30 to 1. Not a bad bang for our buck. And although we have 
made great strides in reducing our Nation's air pollution, more 
must be done if we want to protect our children and compete in 
the emerging global clean energy economy.
    Today we discuss two new clean air regulations, the Clean 
Air Transport Rule and the Utility Air Toxics Rule. These 
regulations target our largest emitters of many known toxics 
that cause cancer, brain defects, and respiratory stress: 
fossil fuel power plants. And we have a chart over here. This 
is a busy chart, but I think it shows in the U.S. power plants 
emit, among other things--I am almost tempted to take out my 
reading glasses so I can read this stuff--but organics. In 
fact, I am going to take out my glasses to read this stuff.
    [Laughter.]
    Senator Carper. In a true sign of bipartisanship, Senator 
Barrasso--these aren't any good.
    Senator Barrasso. I have done surgery with these glasses.
    Senator Carper. That is what I have heard.
    [Laughter.]
    Senator Carper. All right, here we go. From power plants, 
U.S. power plants, emissions, 60 percent of the arsenic, 60 
percent of the SO2, 13 percent of the nitrogen oxide, 30 
percent of the nickel, 20 percent of the chromium, 50 percent 
of the mercury, and over 50 percent of many acid gases. It is a 
good chart if you can read it.
    These toxic pollutants know no State boundary and they send 
thousands of our children to the hospital every day and 
contribute to shorter life spans for thousands every year.
    Just one of these rules, the Air Toxics Regulation, we 
could see from it some $13 in benefits for every dollar that we 
spend in compliance and, again, getting greater health care 
results for less money, and that is being demonstrated by a 
chart held by one of our--I was going to say one of our 
interns, but our interns are sitting over here, making him do 
all the work. This is a pretty good chart, I can actually read 
this. But we are looking at the billions of dollars in 2010 for 
the cost of implementation, it looks like about $11 billion. 
The payoff looks like about $145, $146 billion. That is a 
pretty good return.
    And as we will hear today, these regulations are long 
overdue, addressing pollution that should have been cleaned up 
years ago, maybe even decades ago. We will also hear today that 
we have the technology to meet these new standards, and many 
States like Delaware have successfully implemented similar 
measures.
    I look forward to hearing our testimony today on these 
important issues and regulations. We look forward to working 
with the Administration and with our colleagues, Democrat and 
Republican, to ensure that we have even cleaner air going 
forward.
    Senator Barrasso, thank you.
    [The prepared statement of Senator Carper follows:]

              Statement of Hon. Tom Carper, U.S. Senator 
                       from the State of Delaware

    Since coming to the U.S. Senate a decade ago, I have made 
it my mission to work with my colleagues to ensure that EPA has 
the right tools to clean our air. As some of you know, I have 
worked diligently across the aisle on clean air legislation to 
reduce deadly emissions of sulfur dioxide, nitrogen oxide, 
mercury and other air toxics in our country.
    Often times, I'm asked why I am so passionate about clean 
air. Well here are a few reasons. First, I believe we ought to 
treat other people the way we'd want them to treat us. As many 
of you know, air pollution knows no State boundary.
    As Governor of Delaware in the 1990's, I quickly realized 
that one State could do everything in its power to reduce its 
air pollution, but could still find itself with dirty air 
because of bad neighbors. Many of you have heard me say that 
Delaware is at the tailpipe of America. In fact, our Secretary 
of Natural Resources, Colin O'Mara who is here today, has said 
up to 90 percent of Delaware's pollution comes from other 
states.
    As Governor, I could have shut down EVERY SOURCE OF 
POLLUTION IN THE STATE, and DELAWARE would still have been in 
nonattainment. As Governor, I quickly learned that my 
neighbor's dirty air meant higher health care costs for my 
state. My neighbor's dirty air meant difficulty attracting 
businesses to my state. And, my neighbor's dirty air meant WE 
were paying the full price of their dirty energy.
    That's when I realized we had to have a national solution 
to address our air quality problems. States cannot do it alone. 
We're all in this together. We've got to work together, and we 
need to work with the EPA to continue cleaning up our air. 
Second, I believe it's critical for us to achieve better health 
care results in America for less money.
    Over the 1990 to 2020 time period, the EPA estimates that 
our country will see over $12 trillion in health and economic 
benefits-- in the form of longer lives, healthier kids, and 
greater workforce productivity --from the Clean Air Act. The 
Clean Air Act benefits outweigh the costs--30 to 1. That's a 
pretty big bang for the buck!
    Although we've made great strides in reducing our nation's 
air pollution, more must be done if we want to protect our 
children and compete in the emerging global clean energy 
economy. Today, we discuss two new clean air regulations--the 
Clean Air Transport Rule and the Utility Air Toxics Rule. These 
regulations target our largest emitters of many known toxics 
that cause cancer, brain defects and respiratory stress--
fossil-fuel fired power plants.
    These toxic pollutants know no State boundary and send 
thousands of our children to the hospital everyday and 
contribute to shorter life spans for thousands every year. Just 
one of these rules--the air toxics regulation--we could see $13 
in benefits for every $1 we spend in compliance. Again getting 
greater health care results for less money. And as we will hear 
today, these regulations are long overdue, addressing pollution 
that should have been cleaned up decades ago.
    We will also hear today that we have the technology to meet 
these new standards, and many states, like Delaware, have 
successfully implemented similar measures. I look forward to 
hearing testimony on these important regulations and look 
forward to working with the Administration and my colleagues to 
ensure we have clean air.

           OPENING STATEMENT OF HON. JOHN BARRASSO, 
             U.S. SENATOR FROM THE STATE OF WYOMING

    Senator Barrasso. Thank you very much, Mr. Chairman. I 
appreciate having these hearings today about the regulations 
coming out of the EPA. We have held a number of hearings on 
these regulations and we have gotten some very useful 
testimony. I am happy to see Senator Cornyn here with us, and I 
am disappointed that the Chairman has ruled that Senator Cornyn 
is not permitted to participate fully and ask his important 
questions----
    Senator Carper. Hold that just for a second. This doesn't 
take away from your time.
    I think most of us probably live by the Golden Rule. 
Senator Cornyn and I actually talked about this yesterday and I 
said, John, do you want to give an opening statement and have 
an extended opening statement in your introduction and make 
whatever points you want, and he actually said, that is fine, I 
would be pretty pleased to do that.
    And we talked today and I said, you know, in this further 
Golden Rule, when I was in my first year, first 2 years in the 
U.S. Senate, I used to go to hearings of the Judiciary 
Committee. I wasn't on the committee, but they would actually 
let me sit at the dais with the committee, and at the end, 
after everybody else on the committee had asked their 
questions, if they had any extra time, they would let me ask 
questions too, at least for 5 minutes, and I offered that 
opportunity to Senator Cornyn. You don't know this, but I 
offered that opportunity to Senator Cornyn, and he said what he 
would really rather do is chair the hearing. So we have agreed 
to do that and I will questions from the dais over here. But I 
think we worked this out.
    If you want to say that, you can go ahead, but I think we 
worked it out.
    Senator Barrasso. Well, Mr. Chairman, let me go on, because 
there has been a lot of talk about public health benefits of 
additional government restrictions on power plants, on 
factories, on small businesses, and on other job creators. We 
have also discussed the very real fact that American 
unemployment stands at 9.1 percent. These are people who are 
looking for work and cannot find someone to employ them. The 
rest of America wants to keep their jobs, and everyone wants 
good public health. The question is do the regulations coming 
out of the EPA accomplish all of those goals, and to me the 
answer is they do not.
    According to the National Economic Research Associates' 
recent study, the EPA's Clean Air InterState Rule, the 
Transport Rule, and the Clean Air Mercury Rule, known as 
Utility MACT, the two rules that we are discussing today, would 
alone result in $184 billion in costs to power providers and 
consumers and 1.44 million jobs lost, as the poster shows.
    Unemployment in this Country is high and the greenest 
State, California, where regulations such as these have been 
adopted for years, has one of the highest unemployment rates of 
all. California's unemployment rate stands at 11.7 percent.
    The negative health benefits of high unemployment are also 
now well documented. In this very Committee, on June 15th, just 
2 weeks ago, Dr. Harvey Brenner of Johns Hopkins University, 
testified, ``The unemployment rate is well established as a 
risk factor for elevated illness and mortality rates in 
epidemiological studies performed since the early 1980's.'' He 
also found that ``In addition to influences on mental 
disorders, suicide, alcohol abuse, and alcoholism, unemployment 
is also an important risk factor in heart disease and overall 
decreases in life expectancy.'' In addition, according to the 
National Cancer for Health Statistics, we learn that American 
children in poverty are 3.6 times more likely than non-poor 
children to have poor health and 5 times more likely to die 
from an infectious disease.
    We have here testifying today Ms. Gina McCarthy, and she 
has stated families shouldn't have to choose between a job and 
healthy air; they are entitled to both. But families need to be 
employed; otherwise, the 9.1 percent who are looking for 
worker, the older work in Michigan, the dock worker in 
Massachusetts, the fisherman in Connecticut, the miner in 
Wyoming, the stay-at-home moms and their children will feel the 
negative effects.
    If we want to talk about public health, then let's focus on 
the major threat to the public, and that is unemployment. We 
must face the facts; otherwise, the health costs of not 
addressing unemployment will far exceed any health benefits of 
the regulations being proposed by the EPA today.
    This Administration and this EPA are on the wrong track. 
They are doing so by proposing dozens of regulations to drive 
up the cost of doing business, and that includes energy costs, 
for whole sectors of the American economy that the 
Administration has basically shown that they don't like; the 
refiners, the coal mines, the rare earth mines, ranchers, dairy 
farmers, cement manufacturers, fertilizer producers, coal-fired 
nuclear power plants, to name a few. This Administration, 
through its policies, is making it harder and more expensive 
for the private sector to create jobs. I am looking for ways to 
make it cheaper and easier for the private sector to create 
jobs.
    This Administration has also been subsidizing sectors of 
the economy that they favor; renewable energy, manufacturing 
and production. In a June 25th Washington Post story entitled, 
Obama's Focus on Visiting Clean Tech Companies Raises 
Questions, the article went on to State, along with Capitol 
Hill fallout, the Administration's attention to certain clean 
tech companies has led to some industry concerns. Executives of 
some struggling startups ask whether the Administration 
rigorously examines companies and their products before 
endorsing a favored few.
    This is the Washington Post. They give an example. The 
article points out that one solar panel manufacturing company 
that the President has backed ``used an array of glass tubes 
that are expensive to produce, causing investment advisors to 
question whether the product could compete with less expensive 
Chinese models.'' The company received a $530 million Federal 
loan guaranty under the President's stimulus plan.
    Many companies in the article said that they only got a 
fraction of the money that Obama doled out to those few winners 
that could produce much more with less. One CEO is quoted as 
saying the Administration is giving some companies massive 
advantages over others. And when the President touted the 
success of the LED light bulb manufacturer in North Carolina, 
he failed to mention that one of the companies he toured was 
having significant financial difficulties, the stock value was 
cut in half in the last year, and this was despite the company 
receiving a $39 million tax credit through the Obama stimulus 
plan. And financial analyst Jeffrey Benneck stated that company 
would have a hard time competing unless ``anyone can get their 
cost down to compete with the Chinese companies.''
    Picking winners and losers just doesn't work. This 
Administration has had 2 years to get this right and has 
failed. Costly job crushing regulations, heavy tax burdens, and 
investment in uncompetitive industries does not foster economic 
growth; it does not create jobs; it does not promote commerce; 
and does not make the public healthier.
    Thank you, Mr. Chairman. Look forward to the testimony.
    Senator Carper. You are welcome.
    Senator Cardin.

         OPENING STATEMENT OF HON. BENJAMIN L. CARDIN, 
            U.S. SENATOR FROM THE STATE OF MARYLAND

    Senator Cardin. First, Senator Carper, let me thank you 
very much, not just for holding this hearing, but for your 
leadership. You have devoted a good part of your career to the 
issues of clean air. We are neighboring States and we share the 
same challenges of being downwind. So I thank you very much for 
your continued leadership in this area. You are making a 
difference and I am proud to work with you on these issues.
    I must say that I think it is a false dilemma to say that 
you have to choose between jobs and good health and clean air. 
I can tell you, in my own State of Maryland, we have created 
jobs by implementing the toughest standards on clean air in the 
region. I feel very fortunate to be a State where the power 
companies take responsibility for their actions. It is time 
that power companies around the Nation take responsibility for 
their actions and stop blaming EPA for doing its job. I might 
say if they used the millions of dollars they spend in fighting 
these regulations, whether in the courts or in the agencies, 
and use that to implement clean air technology, I think we 
would be further along today.
    In 2007, Maryland experienced, as a downwind State, 
motivated the Maryland legislature and our Governor to take 
firm and decisive action to reduce mercury, SOx and NOx 
emissions in the State by implementing the toughest power plant 
emission laws on the East Coast, and we created jobs in doing 
that, Mr. Chairman, and we have a healthier environment. But it 
is not enough. Using 2002 as a submissions baseline, the 
Healthy Air Act has Maryland well on its way to reducing its 
inState NOx emissions by 75 percent by 2012, after already 
achieving an interim goal of a 70 percent reduction target for 
NOx in 2009. SO2 emissions will be reduced by 80 percent this 
year, with a second phase of controls in 2013 to achieve an 85 
percent reduction of SO2 emissions.
    Despite Maryland's success in reducing our emissions, as 
you point out, Mr. Chairman, pollution from upwind States 
prevents Maryland from reaching attainment under the Clean Air 
Act. So we can do all this, but if we don't have a national 
standard, we can't achieve the type of clean air necessary for 
public health in Maryland.
    On most bad air days, somewhere between 50 percent and 75 
percent of Maryland's air pollution originates in upwind 
States. This June, the Baltimore-Washington Metropolitan Area 
experienced 22 moderate and unhealthy air days. More than 2 
million Marylanders suffer from respiratory and cardiovascular 
diseases like asthma, emphysema, and diabetes. Unhealthy air 
days exacerbate the health problems of at-risk populations and 
cost Americans billions of dollars in health care costs, loss 
of wages due to illness triggered by air days that leads to 
absences from work and school.
    EPA's newly proposed Transport Rule is a step toward 
addressing the persistent clean air issues the Mid-Atlantic and 
Northeast States face. The rule's requirement for power plants 
to finally install modern pollution control technology across 
most of the eastern half of the United States is long overdue.
    Baltimore City and Anne Arundel County, Maryland, are two 
jurisdictions that are projected to have maintenance problems 
even with the new Transport Rule in place. The new rule is an 
important first step, but clearly there is more work that needs 
to be done.
    Fortunately, there are opportunities on the horizon to 
achieve emission reductions needed to allow all States to 
achieve attainment.
    Mr. Chairman, I am committed to working with you, I am 
committed to working with all the members of this Committee to 
come up with the reasonable ways that we can address these 
issues at the national level, make sure the tools are 
available. But one thing I believe we can't compromise, and 
that is clean air. The Clean Air Act is critically important 
for the public health of this Nation. Air knows no geographical 
boundaries. We need to work together. This Committee has the 
primary jurisdiction and I hope that we will continue to find 
ways in which we can help our industries comply with the Clean 
Air Act.
    I must tell you, to me this is about jobs, it is about 
creating the type of economic growth in this Nation that will 
allow us to have the job growth and healthy environment. We 
should not have to make a choice between the two.
    Senator Carper. Thanks very much for your statement. Thanks 
for your kind words, and I look forward to working with you in 
all this going forward.
    All right, Senator Sessions. Good morning.

           OPENING STATEMENT OF HON. JEFF SESSIONS, 
             U.S. SENATOR FROM THE STATE OF ALABAMA

    Senator Sessions. Good morning. Thank you.
    Mr. Chairman, since its enactment 40 years ago, I do truly 
think it is incontestable that the Clean Air Act has produced a 
much cleaner environment. In fact, over the past 30 years total 
emissions of the six principal pollutants have been decreased 
by 57 percent. EPA national emission estimates show that in 
1980 there were 267 millions tons per year produced of these 
emissions. That number has been decreased dramatically, to 107 
million tons in 2009 and progress continues. And all of us on 
the Committee want to ensure that we continue that progress, 
and I believe that new restrictions can be effective and 
reasonable on particularly pollutants like mercury that we have 
had some good studies on in Alabama.
    But I am concerned about the timing, cost, and manner of 
several of EPA's new rules, as well as the cumulative impacts 
of these regulations and rules on economic growth and 
development in a time of our Country's economic stress.
    This chart--maybe you can hold it back so the Chairman can 
see too--is a chart produced by the American Legislative 
Exchange of State Legislators showing how these regulations are 
coming forward in ever-increasing numbers and having 
cumulatively a significant impact on American competitiveness 
economically throughout the world. So I thank you, Jeff, for 
that.
    I think it indicates that the complaints I am hearing in 
record numbers from people all over my State about excessive 
new regulations are valid. There seems to be a train wreck of 
regulations and rules coming out of EPA. The ratepayers will be 
the ones who pay the cost. The increased cost of energy could 
drive companies away from the United States and harm our 
economy's ability to rebound from the recent recession. During 
this time of high unemployment, 9.1 percent, we really need to 
be looking at ways to produce cleaner, cheaper energy, not 
driving up costs.
    There is no doubt. Those of us who have been involved in 
economic development know one of the most important questions 
businesses ask about where they are going to site a new plant 
and create jobs is how much the energy costs are. We have got 
to consider that as we go forward, so I would like to raise 
four concerns at the hearing today.
    First, EPA issued the Transport Rule after the court cited 
concerns with the trading provision of the Bush 
administration's Clean Air Rule. However, instead of simply 
correcting those deficiencies, the EPA went much further than 
was required by the courts and now has decided to impose new 
requirements. In addition, regarding the Utility MACT Rule, the 
EPA had originally decided to impose new restrictions on 
mercury emissions from power plants, but after executing an 
agreement with an environmental group, the have decided to 
cover all hazardous pollutants, changing the nature of that 
review.
    Second, I am concerned about the deadlines for compliance 
with the Transport Rule and the Utility MACT Rule. Too fast a 
change can impose unnecessary costs. I am concerned about the 
cumulative impacts and costs from all the rules together and 
what impact that would have on job losses and increased 
electricity rates. One estimate is that increases in 
electricity rates of over 20 percent will occur. This is a tax, 
really. The articulate Larry Kudlow keeps talking about when 
you get a drop in energy prices, you get a tax cut, and an 
increase is a tax increase. It is the kind of thing you can't 
avoid, you have to pay, and paying more for the same amount of 
energy is the equivalent of a tax increase.
    Finally, I want to be sure that EPA is listening to 
concerns of the regulated industry concerning the accuracy of 
the data that they rely on. I continually hear that EPA has 
incorrect data and incorrect calculations. I want to be sure 
that they constantly are willing to ensure that they are 
accurate in the assumptions they make when they impose new 
rules.
    Thank you, Mr. Chairman.
    Senator Carper. You bet. Thank you, Senator Sessions.
    Senator Lautenberg, thanks for joining us.

        OPENING STATEMENT OF HON. FRANK R. LAUTENBERG, 
           U.S. SENATOR FROM THE STATE OF NEW JERSEY

    Senator Lautenberg. Thanks, Mr. Chairman, for your 
leadership on these issues. I think they rank among the primary 
concerns that all of us have.
    We face a funny dilemma that says, well, you can choose 
between extending life, and I heard the Senator from Alabama 
very clearly talk about the benefits that we have gotten from 
the Clean Air Act, and I am a living example of what has 
happened with longevity in our society. So that has improved, 
and I would like it to continue, if that is not too selfish. 
But there we are. We see positive results. And I don't 
understand why it is that we can't do what we have to do in the 
economy as well as for people's health.
    Mr. Chairman, I ask that a letter to the Wall Street 
Journal dated December 2010 from eight utilities that says we 
are OK with EPA's new air quality regulations, and these are 
outstanding companies, including Exelon and PSE&G in my State, 
other well known companies, and they say it is OK. So we know 
that the health of our children depends not only on what we do, 
but also on what our neighbors do, and that is why so many of 
us have worked so hard to keep second-hand smoke out of 
children's lungs. Yet, when the emissions from a power plant in 
one State threaten the citizens of another, too often little or 
nothing is done about it, and we can't make any mistakes.
    Pollution doesn't recognize State boundaries. Dirty air 
blows into New Jersey from many other areas as well, including 
States in the Midwest, where companies continue to build taller 
smoke stacks that shield local residents from health risks, but 
put others in danger. The Environmental Protection Agency is 
attempting to correct this problem by cutting power plant 
emission from 31 upwind States. This could slash sulfur 
pollution in half and save as many as 36,000 lives a year. I 
don't know how you put a numerical value on that, but it has to 
be pretty high.
    Power plants are also a major source of air toxics like 
dioxins, which can cause birth defects; lead, which damages 
nervous systems and reduces children's intelligence levels; and 
arsenic, which causes cancer. One of the worst of these air 
toxics is mercury. Brain poison for children. Mercury can 
seriously damage a child's kidney, liver, and nervous system. 
Pregnant women who are exposed to high levels of mercury are 
also very vulnerable. And there are newborns; they experience 
brain damage, learning disabilities, and hearing loss. So we 
don't discover these things until a much later period of time.
    The EPA wants to cut the emissions of air toxics like 
mercury by as much as 90 percent and I would like them to do 
it. The proposed rule has been in the making since 1990, when 
both parties came together to pass the Clean Air Act amendment. 
But now big polluters and their friends in Congress are 
stalling, claiming it is going to cost businesses too much 
money to comply, and I believe it is nonsense. EPA simply wants 
to hold all companies to the standards used at the cleanest 
plants, which have shown that they can succeed by investing in 
clean technology.
    To our colleagues who claim these measures will be too 
costly to businesses, we have to ask what about the health cost 
of breathing dirty air? How do you put a price on human life? 
EPA's proposed pollution control measures are now more than a 
decade overdue and children a paying a price while industry and 
its lawyers and lobbyists create delays. The bottom line is 
rules and regulations aren't making our children sick; 
pollution is making our children sick. And we have to do a heck 
of a lot more to protect kids from dangerous of dirty air.
    My oldest grandchild, 17 years old, has asthma and we know 
what happens with him when the polluted air is heavy. My 
daughter, when she takes him to play sports, he is pretty 
athletic, she first looks for an emergency clinic to make sure 
that, if he starts wheezing, she can get him there on time, 
because in our family my sister, who was asthmatic, tried to 
get to her car where she had her respirator, from a school 
board meeting and she didn't make it out of the parking lot, 
collapsed, and died 3 days later from asthma.
    So when we have a chance to do something to keep people 
healthy, keep them alive, then why look at the dark side? Look 
at the positive side.
    I look forward to hearing our witnesses about how we can 
work together to ensure all Americans have clean, safe air to 
breathe, and I thank you, Mr. Chairman.
    Senator Carper. Mr. Lautenberg, thank you for sharing that 
with us.
    The first panel is going to be one witness. On the second 
panel we have several witnesses who are going to be testifying.
    Senator Cornyn has been good enough to come by to introduce 
one of his own, the Chairman of the Texas Commission on 
Environmental Quality, Bryan Shaw. Senator Cornyn, you are 
recognized at this time. Welcome.

            OPENING STATEMENT OF HON. JOHN CORNYN, 
              U.S. SENATOR FROM THE STATE OF TEXAS

    Senator Cornyn. Well, Mr. Chairman, thank you very much. I 
appreciate your courtesy. I could only imagine if the Golden 
Rule were applied by the Senate and Congress in Washington on a 
daily basis, I can't help but think this would be a better 
place to work and we would do a better job representing our 
constituents. But I appreciate Senator Barrasso and Senator 
Inhofe making a formal request for me to participate as though 
I were a member of the panel, but as you and I discussed when 
you were kind enough to come by my office yesterday, I think my 
concerns are going to be adequately expressed by this 
statement, and I know the panel members will ask further 
questions that will elucidate the matters that I thought needed 
covering.
    But I want to be here particularly to welcome the Chairman 
of the Texas Council on Environmental Quality, Dr. Bryan Shaw, 
and to speak on behalf of Texas, who may be significantly 
impacted by the Clean Air Transport Rule. I appreciate the 
opportunity to speak and I know Dr Shaw will address several 
issues concerning EPA's action on the second panel, but I want 
to focus my limited time on reports that EPA is planning to 
sweep Texas into the final CATR sulfur dioxide program without 
due process. And what I mean by due process, I mean simply 
notice and the opportunity to be heard, a matter of fundamental 
fairness, which I believe, if Texas will be swept into this 
rule, will be denied.
    I hope this worst kept secret in town proves to be wrong, 
or, if it is right, that it is appropriately reconsidered. This 
anticipated inclusion was brought to my attention recently, and 
I have serious concerns regarding the legality of this action 
and the projected harm it will do to electricity producers and 
consumers and job creators in my home State. I agree with the 
panel that we all want clean air and clean water. We also need 
to consider, I don't think it is unreasonable to consider the 
impact on consumers who are already suffering from high 
gasoline prices, high food prices, and, many places, high 
unemployment. So I think it is important to consider all of 
those factors in determining the cost-benefit of any rule.
    By way of background, the EPA did propose to include Texas 
in the CATR nitrogen oxides program, but Texas was not one of 
the 28 States EPA proposed to include in the CATR SO2 program. 
While EPA did request comments on the hypothetical future 
emissions as a basis for potentially including Texas in the SO2 
annual standard program, it is critical that the EPA never 
altered its original position excluding Texas or proposal for 
comment in SO2 emissions budget for Texas or specified any 
other type of SO2 requirement, despite issuing three 
supplemental notices regarding aspects of the proposed CATR 
rule since it was originally published.
    My understanding is that if included in the CATR annual 
program, the State of Texas will be required to reduce its SO2 
emissions by around 45 percent in just 6 months. Forty-five 
percent in 6 months, due to several incorrect assumptions about 
the State's ability to comply in that period of time. EPA 
assumes that most Texas power plants have or will immediately 
stop using Texas lignite as fuel and that dramatic reductions 
can be achieved with existing and currently planned pollution 
controls, or fuel switching, without a significant impact on 
the Texas economy and on Texas consumers.
    Yet, a diverse group of stakeholders, including union 
workers, chemical companies, investor-owned utilities, 
municipally owned utilities, and others, have expressed 
significant concerns that compliance costs will require 
significant capital investment estimated at about $1 billion. 
Jobs will be lost due to closures and drastic reductions in 
plant operations, and between 7,000 and 13,000 megawatts of 
generation would be immediately be at risk in the State, and 
the loss of generation would drastically reduce our power 
grid's reverse margin.
    Earlier this week we had a hot day, and that won't surprise 
you, in Texas and the Electricity Reliability Council of Texas, 
or ERCOT, issued an energy emergency alert level 1 for power 
reserves falling to less than 2300 megawatts. If reserves fall 
to less than 1750 megawatts, power loads can be interrupted.
    This is only the beginning of the summer, and the EPA's 
anticipated rules will force significant base load to shut down 
and reserve margins to dip down even further. If we have an 
unplanned significant outage due to a storm or other unforeseen 
event, many people in Texas could end up without power and air 
conditioning on some of the hottest days of the year.
    And I would just point out that last week, when I was in 
Austin, I was startled by the news that Amarillo, Texas, in the 
northern part of Texas, usually a little cooler than the rest 
of the State, had temperatures at 111 degrees. So that is a 
threat to health and life like some of the other factors that 
Senator Lautenberg and others have mentioned.
    Any inclusion of Texas in CATR's SO2 program should be done 
with a full and open process in compliance with the 
Administrative Procedures Act. I believe to include Texas 
without notice and an opportunity to be heard would be a 
violation of that law. Instead, stakeholders have had to rely 
on tidbits from those inside the agency about the fate of our 
State. This, if it is true, would be an abuse of power. Every 
State deserves to know what is being asked of it and the 
opportunity to comment on proposed emission reduction budgets 
and other requirements that will impact the lives of its 
citizens. This rule will impact the elderly and children who 
depend on air conditioning at their homes in a hot summer, and 
the livelihoods of millions of hardworking Texas.
    My home State has created 37 percent of new jobs in this 
Country in the last year. In fact, the one thing I hear over 
and over again is the enormous strain that the uncertainty of 
regulation is having on job creators not just in my State, but 
around the Country.
    If EPA believes that Texas should be included in CATR's 
annual program, it should demonstrate that inclusion is 
necessary, that it is justified, and that it is beneficial 
through a transparent process. I know the Administration has 
heard from Democrats, this is not a partisan issue, heard from 
Democrats, Republicans, members in labor and management, and 
other job creators in the State. I am hopeful that the EPA will 
reconsider including Texas in the final rule without due 
process. The stakes are too high to forego adequate process for 
the citizens of our State and, frankly, we deserve better from 
the Federal Government and the EPA.
    So thank you very much, Mr. Chairman, for allowing me to 
make this statement, and I want to thank you for allowing me to 
welcome Chairman Shaw for coming here, and I hope you will 
enjoy his testimony. Thank you so much.
    Senator Carper. Thank you, Senator Cornyn. Good to see you. 
Thank you for the introduction.
    With that, I think we will turn to our first panel, a one-
woman show. We welcome Gina McCarthy back for this panel. Gina 
McCarthy is the Assistant Administrator for the Office of Air 
and Radiation at the U.S. Environmental Protection Agency. She 
has served in that capacity now for just over 2 years.
    Ms. McCarthy, you will have 5 minutes to deliver your 
opening statement. The full content of your written statement 
will be included in the record, and then we would like to ask 
some questions of you . But you are recognized at this time. 
Welcome. It is great to have you here. Thank you.

 STATEMENT OF HON. GINA MCCARTHY, ASSISTANT ADMINISTRATOR FOR 
THE OFFICE OF AIR AND RADIATION, U.S. ENVIRONMENTAL PROTECTION 
                             AGENCY

    Ms. McCarthy. Good morning, Chairman Carper, Ranking Member 
Barrasso, and members of the Subcommittee. I really appreciate 
the opportunity to testify on the need to reduce harmful air 
pollution from power plants.
    It is time to start cleaning up. That is what the 
Administrator told the Edison Electric Institute. The 
Administrator discussed the need to begin investing now to 
reduce emissions of sulfur dioxide, nitrogen oxides, and 
mercury from power plants. But it wasn't Administrator Jackson; 
that was Administrator Leavitt, who made those statements more 
than 7 years ago.
    As acknowledged by the title of this hearing, we are not 
the first administration to recognize the need to clean up 
power plants and to issue rules to address that need.
    Over the years, many power plants have invested in modern 
pollution control equipment to reduce their emissions and to 
help provide healthier air to all our citizens. Many other 
power plants, however, have simply not made those investments.
    Effective technologies for controlling SOx, NOx, and 
mercury emissions from power plants have been available for 
more than 30 years, yet a substantial portion of the coal fleet 
lacks these advanced pollution control equipment. For example, 
although SO2 scrubbers have been available for 35 years, well 
over a third of the coal capacity has yet to apply them. Many 
of these uncontrolled units are small and were built before the 
Clean Air Act was enacted more than 40 years ago.
    Electric power plants today are the Country's largest 
source of SO2 and mercury and the largest stationary source of 
NOx. These plants cause smog and fine particle pollution, acid 
rain, and exposure to mercury and other toxic pollutants which 
contribute significantly to a wide variety of public health and 
environmental problems. At recent air pollution levels, 
exposure to fine particles from all types of sources, including 
power plants, is believed to still cause between 130,000 and 
320,000 premature deaths each and every year, while smog 
exposure prematurely ends the lives of an additional 4700 
Americans.
    The Bush administration recognized the need to clean up 
power plants and issued two rules to do so, the Clean Air 
InterState Rule and the Clean Air Mercury Rule. The Court of 
Appeals, however, held that these rules did not meet the Clean 
Air Act requirements and they told EPA to redo them.
    To replace these two overturned rules, we will soon be 
issuing two rules, the Clean Air Transport Rule, which we are 
talking about today, as well as finalize the Mercury and Air 
Toxic Standards in November.
    We are not pursuing these rules, however, just because the 
Clean Air Act requires it and because the courts told us we had 
to do it. We are pursuing these rules because they will 
dramatically improve public health. They are affordable and 
they are technologically achievable.
    The Clean Air Transport Rule is designed to help States 
achieve the health-based ambient air quality standards for both 
smog and soot. It will require reductions in power plant 
emissions in NOx and SO2 in the middle and eastern portions of 
the Country.
    We have also proposed the Mercury and Air Toxics Standards 
to control emissions of toxic air pollutants from power plants.
    The Transport Rule and the Mercury Air Toxics Standards are 
projected to avoid tens of thousands of premature deaths, heart 
attacks, cases of acute bronchitis, hospital and emergency room 
department visits, as well as hundreds of thousands of cases of 
aggravated asthma and millions of days when people will miss 
work or school each and every year.
    Some in industry are calling us to move quickly, even more 
quickly than they are proposing on these rules. The Clean 
Energy Group recently said needed regulatory certainty will 
result from EPA's timely implementation of regulations 
consistent with the Clean Air Act, which is in the best 
interests of the electricity industry, the market, and 
customers.
    Over the last 40 years, the Clean Air Act has provided a 
success story of which all Americans can and should be proud. 
Key air pollutants are down more than 60 percent, while our 
economy has grown by over 200 percent. Each dollar we have 
spent cleaning up the air has given us more than $30 in 
benefits. And the investments in the cleaner energy sector 
required by these standards will keep people working and it 
will create jobs.
    The Clean Air Transport Rule and Mercury Air Toxics 
Standards are continuing the successful history of the Clean 
Air Act and EPA's implementation of it.
    Thank you very much.
    [The prepared statement of Ms. McCarthy follows:]
    
    
    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    
    Senator Carper. Thank you, Ms. McCarthy.
    Before we get started with questions, I want to ask 
unanimous consent to place into the record two letters to me 
from the Institute of Clean Air Companies and the American 
Federation of Labor that State that labor availability will in 
no way constrain industry from complying with the proposed 
Transport Rule or Air Toxics Rule.
    I also ask unanimous consent to place into the record a 
letter to EPA Administrator Lisa Jackson from Ms. Angela Davis, 
mother from Pennsylvania. She writes in support of the Air 
Toxics Rule and tells her terrible story of losing her 17 year 
old son Cameron to asthma.
    If there is no objection, those will be made a part of the 
record.
    [The referenced documents follow:]
   
   [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

   
    Senator Carper. Ms. McCarthy, again, thank you for your 
testimony and for your service. I just want to start off by 
saying you have the opportunity here, not only Senator Cornyn's 
introduction for his Commissioner from Texas, but also to make 
some additional comments. Anything that you want to say just in 
response to some of Senator Cornyn's comments?
    Ms. McCarthy. I would appreciate the opportunity and again, 
Senator, thank you for your leadership on these issues.
    We have looked extensively and we have met with the company 
and we have spoken on the Texas issues and their concerns 
related to the Transport Rule. Let me point out just a few 
things. One is that the process that we used, the public 
process we used related to the Transport Rule thoroughly 
addressed both the legal requirements under the Act to look at 
the air pollutants that Texas is contributing to their downwind 
neighbors. We also did extensive modeling to show what the most 
cost-effective emissions could be achieved in Texas 
commensurate with what we believe to be the significant 
contribution to downwind States.
    We are very confident that we not only met our legal 
obligation, but we also met the spirit of the law. We actually 
identified and sought comments on including Texas for the 
variety of pollutants that we were looking at. We actually 
received comments from both TCEQ, as well as the regulated 
community that talked in detail----
    Senator Carper. Comments from what? What was the acronym 
you used?
    Ms. McCarthy. TCEQ. That is the Texas----
    Senator Carper. Council on Environmental Quality?
    Ms. McCarthy. I am sorry.
    Mr. Shaw. Commission on Environmental Quality.
    Ms. McCarthy. Commission on Environmental Quality, TCEQ. 
Thank you very much.
    Senator Carper. Thank you.
    Ms. McCarthy. That was their Chairman, Bryan Shaw.
    Senator Carper. Oh, OK.
    Ms. McCarthy. And we firmly believe that we have met not 
only our legal obligation, but we are basically--the State and 
the regulated community provided great comments, and we know 
they understand and we will consider those comments in the 
final.
    Senator Carper. All right, thanks. Thanks for saying that. 
Could you take a moment to discuss with us how the Transport 
Rule, that is, the one replacing the Clean Air InterState Rule, 
tries to ensure that we are all better neighbors when it comes 
to air pollution?
    Ms. McCarthy. Yes. I believe that--I don't cover this too 
much--you are more than familiar with the Clean Air InterState 
Rule, but it was a rule that intended to address the clean 
neighbor provisions in the Clean Air Act, in other words, that 
downwind States shouldn't have to suffer the air pollution from 
upwind States that are causing them to be out of air quality 
attainment, have bad air quality, or to continue to achieve 
that air quality through maintenance operations.
    The Clean Air InterState Rule and the Clean Air Mercury 
Rule were found by the courts to be failing in terms of meeting 
the obligations of the Clean Air Act. The courts told us that 
they would remand it back to the agency, but we needed to be 
expeditious in terms of replacing those rules with rules that 
would meet the test of the Clean Air Act and the courts.
    Senator Carper. When can we see a final Transport Rule from 
EPA? I am hoping it is going to be soon.
    Ms. McCarthy. Next week.
    Senator Carper. Next week. All right. That is pretty soon.
    Ms. McCarthy. That is soon.
    Senator Carper. Monday? Probably not Monday.
    Ms. McCarthy. Actually, I will go off over the weekend and 
will contemplate it, Senator, but it will be middle of the week 
next week.
    Senator Carper. Thank you.
    Ms. McCarthy. And thank you for your patience.
    Senator Carper. Sure. A couple of my colleagues talked to 
you about how important energy costs are in driving economic 
development or job creation in certain States. As Governor, I 
worked for 8 years on economic development and job creation. I 
loved it and still do. I describe myself as a recovering 
Governor.
    And there are any number of factors that companies consider 
when they are deciding whether to create jobs, put up shop in a 
particular area of a State, grow jobs or not grow jobs. They 
look at schools, they look at quality of schools; they look at 
access to decisionmakers; they look at look at regulations, 
whether or not the regulations use common sense; they look at 
access to transportation; they look at crime. They look at all 
kinds of stuff. They also look at energy costs, and some of 
them look at a lot of energy costs, and a lot of them look at 
health care costs, given how much health care costs are.
    And, for me, one of the things that drives me crazy is that 
we have to compete with States that have lower--for jobs, we 
have to compete with other States for jobs where they burn 
dirty fuel, they put out a lot of air pollution, they get 
cheap, in some cases, coal-created electricity. It is cheap for 
them and they send the pollution over to us, and then we have 
to take special safeguards that drive up our energy costs to 
compensate for the cheap energy costs that our neighbors have. 
And, on top of that, we end up with more air pollution in our 
State from their State and it drives up our health care costs. 
That is just not fair. That is just not fair. Do you have any 
comment on that?
    Ms. McCarthy. Senator, I would agree with you. The Clean 
Air Act actually intended that when national ambient air 
quality standards were changed, that this upwind issue, this 
interState transport of pollution would be addressed. It simply 
hasn't been effectively addressed. It has caused an economic 
disparity, where some States that are the receivers of this 
pollution have to spend much more money to take a look at eking 
out pollution reductions that in upwind States would be much 
cheaper to produce for the American public.
    And it is a level playing field issue, it is a good 
neighbor issue, it is a fairness and equity issue, and it is 
time that we took action and moved these rules forward that 
will provide everybody equal opportunity for clean air. I have 
worked in States, as you have lived in, where I believe that we 
could shut the entire State down and still not produce the 
clean air that our citizens are looking for. That has to 
change.
    Senator Carper. Thank you. In 1998, the agency, EPA, 
completed a report to Congress on the health impact of air 
toxic emissions from utilities and whether utilities should be 
regulated under the air toxics framework in the Clean Air Act. 
Could you take maybe a minute, that is about what I have left, 
and describe this report and the results? I am thinking the 
report was due sometime like in 1993. Maybe you can clarify 
that for us, if you would, please.
    Ms. McCarthy. Yes. There were two reports that were 
required in the 1990 Clean Air Act; one had to do with looking 
at all of the health and science around the issues of mercury: 
Is it a pollutant? Is it a pollutant that is posing significant 
risk to public health and the environment? And the other was 
specifically looking at the utilities as whether or not they 
are a major contributor and should be regulated under the Clean 
Air Act.
    And those studies were completed in the end of 1997 and 
1998; they underpinned the decision of the EPA that mercury is 
a toxic constituent; it is a pollutant that threatens, in 
particular, the health of our children; that it needed to be 
addressed. It also verified that utilities are the major 
stationary contributor toward the emissions of mercury in our 
atmosphere.
    And this decision led to an appropriate necessary decision 
that said that utility mercury emissions and emissions of other 
hazardous air pollutants should be regulated under the 
provisions in which we are now moving forward to regulate it. 
And without these there is no Federal standard to control toxic 
emissions from this Country's largest stationary source of 
emissions without this rule moving forward.
    Senator Carper. All right, thank you. Thanks very much for 
those responses.
    Senator Sessions.
    Senator Sessions. Thank you.
    You do have a high responsibility, Ms. McCarthy, and I 
understand that, but you would acknowledge that, for example, 
with regard to mercury, President Bush's regulations would drop 
the mercury emissions 70 percent. Now EPA wants to go to 90 
percent. Do you know whether or not that extra 20 percent will 
cost as much as the first 70? Don't we have an extra cost when 
you reduce the emissions closer and closer to zero?
    Ms. McCarthy. Senator, I appreciate the question, and EPA 
looks very closely at both the costs and the benefits. The 
benefits and cost ratio for the Mercury Air Toxics Rule is 
going to be very significantly leaning toward many more 
benefits as opposed to cost.
    Senator Sessions. Well, we have a number of challenges. On 
how we achieve those we can disagree. I know the Chairman 
shares a belief that nuclear power can be one of our clean 
energy sources. Natural gas is cleaner. But both of those 
sources--cleaner than coal. Both of those sources are under 
environmental attack and it is hard to move forward with them 
in a way that would economically make sense for America, it 
seems to me.
    What is the compliance deadline for the Transport Rule and 
the Utility MACT? Are those deadlines mandated by courts, are 
they your deadlines, and is there any opportunity to seek 
compliance or delays in order to reasonably transition?
    Ms. McCarthy. The statutory deadline for the rules related 
to MACT, which is our Toxics Standards, are a 3-year window for 
compliance. States usually, and often, give a 1-year extra 
window, which we would encourage in this rule, and we are 
encouraging. That is a 4-year window in order to comply with 
the rules from the date of the rule becoming effective.
    Senator Sessions. And when would those likely be?
    Ms. McCarthy. We are intending to complete the rule in 
November of this year, which means the compliance window would 
be November 2014 or 2015, depending upon whether the State 
gives that extra year.
    Senator Sessions. I have learned that some of the EPA 
proposed Transport Rule was based on incorrect data and 
assumptions. Are you aware of any of those problems and are you 
committed to ensuring that the data you actually base a 
decision on is accurate?
    Ms. McCarthy. We are certainly openly and we will be 
reviewing all of the comments and will consider those in the 
final. EPA has no interest in basing its decisions on 
inaccurate or incomplete data and we believe that we will have 
the data sufficient to make this decision.
    Senator Sessions. With regard to ozone, we have made some 
real progress in ozone reduction; the standards have gone from 
125 parts per billion to 75 today. The first drop was to 85, 
and then 85 to 75. And now I understand you are considering 
ozone standards as low as 60 parts per billion. But one of the 
things that is troubling about this to me is the alteration of 
the normal standard of evaluation of ozone, the 5-year review 
process.
    In other words, the last reduction went from 85 to 75. That 
is a 13 or so percent reduction. The previous one was from 125 
to 85, a 33 percent. But as you get that number lower, there is 
a lot of naturally occurring ozone and it is harder to get each 
percentage below, I think you would recognize. So EPA's 
reconsideration of the 2008 ozone determination is occurring 
outside the normal 5-year window, or at least inside it; it is 
about 2 years or 3 years instead of the 5-years.
    How do you justify that? Don't you think that a rational 
policy would be a gradual, sustained, reasonable reduction of 
ozone?
    Ms. McCarthy. Senator, we are moving forward the 5-year 
review of ozone, but when Administrator Jackson came into 
office, we were facing litigation requiring the prior 
administration's decision to make a determination that 75 ppb 
was the appropriate level for ozone. That was outside of the 
range of science-based information that the Clean Air Science 
Advisory Committee recommended to the agency at that time. The 
Administrator decided that rather than litigate, she would work 
with the litigants to put that litigation on hold; she would 
revisit the science. She didn't believe that the decision that 
the Bush administration was actually commensurate with the 
science at the time it was made; it was in conflict with the 
recommendations of the Clean Air Science Advisory Committee, 
and she was appropriate, rather than to defend that standard 
and to move forward with it, to reconsider that, and that 
decision will be made at the end of July.
    Senator Sessions. It is a very significant matter, and 
numbers I am seeing are that it costs as much as $90 billion. 
And we have to ask ourselves whether the path we are on, a 
steady reduction, closer and closer to situations in which 
certain days naturally occurring in the summer in my State get 
close to 60 parts per billion, I am told, naturally. So I don't 
know exactly what that figure is and the appropriate number is, 
but I do believe that you are accelerating that beyond what was 
expected and it is going to have a great cost and is causing 
some concern.
    Mr. Chairman, I think Senator Barrasso will be back 
shortly, and I thank you for the opportunity to----
    Senator Carper. Should we wait for him? What do you think?
    Senator Sessions [continuing]. to ask these questions.
    Senator Carper. All right. You bet. Thanks.
    Senator Sessions raised questions, justifiably so, about 
the cost of implementation of these regulations and one of the 
things that you may recall that Senator Alexander and I worked 
on for years is legislation that would step down over time 
emissions of sulfur dioxide, nitrogen oxide, and mercury; and 
our goal for mercury was to reduce emissions by as much as 90 
percent. I think we asked for and got a GAO study that showed 
mercury reductions can be obtained at that level for as low as, 
I think, $0.10 a month for families who use electricity, and I 
would ask unanimous consent to submit that EPA study for the 
record.
    Senator Sessions. I would be glad to see that. Thank you.
    Senator Carper. Sure.
    [The referenced document follows:]
    
    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    
       
    Senator Carper. All right, Senator Lautenberg.
    Senator Lautenberg. Thanks, Mr. Chairman. We have this 
debate going on here about whether or not things that will 
improve health are affordable, and I mentioned before the Wall 
Street Journal article, a letter to the editor written by eight 
companies, including Public Service Electric & Gas, Calpine 
Corporation, National Grid USA, Exelon, Austin Energy Texas 
Company, that says we are OK with EPA's new air quality 
regulation; and it goes on to suggest that plants are retiring 
old plants because of EPA's regulations fails to recognize that 
the lower power prices and depressed demand are the primary 
retirement drivers.
    Contrary to the complaints by the claims that EPA's agenda 
will have negative economic consequences, our companies, they 
say, experience complying with air quality regulation 
demonstrates that regulations can yield important economic 
benefits, including job creation, while maintaining 
reliability. How do we ignore that evidence, I can't quite 
comprehend.
    Now, people in my State of New Jersey are suffering because 
a coal-fired plant just across the river in Pennsylvania is 
pumping dangerous levels of sulfur dioxide into the air. It is 
the Portland Generating Station in Pennsylvania, located just 
across the Delaware River from New Jersey, and is the primary 
source of sulfur dioxide pollution in several New Jersey 
counties. In fact, the Portland Generating Station in 
Pennsylvania emits more sulfur pollution than all of the power 
plants in New Jersey combined.
    So we have this problem. Emissions from the plants are 
causing some New Jersey counties to exceed Federal limits for 
sulfur dioxide that causes serious breathing problems for 
children, the elderly, and people with asthma. EPA has proposed 
reducing sulfur pollution from the plants by more than 80 
percent.
    Ms. McCarthy, when will EPA finalize the rule and offer 
some relief to those people in New Jersey who are breathing 
that polluted air?
    Ms. McCarthy. First of all, Senator, I hope you are proud 
of your State of New Jersey; they did a wonderful job on the 
petition and the data that they presented. We have been working 
closely with them. As you know, we have proposed some control 
strategies, a Federal implementation plan to address these 
pollutants from that particular facility. We have finished the 
comment period, we have finished the hearings, and we will be 
issuing that final decision this summer.
    Senator Lautenberg. This summer?
    Ms. McCarthy. Actually, end of summer, potentially 
September. But we are moving forward. We want it to be 
defensible and we think you have made a very strong case.
    Senator Lautenberg. Terrific. Earlier this week OMB 
released a report that found EPA rules had cost polluters 
roughly $25 billion, while providing as much as $550 billion in 
public benefits over the last decade. Should we expect this 
pattern of modest cost to polluters, large benefits to the 
public to continue if EPA follows through on the rulemakings 
you have had in the works?
    Ms. McCarthy. Senator, EPA has had 40 years of history in 
doing exactly what you suggest, which is to find the most cost-
effective ways to achieve the greatest amount of public health 
benefit. What the OMB study showed is that we are still on 
track, as we have been for 40 years. We are going to maintain 
that track record. And the Clean Air Transport Rule that you 
are talking about today is exactly the same rule with high 
benefits, low costs. The Mercury Rule is the same. So we are 
proud of these and they will continue in the course that we 
have set for the Clean Air Act.
    Senator Lautenberg. On balance, the benefits far exceed the 
costs.
    Ms. McCarthy. They do, on a balance of 30 to 1, sir.
    Senator Lautenberg. The Clean Air Act requires EPA to issue 
air toxic rules that force polluting facilities to operate as 
cleanly as other companies in their industry that have already 
invested in pollution controls. What message might it send the 
companies that invested in technology to reduce the pollution 
decades ago if we are going to delay those rules yet again?
    Ms. McCarthy. I think the major concern and what you are 
hearing from the Clean Energy Group is that for those who have 
invested in clean energy, we are not allowing them to run their 
units as they are available to run and, instead, basically 
investing in the dirty ones by allowing them to make more 
profits while the cleaner ones sit by. I think we need to 
recognize the public health costs of that pollution and that 
cost should be reflected in the way in which we meet our energy 
obligations in this Country.
    Senator Lautenberg. A former high-ranking EPA official who 
left the agency during the Bush administration told the New 
York Times that a decade-long delay in air toxic rules says, 
``costs thousands of lives.'' Now, you recently put an end to 
that delay by proposing limits on the largest sources of air 
toxics, but polluting industries continue to lobby to prevent 
these long-overdue rules. What would be the impact of further 
delaying or weakening these rules in terms of illness and loss 
of life? What might we expect?
    Ms. McCarthy. The Mercury Air Toxics Rule alone would 
reduce premature deaths by 17,000 every year. The Transport 
Rule has equal size benefits, and actually even more. We are 
talking about lives lost, work days lost. We are talking about 
exacerbated asthma levels. We are talking about hospital and 
emergency room visits. Those are real costs to American 
workers, to American families, and to our children?
    Senator Lautenberg. Thank you very much, Ms. McCarthy.
    I have to say, Mr. Chairman, that the Massachusetts accent 
lends charm to the facts that we are hearing, so well 
delivered. Thank you, Ms. McCarthy.
    Ms. McCarthy. Thanks, Senator.
    Senator Carper. I knew it wasn't Mississippi, that's for 
sure.
    Maybe we will go another 2 minutes or so, and then we will 
go to our newt panel.
    Recently, American Electric Power, AEP, stated that they 
are retiring, I believe, some 6,000 megawatts in the next 
couple of years, and all these retirements are due to recent 
clean air regulations proposed under your watch. However, 
didn't AEP agree to retrofit or retire most of the megawatts in 
question under consent decrees with former President Bush's 
EPA? And is it your understanding that AEP's retirement 
announcement includes facilities listed in past consent 
decrees?
    Ms. McCarthy. Many of the facilities that they indicated 
would be retiring as a result of our rules have already been 
under consent agreements. In fact, 20 of them were already 
under consent agreements to retire or upgrade with proper 
pollution control equipment.
    In addition, as we all know, announcements have been made 
that retirements are in the offing for some of these smaller, 
inefficient; they simply can't compete in the market. So what 
AEP was doing was confusing information by attributing market 
conditions and their failure to comply with earlier required 
reductions with the impacts of these rules.
    Senator Carper. All right, thank you. Another question is 
in testimony from an earlier hearing, a company mentioned that 
they had several coal-fired units that are currently not being 
scrubbed and, therefore, may have to close down or switch to 
natural gas, if possible, due to the air toxics regulations. 
Many of the sites in question were installed over 50 years ago, 
over a half century ago. How efficient are these coal-fired 
plants today if they are running on 50-year-old technology?
    Ms. McCarthy. I would say, Senator, first, that these rules 
seek the most cost-effective ways to make these reductions. Our 
coal-fired power plants now are, on average, over 50 years old. 
What we see is that those units are at least, the average, 20 
percent efficient than the units that are constructed today, 
and many of them are nearly 40 percent less efficient. They are 
simply not competitive if they have to compete on a level 
playing field. But those are market decisions. Our decisions 
don't drive those retirements. Our decisions drive the 
installation of cost-effective, available pollution control 
equipments that save lives.
    Senator Carper. Good. A third question, in the 1970 and 
1990 Clean Air Act amendments, Congress delayed air control 
requirements for older coal plants because apparently we 
thought that most of the old plants would still retire. The 
thought of investing in new technologies at a plant that 
wouldn't be around much longer didn't really seem logical at 
the time. But looking back, did many of these coal plants 
actually retire? And what would you guess is the average age of 
our coal fleet, any idea?
    Ms. McCarthy. We did not see the retirements that the Clean 
Air Act expected. We now have a coal fleet that, on average, is 
over 50 years old. We see them being more inefficient than 
current technologies and we see the availability of equipment 
that can be installed that will help them reduce the pollution 
that was expected under the Clean Air Act. So I would say that 
what we are seeing now, though, is, with the change in the 
market that inexpensive natural gas has brought to the table, 
that you are seeing a change in the position of those, the 
marketability of those units and the electricity they generate. 
So many retirements are expected just simply as a result of 
inexpensive natural gas, but that gives us the opportunity at 
this point, frankly, to have an ability to bring cost-effective 
reductions to the table.
    However, I would also add that it will not reduce, and we 
don't predict a significant number of retirements attributable 
to these rules. We are talking about 10 gigawatts of coal 
retirement. There are 300 gigawatts of coal retirement in the 
system today and there is 1,000 gigawatts of electricity 
generation today.
    So we are talking about a small amount of retirements 
attributable to this rule and the installation of pollution 
control equipment in the vast majority of those larger units 
that are necessary and functioning and competitive, and that is 
going to produce the results that we are looking for that will 
have such significant public health benefits without increasing 
significantly electricity costs.
    Senator Carper. OK. Thanks so much.
    Senator Merkley, welcome. Good to see you.
    Senator Merkley. Thank you very much, Mr. Chair. Good to be 
here.
    Thank you for your testimony. I wanted to ask for EPA's 
perspective on coal plants that have agreed to a negotiated 
shutdown but are now making or needing to make new investments 
in pollution control technologies. Specifically, we have a 
plant in Boardman, Oregon that has negotiated to shut down all 
coal firing by 2020. But if they upgrade all their pollution 
controls to meet the requirements, then they feel like they 
need to keep the plant open longer in order to be able to 
recoup the investment in those technologies.
    Does EPA have any flexibility on specific pollution 
reduction targets if it can also take into consideration a 
State-negotiated and federally enforceable shutdown, especially 
if that produces a better picture in terms of total emissions 
reduction?
    Ms. McCarthy. Senator, we are more than happy to sit down 
with the folks who have negotiated the settlement and with 
Boardman themselves. We think that the agreement that was 
reached is quite remarkable. I think that you should be very 
proud of them, their attitude in working with all of the 
concerned citizens, as well as our regional EPA offices, and 
coming up with this agreement, and we are more than happy to 
look at what flexibilities are available to us on a one-on-one 
basis to take a look at how we can accommodate this agreement 
and ensure that they have certainty moving forward.
    Senator Merkley. Thank you. I think that would be very 
helpful. Thank you.
    Thank you, Mr. Chair.
    Senator Carper. You are welcome.
    Senator Barrasso.
    Senator Barrasso. Thank you, Mr. Chairman.
    Ms. McCarthy, Senator Cornyn was here, had a couple of 
questions. In the Clean Air Transport Rule proposal, EPA 
excluded Texas from the SOx trading program, but now sources 
say that Texas will be included in the final rule. All EPA did 
in the proposal was, in a single sentence, asked for comment on 
possibly including Texas. No specific program elements, such as 
emission budgets, were provided for public review and comment, 
as they were for every other State included in the trading 
program. So obviously we have serious concerns that this 
violates the Administrative Procedure Act. Is your position 
otherwise?
    Ms. McCarthy. My position is that Texas was in the CAIR 
program, it had requirements and, as you know, the Transport 
Rule is replacing the Clean Air InterState Rule. We did provide 
sufficient notice that we had concerns about the significant 
contribution of Texas. As you indicated, we sought comment on 
that issue, which we are required to do under the law.
    We will take a look at the comments we received, but I will 
tell you that in our record, when that is released with the 
Transport Rule as it is released next week, you will see that 
the regulated community, as well as the State, did not miss 
that sentence; they actually understood the implications. They 
provided significant comment and we will make our decision on 
the basis of that comment and sound data that we have available 
to understand the significant contribution that the State of 
Texas might make to their downwind States.
    Senator Barrasso. This EPA appears to be rushing to issue 
as many new rules and regulations as it possibly can, and it 
seems to be making critical mistakes in the analysis that can 
have huge impacts on the recovery of our economy. For example, 
the Texas Commission on Environmental Quality points to a 
number of careless errors in an analysis EPA did provide in 
support of its Clean Air Transport Rule, hypothetical 
assumption about future Texas emissions. At a plant EPA 
predicted to have an increase of more than 15,000 tons per year 
in SOx, there actually is an enforceable cap on emissions that 
reduces the emissions by more than 27,000 tons per year.
    In light of these and other discrepancies, how is it that 
the EPA's last minute addition of Texas is not just arbitrary 
and capricious when EPA attempts to base a regulatory program 
not on what is actually happening, but on flawed data and 
mistake-ridden predictions about future emission levels that 
don't exist?
    Ms. McCarthy. Senator, I would say that we do not believe 
that we are rushing to judgment or we will produce a rule that 
is based on inaccurate data. We are not rushing; it has been 20 
years delay in terms of bringing this rule in addressing the 
issues associated with interState pollution. We are not rushing 
to judgment. We will take a look at the data that is available 
to us and we will make a sound decision, and that decision will 
be based on quality data and sound analysis.
    Senator Barrasso. So do you dispute the Texas Commission on 
Environmental Quality's pointing out the careless errors in the 
analysis that the EPA provided in support of your rule in terms 
of assumptions that were made?
    Ms. McCarthy. I do believe that every rule is a challenge 
in terms of getting every number right, and we take that 
challenge very seriously. There was an error that was pointed 
out to us very early in the process on one computation that had 
to do with a small amount of information that had no impact in 
terms of the outcome of the decisionmaking for the regulated 
community. We took public responsibility for that. We put a 
notice out; we correct that very early in the process. I do not 
believe that there are substantive data problems in either the 
proposal, and we certainly, though, will look at the comments 
we have received, and if TCEQ and others point out issues, we 
will look at those thoroughly and address them in the final 
rule.
    Senator Barrasso. Well, thank you for admitting that there 
was an error in that, and I know that Texas is going to go on 
to continue to address this with you, as will I.
    You have often referenced EPA's report of the benefits and 
costs of the Clean Air Act from 1990 to 2020 as justification 
for saying that today's EPA regulations will provide trillions 
in benefits. In congressional testimony before the House Energy 
and Commerce Committee on March 24th, you stated, EPA can't 
monetize all of the benefits from recent Clean Air Act 
regulations. To the extent we can, however, you said, study 
indicates that the Clean Air Act will provide $2 trillion in 
benefits in 2020, over $30 in benefits for every dollar spent.
    The EPA relies upon their own cost-benefit analysis of the 
Clean Air Act when they cite this up to $2 trillion in annual 
economic benefits by 2020. Are you saying that in the absence 
of air quality regulations, that gross domestic product in 2020 
would then only be $18 trillion because of the $2 trillion that 
you are taking under account?
    Ms. McCarthy. Actually, EPA doesn't believe that gross 
domestic product is an appropriate measure of the economic 
success of the rules that we are doing and the cost-benefits. 
The only thing I would tell you, Senator, is that the study 
that I was quoting on cost effectiveness of our rules and the 
kind of benefits we bring to the American public versus cost 
was actually a study that was first envisioned by the 
legislature.
    It was heavily peer-reviewed by a body that the legislature 
asked us to create that has expert panels. It went through 
rigorous peer review process. So when you say it was an EPA 
cost-benefit study, everything that underpinned that rule went 
through scientific rigorous review by professionals in the 
field and it is done in accordance with the best economic 
practices. So while we filled the data in, it was done 
absolutely with everybody's view and peer review, and we 
believe it is one of the most credible analytical reports that 
you will see today in terms of the cost-benefits of any 
rulemaking.
    Senator Barrasso. Clearly, the Country is very concerned 
about the economy, 9.1 percent unemployment, getting that under 
control, getting people back to work, and we need to understand 
the true costs and benefits of the regulations coming out of 
your agency, but other agencies as well. So could you please 
explain why the total benefits in EPA's study are based on 
public surveys of how much people are willing to pay to avoid 
slightly greater health risks and not more focused on economic 
considerations such as the GDP and employment, which I think is 
key to getting people back to work?
    Ms. McCarthy. I think that the idea of using GDP as a 
measure of economic success is fine in the economic world, but 
we actually put a value on human life. There needs to be people 
out there working in jobs, getting to their jobs, sending their 
kids to school. What we have done in the IRAs, in the analysis 
of the Mercury and Air Toxics Rule is done a specific cost-
benefit analysis that is not based on a survey or projections 
of what someone might want to pay, but actual economic analysis 
of the costs and benefits associated with this rule; and when 
we do that we see costs of $10.9 billion in 2015, as opposed to 
benefits of $59 billion to $140 billion. That is a credible 
cost-benefit analysis.
    Senator Barrasso. Mr. Chair, my time has expired. I have 
some additional questions that perhaps I could submit those for 
the record and get a written response.
    Senator Carper. OK. Sounds great.
    Senator Barrasso. Thank you, Mr. Chairman.
    Senator Carper. Thanks so much.
    I think that's it. Senator Merkley, anything else?
    Senator Merkley. Thank you, Mr. Chair. Since I used only 
about 30 seconds of my time, I would like to do one followup 
here, which is just to observe that recently a bipartisan 
delegation of Senators took a trip to China, 10 of us led by 
the majority leader, and what I was tremendously struck by was 
that virtually every conversation we had with a diplomat had 
some element of the health impact of the air in China on his or 
her family. We had one diplomat talking about the fact that----
    Senator Carper. Chinese diplomats?
    Senator Merkley. American diplomats.
    Senator Carper. OK.
    Senator Merkley. American diplomats saying that they could 
only keep their family in the country for 2 years because of 
the advice of their physicians about the impact on the long-
term health of their family. We had another diplomat saying 
that the children were all affected by China cough, which 
apparently is the term now used by the persistent cough, as if 
you were a smoker.
    And it took me by back, in a way, to being in Southern 
California, in LA, before the full impact to clean up the air 
in LA, where your eyes stung and your lungs were irritated, and 
I just want to say that I think Americans understand that there 
is just an enormous value to our quality of life to take 
pollutants out of the air, and thus the widespread support for 
clean air. It does have value and we appreciate having an 
agency that is recognizing that the environment and the economy 
are not at war together; they can be in partnership to make a 
better America for all.
    Senator Carper. Thanks for that statement.
    Ms. McCarthy, you are now excused. Thank you so much. Our 
colleagues have 2 weeks to ask some additional questions, and 
if someone does I would just ask that you respond promptly. 
But, again, we appreciate your presence, your testimony, your 
responses, and your service. We look forward to seeing you 
soon. Thank you.
    Ms. McCarthy. Thank you.
    Senator Carper. As our next panel comes to the witness 
table, I would observe I think we know, we realize we need 
electricity in this Country. Quality of life, if we didn't have 
it, frankly, it wouldn't be very good. And we generate 
electricity from a lot of different sources. Close to 50 
percent of our electricity comes from coal, another 20 percent 
comes from nuclear. I would like to personally see that go up a 
little bit. We generate a fair amount of electricity from 
natural gas-fired power plants and I think we are going to see 
that continue to rise. Some comes from hydro. My hope is we 
will be generating some electricity off the East Coast here, 
including off Rehoboth Beach in a couple of years, about 12 
miles out. But we all realize that we need electricity.
    We also need to be fair in the way that we generate that 
electricity, so that States that are generating electricity for 
their own use, for their own people, for their own businesses 
don't disadvantage other States that happen to be downwind from 
them. And that is what we are trying to get out and trying to 
do it in a way that is cost-effective and uses some common 
sense.
    Someone who is pretty good at using common sense is our 
lead off witness here, and his name is Collin O'Mara. He has 
been our Secretary of Natural Resources and Environmental 
Protection for the State of Delaware, starting, I think, he was 
nominated by Jack Markell, Governor, when Jack was, I think, 
about 29 years old. I kid with him back home; if I had half his 
energy, I would be both president and vice president. This guy 
is a dynamo and just a great server to the people of Delaware. 
He is also currently the Chairman of the Ozone Transport 
Commission and is instrumental in making Delaware a leader in 
the global clean energy economy.
    We have Bryan Shaw. Bryan has been introduced also by John 
Cornyn, but he is the Chairman of the Texas Commission on 
Environmental Quality. Welcome, sir. Very nice to see you, Dr. 
Shaw.
    Sue Tierney, Managing Principal of the Analysis Group, 
Incorporated. Ms. Tierney, great to see you. Thank you for 
coming.
    Barbara Walz, who is the Senior Vice President for Policy 
and Environment, Tri-State Generation and Transmission 
Incorporated. Welcome.
    And Mr. David Carpenter, who is the Director of the 
Institute of Health and Environment at the State University of 
New York at Albany.
    Our oldest son, Christopher, is going to go to work for a 
company that actually makes, part of their business model is to 
take the concept of the cleanest, most affordable form of 
energy is the energy we never use, a company called Honeywell. 
Actually, a big part of their business model is based on that 
and our son is going to be going to work next Monday, a week 
from Monday in that part of the business and is going to be 
living and working out of Albany, so you will have a new 
neighbor there, a new Carper to join the Carpenters. Welcome, 
Dr. Carpenter.
    Secretary, I want to welcome you and thank you for your 
time. Your testimony will be made part of the record and we 
will ask you to use about 5 minutes to do that. I understand 
you are under the gun to get to your next engagement back in 
Delaware, so we will try to be mindful of your time. Please 
proceed.

STATEMENT OF COLLIN P. O'MARA, SECRETARY, DEPARTMENT OF NATURAL 
 RESOURCES AND ENVIRONMENTAL CONTROL FOR THE STATE OF DELAWARE

    Mr. O'Mara. Chairman Carper, Ranking Member Barrasso, thank 
you very much for the opportunity to be with you today. Before 
I testify to the broader transport challenges, I would first 
like to address the Utilities Toxics Rule just briefly.
    We believe the toxics rule proposed by EPA on May 3d to set 
emissions standards for hazardous air pollution from coal and 
oil electrical utility steam generating units will produce 
significant and cost-effective public health benefits. We also 
believe this is well overdue. The proposed emission standard is 
much superior to the existing CAMR trading approach.
    Since 2009, Delaware has actually already required that 
every coal-fired unit in the State, you control its mercury 
emissions by at least 90 percent. We develop our standards in 
consultation with industry. Our experience has demonstrates 
that controlling toxic metals like mercury on a unit-by-unit 
basis is both cost-effective and technologically feasible. 
While there are several coal units in Delaware that are 
scheduled for shutdown, existing units ranging from 90 
megawatts to 400 megawatts in size were all able to achieve 
these reductions in a cost-effective and timely manner. We 
adopted this approach because we do not believe it is proper to 
allow emissions trading or averaging of neurotoxins when cost-
effective and site-specific reductions are possible.
    A strong complimentary Transport Rule would make the 
incremental lift necessary to meet the goals and requirements 
of the Toxics Rule much smaller. For example, acid gas 
emissions are eliminated with any level of scrubbing technology 
for sulfur dioxide, so we can actually achieve multi-pollutant 
reductions at the same time if we do these policies in tandem.
    Regarding the Transport Rule itself, as Senator Carper said 
earlier, Delaware's air quality challenge is caused by both 
local emissions and emissions from upwind sources. In Delaware, 
as much as 90 percent, that is 90 percent of our non-attainment 
problem comes from out-of-State sources; and, as a result, we 
face significant public health consequences, including higher 
than average rates of respiratory illness, lung disease, and 
asthma.
    Primarily due to this pollution transported into our State, 
all of Delaware is currently designated as non-attainment, or 
out of compliance with the 8-hour ozone National Ambient Air 
Quality Standards, the NAAQS. Our most populace county, New 
Castle County, up north, is designated non-attainment for 
particulate matter as well.
    Up to now, Delaware has been able to offset the inadequate 
mitigation of transport by requiring additional control of its 
local sources above and beyond most States. Delaware has 
adopted numerous measures to meet the legal requirements of the 
Clean Air Act, including multi-pollutant regulations, 
transportation conformity, multiple rounds of control 
technology reviews, plus a myriad of other regional measures 
like paint regulations, gas cans, and other consumer products. 
And these have resulted in significant mitigation of Delaware's 
local emissions and improvements in air quality.
    However, as we put together our plans to meet the new 75 
parts per billions or lower standards, there are virtually no 
cost-effective pollution reduction options remaining for the 
State. In fact, our modeling shows, as you said earlier, that 
we could eliminate all stationary sources in the State of 
Delaware and still not achieve attainment under the likely new 
standard.
    For this reason, it is absolutely imperative that we find 
ways to reduce pollution from upwind sources that continue to 
impair air quality in Delaware and much of the ozone transport 
region. While ozone transport regions, as Senator Cardin said, 
of adopting most of the stringent and costly standards in the 
Nation and significantly reduced emissions, highly cost-
effective emission reductions in upwind States continue to be 
possible even after the implementation of some reductions 
through the NOx and CAIR. Delaware and other downwind States 
have been a force to adopt more costly control measures to a 
large extent because of the Federal failure to fully mitigate 
transport.
    This inequity in regulatory requirements has significant 
consequences and has contributed to relatively higher regional 
energy costs for OTR States compared to our counterparts, while 
EGUs and upwind States remain able to offer lower cost 
electricity which is generated by virtually unregulated units. 
This imbalance allows the upwind States to enjoy a competitive 
advantage for economic development while the downwind States 
are suffering more and more every day. This is particularly 
true in the recruitment and retention of manufacturing firms, 
which are heavily dependent on energy pricing. The downwind 
States are forced to deal with the consequences, both 
economically and environmentally, of irresponsible activities 
upwind.
    In addition, these new upwind industries themselves are 
actually contributing to the problem even more because they are 
subject to less stringent standards, which means more direct 
and indirect emissions will then come our way. This is a double 
whammy, so to speak, for the OTR States because they face both 
a competitive disadvantage economically from the increased 
energy costs in our States compared to the other States, as 
well as greater public health costs and environmental costs due 
to the lack of regulatory equity. We must address this growing 
inequity through this new Transport Rule; it is a matter of 
fundamental fairness.
    For Delaware to have any chance of shedding its status as 
the tailpipe of the Nation and reducing local pollution levels 
to comply with the new NAAQS, as required by the Clean Air Act 
legally, we will need a strong Federal commitment to achieving 
significant reductions through a much more comprehensive and 
timely approach than any of the rules that have been proposed 
or adopted to date. This is a regional challenge and, as such, 
requires a truly regional solution. We propose a handful of 
steps that will significantly improve air quality, and we would 
be happy to discuss those during the question session.
    I thank you for this opportunity to testify before you. I 
thank you, Senator Carper, for your incredible leadership on 
air quality issues and look forward to working with you to make 
sure to make sure that all Delawareans can breathe deeply and 
have good public health outcomes. Thank you, sir.
    [The prepared statement of Mr. O'Mara follows:]
    
  [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
  
    
    Senator Carper. Thanks so much for your leadership. It is 
great to be your partner. Thank you.
    Dr. Shaw, welcome. We are delighted to see you. What part 
of Texas are you from?
    Mr. Shaw. I live in Austin at this time. I grew up in West 
Texas, though.

STATEMENT OF CHAIRMAN BRYAN W. SHAW, PH.D., TEXAS COMMISSION ON 
                     ENVIRONMENTAL QUALITY

    Mr. Shaw. Thank you, Chairman Carper and Ranking Member 
Barrasso. I think he stepped out, but thank you for the 
opportunity to address this Committee and to address not only 
what are some very important issues from the standpoint of the 
particular actions in place today that we are discussing, but 
also to shine some light on a larger issue of some issues or 
some actions that EPA has taken that have been focused largely 
on Texas, but have implications broadly.
    EPA has tended to move away from following clearly the 
direction that the Federal Clean Air Act and direction from 
Congress would require in making certain that the relationship 
between State and Federal Government, that is, the State 
regulatory agencies and the Federal EPA, follows what is 
envisioned by the Clean Air Act and also to adhere to the 
directives that this Congress has directed through the Clean 
Air Act, the Clean Water Act, and others. And specifically I 
want to address what has happened with regard to the Clean Air 
Transport Rule and looking at the issues there.
    One, I want to say that my State, fortunately, is not one 
that contributes to those challenges in the northeast. We 
certainly do, and I certainly do support the fact that the 
Clean Air Act requires States to address through the rulemaking 
process to address interState transport, and that failing 
States' ability to avoid impact on those non-attainment areas 
outside of their State, that it would be appropriate for this 
action to take place through the action such as the Clean Air 
Transport Rule.
    However, the problems that I want to discuss largely today 
discuss with the errors in the methodology that was used, the 
errors in the data that were used to come to the conclusions, 
and the unintended impacts that these will foretell.
    I started talking about some of the EPA actions and their 
impact on Texas. I want to briefly discuss that in light of 
what happened with the Flexible Permit Program in Texas. EPA 
has denied that permitting program after about 13 years of 
existence, and in that process EPA failed to follow the Clean 
Air Act requirements and, in fact, they were forced by a 
lawsuit to make a decision. They are supposed to make decisions 
within 18 months of a SIP approval or SIP submittal, and did 
not do that until 13 years later, when forced to do so. And in 
their Clean Air Federal Register notice having to designate why 
the Flexible Permit Program failed to meet Federal 
requirements, they were forced to address what those 
deficiencies were. We followed up and addressed and expressed 
that those deficiencies were unfounded.
    We also agreed to an expedited rulemaking process to 
clarify and ensure that not only did we meet those 
requirements, but that we would continue to meet them going 
forward; and, unfortunately, EPA changed their view of the 
relationship between State and Federal Government and indicated 
that they were not interested in pursuing that further, that 
even though they no longer were arguing verbally that it didn't 
meet Federal requirements, they then generated another 
requirement that they failed to provide notice for and, more 
importantly, indicated that they don't like or don't want the 
Flexible Permit Program going forward, which I think signaled a 
dramatic change in the State-Federal relations, which impacts 
these other regulations as well.
    We have seen similar failure to allow meaningful public 
input through the greenhouse gas tailoring rule, whereby EPA 
unilaterally changed the definition in the tailoring rule such 
that States no longer had the opportunity to address their 
State implementation plans for greenhouse gases, but, instead, 
EPA dictated that greenhouse gases would be regulated January 
2011.
    With regard to how that applies to the Clean Air Transport 
Rule and the MACT Standards, EPA has again avoided public 
participation, meaningful public participation, and I think the 
key there is the definition. While EPA asserts that they did 
indeed ask for comment on inclusion of Texas a Group 2 State, 
having failed to include information about the adequacy of SO2 
budgets, the new unit set-asides, and the variability limits, 
those key components to what a regulation would mean, brings 
into serious question how meaningful that input was, on top of 
the fact that there were several errors associated with the 
data collection and the analysis that suggests that there are 
other potential errors and that the benefits and requirements 
they highlight are unlikely to occur.
    Not only do they have that, but if you do look at the data 
they have, EPA's own data suggests and indicate that Texas 
would not have an impact from PM 2.5 because of the existing 
levels of emissions. In fact, only if you follow through with 
their scenario of what could and might happen if the cost of 
high sulfur coal decreases and low sulfur coal increases, and 
Texas somehow able to change the infrastructure necessary, go 
through the rigorous permitting process, which is very 
demanding and a great daunting task, that somehow we might 
increase our SO2 emissions. There were other discussions 
earlier that there are emissions reductions that are in place 
that EPA failed to take into account. So there is great concern 
that not only are those benefits not there, but that the data 
to lead to those conclusions were wrong and based on a faulty 
scenario.
    As you look at the EPA's efforts to include the ozone 
deployment of the Clean Air Transport Rule as well, the only 
State that is tied to Texas is New Orleans, Baton Rouge, 
Louisiana, and the data shows that Texas does not exceed the 
levels--I will finish up, sir--and also that area is no longer 
non-attainment. So it appears that there is no justification 
for continuing inclusion of Texas in either the PM2.5 or ozone 
portion of the Clean Air Transport Rule.
    And I am happy to answer questions if time permits.
    [The prepared statement of Mr. Shaw follows:]
    
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    Senator Carper. Thanks so much, Dr. Shaw.
    Ms. Tierney, please proceed.

 STATEMENT OF SUE TIERNEY, MANAGING PRINCIPAL, ANALYSIS GROUP, 
                              INC.

    Ms. Tierney. Thank you, Chairman Carper and Ranking Member 
Barrasso. Thank you very much for this opportunity to come and 
speak to you. I have looked at these issues for 20 years, 
during which time I was both a utility commissioner in 
Massachusetts, a regulator, and Secretary for the Environment, 
and was an original member of the Ozone Transport Commission.
    I thought I would look at the question of whether or not 
these regulations relating to mercury, air toxics, and sulfur 
dioxide and nitrogen oxide are achievable so that Americans can 
have both clean air and public health issues, as well as 
reliable electricity supplies. And I think very strongly the 
answer is yes. Six reasons I want to give you today, and they 
are amplified in my written testimony.
    One, the industry has a tremendously successful track 
record in its mission of providing reliable supply. There are 
no circumstances under which there is a situation where the 
utilities have allowed a shutdown of a plant for a reason, 
including clean air, where there were going to be reliability 
considerations.
    No. 2, the regulations, as we have heard today, are not a 
surprise; they have been in the works for many, many years, and 
the technologies that are available in the marketplace are 
achievable, they are feasible, and many utilities and electric 
companies have considerable options in what to put in place to 
comply.
    No. 3, many plants are ready to respond. As we have heard, 
many States have already moved forward on strict mercury 
regulations. There are court orders in place that bring about 
the kinds of changes we are likely to see. We have already 
talked this morning about the regulations that have affected 
American Electric Power. But, additionally, the CEOs of many of 
the largest coal-owning fleets indicate that they are ready to 
comply with these rules, and those include Excel, Duke, Florida 
Power & Light, Wisconsin Energy, Edison, PP&L, NRG, and TVA, 
one of the Nation's largest owners of coal plants.
    Additionally, the low gas prices that we are enjoying in 
the United States have not only lowered prices of electricity 
for American consumers in the last few years, but they are 
putting pressure on coal plants to retire. We have heard this 
morning about the number of older, inefficient, and 
uncontrolled units that operate very rarely, and those are 
likely to move to retirement.
    No. 4, the studies. There have been so many studies in the 
last year on whether or not this set of regulations are 
achievable by the industry. Many of those studies were 
performed prior to the time when EPA had actually issued its 
proposed regulations. Now that we see that there is more 
flexibility, the range of pessimistic estimates of retirements 
are too large. The more reasonable ones indicate that these are 
manageable impacts.
    No. 5, industry and its regulators have a very robust set 
of tools to respond. The system planning organizations, the 
grid operators, the transmission organizations do plans. States 
require utilities in many parts of the Country to do integrated 
resource plans. The wholesale markets in a third of the Country 
are very vibrant. We are seeing plants under construction 
totaling 42 gigawatts as of today. We are seeing plants in 
advanced states of development and permitting, almost 30 
gigawatts on top of that.
    So there is a very strong, vibrant marketplace. States are 
getting prepared. One can avoid some of the costs, as you just 
said, Mr. Chairman, through energy efficiency, and many of the 
States with the lowest prices for electricity and heavy 
reliance on coal actually have the largest opportunity for 
energy efficiency and saving customer bills.
    Finally, there is very clear market evidence that this is 
doable. I already mentioned that CEOs have been reporting to 
investments, according to SEC rules that require them to 
comment truthfully on their ability to comply. AEP and Duke, 
which are part of the PJM interconnection system in the Midwest 
and Mid-Atlantic area, have indicated that by 2014 and 2015, 
when the rules go into effect, they will be ready. And the PJM 
auction for making sure that they have enough power supply in 
that time period in the future came forward with many more 
offers for both energy efficiency, demand response, and new 
generation that would enable the region to comply adequately.
    So I want to say with confidence that these regulations are 
doable and Americans don't have to choose between clean air and 
public health on the one hand and affordable electricity and 
reliable electricity on the other. Thank you.
    [The prepared statement of Ms. Tierney follows:]
    
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    Senator Carper. That was exactly, exactly 5 minutes. 
Normally, when witnesses do that well, we give them an extra 15 
minutes to talk about anything they want.
    [Laughter.]
    Senator Carper. Since lunch is bearing down on us, we will 
forgo. That was great.
    Barbara Walz, welcome. Good to see you. Thank you for 
joining us.

  STATEMENT OF BARBARA WALZ, SENIOR VICE PRESIDENT POLICY AND 
     ENVIRONMENTAL, TRI-STATE GENERATION AND TRANSMISSION 
                       ASSOCIATION, INC.

    Ms. Walz. Thank you. Chairman Carper, Ranking Member 
Barrasso, it is good to be here with you today, and it is 
particularly good to be here with you, Senator Barrasso, as you 
have been a great friend to the co-op world.
    My name is Barbara Walz, and I am Tri-State Generation and 
Transmission Association's Senior Vice President for Policy and 
Environmental. I hold a bachelor's degree in chemical 
engineering and a master's in environmental management.
    Tri-State is a not-for-profit member owned rural electric 
cooperative based in Colorado. Tri-State is committed to 
maintain high environmental standards while providing reliable 
cost-based wholesale electricity to our 44 not-for-profit 
member systems that serve 1.5 million rural customers in 
Wyoming, Nebraska, New Mexico, and Colorado.
    To meet our member energy needs, Tri-State generates or 
purchases power produced by hydropower, solar, wind, coal, and 
natural gas sources. We recently integrated 50 megawatts of 
wind and 30 megawatts of solar into our generation mix. 
Renewables now constitute about 16 percent of our generation 
needs. The bulk of our power comes from coal-based power plants 
in Wyoming, Colorado, Arizona, and New Mexico. These plants are 
an important part of the rural communities in which they 
reside. For example, the Craig Plant in Colorado and the coal 
mines that supply it employ 750 people near a town of 10,000 
and provides $73 million in wages. The plant is also an 
important tax base to Moffat County, paying $9 million in taxes 
each year.
    Tri-State's generating facilities all have state-of-the-art 
emission controls. These plants were primarily built from 1978 
through 1983 and were equipped with controls well before the 
1990 Clean Air Act came into place. We have scrubbers on our 
facilities that remove more than 90 percent of the sulfur 
dioxide and bag houses that remove up to 99 percent of the 
particulate matter. These controls also result in a co-benefit 
mercury emission reduction ranging from 65 to 95 percent.
    Even with all of these advanced environmental controls, 
Tri-State cannot meet the proposed Utility MACT emission 
limits. Significant additional controls will be required and 
will result in higher electricity costs for our co-op 
consumers. In addition, the Utility MACT emission limits for 
new units are set at such low levels that it will be impossible 
to construct and operate new coal facilities, even with the 
most technologically advanced controls.
    Tri-State currently operates in compliance with mercury 
regulations in Colorado and New Mexico. These regulations were 
negotiated in good faith with State agencies and environmental 
groups.
    In the Clean Air Act amendments of 1990, Congress treated 
electricities different than other industries. The law required 
EPA to conduct a study of the hazards to public health that 
were reasonably anticipated to occur as a result of emissions. 
The study was completed in 1998 and found that mercury 
emissions were of greatest concern. Given this determination, 
Tri-State believes that EPA's authority is limited to regulate 
only mercury at this time.
    Particulate matter is already regulated through the 
National Ambient Air Quality Standards. Added particulate 
matter standards included in the MACT will require Tri-State to 
install additional controls at a cost of hundreds of millions 
of dollars. These costs will be passed on to our rural electric 
co-op consumers. Particulate matter should not be regulated 
under this MACT rule.
    The EPA cost-benefit analysis found that 90 percent of the 
benefits of the rule are based on the reduction of particulate 
matter. If this rule is finalized as proposed, it will be 
nearly impossible to meet the time lines for installation of 
controls by 2014. Utilities need time to design, permit, and 
construct retrofit control equipment. There are a limited 
number of qualified vendors who have limited skilled labor to 
take on these technical projects. And because rural electric 
cooperatives are small business, when the deadlines come, co-
ops are not going to be able to get the qualified labor needed 
to get the job done because vendors will be bidding on the 
bigger jobs of our friends in the investor-owned utility 
community.
    Tri-State supports and is committed to good environmental 
regulations, including full implementation of the 1990 Clean 
Air Act, but we firmly believe that the Utility MACT Rule goes 
beyond EPA authority and over-regulates coal plants. What 
Assistant Administrator McCarthy is saying utilities need to do 
Tri-State did 30 years ago, and we have those controls in place 
today and they still do not meet the Utility MACT Standard.
    Thank you for inviting me to testify here today, and I 
would be happy to take any questions.
    [The prepared statement of Ms. Walz follows:]
 
 
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    Senator Carper. Thanks, Ms. Walz. Thanks so much.
    Dr. Carpenter, welcome. Please proceed.

STATEMENT OF DAVID O. CARPENTER, M.D., DIRECTOR, INSTITUTE FOR 
          HEALTH AND ENVIRONMENT, UNIVERSITY OF ALBANY

    Dr. Carpenter. Senators Carper and Barrasso, I thank you 
for the opportunity to testify before this Subcommittee on 
clean air and nuclear safety. I am a public health physician 
and the former Dean of the School of Public Health at the 
University at Albany, and, as you know, public health is that 
part of the medical profession that is concerned with 
prevention, rather than treatment, of disease. I strongly 
support the new regulations and changes in the Clean Air 
InterState Rule and Clean Air Mercury Rule. These changes, once 
implemented, will significantly reduce morbidity and mortality 
of U.S. citizens, especially those living downwind of coal-
fired power plants.
    There is overwhelming scientific evidence that exposure to 
current levels of major air pollutants causes serious disease 
and death of thousands of Americans. The risk of sudden death 
due to respiratory or cardiovascular failure is dramatically 
elevated in older persons on days when concentrations of these 
pollutants are elevated.
    Air pollutants cause asthma attacks both in children and 
adults, and increase the risk of respiratory infections. 
Particulate air pollution contains cancer-causing polyaeromatic 
hydrocarbons and metals such as arsenic, chromium, and nickel 
that are known human carcinogens. Consequently, chronic 
exposure to particulate air pollution increases the risk of 
lung and other cancers.
    The detailed scientific evidence for these statements is 
contained in my written testimony.
    Let me tell you of studies that I and my colleagues have 
recently completed. In New York, we have an excellent data base 
that reports to the State Health Department all of the diseases 
diagnosed in patients when they are discharged from the 
hospital. We have this information on hospitalization for about 
2.5 million New Yorkers each year from 1993 to 2008, with 
information on age, sex, race, and zip code of residence.
    We have compared rates of hospitalization for various 
respiratory diseases in New Yorkers who live in a zip code that 
contains a fossil fuel-fired power plant, not just coal, as 
compared to those that live in a zip code that does not contain 
such a power plant. We find that living in a zip code that 
contains a power plant is associated with 11 percent greater 
frequency of hospitalization for asthma, a 15 percent greater 
rate of hospitalization for respiratory infection such as 
pneumonia, and a 17 percent greater rate of hospitalization for 
chronic obstructive pulmonary disease.
    These increases rates reflect only the contribution of 
power plants, not the total air pollution contribution, 
because, unlike emissions from motor vehicles, power plants are 
stationary. In addition, these data do not reflect illnesses 
that do not lead to hospitalization, nor the transport of 
contaminants into Connecticut, Massachusetts, and Vermont.
    Implementation of these changed rules will also 
significantly reduce releases of metals that are known to be 
carcinogenic and of mercury, a very dangerous metal that is 
converted into methylmercury in bodies of water. Methylmercury 
bio accumulates in fish and, as a consequence, many fish from 
inland lakes and streams, as well as the oceans, are now unsafe 
to eat, especially by children and women of reproductive age. 
Methylmercury, like lead, is a neurotoxicant. The National 
Academy of Sciences concluded in 2000 that methylmercury causes 
irreversible reduction of IQ in children exposed before birth 
to the methylmercury in their mother's body.
    Further results indicate that between 8 and 10 percent of 
U.S. women of reproductive age contain levels of methylmercury 
in their body as a result of eating fish that poses harm to 
their unborn child. The majority of this mercury comes from 
releases from coal-fired power plants, and these releases make 
fish, an otherwise healthy food, unsafe to eat.
    Coal-fired power plants produce more hazardous air 
pollution in the United States than any other industrial 
source. The Clean Air Act requires control of hazardous air 
pollutants from coal-fired power plants, but absent these new 
rules no national standards exist to limit these pollutants 
from these plants. In the U.S. there are more than 400 coal-
fired power plants located in 46 States across the Country, and 
they release in excess of 386,000 tons of hazardous air 
pollutants into the atmosphere each year. Hazardous air 
pollutants are known to cause sudden death from cardiovascular 
and respiratory disease and also cause cancer.
    It is the responsibility of all of us to protect the health 
of the public, and especially the health of the unborn and of 
children. Implementation of these rules, which reduce air 
pollutants coming from power plants will help significantly to 
reduce the burden of disease and the death of the public.
    Thank you very much for the opportunity to testify.
    [The prepared statement of Dr. Carpenter follows:]
    
    
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    Senator Carper. You were right on the money too.
    Senator Barrasso, we don't see this every day.
    Senator Barrasso. No, we don't.
    Senator Carper. It is pretty impressive.
    Secretary, I was mentioning to Senator Barrasso today is 
also June 13th, the last legislative day, the last day of the 
Fiscal Year for a bunch of States. In Dover, Delaware, this is 
really a big day for Governors and secretaries of the Natural 
Resource and Environmental Control. The legislature convenes at 
2 this afternoon and I know there is a Governor back there who 
would like to have his Secretary by his side, so I am going to 
ask a question or two of Secretary O'Mara, and I said to 
Senator Barrasso if he has any questions to ask of you, to feel 
free. I think he is not going to, but at that point in time you 
would be excused to return in your personal helicopter. No, not 
really. We wish. They used to say to me when I was Governor, do 
you have your plane? I said, no, we have a glider in Delaware. 
All we need.
    [Laughter.]
    Senator Carper. Secretary, a couple of questions, if I 
could, then you will be excused. Do I understand you and Dr. 
Shaw are contemporaries from your respective States? Is that 
pretty much it?
    Mr. O'Mara. Absolutely.
    Senator Carper. Have you all met before?
    Mr. O'Mara. No, not before.
    Senator Carper. Well, good. Secretary O'Mara, before you 
go, would you just comment on some of Dr. Shaw's concerns with 
EPA's rulemaking process that he has expressed?
    Mr. O'Mara. I think one of the challenges that we do face 
is that, as you said in your opening remarks, that pollution 
doesn't really know State boundaries. So we need to have good 
science driving and look at what the attainment area should be. 
I obviously can't speak to the mechanics of what was noticed 
and what wasn't and the specifics, but I do think that adopting 
a regional approach to address a regional problem is absolutely 
critical, and having the science drive that.
    One of the things that I didn't mention in my comments was 
having broader non-attainment areas make a lot of sense and 
just making sure that those boundaries are broad enough to 
actually be able to resolve the challenge. So while I can't 
speak to some of the mechanics of the administrative process, I 
generally agree that we need to make sure that we are looking 
beyond our State borders for reductions that improve the 
quality of life for folks in every individual State.
    Senator Carper. All right. Another question for you, if I 
could. Two of the witnesses on this panel believe that the 
emissions standards for the Transport Rule and the Air Toxics 
Rule are too tight and said it would need more time. Could you 
just take maybe a minute or two to highlight your experiences 
with our own regulations in Delaware and how companies have 
been able to respond to tighter emission standards?
    Mr. O'Mara. In many ways Delaware is a great example of a 
real test case, rather than a theoretical model or some kind of 
abstract hypothesis because, like many other States, to achieve 
our air quality attainment plan, our SIP goals, we really 
needed to do everything we possibly could to reduce emissions 
in State. So we have had a very strong mercury rule in place 
for several years, and companies in our State found they were 
able to, through a fairly cost-effective carbon injection 
technology, go from 70, 80, 90 percent emission reductions for 
mercury.
    Senator Carper. Does that kind of thing cost hundreds of 
millions of dollars to have that kind of technology?
    Mr. O'Mara. It is in the millions, but in the lower part.
    Senator Carper. OK, thank you.
    Mr. O'Mara. And these are investments they believe they can 
recoup very quickly in the capacity markets and other types of 
investments in the PJM grade, of which Delaware is a part.
    Senator Carper. But do they find that they had confined in 
the work force people, tradesmen and women who could actually 
do the work, or is it hard to find them?
    Mr. O'Mara. No, absolutely, because one of the--there is a 
series of improvements being made right now in the largest coal 
unit in Delaware, and under your leadership we were able to 
make that successful, about $300 million worth of improvements 
to actually put four or 500 tradesmen to work that are working 
right now that actually weren't employed otherwise because of 
other changes in the broader economy. So we found a good supply 
of skilled labor and actually the cost for implementation was a 
little lower because of that competition.
    Senator Carper. OK. Good. Thanks. One quick followup. Under 
the Clean Air Act States have few tools available to them to 
hold upwind States accountable. What if we took away these 
tools from the States and just had one standard that stood 
forever for utilities? How could that affect a State more like 
ours, or like New Jersey or Rhode Island, or some of the other 
States that are represented here, Maryland?
    Mr. O'Mara. We fundamentally agree that the work that you 
have been working on in the multi-pollutant regulation of 
having some national standards, it is critical to have a 
baseline, a floor, if you will, of consistently. At the same 
time, we do believe that the States should have some 
flexibility to go above and beyond that floor. In many cases 
there are local factors that do require and that States will 
want to address, smaller cancer causes, more localized 
problems.
    So we would love to see a national floor that had a 
rigorous base to make sure that there aren't these massive 
transport issues, while still giving the States some 
flexibility to address key issues that might be specific to 
their individual State.
    Senator Carper. OK.
    Senator Barrasso, any questions of Secretary O'Mara?
    Senator Barrasso. No. Thank you, Mr. Secretary.
    Senator Carper. Do you think he is a keeper? What do you 
think?
    Senator Barrasso. The people of Delaware are fortunate to 
have both of you.
    Senator Carper. Oh, you are nice to say that. I would say 
you are least half right, with respect to him. Thank you, 
Senator.
    OK, Secretary O'Mara, good luck. Tell the Governor I said 
good luck. Go get them.
    Mr. O'Mara. We will give everybody your best in Dover.
    Senator Carper. Please do.
    Let me yield now, if I could, to Senator Barrasso.
    Senator Barrasso. Thank you, Mr. Chairman.
    Ms. Walz, it is my understanding Tri-State owns about 24 
percent in Basin Electric, which in turn owns the Laramie River 
Station Power Plant, and it is the largest employer in the 
Wheatland area, about 300 well paid people, great benefits, 
good salaries, good jobs, and the taxes paid to the county, to 
Platte County, are over half of the county's budget.
    What happens to a town, Wheatland, a county like Platte 
County, and it is not just them, hundreds of communities around 
the Country, if a power plant has to close because of a 
combination of EPA regulations? What happens to kids? What 
happens to the seniors in the small towns in terms of the 
school district, emergency services, police, fire services? 
What are the impacts when EPA regulations force the closure of 
a power plant?
    Ms. Walz. Senator, in my opinion, I will use the example of 
Laramie River Station. It is a very critical aspect for the 
town of Wheatland. It employs a large number of people with 
good paying jobs, good benefits, takes care of family, keeps 
produces and services flowing in the community. Basically, I 
think if the power plant there had to close, it would be 
devastating to that community. I would say significant people 
would have to move either out of the area, out of the State, 
and find other opportunities because it is a critical key 
aspect to the town of Wheatland, and similar to other rural 
communities where we have power plant locations.
    Senator Barrasso. In your written testimony you stated 
that, ``Because we are a not-for-profit cooperative that is 
ultimately owned by our consumers, these new compliance costs 
are going to be passed on directly to cooperative member owners 
in the form of higher rates.'' Please describe for me and for 
the Committee how the cooperative member, who they are? Are 
they wealthy CEOs? Are we talking about Wall Street financiers? 
And will the folks at home feel the impact of higher costs?
    Ms. Walz. Yes, Senator. A cooperative is an electric 
utility owned by the residents in the communities. You have to 
be in a rural area to be considered a rural electric 
cooperative. So essentially the people that get the end-use 
electricity are farmers, ranchers, small businessmen in the 
small towns. Basically, in the event, again, rates were 
increased because of costs associated with these controls, all 
of those costs are passed on directly to those end-use 
customers. It is different than investor-owned, where you have 
shareholders and others to absorb the costs.
    Additionally, they are absorbing more costs. An example I 
can give you for that is if you look at one mile of 
transmission line and you look at a cooperative across the 
Country, basically you have five consumers per one mile of 
transmission line. In Wyoming, it is actually 2.8 consumers, so 
even less population there.
    Where you have an investor-owned utility, you have about 37 
people that are served by one mile. That one mile of 
transmission line still has the same costs associated with it 
not only for capital investment, for operation and maintenance; 
and that is just the transmission line side. If you look at the 
generation stations and the cost of additional controls 
associated with that and you invest $100 million into a 
community where you only serving a much, much smaller 
population than like a Chicago or even a Denver, obviously the 
costs are more significant for those rural folks; they have a 
larger share, if that makes sense.
    Senator Barrasso. Do you feel the EPA really understands 
how rural co-ops operate, how they work, compared to company-
owned?
    Ms. Walz. It has been my experience that we routinely have 
to explain the differences on both the Federal and State level, 
that I do not think they understand fundamentally the 
differences.
    Senator Barrasso. Dr. Shaw, in your testimony you said we 
question whether it is appropriate for EPA to establish energy 
policy for the Country. Could you elaborate a little bit 
further on this point and where this issue could be handled 
better?
    Mr. Shaw. Sure. Clearly, the Clean Air Act gives certain 
authority to EPA, and specifically their intent is to derive 
the standards and programs to address those environmental 
issues. It appears in this rulemaking that EPA is more intent 
on changing what the energy fuel makeup of the Nation is 
through a misapplication, if you will, of the section of the 
Clean Air Act that they are using to justify this. A great deal 
of the concerns I have are exactly with that. EPA doesn't seem 
to be addressing those requirements for justifying the health-
based concerns associated with the emissions; instead, it is 
looking at more trying to assert a different policy using this 
as a tool.
    Senator Barrasso. Thank you.
    Thank you, Mr. Chairman.
    Senator Carper. You are welcome.
    Two last questions, then I am all done.
    Dr. Carpenter, if I could ask a question of you. In 
Chairman Shaw's testimony he questions the scientific knowledge 
that we have on health effects of mercury exposure. However, in 
Texas alone, where I used to live, I was a naval flight officer 
stationed at Corpus Christi, lived in Flour Bluff. The only guy 
I ever talked to from Texas who knew where Flour Bluff was 
George W. Bush.
    However, in Texas alone, the Lone Star State has numerous 
health advisories against eating mercury-laden fish in Texas 
waters. Could you take a minute or two to give us a little more 
detail on what we know about airborne mercury particles; how 
they can get into our fish and how mercury exposure impacts 
developing children's health? And are U.S. coal-fired power 
plants a large source of that mercury, are they a significant 
source, a small source? Finally, is the scientific data robust?
    You will hear us say from time to time we need good 
science; we need to work on good science. And when George 
Voinovich was here, he chaired this Subcommittee, he and I 
actually worked on a proposal to require somebody at a very 
high level at EPA to be like their science I won't say czar or 
czarina, but just somebody who was there to say we are using 
good science, we are just dedicated and committed to good 
science. So is the scientific data robust?
    Dr. Carpenter. Let me start with the second question you 
asked, which is what is the percentage of contribution from 
coal-fired power plants, and the best evidence--and I think the 
best evidence comes through reports of the National Academy of 
Sciences, which has done extensive reports on the issue of 
mercury--is that about 50 percent or a little more of the 
mercury in fish in U.S. waters comes from coal-fired power 
plants.
    Senator Carper. A little more than half?
    Dr. Carpenter. A little more than half.
    Senator Carper. OK.
    Dr. Carpenter. Now, mercury is a global pollutant. We get 
some mercury from China, because when coal is burned, the 
mercury goes into the air; it is the vapor phase of the 
elemental mercury and it can be transported for long distances.
    On the other hand, there is clear evidence, particularly 
studies in Florida, where mercury releases from power plants 
were dramatically decreased and mercury levels in local fish 
followed over a period of time showed a dramatic reduction.
    So while getting all the mercury out of the power plants 
isn't going to solve all of the problem--everyone would agree 
with that--it is going to solve the majority of the problem.
    Now, is the evidence robust? The evidence is overwhelming. 
Mercury causes a reduction in IQ of children born through the 
mercury in their mother's body. It has been demonstrated in 
countries around the world. Again, the National Academy of 
Sciences reports are probably the most objective critical 
reports in that regard, but there are hundreds of scientific 
publications.
    So I think it is simply not true that there is any question 
about the science, nor any question about the impact. And what 
we need here is the will to follow through and reduce the local 
mercury releases, which are the majority albeit not all of the 
problem.
    Senator Carper. All right, thanks.
    My final question would be of Ms. Tierney, if I could. We 
had a hearing, Senator Brown of Massachusetts asked us to do a 
field hearing up in Boston and we focused on an issue involving 
Federal financial management up there, and there was a 
Congressman named John Tierney who testified. I think he is 
maybe from the Third District. Are you from Massachusetts?
    Ms. Tierney. I am from Massachusetts. I am married to John 
Tierney, but not that one.
    [Laughter.]
    Senator Carper. It is a small world, isn't it? OK. Well, in 
your testimony--I wonder if the other John, Congressman John 
Tierney is married to a woman named Sue. Wouldn't that be 
something?
    Ms. Tierney. They are just all over the place.
    Senator Carper. They are. Up there they are.
    In your testimony you State that reliability should not be 
an issue with the implementation of the Transport Rule or the 
Air Toxics Rule. However, in Chairman Dr. Shaw's testimony, he 
mentions that the Electric Reliability Council of Texas 
recently came out with a report contrary to your findings, I 
believe, and I would just ask are you familiar with that report 
and could you take a shot at explaining the differences, if 
there are any, please?
    Ms. Tierney. I would be happy to. ERCOT, which is the 
Electric Reliability Council of Texas, very recently came out 
with a study, having been asked by the Public Utility 
Commission of Texas, to look at this question of whether the 
clean air rules would be adversely affecting reliability in 
Texas. The ERCOT analysts essentially ran a model of what the 
system would look like with these new regulations in place, 
with gas prices as they are today and expected to be in the 
future, and a number of other assumptions.
    The interesting results were that ERCOT did not believe 
that coal plants would likely retire as a result of these 
rules. They said that some of the oldest thermal gas-fired 
power plants might retire and, if that were the case, ERCOT had 
not really looked at the question of what would be in place to 
replace them.
    In Texas, which has one of the most vibrant markets for 
power in the Country, there is a tremendous amount of market 
interest and development of gas-fired power plants and wind 
power plants. There are many in process at the moment, and one 
of the interesting things that ERCOT discovered was that in 
order to address some of those potential retirements of gas-
fired power plants in the Houston and Dallas-Fort Worth area, 
that would enable--when those units would be replaced, that 
would avoid transmission investment that would be required 
otherwise in that area and there would actually be savings for 
Texas consumers.
    Senator Carper. All right, thank you.
    Senator Barrasso, last questions? Any closing comment, 
please.
    Senator Barrasso. Yes, thank you, Mr. Chairman, for holding 
this hearing.
    Dr. Shaw, you said throughout your testimony the EPA rules 
are not technologically feasible, that they won't work. 
Assistant Administrator McCarthy was here earlier, testified in 
the first panel, that effective technologies for controlling 
emissions--mercury, NOx, SO2--from power plants ``have been 
available for years.'' So what are you seeing that Assistant 
Administrator McCarthy isn't seeing?
    Mr. Shaw. Thank you. Certainly, while these rules have been 
talked about for some time, what we are seeing more recently is 
the advent of these controls that they are looking to putting 
into a very tight timeframe. Some of what is missed in their 
analysis is the, for example, the ERCOT study that was just 
talked about did not consider that the Clean Air Transport Rule 
would include Texas, even though EPA was taking comment on 
that, the models that they applied did not consider those 
impacts.
    So what we are looking at is, in the State of Texas, due to 
our resilient growth in both population and in job creation, 
the demand has increased such that even absent some of the 
early retirements associated with these rules, we are looking 
to not meet the increase in demand required to maintain reserve 
capacity. So I think what Ms. McCarthy is seeing is that it 
fails to look at some of the control technologies that are 
already in place and does not take full account of the costs 
associated with not only the capital investment, but also the 
operating and changes in infrastructure required for those.
    Senator Barrasso. Ms. Tierney, you work with utilities that 
seem to support the proposed EPA MACT Rule for the power 
sector, along with most of the other rules coming down the pike 
that, to me, increase the cost of doing business for coal-fired 
facilities. As I understand it, your clients don't use a 
significant amount of coal, so their own compliance 
expenditures under the rule wouldn't be very much. Those 
clients wouldn't need to stand in line for additional 
engineering resources for capital and the like. Yet, they kind 
of speak with confidence about the rule.
    There was an editorial in the Wall Street Journal back in 
December that might shed some light on some of the motivation 
of those utilities. The Journal wrote, ``Eight leading utility 
CEOs responded recently to one of our editorials with a letter 
defending the EPA, claiming that the coal retirements are 'long 
overdue' and that the regulations would 'yield important 
economic benefits.' ''
    What they didn't mention is that those benefits were mostly 
accrued to the businesses that they happen to head. The Journal 
cited actual transcripts of analyst calls with CEOs of those 
companies, notably John Rowe at Exelon, Lew Hay at NextEra. 
Essentially, they went on to say these companies say that the 
rules that are costly for their coal-fired competitors will 
cause more consumption of natural gas, thus significantly 
increasing the price that consumers can be charged for 
electricity in the markets that these two companies serve, 
without requiring either company to make any additional 
investment. It is called increasing the ``clearing price'' of 
energy.
    So do you disagree that these clients have an economic and 
a competitive motive to embrace what to me are very costly EPA 
rules and regulations?
    Ms. Tierney. I don't disagree that there will be companies 
such as those in the Clean Energy Group who have already made 
the investments and are already living in markets where they 
have a competitive disadvantage at the moment. That said, I 
also work for transmission companies, grid operators, oil 
electric co-ops, large and small energy consumers, 
environmental groups. I have a very diverse set of clients, and 
as a result of that I speak for myself in saying that all of 
the issues that I have described here today are based on 
analysis of what is going on in the industry. Among those 
things that I mentioned are the CEOs' testimony and statements 
from companies that are not among the group of companies that 
you just described who have coal units who have said that they 
are ready and well prepared to live with these new manageable 
rules.
    Senator Barrasso. Thank you.
    Thank you, Mr. Chairman.
    Senator Carper. Any closing statement? Do you want just a 
quick closing statement?
    Senator Barrasso. No. I just continue to be concerned about 
an unemployment rate, Mr. Chairman, 9.1 percent, I think we 
will get new numbers out tomorrow, and I think that has a 
significant impact on the health of people who are looking for 
jobs, trying to raise families, trying to put food on the 
table.
    And I think we can do a lot for people and for the Country 
and for the health of individuals by getting people back to 
work, and I think that has to be included in a lot of these 
discussions, and I wish that the Environmental Protection 
Agency would focus a little more on that and a little bit less 
on being fixated with eliminating any potential environmental 
risks, no matter how small and no matter how costly.
    So thank you, Mr. Chairman.
    Senator Carper. I would just close, again, thanking all of 
you for being here and for preparing to be here with us today 
and for your testimony. Just to followup on what Senator 
Barrasso has said, the States that are along the Mid-Atlantic 
and the Northeastern part of our Country who end up having to 
spend more money for our energy because others create cheap 
energy and send the pollution our way impedes our ability to 
create jobs and retain jobs.
    The fact that we may incur greater costs for health care 
because our air is dirtier because of the bad air that comes to 
us from folks that use, in some cases, old coal-fired plants to 
create electricity, that impedes our ability to maintain our 
own jobs. Several of our witnesses have said there is an equity 
question. There is really a fairness question. It really goes 
back to the Golden Rule; we ought to treat other people like we 
want to be treated, or, conversely, don't treat others the way 
you don't want to be treated. So that is at play here.
    And for us the question is how can we address this question 
of fairness or unfairness, and it is the health care costs that 
underlie it all and the economic disadvantages for some States, 
particularly in the Mid-Atlantic and the Northeast. How do we 
do that in a way that is cost-effective? How do we do that in a 
way that maybe harnesses market forces and uses good science?
    We just have to be smart enough to do that, and I think the 
two of us are. I think maybe our 98 colleagues are as well. One 
of the things, we have a lot of smart people working for us and 
we have to be able to figure this out. We tried legislatively 
for, gosh, my first 8 years in the Senate to do this 
legislatively and harness market forces.
    Ultimately, we couldn't do it. We just couldn't summon the 
political will to pass what I thought was pretty legislation, 
bipartisan legislation. And it falls on EPA to do what we were 
unable to do legislatively, and my hope is that, using good 
science and taking a lot of comments and advice from folks 
around the Country, to use that.
    At the end of the day the question is can we have cleaner 
air, can we have jobs that actually might be created from 
cleaning that air? I think we can do that. I think we can do 
that and history would show that we have been able to do that 
pretty well for some time.
    The folks, our colleagues who haven't come and had the 
privilege of hearing your statements and to ask you questions, 
they will have a couple of weeks where they can submit 
questions, and we would just ask, if you do get those 
questions, if you would promptly respond to them, we would be 
most grateful. So wherever you have come from across this great 
land of ours, thank you for making the trek. It is great to be 
with all of you. Happy Fourth of July. Thank you so much.
    With that, this hearing is adjourned.
    [Whereupon, at 12:23 p.m. the committee was adjourned.]
    [Additional material submitted for the record follows.]

          Statement of Senator James M. Inhofe, U.S. Senator 
                       from the State of Oklahoma

    Chairman Carper, thank you for holding this hearing today 
to discuss EPA's proposed Transport and Utility MACT rules. I 
would also like to thank the witnesses for being here today.
    Let me say at the outset that, when it comes to reducing 
real air pollution from power plants, the best way to 
accelerate environmental progress and institute certainty for 
businesses is through multi-pollutant legislation. And even 
though we have fallen short in recent years, it is increasingly 
clear that the Clean Air Act needs to be updated and the rules 
for electric utilities are the place to start.
    This is not something new for me. I supported 3-P 
legislation when, as Chairman of EPW, I tried to advance the 
Clear Skies bill. Because that effort eventually failed, for 
reasons I won't get into now, we received regulations under the 
Clean Air Act that the DC Circuit ultimately rejected--
something I predicted would happen. Here's what I said when the 
Bush administration's Clean Air InterState Rule was 
promulgated: ``This Clean Air InterState Rule is significantly 
more vulnerable to court challenges than legislation and will 
undoubtedly be held up. Trying to litigate the way to cleaner 
air only delays progress, often yields little or no result and 
wastes millions in taxpayer dollars.''
    So here we sit, debating EPA's replacement regulations that 
are onerous and complex and vulnerable to the same lawsuits 
that stymied previous attempts to reduce emissions of sulfur 
dioxide, nitrogen oxides and mercury.
    Most alarming is the effect the rules will have on our 
economy. Messy court rulings and bureaucratic overreach have 
produced regulations that will harm the economy. As the 
National Economic Research Associates (NERA) recently pointed 
out, these rules will likely result in electricity costs 
increasing by as much as 23 percent and 1.4 million lost jobs 
by 2020. Not a recipe for economic recovery.
    Of course, these aren't the only hurdles the power sector 
faces. Known as the ``train wreck,'' utilities also face moving 
and uncertain emissions targets as EPA further tightens 
National Ambient Air Quality Standards (NAAQS) for ozone and 
Particulate Matter (PM) over the next few years. Combined with 
rules for regional haze, new source performance standards, Acid 
Rain, and new source review requirements, the Clean Air Act 
presents a labyrinth of overlapping and redundant requirements 
that drive up electricity costs and hamper our economy.
    In my State of Oklahoma, EPA's rules are causing 
substantial concern. And we're starting to see the effects 
already. Earlier this month, American Electric Power (AEP) 
announced it would be forced to close power plants in six 
states and lay off 600 workers as a result of EPA's rules. Two 
plants are being idled in Oklahoma.
    All of this might be great for environmental lawyers who, 
incidentally, make money by exploiting the citizen suit 
provisions of the nation's environmental laws. That's right, 
your tax dollars being used to destroy jobs in your own 
community. So you can bet these rules will be challenged, and 
we'll be back here next year.
    It might also be great for energy companies--who profit by 
rising electricity prices. Exelon CEO, John Rowe, has been 
quoted as saying that for every $5 dollar increase per megawatt 
of power generated, his company makes $700 to $800 million in 
additional annual revenue. The regulations we debate here today 
could raise electricity prices by as much as 20 percent in some 
markets.
    But ultimately, it's working families that pay the price.
    Of course, there are ways to reduce emissions and help keep 
electricity rates low. Perhaps the biggest one would be to 
update the Clean Air Act to stop the EPA ``train wreck.'' 
Reducing emissions doesn't have to be this costly--the Obama 
EPA just wants it to be. Recall President Obama's pledge: 
``under my plan electricity rates will necessarily skyrocket.''
    Last year, Senators Carper and Alexander introduced ``3P'' 
legislation that began to look at many of the issues we address 
here today. I commend them for taking on that challenge. But 
that legislation failed to get widespread support because it 
did nothing to address the utility ``train wreck.'' It simply 
added new requirements on top of old, increasing uncertainty 
and costs.
    Now, with plant closures on the horizon, workers being laid 
off, and electricity prices sure to rise, a coalition of 
Congressmen and Senators is coming together to fix the Clean 
Air Act. I look forward to working with them. We can and should 
continue to reduce emissions, but we should do so in a way that 
protects families from skyrocketing electricity prices and 
businesses from unachievable requirements.


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