    [House Hearing, 114 Congress]
    [From the U.S. Government Publishing Office]

                              STATE PERSPECTIVES:
                           HOW EPA'S POWER PLAN WILL
                             SHUT DOWN POWER PLANTS

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

                                    HEARING

                                   BEFORE THE

                          SUBCOMMITTEE ON ENVIRONMENT

                  COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY
                            HOUSE OF REPRESENTATIVES

                        ONE HUNDRED FOURTEENTH CONGRESS

                                 FIRST SESSION

                                   __________

                               September 11, 2015

                                   __________

                               Serial No. 114-38

                                   __________

     Printed for the use of the Committee on Science, Space, and Technology

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

           Available via the World Wide Web: http://science.house.gov

                                        ______

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                  COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY

                       HON. LAMAR S. SMITH, Texas, Chair
    FRANK D. LUCAS, Oklahoma             EDDIE BERNICE JOHNSON, Texas
    F. JAMES SENSENBRENNER, JR.,         ZOE LOFGREN, California
        Wisconsin                        DANIEL LIPINSKI, Illinois
    DANA ROHRABACHER, California         DONNA F. EDWARDS, Maryland
    RANDY NEUGEBAUER, Texas              SUZANNE BONAMICI, Oregon
    MICHAEL T. McCAUL, Texas             ERIC SWALWELL, California
    MO BROOKS, Alabama                   ALAN GRAYSON, Florida
    RANDY HULTGREN, Illinois             AMI BERA, California
    BILL POSEY, Florida                  ELIZABETH H. ESTY, Connecticut
    THOMAS MASSIE, Kentucky              MARC A. VEASEY, Texas
    JIM BRIDENSTINE, Oklahoma            KATHERINE M. CLARK, Massachusetts
    RANDY K. WEBER, Texas                DON S. BEYER, JR., Virginia
    BILL JOHNSON, Ohio                   ED PERLMUTTER, Colorado
    JOHN R. MOOLENAAR, Michigan          PAUL TONKO, New York
    STEVE KNIGHT, California             MARK TAKANO, California
    BRIAN BABIN, Texas                   BILL FOSTER, Illinois
    BRUCE WESTERMAN, Arkansas
    BARBARA COMSTOCK, Virginia
    DAN NEWHOUSE, Washington
    GARY PALMER, Alabama
    BARRY LOUDERMILK, Georgia
    RALPH LEE ABRAHAM, Louisiana
                                     ------

                          Subcommittee on Environment

                     HON. JIM BRIDENSTINE, Oklahoma, Chair
    F. JAMES SENSENBRENNER, JR.          SUZANNE BONAMICI, Oregon
    RANDY NEUGEBAUER, Texas              DONNA F. EDWARDS, Maryland
    RANDY WEBER, Texas                   ALAN GRAYSON, Florida
    JOHN MOOLENAAR, Michigan             AMI BERA, California
    BRIAN BABIN, Texas                   MARK TAKANO, California
    BRUCE WESTERMAN, Arkansas            BILL FOSTER, Illinois
    GARY PALMER, Alabama                 EDDIE BERNICE JOHNSON, Texas
    RALPH LEE ABRAHAM, Louisiana

                                C O N T E N T S

                               September 11, 2015

                                                                       Page
    Witness List.....................................................     2

    Hearing Charter..................................................     3

                               Opening Statements

    Statement by Representative Jim Bridenstine, Chairman,
      Subcommittee on Environment, Committee on Science, Space, and
      Technology, U.S. House of Representatives......................     5
        Written Statement............................................     6

    Statement by Representative Suzanne Bonamici, Ranking Minority
      Member, Subcommittee on Enviorment, Committee on Science,
      Space, and Technology, U.S. House of Representatives...........     6
        Written Statement............................................     8

    Statement by Representative Lamar S. Smith, Chairman, Committee
      on Science, Space, and Technology, U.S. House of
      Representatives................................................     9
        Written Statement............................................    10

    Statement by Representative Eddie Bernice Johnson, Committee on
      Science, Space, and Technology, U.S. House of Representatives..    10
        Written Statement............................................    11

                                   Witnesses:

    Mr. Craig Butler, Director, Ohio Environmental Protection Agency
        Oral Statement...............................................    14
        Written Statement............................................    17

    Dr. Bryan Shaw, Chairman, Texas Commission on Environmental
      Quality
        Oral Statement...............................................    21
        Written Statement............................................    23

    Mr. Jason Eisdorfer, Utility Program Director, Oregon Public
      Utility Commission
        Oral Statement...............................................    28
        Written Statement............................................    30

                 Appendix I: Additional Material for the Record

    Documents submitted by Representative Suzanne Bonamici, Ranking
      Minority Member, Subcommittee on Enviorment, Committee on
      Science, Space, and Technology, U.S. House of Representatives..    64

    Documents submitted by Representative Jim Bridenstine, Chairman,
      Subcommittee on Enviorment, Committee on Science, Space, and
      Technology, U.S. House of Representatives......................    71

    Documents submitted by Representative Donna F. Edwards,
      Subcommittee on Enviorment, Committee on Science, Space, and
      Technology, U.S. House of Representatives......................    76

    Documents submitted by Representative Gary Palmer, Subcommittee
      on Enviorment, Committee on Science, Space, and Technology,
      U.S. House of Representatives..................................    92

                              Appendix II: Slides

    Slide submitted by Representative Jim Bridenstine, Chairman,
      Subcommittee on Enviorment, Committee on Science, Space, and
      Technology, U.S. House of Representatives......................   126

    Slide submitted by Representative Bill Foster, Committee on
      Science, Space, and Technology, U.S. House of Representatives..   127

                              STATE PERSPECTIVES:
                           HOW EPA'S POWER PLAN WILL
                             SHUT DOWN POWER PLANTS

                                  ----------

                           FRIDAY, SEPTEMBER 11, 2015

                      House of Representatives,
                    Subcommittee on Environment
                   Committee on Science, Space, and Technology,
                                                       Washington, D.C.

        The Subcommittee met, pursuant to call, at 9:04 a.m., in
    Room 2318 of the Rayburn House Office Building, Hon. Jim
    Bridenstine [Chairman of the Subcommittee] presiding.

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Chairman Bridenstine. The Subcommittee on the Environment
    will come to order.
        Without objection, the Chair is authorized to declare
    recesses of the Subcommittee at any time.
        Welcome to today's hearing entitled ``State Perspectives:
    How the EPA's Power Plan Will Shut Down Power Plants.'' I
    recognize myself for five minutes for an opening statement.
        Today's hearing focuses on the EPA's final Clean Power Plan
    rule and the tremendous impact that this rule will have on the
    states upon final implementation. I am very concerned about how
    this regulation will affect the American economy, more
    specifically, access to cheap and abundant traditional energy
    sources as well as affordable and reliable electricity. Today,
    I look forward to hearing testimony from state regulators about
    how this rule will specifically impact the citizens of their
    states.
        The negative impacts of EPA's supposed Clean Power Plan are
    well documented. A few months ago, we heard from industry
    groups about some of these impacts. The Committee learned that
    the total compliance costs of the rule could be as high as $366
    billion by the year 2030. Additionally, according to the
    National Association of Manufacturers, the regulation is
    projected to cause double-digit electricity price increases in
    43 states.
        Moreover, the Committee has heard testimony that the EPA is
    using questionable legal authority to promulgate the Clean
    Power Plan under section 111 of the Clean Air Act. In fact,
    Laurence Tribe, leading environmental and constitutional law
    professor and mentor to President Obama, referred to the method
    by which this rule was enacted as ``burning the Constitution.''
        This Committee has also heard testimony at previous
    hearings that the climate benefits from any reductions in
    carbon emissions realized by the rule will be negligible on a
    global scale.
        Unfortunately, we have a rule that will place tremendous
    costs on the American people for very little benefit if you
    believe the models that we've been given by the Administration.
        The U.S. Energy Information Administration reaffirmed many
    of these facts in a report analyzing the impacts of the Clean
    Power Plan. The Committee heard testimony from Howard
    Gruenspecht at EIA, who reported that EPA's rule will shut down
    large numbers of coal-fired power plants, increase electricity
    prices, and decrease the U.S. GDP.
        Many states, including the ones that we have represented
    before us today have pushed back on the massive overreach of
    EPA's carbon emission rule. States are uniquely positioned to
    protect the environment in their states and support their local
    economies, a key fact the EPA disregarded in promulgating this
    rule. My home State of Oklahoma, which has been leading the
    charge against EPA's onerous rule, recognizes that this rule
    will harm reliability and impose massive costs on its citizens.
    I applaud Oklahoma's efforts to fight against the EPA and its
    activist, overbearing regulatory agenda.
        This Committee has called many hearings conducting
    oversight of EPA's regulatory agenda and will continue to do so
    in order for the American people to understand how this will
    impact their lives.
        I thank all of our witnesses for testifying today and I
    look forward to hearing about how EPA's final Clean Power Plan
    will impact your states.
        [The prepared statement of Chairman Bridenstine follows:]

               Prepared Statement of Subcommittee on Environment
                            Chairman Jim Bridenstine

        Today's hearing focuses on the EPA's final Clean Power Plan rule
    and the tremendous impact that this rule will have on the states upon
    final implementation. I am very concerned about how this regulation
    will affect the American economy; more specifically, access to cheap
    and abundant traditional energy sources as well as affordable and
    reliable electricity.
        Today, I look forward to hearing testimony from state regulators
    about how this rule will specifically impact the citizens of their
    states. The negative impacts of EPA's supposed Clean Power Plan are
    well documented. A few months ago, we heard from industry groups about
    some of these impacts. The Committee learned that the total compliance
    costs of the rule could be as high as $366 billion by 2030.
    Additionally, according to the National Association of Manufacturers,
    the regulation is projected to cause double digit electricity price
    increases in 43 states.
        Moreover, the Committee has heard testimony that the EPA is using
    questionable legal authority to promulgate the Clean Power Plan under
    section 111 of the Clean Air Act. In fact, Laurence Tribe, the leading
    environmental and constitutional law professor and mentor to President
    Obama referred to the method by which this rule was enacted as
    ``burning the Constitution.''
        This Committee has also heard testimony at previous hearings that
    the climate benefits from any reductions in carbon emissions realized
    by the rule will be negligible on a global scale. Unfortunately, we
    have a rule that will place tremendous costs on the American people for
    very little benefit.
        The U.S. Energy Information Administration reaffirmed many of these
    facts in a report analyzing the impacts of the Clean Power Plan. The
    Committee heard testimony from Howard Gruenspecht at EIA who reported
    that EPA's rule will shut down large numbers of coal-fired power
    plants, increase electricity prices, and decrease the U.S. Gross
    Domestic Product.
        Many states, including the ones that we have represented before us
    today have pushed back on the massive overreach of EPA's carbon
    emission rule. States are uniquely positioned to protect the
    environment in their states and support their local economies--a key
    fact the EPA disregarded in promulgating this rule.
        My home state of Oklahoma, which has been leading the charge
    against EPA's onerous rule, recognizes that this rule will harm
    reliability and impose massive costs on its citizens. I applaud
    Oklahoma's efforts to fight against the EPA and its activist,
    overbearing regulatory agenda.
        This Committee has called many hearings conducting oversight of
    EPA's regulatory agenda and will continue to do so--in order for the
    American people to understand how this will impact their lives. I thank
    all of our witnesses for testifying today and I look forward to hearing
    about how EPA's final Clean Power Plan will impact your states.

        Chairman Bridenstine. I now recognize the Ranking Member,
    the gentlewoman from Oregon, for an opening statement.
        Ms. Bonamici. Thank you very much, Mr. Chairman, and thank
    you to all of our witnesses for being here today to discuss the
    Environmental Protection Agency's Clean Power Plan.
        I am especially pleased to welcome Mr. Jason Eisdorfer, a
    fellow Oregonian. I'm looking forward to learning more about
    Oregon's work to implement the Clean Power Plan and I'm glad
    you will discuss some of the successes our state has had in
    reducing greenhouse gas emissions. I want to say, Mr. Chairman,
    I'm glad the title is ``State Perspectives,'' plural, because
    there are different perspectives here.
        The mission of the EPA is important yet simple: to protect
    human health and the environment. And the goal of the Clean
    Power Plan is equally important and simple: to cut carbon
    emissions from the largest source, largest source--sorry--the
    power sector, so that we can lessen the effects of climate
    change on our states, our country, and our planet.
        The Clean Power Plan offers enormous flexibility to states
    as they tackle their individual carbon emissions targets and
    the collective goal of reducing carbon emissions by 32 percent
    by the year 2030. Inaction is unacceptable.
        The Pacific Northwest faces risks that Oregonians take very
    seriously. For example, according to the National Climate
    Assessment, the snowpack in the Cascade Mountains has decreased
    by 20 percent compared to 1950, and what snow remains melts
    about 30 days earlier than usual. These changes are putting
    additional pressure on the region's water supply. Also the
    coastline, the health of our commercial fisheries are
    threatened by rising seas and ocean acidification. Thousands of
    salmon from the Columbia River died this summer because the
    water's too warm. These and other changes have the potential to
    negatively affect not only the safety, but also the economic
    security of my constituents.
        Thankfully Oregon is a state that has been proactive in
    efforts to mitigate and adapt to climate change. As a result,
    Oregon can be a resource for states that are just beginning to
    address this important challenge. As a former member of the
    Oregon legislature, I helped establish some of the state's
    carbon emissions reduction goals. For example, in 2007, Oregon
    set a target of reducing statewide emissions by 75 percent by
    the year 2050. We also set the goal of having up to 25 percent
    of our energy generated through renewable sources by 2025.
    These efforts and others have put Oregon in a position to not
    only meet, but likely surpass, its Clean Power Plan carbon
    reduction goal, and all of that while maintaining a healthy and
    vibrant economy.
        Oregon is a leader in renewable energy technology and many
    businesses have developed new products that add jobs to our
    economy and are energy efficient. One innovative example is
    Lucid Energy, which has developed technology to generate
    electricity through a hydropower system in existing city water
    pipes.
        Some today will likely contend that regulating carbon hurts
    the economy. But a recent report by Citi GPS adds to the
    growing body of evidence showing that this is simply not the
    case. The report states: ``We are not climate scientists, nor
    are we trying to take sides in the global warming debate;
    rather we are trying to take an objective look at the economics
    of the discussion, to assess the incremental costs and impacts
    of mitigating the effects of emissions, to see if there is a
    solution which offers global opportunities without penalizing
    global growth.'' The authors conclude: ``The incremental costs
    of following a low-carbon path are in context limited and seem
    affordable. The return on that investment is acceptable and,
    moreover, the likely avoided liabilities are enormous.'' When
    you have climate scientists and economists agreeing that action
    to address climate change is necessary and that the benefits
    outweigh the risks, then it is time for our country to stop
    dragging its feet and to move forward as a Nation and a global
    leader.
        The Clean Power Plan builds on the efforts of states like
    Oregon by creating a unified, national approach to our biggest
    environmental challenge. The Clean Power Plan represents an
    opportunity for American ingenuity that will allow us to
    benefit from the much-needed transition to a low-carbon
    economy.
        Thank you, Mr. Chairman, and again thank you to our
    witnesses for being here this morning, and I do want to ask
    that the Citi GPS report from which I quoted be entered into
    the record.
        Chairman Bridenstine. Without objection, so ordered.
        [The information appears in Appendix II]
        Ms. Bonamici. Thank you, Mr. Chairman, and I yield back the
    balance of my time.
        [The prepared statement of Ms. Bonamici follows:]

                Prepared Statement of Subcommittee on Oversight
                    Minority Ranking Member Suzanne Bonamici

        Thank you, Mr. Chairman, and thank you to our witnesses for being
    here today to discuss the Environmental Protection Agency's Clean Power
    Plan. I am especially pleased to welcome Mr. Jason Eisdorfer, a fellow
    Oregonian. I'm looking forward to learning more about Oregon's work to
    implement the Clean Power Plan and I'm glad you will discuss some of
    the successes our state has had in reducing greenhouse gas emissions.
        The mission of EPA is important yet simple--to protect human health
    and the environment. The goal of the Clean Power Plan is equally
    important and simple--to cut carbon emissions from the largest source,
    the power sector, so that we can lessen the effects of climate change
    on our states, our country, and our planet.
        The Clean Power Plan offers enormous flexibility to states as they
    tackle their individual carbon emission targets and the collective goal
    of reducing carbon emissions by 32 percent by the year 2030.
        Inaction is unacceptable. The Pacific Northwest faces risks that
    Oregonians take very seriously. For example, according to the National
    Climate Assessment, the snowpack in the Cascade Mountains has decreased
    by 20 percent compared to 1950, and what snow remains melts about 30
    days earlier than usual. These changes are putting additional pressure
    on the region's water supply.
        Also the coastline and the health of our commercial fisheries are
    threatened by rising seas and ocean acidification. Thousands of salmon
    from the Columbia River died this summer because the water was too
    warm. These and other changes have the potential to negatively affect
    not only the safety, but also the economic security of my constituents.
        Thankfully Oregon is a state that has been proactive in efforts to
    mitigate and adapt to climate change. As a result, Oregon can be a
    resource for states that are just beginning to address this important
    challenge.
        As a former member of Oregon's state legislature, I helped
    establish some of the state's carbon emissions reduction goals. For
    example, in 2007, Oregon set a target of reducing statewide emissions
    by 75 percent by 2050. We also set the goal of having up to 25 percent
    of our energy generated through renewable sources by 2025. These
    efforts and others have put Oregon in a position to not only meet, but
    likely surpass, its Clean Power Plan carbon reduction goal. And all
    while maintaining a healthy and vibrant economy.
        Oregon is a leader in renewable energy technology and many
    businesses have developed new products that add jobs to our economy and
    are energy efficient. One innovative example is Lucid Energy, which has
    developed technology to generate electricity through a hydropower
    system in existing city water pipes.
        Some today will likely contend that regulating carbon hurts the
    economy. But a recent report by Citigroup adds to the growing body of
    evidence showing that this is simply not the case. The report states:
    ``We are not climate scientists, nor are we trying to take sides in the
    global warming debate, rather we are trying to take an objective look
    at the economics of the discussion, to assess the incremental costs and
    impacts of mitigating the effects of emissions, to see if there is a
    'solution' which offers global opportunities without penalizing global
    growth.''
        The authors conclude: ``the incremental costs of following a low
    carbon path are in context limited and seem affordable, the 'return' on
    that investment is acceptable and moreover the likely avoided
    liabilities are enormous.''
        When you have climate scientists and economists agreeing that
    action to address climate change is necessary and that the benefits
    outweigh the risks, then it is time for our country to stop dragging
    its feet and to move forward as a nation and a global leader.
        The Clean Power Plan builds on the efforts of states like Oregon by
    creating a unified, national approach to our biggest environmental
    challenge. The Clean Power Plan represents an opportunity for American
    ingenuity that will allow us to benefit from the much needed transition
    to a low carbon economy.Thank you, Mr. Chairman, and again thank you to
    our witnesses for being here this morning. I yield back the balance of
    my time.

        Chairman Bridenstine. Thank you, Ms. Bonamici.
        I now recognize the chairman of the full Committee, Mr.
    Smith.
        Chairman Smith. Thank you, Mr. Chairman, and thank you also
    for holding this hearing today.
        Over the last year, the Environmental Protection Agency has
    released some of the most expensive and burdensome regulations
    in its history. These rules will cost billions of dollars,
    place a heavy burden on American families, and diminish the
    competitiveness of American workers around the world.
        Today's hearing will examine the Clean Power Plan and the
    manner in which EPA has used secret science, questionable legal
    interpretations, and flawed analysis to place tremendous and
    unlawful burdens on the states, and yet, despite these issues,
    this Administration continues to force costly and unnecessary
    regulations on hardworking American families. On August 3rd,
    the Obama Administration ignored the outcry from stakeholders
    and the American public when it issued the final rule on its
    Power Plan. The Clean Air Act was never intended to regulate
    carbon. This final rule is another example of the President and
    his Environmental Protection Agency sidestepping Congress to
    push an extreme agenda.
        It is well documented that the final plan will shut down
    power plants across the country, increase electricity prices,
    and cost thousands of Americans their jobs. My home State of
    Texas would be one of the hardest hit. The state would be
    forced to close affordable coal-fired power plants, which also
    provide reliable electricity during peak usage times in the
    summer. Additionally, the rule will cause double-digit
    electricity price increases across the United States.
        Despite EPA's statements to the contrary, this rule goes
    well beyond the regulation of power plants, even reaching down
    into Americans' homes to control electricity use. Higher energy
    prices means the price of everything will increase, and low-
    income families already struggling to make ends meet will be
    among those most burdened by this costly rule. The so-called
    Clean Power Plan is simply a power grab that will force states
    to try to reach arbitrary and often impossible targets for
    carbon emissions.
        EPA asserts that the Clean Power Plan will help combat
    climate change. However, EPA's own data demonstrates that is
    false. The data shows that this regulation would reduce sea-
    level rise by only 1/100th of an inch, the thickness of three
    sheets of paper. This rule represents massive costs without
    significant benefits. In other words, it's all pain and no
    gain. Under the Clean Power Plan, Americans will be subject to
    the constant threat of government intervention so the onslaught
    of EPA regulations continues.
        I look forward, Mr. Chairman, to today's hearing and to
    hearing from the witnesses about the impact of these burdensome
    EPA regulations on their states, and I yield back.
        [The prepared statement of Chairman Smith follows:]

       Prepared Statement of Committee on Science, Space, and Technology
                            Chairman Lamar S. Smith

        Over the last year, the Environmental Protection Agency (EPA) has
    released some of the most expensive and burdensome regulations in its
    history. These rules will cost billions of dollars, place a heavy
    burden on American families and diminish the competitiveness of
    American industry around the world.
        Today's hearing will examine the Clean Power Plan and the manner in
    which EPA has used secret science, questionable legal interpretations,
    and flawed analysis to place tremendous and unlawful burdens on the
    states. And yet, despite these issues, this Administration continues to
    force costly and unnecessary regulations on hardworking American
    families.
        On August 3rd, the Obama administration ignored the outcry from
    stakeholders and the American public when it issued the final rule on
    its Power Plan. The Clean Air Act was never intended to regulate
    carbon. This final rule is another example of the president and his
    Environmental Protection Agency sidestepping Congress to push an
    extreme environmental agenda.
        It is well documented that the final plan will shut down power
    plants across the country, increase electricity prices and cost
    thousands of Americans their jobs. My home state of Texas would be one
    of the hardest hit. The state would be forced to close affordable coal-
    fired power plants, which also provide reliable electricity during peak
    usage times in the summer. Additionally, the rule will cause double
    digit electricity price increases across the United States. Despite
    EPA's statements to the contrary, this rule goes well beyond the
    regulation of power plants, even reaching down into Americans' homes to
    control electricity use.
        Higher energy prices means the price of everything will increase,
    and low-income families already struggling to make ends meet will be
    among those most burdened by this costly rule. The so-called Clean
    Power Plan is simply a power grab that will force states to try to
    reach arbitrary and often impossible targets for carbon emissions.
        EPA asserts that the Clean Power Plan will help combat climate
    change. However, EPA's own data demonstrates that is false. This data
    shows that this regulation would reduce sea level rise by only 1/100th
    of an inch, the thickness of three sheets of paper.
        This rule represents massive costs without significant benefits. In
    other words, it's all pain and no gain. Under the Clean Power Plan,
    Americans will be subject to the constant threat of government
    intervention. The onslaught of EPA regulations continues.
        I look forward to hearing from today's witnesses about the impact
    of these burdensome EPA regulations on their states.

        Chairman Bridenstine. Thank you, Chairman Smith.
        I will now recognize the Ranking Member of the full
    Committee for her statement.
        Ms. Johnson of Texas. Good morning, Mr. Chairman, and thank
    you to all of our witnesses who are here.
        EPA's Clean Power Plan is a step in the right direction.
    The scientific evidence shows we cannot afford to wait, but
    must act now if we are to stand a chance of lessening the
    impacts of climate change. Record temperatures, an increase in
    heavy rain events, and rising seas are a few examples of what
    Americans are confronting now and can expect to see more
    frequently in the coming years.
        As the largest source of carbon pollution, cutting
    emissions from power plants is the key to any solution. This is
    why I am supportive of the Clean Water Plan--Clean Power Plan
    and its goal to reduce carbon emissions by 32 percent by 2030
    from the power sector. The final rule we will be discussing
    today is responsive to more than four million public comments
    received by EPA. It sets reasonable limits that take into
    account the characteristics of each state. It provides states
    with an additional two years to formulate and implement their
    compliance plans. It responds to concerns about grid
    reliability by including a reliability safety valve and
    requiring states to consider reliability concerns in their
    state implementation plans. And finally, the central feature of
    the rule is the enormous flexibility it provides to states.
        EPA is not prescribing a specific set of measures, but
    instead, states will choose what goes into their plans, and
    they can work alone or as part of a multi-state effort to
    achieve meaningful carbon reductions.
        Today, I suspect that we will hear some of the same old
    arguments about the Clean Power Plan that we hear about nearly
    every regulation issued by the EPA: that it will cause nothing
    but harm to our economy, that the federal government is
    overstepping its authority, that the rule is unnecessary, and
    that it won't make any difference in the long run.
        However, we know that these assertions are just not true.
    Rather, as history has shown us time and again, stricter
    pollution limits have invariably led to innovation and the
    creation of new technologies that end up creating jobs while
    protecting our environment. I am confident American industry
    will continue this record of innovation and job creation as the
    Clean Power Plan is implemented.
        Additionally, and perhaps, most importantly, the Clean
    Power Plan sends a strong and much needed signal to the rest of
    the world about the seriousness of the United States in
    addressing climate change. Such a position is critical to
    meaningful international engagement on this issue.
        I recognize that implementing the Clean Power Plan will not
    be easy, and that there are real costs associated with
    transitioning to a low-carbon economy. But the bottom line is
    that the costs of inaction are even greater.
        I look forward to today's discussion and to hearing more
    about how we can achieve the emissions targets in the Clean
    Power Plan.
        I thank you, and yield back the balance of my time.
        [The prepared statement of Ms. Johnson of Texas follows:]

       Prepared Statement of Committee on Science, Space, and Technology
                      Ranking Member Eddie Bernice Johnson

        Thank you, Mr. Chairman, and thank you to our witnesses for being
    here this morning.
        EPA's Clean Power Plan is a step in the right direction at the
    right time. The scientific evidence shows we cannot afford to wait, but
    must act now if we are to stand a chance of lessening the impacts of
    climate change. Record temperatures, an increase in heavy rain events,
    and rising seas are a few examples of what Americans are confronting
    now and can expect to see more frequently in the coming years.
        As the largest source of carbon pollution, cutting emissions from
    power plants is the key to any solution. This is why I am supportive of
    the Clean Power Plan and its goal to reduce carbon emissions by 32
    percent by 2030 from the power sector.
        The final rule we will be discussing today is responsive to the
    more than 4 million public comments received by EPA. It sets reasonable
    limits that take into account the characteristics of each state. It
    provides states with an additional two years to formulate and implement
    their compliance plans. It responds to concerns about grid reliability
    by including a ``reliability safety valve'' and requiring states to
    consider reliability concerns in their state implementation plans.
        And finally, the central feature of the rule is the enormous
    flexibility it provides to states. EPA is not prescribing a specific
    set of measures, but instead, states will choose what goes into their
    plans, and they can work alone or as part of a multi-state effort to
    achieve meaningful carbon reductions.
        Today, I suspect that we will hear some of the same old arguments
    about the Clean Power Plan that we hear about nearly every regulation
    issued by the EPA. That it will cause nothing but harm to our economy.
    That the federal government is overstepping its authority, that the
    rule is unnecessary, and that it won't make any difference in the long-
    run.
        However, we know that these assertions are just not true. Rather,
    as history has shown us time and again, stricter pollution limits have
    invariably led to innovation and the creation of new technologies that
    end up creating jobs while protecting our environment. I am confident
    American industry will continue this record of innovation and job
    creation as the Clean Power Plan is implemented.
        Additionally, and perhaps, most importantly, the Clean Power Plan
    sends a strong and much needed signal to the rest of the world about
    the seriousness of the United States in addressing climate change. Such
    a position is critical to meaningful international engagement on the
    issue.
        I recognize that implementing the Clean Power Plan will not be
    easy, and that there are real costs associated with transitioning to a
    low carbon economy. But the bottom line is that the costs of inaction
    are even greater. I look forward to today's discussion and to hearing
    more about how we can achieve the emissions targets in the Clean Power
    Plan.
        Thank you and I yield back the balance of my time.

        Chairman Bridenstine. Thank you, Ranking Member Johnson.
        And now to introduce our first witness, the Chairman of the
    Texas Commission on Environmental Quality, Dr. Bryan Shaw, I
    yield to the Chairman of the full Committee, Mr. Smith.
        Chairman Smith. Thank you, Mr. Chair, and let me say it's
    nice to be able to welcome a Texas colleague.
        Chairman Shaw was appointed to the Texas Commission on
    Environmental Quality (TCEQ) in 2007. Since then, he has served
    on the Texas Environmental Flows Advisory Group and is Chair of
    the Texas Advisory Panel on Federal Environmental Regulations.
    He was appointed Chairman in 2009. Prior to joining the TCEQ,
    Chairman Shaw served as a member of the U.S. Environmental
    Protection Agency's Science Advisory Board Committee on
    Integrated Nitrogen. He also served on the Environmental
    Protection Agency SAB Environmental Engineering Committee and
    the Ad Hoc Panel for Review of EPA's Risk and Technology Review
    Assessment Plan. Additionally, he is a member of the U.S.
    Department of Agriculture's Agricultural Air Quality Task
    Force. In addition to his chairmanship, Dr. Shaw serves as an
    Associate Professor in the Biological and Agricultural
    Engineering Department of Texas A&M University. His research
    there focuses on air pollution, air pollution abatement,
    dispersion model development, and emission factor development.
    Chairman Shaw received his bachelor's and master's degrees in
    agricultural engineering from Texas A&M and his Ph.D. in
    agricultural engineering from the University of Illinois at
    Urbana-Champaign.
        Thank you, Mr. Chairman, and I'm pleased that Chairman Shaw
    is here to testify.
        Chairman Bridenstine. Thank you, Chairman Smith.
        I will now yield to the gentleman from Ohio, Mr. Johnson,
    to introduce our next witness, Mr. Craig Butler, Director of
    the Ohio Environmental Protection Agency.
        Mr. Johnson of Ohio. Thank you, Mr. Chairman, and it is
    indeed my distinct pleasure to introduce Director Craig Butler,
    the Director of Ohio's Environmental Protection Agency.
    Director Butler received his bachelor's degree in geography and
    environmental science from Mansfield University and his
    master's degree in environmental science from Ohio University.
    Craig and his team have done some tremendous work for Ohio. The
    respect that they have earned from people across our state both
    within the energy sector and in the state agencies is clear.
    Their high standards of an exceptional work ethic is evident in
    everything that they do. For instance, the comments that
    Director Butler and his agency submitted to the U.S. EPA in
    response to the Clean Power Plan proposal are viewed by many as
    some of the most detailed, extensive and informative comments
    that the U.S. EPA received regarding this regulation. They
    clearly highlighted the many shortcomings of the Clean Power
    Plan, such as its potential impact on grid reliability and
    energy costs.
        Director Butler, I want to personally thank you for being
    here today. I wish I could stay and hear the entire testimony
    but with it being the last day of the week, we have multiple
    hearings in conflict, and so I've got to go to another hearing
    that is getting underway as we speak. But I want to reiterate,
    thank you so much. The work you're doing in Ohio and the
    example that you're setting across the Nation, boy, I sure we
    could get along and work out a working relationship with the
    federal EPA the way that we've done it in Ohio. You're to be
    commended, and I welcome you.
        Chairman Bridenstine. Thank you, Mr. Johnson.
        Our final witness today is Mr. Jason Eisdorfer, Utility
    Program Director for the Oregon Public Utility Commission, and
    I'd like to yield to the Ranking Member, Ms. Bonamici, for an
    introduction.
        Ms. Bonamici. Thank you very much, Mr. Chairman.
        It's my honor to introduce a fellow Oregonian, Mr. Jason
    Eisdorfer, who has served as the Utility Program Director of
    the Oregon Public Utility Commission since 2012. He oversees a
    staff of approximately 77 employees and provides direction to
    formulate policies, recommendations and practices regarding the
    regulation of investor-owned utility, natural gas, water and
    telecommunications utilities. Previously, Mr. Eisdorfer was the
    Interim Director of Strategy Integration at the Bonneville
    Power Administration, a federal power marketing administration,
    and before that, he served as BPA's Greenhouse Gas Policy
    Advisor. In this role, he served as the Senior Advisor to the
    Agency on Policies and Programs Related to Climate Change. He
    served as Legal Counsel and Energy Program Director of the
    Citizens Utility Board of Oregon for 13 years. He has
    coauthored state legislation related to climate change and
    electric utility restructuring and operations including the
    Electricity Restructuring Law in 1999 and the Oregon Renewable
    Energy Act and Climate Change Integration Act, both of 2007,
    and more recently he has advised on additional state
    legislation concerning storage technology pilots and natural
    gas utility carbon reduction programs. Mr. Eisdorfer has served
    as an Adjunct Professor of Law at both the University of Oregon
    School of Law and the Northwestern School of Law at Lewis and
    Clark College teaching classes on energy law and climate change
    and policy. He is a graduate of the University of Chicago and
    he received his law degree, as I did, from the University of
    Oregon. Go Ducks.
        Thank you for joining us today, Mr. Eisdorfer.
        Chairman Bridenstine. Thank you, Ranking Member Bonamici.
        In order to allow time for discussion--we're going to move
    to witness testimonies--please limit your testimony to five
    minutes. Your entire written statement will be made a part of
    the official record.
        I now recognize Chairman Shaw for five minutes to present
    his testimony.

                 TESTIMONY OF DR. BRYAN SHAW, CHAIRMAN,

               TEXAS COMMISSION ON ENVIRONMENTAL QUALITY

        Dr. Shaw. Mr. Chairman, Ranking Member Bonamici and Members
    of the Committee, thank you for the opportunity to be here, and
    good morning. A special thank you to Chairman Smith for the
    kind introduction.
        My name is Dr. Bryan Shaw. I'm the Chairman of the Texas
    Commission on Environmental Quality. As the leader of this
    agency, my job is to ensure we carry out our mission, which is
    to mitigate environmental risk while basing all of our
    regulations on sound science and compliance with state and
    federal statutes. In every case where Texas disagrees with EPA
    actions, it is because EPA's actions are not consistent with
    these principles.
        As you know, the EPA's Clean Power Plan for existing power
    plants was signed by the EPA Administrator on August 3, 2015,
    and is currently awaiting publication in the Federal Register.
    The final version of the Clean Power Plan is radically
    different than EPA's proposed plan, and as such, the TCEQ is
    continuing to study and evaluate the impacts of the final rule.
        Currently, the following concerns associated with the rule
    have been identified. First, EPA's methodology for determining
    the Best System of Emission Reduction, or BSER, in this Rule
    marks a radical departure from historical practice, and, I
    would argue, the plain language of the Clean Air Act.
    Specifically, the EPA has now asserted the power to determine
    Best System of Emission Reduction by evaluating technologies
    and methods outside the fence of the facilities it claims to be
    regulating. This is the first time the EPA has not determined
    this BSER based on technology or methods that could be applied
    to the source itself or materials being used by the source. In
    the past, Best System of Emissions Reduction evaluations have
    included installing scrubbers, low-emission combustion
    technology, pretreatment of fuels, and myriad other systems
    that a facility operator actually can control. But in this
    case, the EPA has evaluated states' electric grids and energy
    policies as a whole, instead of the individual sources which it
    has authority to regulate under Section 111(d) of the Clean Air
    Act.
        The final Clean Power Plan establishes national performance
    rates for two subcategories, steam generating units and
    stationary combustion turbines, applying three building blocks
    as BSER. While the final rule allows states to use--to elect to
    use alternate statewide goals, these goals are derived from the
    same performance rates. However, only the first of these
    blocks, Building Block 1, or the heat rate improvement, those
    efficiency improvements on existing coal-fired power plants, is
    within the historical approach of how EPA has determined BSER
    in the past. Block 2, which is redispatching generation from
    steam-generating units to natural gas combined cycle units, and
    Block 3, increased renewable energy, rely on the assumption of
    other generating units increasing their generation, generating
    units in which most circumstances are not located in the same
    area, and for most forms of renewable energy, are not even
    subject to the Federal Clean Air Act. In effect, EPA is setting
    standards for existing power plants based on the method of
    electric generation they prefer, not on the control technology
    or methods that can be feasibly applied to the existing
    sources.
        Another major concern is that the final Clean Power Plan
    has an insignificant effect on global carbon dioxide
    concentrations, global temperatures, and sea-level rise. The
    final rule does not provide a single quantifiable climate
    benefit. EPA's purported climate benefits are based solely on
    the Office of Management and Budget's Social Cost of Carbon and
    their claim that it will put the United States in a stronger
    bargaining position at the President's upcoming climate summit
    in December. Aside from the obvious substantive objections I
    have to this line of reasoning, I submit to you that a
    regulation this expensive that entails such an unprecedented
    arrogation of power to the Executive Branch cannot be justified
    as a bargaining chip or with fuzzy math.
        Furthermore, the EPA is deceiving the American public by
    claiming wildly inflated economic benefits only tangentially
    related to the purpose of the rule. The rest of EPA's claimed
    benefits from the rule are actually co-benefits from reductions
    of non-GHG, non-greenhouse-gas, pollutants such as nitrogen
    oxides and sulfur dioxide, and even these benefits are suspect.
    Not only are criteria pollutants not the purpose of the final
    Clean Power Plan, the majority of claimed co-benefits are due
    to changes in ambient concentrations of ozone and PM2.5 in
    areas that are already attaining the National Ambient Air
    Quality Standards for these criteria pollutants, so it is
    irrational for the EPA to claim a health benefit from reduction
    in a pollutant in areas where the EPA has already determined
    that the current concentration of the pollutant is adequate to
    protect human health. In areas not attaining this standard,
    there are other rules in the Clean Air Act requires those
    states to develop plans to address those and bring them into
    compliance.
        So one final issue before I close would be a more technical
    concern about leakage that the EPA has included in the final
    rule. ``Leakage'' is the shift of generation from existing
    units to new units that are not subject to the Clean Power
    Plan. This results in a net increase in emissions, and the EPA
    is requiring states that choose to use a mass-based approach
    must address this leakage. Also, they propose to address that
    in the federal plan if that federal plan includes a mass-based
    approach. EPA's motivation for its leakage policy is to remedy
    the nonsensical situation that emission standards for existing
    fossil fuel units under 111(d) are much more stringent than the
    standards for new fossil fuels under 111(b), that is, it would
    have a more stringent standard for existing sources than for
    new, and this makes that very detrimental and unworkable moving
    forward.
        So it's important for me to bring this forward, and I thank
    you for the opportunity to testify today.
        [The prepared statement of Mr. Shaw follows:]

      [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Chairman Bridenstine. Thank you, Chairman Shaw.
        Director Butler, you are recognized for five minutes.

                TESTIMONY OF MR. CRAIG BUTLER, DIRECTOR,

                  OHIO ENVIRONMENTAL PROTECTION AGENCY

        Mr. Butler. Chairman Bridenstine, Ranking Member Bonamici,
    Members of the Subcommittee, and in particular, Representative
    Bill Johnson, thank you. My name is Craig Butler, and I'm
    Director at Ohio EPA, the Environmental Protection Agency in
    Ohio. Thanks for the opportunity to provide testimony on the
    now-final Clean Power Plan issued by the U.S. Environmental
    Protection Agency.
        When I provided testimony back in March in the House
    Subcommittee on Energy and Power, the CPP was only a proposal,
    and U.S. EPA was in the process of collecting and evaluating
    what turned out to be over 4.3 million comments, and while we
    continue to review the final rule presented by U.S. EPA, our
    fundamental and legal technical concerns persist or continue to
    grow.
        Ohio has striven to revive its manufacturing output over
    the last few years. Driven by affordable and reliable power,
    countless energy-intensive industries including auto
    manufacturing, steel, glass production and iron reside in Ohio.
    This manufacturing rebound has been due in no small part to the
    shale gas production in the eastern part of the state, and like
    our locally mined coal, provides a foundation for predictable
    and relatively stable low-cost power to industries and citizens
    in the State of Ohio.
        While working to revive our manufacturing output, we have
    achieved significant emission reductions from our coal-fired
    power plants. Between 2005 and 2014, carbon dioxide emissions
    from these units were reduced by approximately 30 percent.
    Given these reductions, one might think that Ohio is well on a
    path to comply with the final CPP.
        Unfortunately, U.S. EPA suggests using a baseline for
    emission reductions is 2005, but in reality they're using 2012,
    meaning that any reductions prior to that are not being
    considered for compliance with our mandated reduction target.
        Ohio's coal fleet has and will continue to improve its
    operational efficiency, however, requiring additional pollution
    control measures will be extremely costly and will undermine
    the long-term viability of these plants.
        Ohio has experienced a dramatic loss in generating
    capacity, losing some 6,100 megawatts between years 2010 and
    2015, primarily due to U.S. EPA's Mercury and Air Toxics
    Standard. A further reduction in usage of coal-fired generation
    is the biggest means for complying with the final CPP and is a
    serious concern with respect to end-user costs, infrastructure
    and reliability.
        As mentioned, on August 3rd, EPA released three rules that
    will have an adverse effect on coal-based electricity
    generation across the country. Finalizing emissions standards
    for new electronic generation units was the first rule released
    and created a reliance on cost-prohibitive technology that will
    effectively prevent any new coal plants from being built across
    the country. Carbon capture and sequestration, the only
    technology described in that rule, is provided--is proving to
    not be ready for wide-scale technical implementation. Costs are
    escalating to the point where even with heavy subsidization,
    projects are being abandoned.
        The second and third rules work together. The second rule
    is the final version of the CPP and the third rule is a
    proposed back stop or federal plan for states that are unable
    to or choose not to comply with the final CPP. These rules will
    result in an unprecedented overhaul of the power generation,
    transmission systems by dramatically reducing fossil-fuel-based
    power generation and establishing aggressive new renewable
    targets. These rules together circumvent Congressional
    authority by creating a large-scale program to revamp the power
    industry and replace the long-standing economic model for
    generation of electricity based on an environmental model.
        U.S. EPA made certain changes in response to comments on
    the proposed CPP. U.S. EPA is evident, however, it raised the
    rule's carbon emissions reduction from 30 percent to 32
    percent. In Ohio, our mandated target is now roughly 11 percent
    more aggressive than the proposed rule, meaning Ohio will need
    to lower its carbon emission rate by 37 percent between 2012
    and the final plan.
        The final CPP dictates that natural gas generation be
    deployed at 75 percent capacity factor. Updated cost
    projections using the final rule haven't been completed but our
    Public Utilities Commission conducted an analysis of the
    proposed rule, estimating a 70 percent capacity factor and
    predicted wholesale energy prices to be 39 percent higher in
    calendar year 2025, costing Ohioans $2.5 billion more than
    projected.
        U.S. EPA has made profound changes to the rule. The number,
    the nature, and the overall level of wholesale changes drive
    Ohio to call for U.S. EPA to rerelease the final CPP as a
    proposed action allowing interested parties an opportunity to
    review and provide comment.
        On numerous occasions, EPA and the DC. Circuit Court of
    Appeals and the State of Ohio have pointed out serious legal
    shortcomings. This is why Governor Kasich has written a letter
    to the President asking to stay the implementation of the rule
    and all legal appeals--until all legal appeals have been
    resolved.
        I strongly believe that the CPP is not the answer, and with
    unresolved legal challenges, along with substantial changes
    between the draft and final proposal, U.S. EPA should hold off
    on implementing this plan until legal challenges are resolved
    or reissue the final plan as a proposed action.
        Thank you for the opportunity to testify, and I'm happy to
    answer any questions.
        [The prepared statement of Mr. Butler follows:]

     [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Chairman Bridenstine. Thank you, Director Butler.
        Mr. Eisdorfer, you are recognized for five minutes.

                   TESTIMONY OF MR. JASON EISDORFER,

                       UTILITY PROGRAM DIRECTOR,

                    OREGON PUBLIC UTILITY COMMISSION

        Mr. Eisdorfer. Chair Bridenstine, Chair Smith, Members of
    the Committee, I am Jason Eisdorfer, Director of the Utility
    Program at the Oregon Public Utility Commission.
        For more than a year now, three Oregon state agencies, the
    Department of Environmental Quality, the Department of Energy,
    and the Public Utility Commission, along with nearly two dozen
    major stakeholders have been working together to understand
    EPA's draft and now final 111(d) rule, and we are now working
    on implementing the Clean Power Plan.
        In our initial comments to the rule back in October of last
    year, the Director of Oregon's DEQ wrote on behalf of the state
    that ``The Clean Power Plan proposal is a welcome federal
    response to reversing climate change and is a good first step
    in mitigating the effects of greenhouse gas pollution across
    the country.'' Governor Kate Brown has stated that ``The EPA's
    Clean Power Plan is in the best interests of Oregon on many
    fronts. A healthy environment is essential to ensuring the
    health of Oregonians and protects our quality of life for many
    generations to come.
        As we look at how Oregon fares under the final rule, we can
    say that Oregon is in pretty good shape, and there is a reason
    for this. Oregon has been planning for this eventually for more
    than two decades. The risk of greenhouse gas regulation that we
    have required the utilities to plan for is now a reality.
    Oregon's utility ratepayers have been investing in clean energy
    to reduce the costs and risks of carbon regulation and those
    investments are paying off. Here are a few investment
    highlights.
        The investor-owned utilities in Oregon engage in integrated
    resource planning, which is firmly rooted in robust analysis
    that compels the utility to make decisions that result in a
    least-cost, least-risk future for its customers. This has
    included considering that risk of future costs of greenhouse
    gas regulation and the utilities' decisions about what types of
    energy resources to invest in.
        Oregon's largest utility, Portland General Electric, is
    retiring the State's only coal plant in 2020, about 20 years
    ahead of schedule, based on a least-cost, least-risk
    determination by the Public Utility Commission. Customers of
    the two largest utilities have been paying into a dedicated
    fund for cost-effective energy efficiency and we believe our
    energy efficiency delivery system is second to none. Oregon has
    a renewable portfolio standard that directs the state's largest
    utilities to serve their customers with 25 percent renewable
    energy by the year 2025.
        This is but a partial list of policies and investments that
    have put Oregon, its utilities and their customers in a strong
    position to comply with the Clean Power Plan. These investments
    will reduce the costs and risk of compliance with the plan and
    keep our utility system strong and robust.
        Despite these long-term investments, or perhaps because of
    these long-term investments, our economy is strong. Since 2000,
    per capital carbon emissions have been in steady decline in
    Oregon and yet the state's GDP is as good as or better than the
    national average. Oregon's real GDP growth exceeded the U.S.
    rate in 13 of the 16 years between 1998 and 2013, and Oregon
    ranks among the 15 fastest-growing state economies in 11 of
    those 16 years.
        The Clean Power Plan provides state regulators with a
    significant degree of flexibility in determining how to comply
    and has accommodated states that are differently situated. In
    Oregon, we are currently exploring that degree of flexibility
    to decide whether to use a rate-based system or a mass-based
    system, for example. To their credit, EPA has revised the plan
    to address the concerns of Oregon, other states, and
    stakeholders. And EPA has improved its thinking about the
    reliability effects of the Clean Power Plan in the final rule
    and understands that reliability is of paramount importance to
    utilities, regulators and the customers.
        The plan is accommodating of a variety of state compliance
    approaches, allowing Oregon to leverage existing state laws and
    recognizing under particular approaches the historic investment
    Oregon ratepayers have made in clean energy.
        However, Oregon is not an island and it's not enough for
    Oregon to comply with the Clean Power Plan within its own
    borders. Ratepayers of several of our utilities are tied to
    fossil fuel generation located in other states. We are more
    than interested in how other western states comply with the
    Clean Power Plan since our electricity rates depend on how
    those states comply.
        As Oregon looks to implement its own compliance plan, we
    are very interested in exploring the potential for
    collaboration with neighboring states using market mechanisms
    to reduce the overall cost of compliance and enhance the
    overall effectiveness of reducing greenhouse gas emissions.
    Oregon is proud of our clean energy investment strategy, and we
    are in a good position to comply with the Clean Power Plan. If
    the various states collaborate and cooperate, the Clean Power
    Plan offers the United States a path toward finally addressing
    the real and pressing issue of climate change on an integrated
    and least-cost basis.
        I appreciate the opportunity to testify before the
    Committee today. Thank you.
        [The prepared statement of Mr. Eisdorfer follows:]

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Chairman Bridenstine. Thank you for your testimony.
        Members are reminded that Committee rules limit questioning
    to five minutes, so we'll go into a round of questioning here,
    and I'll recognize myself for five minutes.
        There's a chart that was given to us by the U.S. Chamber of
    Commerce. It's a map of the United States, and you can see that
    the green states--I'm having a hard time reading that little
    but I've got it here. So it says the green states this is
    winners and losers from the EPA carbon regulations, and it says
    states that will be able to increase CO2 are in
    green, or they'll be able to sell credits to others needing to
    achieve compliance. States that are in red must reduce CO2
    emissions or purchase credits from states in order to comply.
        So this to me, this rule has been published--no, it
    actually hasn't been published. It's been finalized but it's
    not been published in the Federal Register as of this point.
    But when it goes into effect, it's going to establish winners
    and losers. I guess my question for the witnesses, and I'd like
    to start with you, Chairman Shaw, is, do you perceive this as a
    transfer of wealth from maybe your State of Texas to the green
    states?
        Dr. Shaw. Thank you, Chairman. Certainly, when you look at
    the fact that Texas rate will have to be reduced by about 33
    percent, that is coming to come at a cost, and certainly one of
    the major costs that we've seen and part of the reason that
    we've been able to have economic prosperity and growth in our
    state has been due to low cost of energy. The likely pretty
    extreme increase in rates is going to make it much more
    difficult for our state to continue to provide those jobs and
    resources that are necessary for that growth. So yes, it would
    certainly make it easier or make an uneven playing field from
    that perspective if you're not having to make those
    investments, and we've made investments. You know, $7 billion
    in building out transmission lines for our 13,000 megawatts of
    wind energy are significant investments that we've already
    made.
        Chairman Bridenstine. Director Butler, how do you see this
    for your state?
        Mr. Butler. Thank you for the question. I look at it two
    ways. There's two ways for a state to comply, particularly
    Ohio. We're either going to need to shut down additional coal
    assets and buy more expensive power, or buy credits from
    somebody else. Both of those will have a significant cost for
    the State of Ohio to reach what I indicated in my testimony,
    which is a 37 percent reduction in CO2 emissions,
    and that's an 11 percent increase over the draft plan.
        Chairman Bridenstine. Mr. Eisdorfer, it looks like your
    state is going to be able to sell power or sell credits. You
    guys stand to gain a lot from a rule that by the way that did
    not exist until this month.
        Mr. Eisdorfer. Mr. Chair----
        Chairman Bridenstine. Or I guess last month.
        Mr. Eisdorfer. Mr. Chair, two quick points. One, under the
    proposed rule, Oregon actually did not come out very well in
    this sense, and yet the state really welcomed the Clean Power
    Plan as a good first step toward addressing climate change. So
    the final rule did turn the tables a little bit.
        But the second point I would make is that there are a
    number of customers of utilities in Oregon that are tied to
    assets in Montana, Wyoming and Utah. So in that sense, Oregon
    is tied throughout the West, and while that makes it look like
    Oregon is sitting pretty, we have a lot of work to do and a lot
    of cooperative discussions on a multistate basis in the West.
        Chairman Bridenstine. Do you disagree that Oregon will be
    advantaged compared to Texas or Ohio?
        Mr. Eisdorfer. Again, there are two things that Oregon has
    to think about. One is complying as a state, and in that sense,
    Oregon is in very good shape. The second thing is, rate impacts
    on customers in Oregon and we have to work with the states in
    which thermal resources are outside of Oregon but serving
    Oregon. So it's a little bit of half a loaf, perhaps.
        Chairman Bridenstine. Dr. Shaw, the EPA has assumed in the
    final Clean Power Plan that renewable energy sources will
    increase dramatically as a result of this rule. My home State
    of Oklahoma is already a nationwide leader in wind energy.
    We're fourth in the country in electricity produced from wind,
    accounting for over 15 percent of electricity generation in
    Oklahoma. Do you believe the EPA's targets for renewable energy
    increases the--increases are--renewable energy increases are
    realistic given the existing increases in production in states
    such as yours and mine, Oklahoma and Texas?
        Dr. Shaw. Chairman, we've--my state as well as yours have
    made pretty phenomenal increases in renewables, especially wind
    energy, and the rate that EPA has projected in determining our
    goal it appears that for years 23 through 30, we would have to
    increase our renewables and wind being part of that at the
    maximum rate that we've ever done it every year in that time
    frame, and I think that's far from typical and would be very
    challenging to meet.
        Chairman Bridenstine. Last question. I'm running out of
    time.
        Under the final Clean Power Plan, will states like Oklahoma
    and Texas get any credit for renewable energy sources that have
    already been implemented in their states? The investments we've
    already made, will we get credit for that?
        Dr. Shaw. Unfortunately, because most of the--many of those
    investments happened after the--excuse me--before the 2012,
    which they use as a baseline, we don't get credit for those
    investments, and so it is a pretty significant blow from that
    perspective.
        Chairman Bridenstine. Thank you for your testimony, and I'd
    like to recognize Ranking Member Bonamici for five minutes for
    her questions.
        Ms. Bonamici. Thank you very much, Mr. Chairman.
        Mr. Eisdorfer, I only have five minutes and I have a lot of
    questions, so I'm going to ask three--one about flexibility,
    one about the grid and one about costs--and I'll ask them all
    at once to save time.
        So you give EPA credit for revising the Clean Power Plan to
    address some concerns of states and stakeholders. You said that
    the Clean Power Plan provides state regulators with a
    significant degree of flexibility in determining how to comply.
    So I want you to talk a little bit about how that flexibility
    will work and how that's responsive to concerns that have been
    raised.
        Secondly, with regard to the grid, you state in your
    testimony that there are existing tools and frameworks across
    the country to protect the reliability of the grid, and that's
    a concern that we've heard raised, so can you please discuss
    how the rule was changed to address reliability concerns and
    whether those changes are sufficient to alleviate the grid
    reliability?
        And finally, one of the main criticisms, and we heard this
    morning, is that the Clean Power Plan will cause electric bills
    to increase, but according to the EPA, the average electricity
    bills will be cut, and by 2030, the average American family
    will save $7 on their electric bill per month. So how have
    consumers and communities in Oregon benefited from programs
    like the Energy Trust, for example, the state's energy
    efficiency program, and specifically, what has been the effect
    on electricity bills? So reliability, grid and cost. Thank you.
        Mr. Eisdorfer. Thank you, Representative Bonamici. We could
    talk for hours on this but I'll try to be brief.
        The flexibility comes in a number of ways and I'll sort of
    list a couple. States are allowed to choose whether to go with
    a mass-based or a rate-based calculation that allows states to
    really tailor their particular situation. Under the proposed
    rule, Oregon was in a position where we really couldn't choose
    between the two, and under the final rule, mass-based became an
    option. So now as we talk to stakeholders, mass-based versus
    rate-based is very much on the table. The EPA also makes it
    very clear that the states are going to have wide discretion on
    how to allocate allowances. States can choose to go it alone or
    join in multistate bilateral or multilateral agreements or even
    go into a trading ready kind of platform. And so there really
    are a number of different choices that the state can make.
        In terms of reliability, there were some significant
    improvements in the plan. The EPA provided a mechanism for
    states to seek a revision of their plan if there are
    unanticipated reliability challenges. There's also a safety
    valve that would allow emissions from a plant to not count
    under the goal under certain reliability circumstances, and
    something that we're actually also looking closely at is the
    memorandum of understanding between the EPA, FERC and the U.S.
    Department of Energy where there's going to be a coordinated
    process to help the states address reliability concerns,
    monitor how that state plan development is going to go, and
    then provide support for this important transition period.
        And then finally, on the electricity bills. What I think
    Oregon has done extremely well in the last 20 years is
    planning. Our integrated resource planning process really
    causes the utilities to think very long and hard about the
    least-cost, least-risk approach. Oregon, especially since 1999
    but even dating back to 1980, has treated energy efficiency not
    as a boutique thing to do every now and then but as a genuine
    resource that a utility should rely on. It is a cost-effective
    resource and should be at the top of the list of any utility
    acquisition as being the lowest-cost resources. So between
    planning, energy efficiency, we've been able to maintain our
    low cost. We are below average and we've been below average for
    quite some time. We don't expect the Clean Power Plan to
    fundamentally change that because the tools that you would use
    to meet the clean power obligations are the very tools that
    we've been using to keep rates low.
        Ms. Bonamici. Thank you very much.
        Chairman Bridenstine. Thank you, Ms. Bonamici.
        I now recognize the Vice Chairman, Mr. Westerman.
        Mr. Westerman. Thank you, Mr. Chairman.
        I have two coal-fired plants in my states that could be
    closed. One is actually in my district in southwestern, and has
    already been announced to be closed, and there are studies that
    show that our rates will increase from 20 to 60 percent because
    of this closure. The obvious negative effects are direct loss
    of several hundred highways jobs and an economic loss of $500
    to $600 million per year. The higher rates will put a
    disproportional burden on low- and fixed-income residents in my
    district, not only in their higher light bills but also in the
    increased cost of goods.
        Chairman Shaw, welcome to the Committee. It's nice to have
    a fellow bio and agricultural engineer. There's not too many of
    us out there.
        Dr. Shaw. Right.
        Mr. Westerman. If you look at Texas, what's the split on
    residential versus industrial commercial use?
        Dr. Shaw. I don't have that information, Congressman. I
    don't know what--you're talking about how much of that--I mean,
    it's largely driven by the commercial. We are a large energy
    consumer because of the fact that we manufacture good and
    process materials that supply much of the rest of the United
    States. So we're heavy on the commercial side.
        Mr. Westerman. Right. And in Ohio, is that similar there
    too?
        Mr. Butler. Yes, sir. Ohio's the sixth largest energy-
    consuming state in the United States. Fifty percent of that is
    for industrial.
        Mr. Westerman. And Mr. Eisdorfer, in Oregon?
        Mr. Eisdorfer. My recollection is that residential is about
    40 percent and the remainder is split between commercial and
    industrial.
        Mr. Westerman. Okay. I think we fail to see sometimes how
    much of the power actually goes into industry and jobs. So if
    you look at current air quality standards in Texas and the rest
    of the United States and compare those to the world, just kind
    of quickly on a scale one to ten, one being low quality and ten
    being high quality, where would you say China would be on that
    scale, Chairman Shaw?
        Dr. Shaw. On the south end of that, some of the worst air
    quality that exists exists in some parts of China.
        Mr. Westerman. And Indonesia, Vietnam. What about Western
    Europe? Where would you----
        Dr. Shaw. They're certainly better than you see in China
    but they're still not at the levels that we are.
        Mr. Westerman. And in the United States?
        Dr. Shaw. I would say if we're not a ten, then the scale
    needs to be accommodating to put us there.
        Mr. Westerman. But we're leading in the world in air
    quality standards?
        Dr. Shaw. Yes, sir.
        Mr. Westerman. Okay. So do you believe higher costs and
    less reliable energy could drive industrial manufacturing jobs
    to countries with lower standards?
        Dr. Shaw. I think it could. I think even the threat of
    higher costs can drive those overseas to lower-cost areas with
    less restrictive regulations.
        Mr. Westerman. And I know in my district, what we need very
    much are jobs and to get people back to work, and I would hate
    for investors to come in and see this huge increase in
    electrical rates and decide to move their manufacturing
    somewhere else and potentially somewhere where it would
    actually do more damage to air quality than they would do in my
    state.
        Let's shift gears a little bit. When we look at this Clean
    Power Plan, there seems to be still be a lot of confusion in
    it, and Mr. Eisdorfer, I've spent quite a bit of time out in
    your state, a very beautiful state, maybe except for the large
    wind farms along the Columbia Gorge that dot the landscape, but
    you do have a tremendous amount of biomass in Oregon. How do
    you feel about the EPA's treatment of biomass as renewable
    energy?
        Mr. Eisdorfer. Representative Westerman, that is something
    that we continue to look at. As you just said, there are some
    things that remain unclear. That's not something that we loved
    and yet at the same time we sort of recognized what the EPA was
    trying to--the message they were trying to send is that not all
    biomass is treated equal. So folks at DEQ and Department of
    Energy are----
        Mr. Westerman. Are they saying some biomass is not
    renewable?
        Mr. Eisdorfer. They're saying that the carbon sequestration
    benefits need to be tracked very closely and so that may mean
    that some biomass is treated a little bit different and
    depending upon if it's very sustainably----
        Mr. Westerman. It's bad enough when EPA's picking winners
    and losers in power but then you even get into the renewables
    and they start winners and losers there. I think we should take
    an all-encompassing approach and utilize all the technology
    that we have, and especially the lower cost more efficient
    technologies and develop these other technologies with more
    research and development in those areas.
        But it looks like I'm about out of time, Mr. Chairman, so
    I'll yield back.
        Chairman Bridenstine. Thank you for your questions.
        Ranking Member Johnson is recognized for five minutes.
        Ms. Johnson of Texas. Thank you very much.
        Mr. Shaw, I'm a native Texan. I'm a nurse by education.
    Last year, Parkland Hospital had a billion dollars of
    uncompensated care. Children's Hospital had about a third of
    that. Many of the conditions are respiratory related, which are
    also related to environmental contamination. Have you factored
    in the cost that it would take the state to continue to afford
    this kind of healthcare cost with most of our people being
    poor, that are living in low-income areas that are damaged more
    frequently by these heavy environmental violations?
        Dr. Shaw. Congresswoman, the Clean Power Plan is directed
    at reducing greenhouse gases, which do not impact the
    respiratory issues. The co-benefits that are claimed in the
    rule----
        Ms. Johnson of Texas. Wait a minute. Repeat what you just
    said.
        Dr. Shaw. The co-benefits, in other words, the rule is
    based on reducing the greenhouse gas----
        Ms. Johnson of Texas. I know what the rule says, but you
    said it does not impact respiratory?
        Dr. Shaw. That's correct. Greenhouse gas emissions do not
    have an adverse impact on respiratory health. High CO2
    levels do not cause respiratory issues. I know it's easy to
    make that conclusion because some of the rhetoric from EPA sort
    of suggests that the Clean Power Plan is going to, by reducing
    greenhouse gases, lead to improvement in respiratory
    conditions. That's not due to reductions of CO2.
        Ms. Johnson of Texas. What is it due to?
        Dr. Shaw. It's due to their co-benefits. They're suggesting
    that the process that they're mandating to reduce greenhouse
    gases will also accidentally, if you will, or at the same time
    likely cause reductions in other emissions that they do
    perceive to cause respiratory impacts. The challenge with that,
    though, is that they're actually assuming that it's going to
    provide health benefits even though your area is already in
    attainment for the PM2.5 standard yet they're assuming that
    reducing PM2.5 even lower leads to health benefits even though
    their standards say that Houston area is already meeting the
    standard and therefore we're not having adverse health effects
    associated with PM2.5. That's my concern, is that it's
    misleading whenever they've told us that you're going to have
    these health benefits associated with this rule. Most of those
    are unsubstantiated. The areas where there could be a benefit
    to those areas that are in non-attainment for ozone or
    something along those lines, those are being addressed through
    other rules and we're making strides to comply with those
    regulations. So CO2 does not lead to respiratory
    challenges.
        Ms. Johnson of Texas. So you're challenging the goal of
    EPA? Their goal is health and safety of the people that inhabit
    this planet.
        Dr. Shaw. The purpose of this--yes, ma'am. The purpose of
    this rule is to reduce greenhouse gas emissions, and as part of
    that, the stated goal there is--primarily the benefits they
    claim are a slight increase--excuse me, decrease in sea-level
    rise, unmeasurable, as well as a hundredth of a degree
    Fahrenheit reduction in increase in global temperature. Those
    are unmeasurable and those are not quantifiable from a benefit
    standpoint. Therefore, they went to the accidental co-benefits
    associated with it, not what the purpose of the rule was, to
    claim benefits to the rule.
        Ms. Johnson of Texas. So you're saying that it has
    absolutely nothing to do with the health status, that the
    science that has indicated that is not pure science?
        Dr. Shaw. I'm suggesting that the goal and the objective of
    the Clean Power Plan and what led to this rule is climate
    change, climate variability, and that the contaminant that
    they're specifically seeking in the greenhouse gases and, more
    particular, carbon dioxide, which is the focus of the rule does
    not have health impacts. Carbon dioxide at the levels that we
    breathe it is actually good for plants. We breathe in oxygen
    and exhale carbon dioxide. You have to get much higher levels
    of carbon dioxide than we're ever going to see in the ambient
    air to get health effects associated with CO2 to the
    human health. So the goal of the plan is to address climate
    change and yet that impact----
        Ms. Johnson of Texas. So climate change has no impact on
    health?
        Dr. Shaw. The model suggestions of what this rule would
    accomplish would be an unmeasurable decrease in sea level and
    one-hundredth of a degree Fahrenheit in temperature change. So
    even the best estimate of what the climate change impact and
    benefit of this rule is so small as to be unquantifiable.
        Ms. Johnson of Texas. So would we continue to see climate
    change with a lot of flooding, a lot of air contamination, this
    is not going to impact health?
        Dr. Shaw. For one, the IPCC, the Intergovernmental Panel on
    Climate Change, has indicated that the adverse weather that
    we're seeing has not been correlated with climate change. So
    there's certainly a science argument to be made and some
    additional data to be there but it's not clear that any--that
    the global climate change is going to have those impacts, and
    it's certainly clear that this rule would not have a measurable
    impact on any of those--a measurable change in climate change.
        Ms. Johnson of Texas. Could you submit to me your research
    findings and the origin of them?
        Dr. Shaw. Sure, I will be happy to provide you some of the
    background information on that.
        Ms. Johnson of Texas. Thank you very much.
        Dr. Shaw. Thank you, Congresswoman.
        Ms. Johnson of Texas. Thank you.
        Chairman Bridenstine. And the Chair now recognizes the
    Chairman of the full Committee, Mr. Smith, for five minutes.
        Chairman Smith. Thank you, Mr. Chairman.
        To respond real quickly to what the Ranking Member said and
    her concern about the unreimbursed costs of Parkland Hospital,
    from what I read, the reason for those unreimbursed costs are
    primarily due to the fact that up to two-third of the births at
    Parkland are the children of illegal immigrants in the country
    today. It is not due to healthcare issues caused by carbon
    emissions.
        Dr. Shaw, let me address my first question to you. The
    Chairman a few minutes ago put a chart on the screen that was
    produced by the Chamber of Commerce that showed that 42 states
    are going to be harmed by this Clean Power Plan, and by harmed,
    I mean they're going to see a dramatic increase in electricity
    costs. These electricity costs--and there's the chart--are
    going to disproportionately hurt low-income individuals because
    it's going to raise the cost of everything, whether it be food,
    whether it be electricity, whether it be anything else, and so
    I very much regret the impact on low-income Americans that this
    plan is going to have.
        But I wanted to ask you, do you see any benefits whatsoever
    as a result of this plan's mandating the reduction in carbon
    emissions?
        Dr. Shaw. Chairman, no. As you look at the exchange I had
    with Congresswoman Johnson, the rule does not, especially from
    the standpoint of its impact on carbon dioxide, does not have a
    measurable impact on sea level and/or the global temperature,
    and to your point, Texas having a competitive energy on the
    market, that is, you only get to generate and sell electricity
    if you can do it cheaply, has naturally driven our electricity
    generation grid, especially in ERCOT, to be the cheapest
    possible. Any reaching in from the federal government to force
    us to then choose more expensive generation will naturally
    increase electricity rates, and unfortunately, those who are
    least able to afford it, the fixed income and low income, will
    be least likely to be able to take advantage of energy
    efficiency measures and therefore they're going to be saddled
    with higher electricity rates and therefore electricity bills.
    So I don't share the EPA's optimism that we're going to have
    lower utility bills, especially for the low and fixed income.
        Chairman Smith. Okay. Thank you, Chairman Shaw.
        Mr. Eisdorfer, let me ask you a question, and that is, do
    you think that this Clean Power Plan is going to have any
    significant impact on climate change?
        Mr. Eisdorfer. Chair Smith, absolutely. We can talk about
    the incremental benefits of this particular plan----
        Chairman Smith. Do you disagree with the EPA's data that
    shows it would only at best impact the rise in ocean levels by
    one one-hundredth of an inch?
        Mr. Eisdorfer. I can't say whether I agree with that or
    disagree with that. I just haven't done that analysis. But I do
    think you have to start somewhere, and if we don't begin to
    address it, then certainly the----
        Chairman Smith. But this is going to cost, by the EPA's own
    admission, which is probably low, the American consumers about
    $9 billion. When the Administrator of the EPA herself was
    before the full Committee a couple of months ago, I made the
    point that I just made to you about no significant impact on
    climate change, and she did not deny that. She said only that
    it could be justified because we need to show action, which I
    don't think is sufficient justification. She did not dispute
    the data that showed it would only impact the rise in sea
    levels by one one-hundredth of an inch, the thickness of three
    pieces of paper, and we're subject the American people to
    burdensome regulations. They're going to cost jobs. It is going
    to increase electricity prices and disproportionately hurt low-
    income Americans, all so we can show action, not because it's
    going to have any significant impact on climate change. That's
    what the Administrator herself said. So apparently you disagree
    with her or you're just not sure?
        Mr. Eisdorfer. Well, Chair Smith, I think that if there are
    going to be costs borne by the public and the ratepayer, it is
    because certain plants are going to be dispatched less or be
    shut down entirely, and those are going to be coal plants, and
    if those coal plants are generating less carbon emissions, that
    is going to have a measurable effect on the environment and is
    beginning to address climate change on a national and
    international basis.
        Chairman Smith. When you say measurable effect, do you have
    any evidence whatsoever that it's going to impact the sea-level
    rise by more than one one-hundredth of an inch?
        Mr. Eisdorfer. I don't have that information.
        Chairman Smith. Okay. Thank you.
        Last question is, you mentioned a while ago that you were
    disappointed that the Clean Power Plan was only going to sort
    of a half a loaf impact on the State of Oregon. What were you
    disappointed about, or what's the half loaf that did not meet
    your expectations?
        Mr. Eisdorfer. Chair Smith, I think I was probably arguing
    against the visual that was produced that seems to indicate
    that Oregon is in really, really great shape. We are in good
    shape for complying as a state, but as ratepayers, since we are
    tied to coal plants and gas facilities in other states, we do
    care very much what happens in those other states.
        Chairman Smith. And I saw one chart that indicated
    electricity rates would actually go up in Oregon. Is that
    possible?
        Mr. Eisdorfer. I think that's a possibility.
        Chairman Smith. Okay. Thank you, Mr. Eisdorfer.
        I yield back, Mr. Chairman.
        Chairman Bridenstine. The Chairman yields back.
        I now recognize Ms. Edwards from Maryland for five minutes.
        Ms. Edwards. Thank you very much, Mr. Chairman, and thank
    you to the witnesses today.
        I just wanted to highlight, Mr. Chairman, that we've been
    hearing a lot about the steps that are necessary to address
    climate change by reducing carbon emissions, and its equivalent
    is setting our economy on fire. That's some of the accusations.
    But it's actually not the case. The efforts of Maryland--and I
    would note that Maryland on that Chamber of Commerce chart is a
    little deceptive, so it makes me question those other red
    states on there. But the efforts of Maryland and other states
    that have been involved in the Regional Greenhouse Gas
    initiative are proof that environmental protection and robust
    economic development can and should go hand and hand.
        I have a recent review of the Regional Greenhouse Gas
    Initiative by the Analysis Group that I want to submit for the
    record. The report finds that over the last three years, the
    Regional Greenhouse Gas Initiative has produced a net economic
    value of $1.3 billion and 14,200 jobs, and this is on top of
    the $1.6 in net economic value and 16,000 jobs created over the
    first three years that were analyzed under the program.
    Additionally, energy bills in my state and the other
    participating states in this regional initiative declined
    between 2012 and 2014 with consumers saving $460 million.
    Overall, the initiative has achieved a 40 percent reduction in
    greenhouse gas emissions compared to 2005 levels while the
    regional economy has grown eight percent, and in fact, Maryland
    has been very supportive of the rule that we're discussing
    today, and began under this regional initiative CO2
    emissions reductions under RGGI that have reaped over $200
    million from credits. They've used those. We've used those in
    our state for grants for renewables, for solar panels, for
    helping low-income people with utility bills, and for rebates
    for energy-efficient appliances. And so I am gratified that the
    EPA has introduced this rule and is preparing to finalize it
    and is preparing to finalize it because I think it's going to
    be a great economic benefit for our state, for this Nation, and
    frankly, for our future.
        Maryland relies heavily on the economic generation of
    income from the Chesapeake Bay as do the other states in the
    region, and so we can't even afford even a little bit of an
    increase in sea level because it would impact our economy
    tremendously, and so I'm gratified for the EPA's work.
        Let me just say as well, and I'm going to read directly
    from the U.S. National Climate Assessment and the U.S. Global
    Change research program that was published in May of 2014.
    Finding five of a number of findings, human health. ``Climate
    change threatens human health and well-being in many ways,'' I
    quote. ``Climate change is increasing the risk of respiratory
    stress from poor air quality, heat stress and the spread of
    foodborne, insectborne and waterborne diseases. Extreme weather
    events often lead to fatalities and a variety of health impacts
    on vulnerable populations including impacts on mental health
    such as anxiety, post-traumatic stress disorder. Large-scale
    changes in the environment due to climate change and extreme
    weather events are increasing the risk of the emergence or
    reemergence of health threats that are currently uncommon in
    the United States such as dengue fever. Key weather and climate
    drivers of health impacts including increasingly frequent,
    intense and longer-lasting extreme heat, which worsen drought,
    wildfire and air pollution risk, increasingly frequent extreme
    precipitation, intense storms and changes in precipitation
    patterns that could lead to flooding, drought, and ecosystem
    changes, and rising sea levels that intensify coastal flooding
    and storm surge causing injuries and deaths, stress due to
    evacuations, and water quality impacts, among other effects on
    public health.'' And so I would welcome any submission for the
    record that would refute the findings of the climate change
    impacts in the United States and those highlights as published
    in May of 2014.
        And then lastly, just as we close out, for our witness from
    Oregon--thank you for the work that you are doing--I wonder if
    you can talk about any regional efforts that you're involved in
    and whether you think that you might change some of your work
    in the region over these next several weeks, months and years.
    Thank you.
        Mr. Eisdorfer. Thank you, Congresswoman. Two quick things.
    One, the Northwest has acted as a region for many, many years,
    so Washington, Oregon, Montana and Idaho are usually in a
    constant state of discussion, and so this is no exception.
    We're having those kinds of discussions.
        Another kind of regional discussion that we're having is
    the PacifiCorp service territory is six states that includes
    Washington, Oregon, Wyoming and Utah, and they--their resource
    fleet is heavy on coal and so that utility is significantly
    impacted by the rule, and so discussions between those states
    are in the offing. They will be coming and we'll be discussing
    what is the least-cost way to approach compliance.
        Ms. Edwards. Thank you, Mr. Chairman.
        Chairman Bridenstine. Thank you.
        I now recognize Mr. Abraham from Louisiana.
        Mr. Abraham. Thank you, Mr. Chairman.
        This, once again, in my opinion, is the EPA doing a little
    malpractice of manipulating data to fit their goal instead of
    using this data objectively to actually formulate a coherent
    plan.
        I'll make a brief mention to Ranking Member Johnson and Ms.
    Edwards as far as wanting some documentation as far as whether
    this climate change, which I assume is global warming the way
    they are playing it, I am a practicing physician that does
    treat respiratory conditions and surely asthma and--
    Administrator McCarthy has often tried to refer to children's
    asthma as something that she uses to try to sell her points.
    But if you look at the data, the objective data from an
    unbiased source, which I have to, that's the CDC, and if you
    look at states like California who have some of the cleanest
    air in the nation, they still have the highest asthma rate and
    they have increasing asthma rates. So if we want to compare
    apples to apples, you are right, Chairman Shaw, in that
    CO2 certainly has no role in respiratory asthma as
    far as exacerbating it.
        So saying that, you know, we do have actually objective
    data that proves your point. I'll refer also to this report
    that has been touted, and I will that if it has not already
    been done, that it be inserted into the record.
        Mr. Eisdorfer, from this report, it says that Oregon stands
    to make or benefit from up to $125 million. Would you agree
    with that?
        Mr. Eisdorfer. I'm sorry. I just don't have the ability
    to----
        Mr. Abraham. Well, it's a good--you know, I'm assuming it's
    a good report. It looks to be fairly unbiased, so I will again
    to submit it to the record, and I'll stay with you, sir. The
    way I understand it, Oregon has only one coal-fired plant?
        Mr. Eisdorfer. Yes, that's----
        Mr. Abraham. And it's supposed to go down or shut down in
    2020?
        Mr. Eisdorfer. Yes. There's the Boardman plant. Its useful
    life was to go out to the year 2040, and there was a discussion
    that began about 2006, 2007 by stakeholders, utilities and the
    regulators, and a least-cost, least-risk analysis was done, and
    the result of that was, it was in the customers' interests, it
    was less costly to actually shut the plan down early rather
    than retrofit it with non-Clean Power Plan environmental
    technologies. So it was actually cheaper to shut it down and
    less riskier to shut it down in 2020 than the full 2040.
        Mr. Abraham. Under the power plan, will Oregon be allowed
    to emit more carbon or less carbon? The way I read it, it's
    more actually. What's your take on that?
        Mr. Eisdorfer. From the baseline from 2012, Oregon's not
    going to be able to emit more carbon than from that baseline.
        Mr. Abraham. Okay, and I will probably respectfully
    disagree reading the report, but I will defer to sources for
    that.
        Chairman Shaw, would you agree that with this BSER
    methodology, that this is an overreach of the federal
    government?
        Dr. Shaw. Clearly, this is exceptional from what I think
    the clear reading of the 111(d) statute prescribes.
        Mr. Abraham. Okay. And that's all I have, Mr. Chairman. I
    yield back.
        Chairman Bridenstine. The gentleman yields back.
        I now recognize Mr. Foster from Illinois.
        Mr. Foster. Thank you, Mr. Chairman.
        Director Butler, I understand one of your fundamental
    objections is that what is proposed is to replace an economic
    model for determining the energy with one that includes
    environmental factors, and so first is just a simple question.
    How many people die in Ohio each year as a result of power
    plant emissions?
        Mr. Butler. Representative Foster, thanks for the question.
    I don't know the exact number to your question but my premise--
    --
        Mr. Foster. Roughly, factor of two.
        Mr. Butler. I don't know. I'm not a physician.
        Mr. Foster. Okay. Well, it's certainly surprising, because
    that seems like a fundamental question here.
        Let's see. I actually do have an estimate, if we could have
    the thing--this is an estimate from--someone by the Clean Air
    Task Force put this together based--I think it's primarily
    driven by particulate emissions, and it looks like--you sort of
    do an eyeball average--about 10 people in 10,000--10 in
    100,000. About one in 10,000 die each year in Ohio, roughly in
    a typical area of Ohio, if this data is correct, and Ohio, I
    think, has something like 10 million people, so we're talking
    thousandish, roughly a thousand people per year die because of
    particulates from coal plants.
        So I was wondering, from a purely economic point of view
    that you advocate, what is the economically optimum number of
    people to die in Ohio each year?
        Mr. Butler. Representative Foster, so Ohio is about 11-1/2
    million people, and ultimately I think the chart that you're
    showing and the argument that you're making is around something
    that Dr. Shaw talked about, this issue about these co-benefits
    of the Clean Power Plan. I mean, you're talking about--this is
    about issues around particulate emissions. It has nothing to do
    with CO2 emissions under the Clean Power Plan.
        Mr. Foster. Right, but this hearing is about closing
    plants.
        Mr. Butler. This hearing is about----
        Mr. Foster. The title of the hearing is ``closing plants,''
    right?
        Mr. Butler. Right.
        Mr. Foster. SO the co-benefits--I do not understand the
    argument that when you complain about the cost of something,
    you don't include the economic co-benefits, but that's a
    separate issue.
        But I was wondering just in general, you know, if you for
    whatever philosophical approach to this you take, how would you
    calculate the economically optimum number of people to die in
    Ohio each year? What are the inputs into that?
        Mr. Butler. Sure. Representative Foster, we care about all
    11-1/2 million Ohioans, and this hearing today is about the
    Clean Power Plan. It is about the CO2 emissions that
    are supposed to be reduced from the Clean Power Plan. We take
    seriously, and as you have seen in my remarks also that Ohio
    has reduced its not only CO2 emissions but we've
    reduced our sulfur dioxide----
        Mr. Foster. I'm asking you the general question. How do you
    do the optimum plan? In your point of view, you know, do you
    believe that the optimum number of people to die from
    particulates in Ohio is zero or some number bigger than zero?
    And how, from your philosophical point of view, do you
    calculate the optimum number of people to die each year?
        Mr. Butler. Sure. Representative Foster, so we benefited
    from an all-fuels approach in the State of Ohio. So not only do
    we have coal plants, we've got hydroelectric plants, we've got
    energy efficiency, we've got natural gas, we've got wind, we've
    got solar. We think that it is in our best economic and
    environmental interest to have all of those in Ohio and we'll
    strive to continue to do that.
        Mr. Foster. But ultimately, you have a philosophy that
    tells you how to optimize that mix, well, maybe purely economic
    or a combination of economic and environmental aspects, that
    allows you to calculate the number of people who should die in
    Ohio each year. How do you--how would you advocate determining
    that number? For example, does it include the health effects in
    the downwind states? If emissions from Ohio kill people in
    downwind states, should that be included or not? If the
    emissions from Ohio raise CO2, we lose the Greenland
    ice sheet and, you know, 75 years from now people die in
    coastal areas, should that be included or not? You know, how
    large is your commons that you're looking at here?
        Mr. Butler. Representative Foster, so the way that we look
    at this in Ohio is that again, it's an all-fuels approach, and
    whether or not you want to--what we don't account for is the
    notion in the Clean Power Plan is that we'll see any impact to
    human health because of emissions that are regulated under the
    Clean Power Plan. We take into development of our plan not just
    clean power but how we look at our energy mix based on an
    economic model. It is also based on looking at environmental
    protection is included my role as Director of being protective
    of human health and the environment. So it's always a balance,
    and how we try to balance with perspectives. We work closely
    with the Public Utilities Commission, all of our utilities, to
    try to set up what that appropriate----
        Mr. Foster. All right. What I'm fishing for is, what is the
    balance of, you know, human suffering and death versus economic
    goals? Because it seems like there's a big disconnect and we're
    talking past each other----
        Mr. Butler. Sure.
        Mr. Foster. --on this where, you know, one side of this
    hearing room, people seem to be, you know, ignoring anything
    regarding quality of life or ultimately death, and versus pure
    economic concerns. I was wondering how you handle that and what
    is the objective function you're optimizing for from a
    mathematical point of view? Does it take into account the
    number of deaths in Ohio, or not?
        Mr. Butler. Well, Representative, I'll just tell you, I
    think your line of questioning's really unfair from the
    perspective of what this hearing is about. It's about the Clean
    Power Plan. It's about looking at CO2 emissions
    relative to the Clean Power Plan. You know, we have addressed--
    --
        Mr. Foster. The title of the hearing is that the Power Plan
    will shut down power plants. We're talking about shutting down
    certain kinds of plants.
        Anyway----
        Chairman Bridenstine. The gentleman's time is expired.
        Real quick, could you answer the question? Is there already
    a National Ambient Air Quality Standard for particulate matter?
    That already exists. Am I incorrect?
        Mr. Butler. Mr. Chairman, that's correct.
        Chairman Bridenstine. Okay. Very well.
        I now recognize Representative Moolenaar from Michigan.
        Mr. Moolenaar. Thank you, Mr. Chairman.
        I wanted to follow up on some of the questions regarding
    the Clean Power Plan rule and the safety valve provision.
    According to the EPA, this would give states a 90-day period to
    exceed carbon limits during emergencies, and EPA has indicated
    that although this safety valve exists, it would be rarely
    used.
        Mr. Shaw and Mr. Butler, I wonder if you could address the
    safety valve provision and give us your thoughts on that?
        Dr. Shaw. Thank you. While I certainly am appreciative that
    there's a recognition that this rule could lead to reliability
    issues, some of the challenges and concerns with the safety
    valve approach is that in order to have allowing generating to
    operate beyond what's permitted and allowed in those extreme
    circumstances, there's two issues. One, the EPA has not made it
    clear what those extreme circumstances are, and so it's going
    to be rare, would you be able to rely on it, and two, one of
    the outcomes of this rule as I see it with the extreme
    advancement in renewables energy is going to make it much more
    challenging for us to be able to account for baseload and
    maximum peak load at times when the wind is not blowing, which
    in Texas, by the way, they're about 180 degrees out of phase.
    And so part of what that's going to mean is, we may not have
    generation available in our market to turn on because it's
    difficult to justify cost of building new generation capacity
    when you may only be able to operate for a few hours a year and
    only during those extreme circumstances, and those rates are
    going to have to be extremely high to warrant those
    multimillions if not billions of dollars in investments.
        Mr. Butler. Representative, so I think my comments would be
    very much and similar to Dr. Shaw in the sense that the way
    that we look at this reliability safety valve on the one hand,
    we are appreciative because I think it was one of the probably
    most mentioned concerns that states had raised with EPA as well
    as our Public Utilities Commission around the notion that they
    were going to be setting up through the Clean Power Plan really
    constrain zones and putting in a position where we would have
    unreliable power supplies at certain times. So what I will tell
    you is, I think we'll have to go on what I've heard is the
    Public Utilities Commission, FERC and U.S. EPA have signed a
    memorandum of understanding. I think they are still trying to
    figure out the dynamics of that as all--as we are as well. So
    we appreciate that there is this reliability safety valve. I
    think it's unknown at this point whether we think that it will
    actually be effective. I've heard the FERC talk about the
    reliability safety valve from the perspective while they have a
    memorandum of understanding, it really is in the details, which
    are yet to be developed.
        Mr. Moolenaar. Okay. Thank you.
        I also want to get back to this question of getting credit
    for--and maybe have all three of you address this issue. For
    energy efficiency changes or reduction in greenhouse gases,
    different plans that you've implemented in your state prior to
    2012 that you don't get credit for, could you talk about that
    aspect? Because that's a concern I've heard from constituents
    as well.
        Dr. Shaw. I'll quickly talk about the case for Texas. With
    regard to, for example, renewable energy, we've had a very
    significant increase where about ten percent of our electric
    generation is from wind power that was accomplished through
    about a $7 billion investment in transmission lines to make
    that occur and a very dedicated effort, and that peaked right--
    because in 2012 in the mix of things, credits were going to be
    expiring and so you had this cliff where lots of wind power was
    installed, a lot of expenditure was made, but then we don't get
    credit because the baseline was drawn after that occurred.
        Mr. Butler. Representative, I'll echo that. One of our very
    chief concerns in comments we made in our draft comments on the
    Power Plan which has yet--was unaddressed and yet to be
    addressed still is this notion of first movers like the State
    of Ohio, like the State of Texas where we have--we've had an
    aggressive renewable portfolio standard in the State of Ohio
    since 2008, had targets for renewables, set targets for solar
    and energy efficiency, hitting targets by the year 2025. To be
    told that, frankly, because we were first movers and we were
    aggressive in implementing those across the state, to be told
    that those efforts between 2005 and 2012 don't count is frankly
    very, very disappointing to us and puts in a very deep hole.
    Number two, I think even more so, recent--very recent
    conversations with U.S. EPA and our modeling looking at the
    finalized Clean Power Plan is that many of our renewable
    portfolio standard activities going forward even after 2012
    will not count because they don't quality under the measurement
    and verification requirements that U.S. EPA has put into the
    final rule.
        Mr. Eisdorfer. Congressman, very quickly, one of the things
    I said earlier is that Oregon was beginning to look at the
    mass-based approach, and under that approach, any energy
    efficiency with a measure life that extends past into--after
    2022 and into the compliance period in a sense very much does
    count to the extent that it causes the utilities to have to
    invest or operate their thermal generation that much less. So
    under mass-based approach, mass-based and rate-based treat
    energy efficiency differently. Under a mass-based, all energy
    efficiency you do, if the measure life extends into the
    compliance period, that's a really good thing.
        Mr. Moolenaar. Mr. Chairman, I yield back.
        Chairman Bridenstine. The gentleman yields back.
        The gentleman from Ohio, Mr. Johnson, is recognized for
    five minutes.
        Mr. Johnson of Ohio. Well, thank you, Mr. Chairman, and I'm
    glad I was able to make it back.
        Director Butler, earlier this year in testimony before the
    Energy and Commerce Committee, as I recall, you stated that
    EPA's Clean Power Plan had not been well designed and that the
    rule was rushed out the door to meet a predetermined schedule.
    So question for you. Now that EPA has released the final Clean
    Power Plan rule, do you still feel that the final rule has some
    of the same flaws that existed in the proposed rule?
        Mr. Butler. Representative Johnson, thanks for the
    question. I think that they obviously made some adjustments in
    the final rule, and I think as I made it brief in my remarks
    today, we still have many of those questions remain and there
    are certain new ones too. The actual final Clean Power Plan is
    dramatically different. A lot of the--many of the targets
    haven't changed. It's like the titles of the book haven't
    changed but all of the pages are different. We're going through
    that analysis of this 1,500-page rule as it's in completion,
    and that is one of the reasons why today I called for EPA ought
    to at a very minimum re-release this rule as a draft so that we
    ought to be able to--rather than having to implement the rule
    immediately at the same time we're reviewing it, give us and
    all the stakeholders an opportunity to review it.
        I will also just mention the idea that U.S. EPA had made
    some assurances that as soon as August 3 when they released
    this rule that beginning in the first week of September they
    anticipated this rule to be issued as final. They have deferred
    and moved away from that position. I think they've given a date
    sometime in late October, which really puts us in a position
    where U.S. EPA will finalize that rule, they will take comments
    on the also corresponding federal backstop plan for 90 days
    after that time period, which would take us into February, all
    the while still requiring states to be able to submit a plan by
    September 2016. Those dates are just unrealistic for us to
    meet.
        Mr. Johnson of Ohio. Sure.
        Mr. Butler. So I think ultimately there are still many more
    questions that have been even--have been raised even in the
    fail plan that we're still unclear about, and frankly, U.S. EPA
    has not been able to answer those questions for us.
        Mr. Johnson of Ohio. Okay. Well, you've answered several of
    my additional questions.
        Let me turn to another issue that we've talked about before
    in some of the hearings and testimonies. For Chairman Shaw and
    Director Butler, it appears that one of the changes between the
    final and proposed Clean Power Plan rule is the amount of coal-
    fired power plant retirements reflected in the base case, the
    scenario that analyzes the current state of affairs without the
    Clean Power Plan. It appears that the EPA believes that 27
    percent or 78 gigawatts of coal-fired electricity in existence
    three months ago will close by next year even without the
    implementation of the Clean Power Plan. EPA claims that it made
    this change based on stakeholder comments submitted on the
    proposed rule.
        So my question, Chairman Shaw and Director Butler, did your
    agencies and the States of Texas and Ohio submit comments for
    the record regarding EPA's proposed Clean Power Plan rule?
        Dr. Shaw. Yes, we did.
        Mr. Butler. Representative Johnson, we submitted over 600
    pages of comments on the Clean Power Plan.
        Mr. Johnson of Ohio. Great. For you both, Chairman Shaw and
    Director Butler, in your comments on the proposed Clean Power
    Plan, did you provide comments regarding the number of coal-
    fired retirements that would occur as a result of other EPA
    rules such as the Mercury Air Toxics Rule?
        Dr. Shaw. My agency did not. Our Public Utilities
    Commission perhaps may have.
        Mr. Butler. Representative Johnson, we did, and we still,
    as I testified today, just by the mercury, the mass rules that
    were responsible for closing 25 percent of our megawatts in
    Ohio, so just over 6,000 megawatts of power turned off this
    year because of the mercury standard.
        Mr. Johnson of Ohio. Okay. Final question for the two of
    you. In your opinions, what stakeholder groups would have
    submitted comments that would have led the EPA to make changes
    to its base case scenario for the amount of coal-fired
    retirements, and do you believe that these comments were only
    submitted in an attempt to make it appear as though the Clean
    Power Plan was less onerous to the states?
        Dr. Shaw. I don't know what groups submitted comments that
    they were able to base that on, and certainly it does seem
    especially with the overly aggressive renewables energy goals
    that they have that one could conclude that it appears that
    they were more concerned with getting a 30 percent reduction
    than in determining what BSER was for the different facilities.
        Mr. Butler. Representative, I concur with that. I still
    believe that there was a predetermined number or a conclusion
    before the plans ultimately were developed.
        Mr. Johnson of Ohio. Got it. Okay. Well, we've heard this
    before, Mr. Chairman. You know, you got to pass it before you
    know what's in it. You got to define it before you do the
    analysis. I mean, that's just a pattern of this Administration
    in so many areas, and this is another one of them. I yield
    back.
        Chairman Bridenstine. The gentleman yields back.
        Without objection, I have a letter here from the Governor
    of Ohio, John Kasich. It's a request to suspend implementation
    of the Clean Power Plan. Without objection, I'd like to have
    this letter entered into the record.
        [The information appears in Appendix II]
        Chairman Bridenstine. I now recognize the gentleman from
    Alabama, Mr. Palmer, for five minutes.
        Mr. Palmer. Thank you, Mr. Chairman.
        It was with great interest that I followed your testimony a
    few minutes ago, several minutes ago, Chairman Shaw, that this
    is really not about air quality, it's about climate change,
    which I think raises some questions as to whether or not this
    should fall under the purview of the EPA since their primary
    responsibility under the Clean Air Act was air quality. That
    said, one of the things that concerns me about this along that
    same line is your excellent analysis of the scientific evidence
    to the contrary of what this will actually do for climate
    change, the very limited impact.
        The one thing that you didn't cover that I'd like for you
    to comment on is that there's recently a report from a former
    lead author of the International Panel on Climate Change, Dr.
    Philip Lloyd from South Africa, who says that the majority of
    climate change that we're seeing is due to natural variations.
    Are you familiar with that?
        Dr. Shaw. I may have. I didn't recognize it from the
    author's name but I have read material similar to that.
        Mr. Palmer. I think this guy obviously has an excellent
    reputation in the scientific community, given that he was a
    lead author of the IPCC, one of their lead authors of the IPCC
    report. So I think it's sensible then to suggest that the EPA
    is imposing an enormous economic burden on the families of
    America for little or no impact.
        Dr. Shaw. And Congressman, I think that as you even look
    into the material, not the summaries but look into the material
    of even previous IPCC reports, you go back a few years and the
    message wasn't that climate change, manmade climate change is
    causing all these issues, it's that we've seen a natural
    climate change and the concern was that manmade emissions might
    accelerate that to lead to events, and then there was a shift,
    it seems to me, that seemed to suggest that all weather
    variability and any unusual weather became accredited to
    climate change, and I think it seems to support what the more
    robust review of the scientific record reflects.
        Mr. Palmer. That came after they realized that we haven't
    had any temperature increase in 18 years and there was no
    evidence to support that, so they just changed the dialog from
    global warming to climate change.
        Mr. Eisdorfer, in regard to this impact that this is going
    to have and your assertion that there's some association with
    health benefits and particularly asthma, there's a study out of
    UCLA, there's several studies to indicate that the single
    biggest predictor of asthma is income. It's not air quality,
    it's income. How do you respond to that?
        Mr. Eisdorfer. Representative Palmer, not really my area of
    expertise. It may be that low-income folks tend to be downwind
    from generating facilities.
        Mr. Palmer. No, sir.
        Mr. Eisdorfer. I'm not really sure what the answer is.
        Mr. Palmer. No, sir, it's the proximity to traffic and
    things like that may have some impact but the study indicates
    that the majority of this is low-income families, and I want to
    continue on that line and point out that the National Black
    Chamber of Commerce is opposed to the Clean Power Plan, and
    they've pointed out that if this goes into effect, that poverty
    rates among black families will go up 23 percent, among
    Hispanic families it'll go up 26 percent. And the states that
    have already implemented a renewable power plan such as
    Maryland, who began this initiative in 2005, their power rates
    have gone up--their electricity power rates have gone up 61
    percent. So you're imposing an enormous burden on families
    through this rule that I don't think the EPA has taken into
    full consideration.
        There's one other thing about this too is how it impacts
    senior households, basically low-income houses. They're below
    34,000, I think, in median income, and there's a report that
    came out that indicated that you've got households, 41 percent
    of seniors went without medical or dental care because they had
    to make a choice between that and paying their energy bill, 30
    percent went without food for a day, 33 percent did not fill
    out a prescription or took less than a full dose.
        You know, this is the real impact of the regulations that
    the EPA is imposing. This is just some pie-in-the-sky stuff.
    This is how it impacts real people. It costs jobs. The Black
    National Chamber of Commerce is estimating that they'll lose
    literally hundreds of thousands of jobs among black workers and
    hundreds of thousands of jobs among Hispanic workers. That's
    the real impact. It's not some issue of we may stop this
    unproven idea of climate change. That's the real impact.
        Chairman Bridenstine. The gentleman's time is expired.
        Mr. Palmer. Thank you, Mr. Chairman.
        Chairman Bridenstine. The gentleman's time is expired.
        I'd like to recognize Ranking Member Bonamici for--she'd
    like to make a submission for the record.
        Ms. Bonamici. Thank you, Mr. Chairman. I would like to
    submit to the record a letter written to the Administrator of
    the U.S. EPA by the Attorneys General of New York, California,
    Connecticut, Maine, Massachusetts, New Mexico, Oregon, Vermont,
    Washington, the District of Columbia, and the Corporation
    Counsel of the City of New York dated August 3, 2015, in which
    this group of Attorneys General and Corporation Counsel wrote
    that the power plant rules issued today are the product of an
    unprecedented effort by the EPA to solicit public input
    including from states, cities, nonprofit organizations and
    industry. They write in strong support of the final rules,
    stating that the rules are firmly grounded in law, and I would
    like to submit this for the record, Mr. Chairman.
        Chairman Bridenstine. Without objection, so ordered.
        [The information appears in Appendix II]
        Chairman Bridenstine. And of course, the states that are
    going to benefit from the Clean Power Plan financially would be
    the ones that would sign that letter.
        I'd like to recognize Dr. Babin from the great State of
    Texas.
        Mr. Babin. Yes, sir. Thank you, Mr. Chairman. I appreciate
    that you said ``great.''
        I have a lot of concerns with the EPA's final rule for the
    Clean Power Plan. While it's an improvement over the proposed
    rule, it goes too far with unrealistic expectations for
    reducing carbon emissions and lacks clarity in other areas. For
    example, I have a new biomass plant in my district that uses
    forest waste for fuel. Under the Clean Power Plan, it's not
    clear if this plant would be treated as a renewable facility
    for purposes of emission counting. Has EPA provided you, Dr.
    Shaw, Chairman Shaw with the TCEQ, with any more guidance on
    how these facilities will be handled under the Clean Power
    Plan?
        Dr. Shaw. That is one of those areas that still remains
    very elusive to get a good answer to, and our fundamental
    understanding.
        Mr. Babin. Okay. Thank you. There's a lot of folks that are
    worried about that in my district.
        And also, Dr. Shaw, I have several coal-fired plants in my
    district. In fact, surprisingly to many Texans, 65 percent of
    our energy is produced in coal-fired plants no matter how cheap
    natural gas is. Do you believe that this new rule will kick-
    start a transition away from coal toward renewable energy in
    Texas causing a number of coal-fired power units to retire?
        Dr. Shaw. It seems that there's no other outcome then in
    order to meet the rule would almost dictate require closing and
    at least throttling back to a point that they're no longer
    economically feasible to maintain many coal-fired power plants.
        Mr. Babin. So war in coal is kind of a good name.
        If so, how will this affect the economy and jobs in my
    district? Won't this raise prices and affect reliability of our
    energy?
        Dr. Shaw. Congressman, I think based on the fact that
    especially ERCOT and I think your district is in the ERCOT
    region is an energy only competitive market which has led to,
    for example, last time our checked, our electricity utility
    rates were about 30 to 35 percent lower than the RGGI states'
    utility rates. That's been because we've incentivized the most
    efficient generation capacity. Anything that makes us depart
    from that is going to necessarily increase electricity rates,
    and in fact, the jobs that are utilizing that energy.
        Mr. Babin. Thank you.
        And directed at you again, Dr. Shaw and Director Butler,
    when Administrator McCarthy was here and testified before the
    Science Committee back in July, she stated unequivocally that
    the EPA's regulatory agenda relies on science that is
    accessible and transparent. Do you agree that with regard to
    the Clean Power Plan, the EPA has promulgated this rule in
    transparently and that all aspects of the rule including the
    calculation of benefits rely upon science and data that have
    been publicly made available?
        Dr. Shaw. I think that is a stretch, and certainly we're
    still digging our way through the 1,500 pages so maybe we've
    missed it in their somewhere, Congressman, but it is a
    challenge to understand the basis, and I think part of that is
    because it's very difficult to quantify some of the benefits
    because it's difficult to quantify the benefit of a hundredth
    of an inch of sea-level-rise change.
        Mr. Babin. Mr. Butler?
        Mr. Butler. Representative Babin, I would agree with Bryan,
    my colleague. Relative to transparency, maybe I'll transition
    and just mention one other issue relative to transparency. U.S.
    EPA often--the Administrator often talks about the
    unprecedented level of outreach that they've done and that they
    held lots of public hearings. I know the States of Ohio, West
    Virginia and Kentucky, we asked the Administrator to hold one
    of those public hearings somewhere within one of our three
    states so that they could see and get firsthand information
    from those the most dramatically affected by the Clean Power
    Plan, coal miners and coal-fired--folks that work at coal-fired
    power plants. The closest they got was Pittsburgh for having
    one of those public hearings, and frankly, the level of
    transparent interaction, I think it was more of just a
    traditional top-down regulatory approach. They developed this
    Clean Power Plan under their own model, handed it to the
    states. We got an opportunity to provide some comment but
    ultimately I think they're still continuing down along the
    strategy that they had all along.
        Mr. Babin. Absolutely. Thank you. I think we can see a
    little more transparency myself.
        I want to thank all the witnesses, and Mr. Chairman, it
    seems that if you give them an inch, the EPA will take a mile.
    This plan is another overreach by this Administration and I
    hope not just for the sake of my home State of Texas but for
    the entire country, we as a Congress will be able to do
    something about this final rule.
        Thank you, and I yield back the balance of my time.
        Chairman Bridenstine. I'd like to thank the doctor from
    Texas.
        I now recognize the gentleman from Texas, Mr. Weber, for
    five minutes.
        Mr. Weber. Thank you, and Chairman Shaw, I'm going to start
    with you. Thank you for being here. I didn't get to hear your
    testimony. I came in late. Apparently I was out too late last
    night.
        But you mention in your testimony that the EPA seems to be
    choosing energy sources that they prefer, and Mr. Westerman
    actually said in his comments earlier that it looks like
    they're in the business of picking winners and losers, and I
    appreciate your comments when I was here about this adversely
    affecting low-income people, especially in Texas, since we have
    our own grid at 85 percent, as you know, ERCOT. So what you're
    saying is that this is actually going to adversely affect low-
    income people more so than others.
        Dr. Shaw. Yes, Congressman. I don't see a way that--when
    you look at a methodology that changes from dispatching
    determining what your generation source is going to be based on
    the economics, which is what our system, especially in the
    ERCOT region, is based on, that a system that changes that and
    says create new generation sources that didn't meet that test,
    that aren't as cost-effective, and then dispatch based on
    greenhouse gas emissions alone, that's necessarily going to
    raise the cost, the rate, if you will, of that electric
    generation.
        Mr. Weber. Well, that's fascinating. I followed your
    exchange with, I think, my colleague from Maryland and also
    from the north part of Texas. Our colleague from Maryland
    seemed to list just a whole bunch of bad things that were going
    to happen, all kinds of illnesses, fires and bad weather. She
    got down and she even said heat. I think she said heat stress,
    which low-income people would actually when their electricity
    bill goes up be more prone to turn off their air conditioning
    and probably accede to heat stress. She had quite a long list
    of bad things the EPA's apparently trying to prevent. The only
    thing she left out was mumps and measles. And so I was
    appreciating your comments to the colleague from Texas that
    actually this is about CO2 and that doesn't cause--I
    mean, CO2 doesn't cause asthma.
        You also said something I think 100--or Chairman Smith
    might have said one-hundredth of a degree Fahrenheit, an
    unmeasurable raise. Is that what he said?
        Dr. Shaw. I said that as well. The Chairman may have
    mentioned that as well. That's from EPA's----
        Mr. Weber. And then one one-hundredth of an inch sea-level
    rise.
        Mr. Eisdorfer, let's go over to you. You seem to be in
    favor of the plan. One one-hundredth of an inch, I was
    fascinated by Chairman Smith's comment that that's three pieces
    of paper. Three pieces of paper. So if we're going to
    disadvantage some low-income people, and by the way, the EPA
    cost estimate of this was $9 billion. If you divide that out by
    50 states, it's $180 million per state, just FY I. A hundred
    and eighty million dollars per state. If we're going to
    disadvantage low-income people and cause their electricity
    prices to rise, Mr. Eisdorfer, how many sheets of paper would
    you add to that pile to disenfranchise what percentage of the
    elderly and the low-income? Would you add one sheet to increase
    the number of disadvantaged economically by this? I mean, is it
    worth that I guess is what I'm saying?
        Mr. Eisdorfer. Congressman Weber, it's absolutely worth it.
    It is----
        Mr. Weber. It is worth it to add one sheet of paper to sea-
    level rise to actually economically disadvantage how many, one
    percent of the elderly in Oregon?
        Mr. Eisdorfer. So we're talking about climate change as if
    it were an environmental issue and this is a one side versus
    the other side kind of thing. I tend to see climate change
    almost entirely as a social and societal issue. The Earth is
    going to take care of itself. The issue is, how is humanity
    going to fare in it, and the Clean Power Plan is not the cure-
    all but it is the start, and it's sort of interesting to me, in
    this discussion we're talking about the economics of the plan.
    We haven't talked a lot about the economics of the built
    environment in Miami or Manhattan.
        Mr. Weber. Let me stop you there. I'm running short on
    time. When you talk about states being socioeconomic and you
    said it's not about environment, which is really interesting to
    me, so if you're concerned about people and society--Mr. Foster
    was saying that a thousand people, I think, would die in Ohio
    from--in his exchange with Director Butler from coal-fired
    plants. The truth of the matter is, and I did some Citicom--
    this Citi data.com research real quick. People are leaving Ohio
    because there's no jobs, and actually 2,800 of them left in
    2008 alone and came to Texas. If you looked back and you did
    some more research, Chicago Tribune will tell you that July
    2013 to July 2014, 10,000 people left and headed to Texas,
    Florida and California. So we have our great TCEQ Director or
    Chairman here. We understand in Texas we want clean air, we're
    doing a good job, so it is about society but it's doing it
    reasonably, and I don't think this EPA rule is reasonable.
        Mr. Chairman, thank you for your indulgence. I yield back.
        Chairman Bridenstine. The gentleman yields back.
        We have a request for another couple of minutes of
    questions from one of our Members, and Ranking Member Bonamici
    has been gracious enough to allow that, so I'm going to give
    her two minutes to ask a few more questions. Then I'll give our
    side another two minutes to ask a few more questions, then
    we'll close.
        Ms. Bonamici, you're recognized.
        Ms. Bonamici. Thank you, Mr. Chairman.
        Mr. Eisdorfer, I want to follow up on the discussion we
    were having about the changes that the EPA made in the final
    rule about the way it treats a number of renewable sources. We
    talked about biomass but also nuclear. Hydropower is very
    important. Oregon does not have any nuclear power plants. But
    can you talk about whether those changes in the treatment of
    renewables will affect the state's energy mix, and if so, how?
        Mr. Eisdorfer. Two changes. One, hydropower was not
    included in the baseline this time so the fact that Oregon is a
    hydropower state doesn't actually play into whether we are
    doing well or not. And secondly, under the mass-based approach,
    any renewable investment that would allow a fossil fuel
    resource to be dispatched differently, dispatched less, and
    actually reduce emissions is a very good thing. So in that
    sense, any non-carbon-emitting resource that allows the
    existing thermal plants to operate differently is good for the
    state.
        Ms. Bonamici. Thank you.
        And in my remaining minute, you said in your testimony that
    Oregon is not an island, and we've talked about the regional
    approach, but could you briefly mention the importance of the
    United States taking a leadership role in international efforts
    to reduce carbon emissions and lessening the risks and impacts
    associated with climate change?
        Mr. Eisdorfer. Well, two brief things. I've heard
    discussion here about sort of a top-down very heavy-handed
    approach, and unwittingly I think the EPA actually didn't do
    that. The Clean Air Act is a work between--is working----
        Ms. Bonamici. The Clean Power Plan?
        Mr. Eisdorfer. Well, the Clean Air Act itself actually
    requires the federal government and the states to work well
    together, and the Clean Power Plan itself is really offering
    opportunities for the states to work very well to come up and
    share with each other and learn from each other, and assuming
    we can do that, we can really show the world the kinds of
    opportunities there are to reduce carbon emissions at a very
    least-cost path, and so if we can do it, everyone else can do
    it. We just need to show the world that we can do it.
        Ms. Bonamici. Thank you.
        Thank you, Mr. Chairman. I yield back.
        Chairman Bridenstine. I thank the Ranking Member, and the
    gentleman from Alabama, Mr. Palmer, is recognized for two
    minutes.
        Mr. Palmer. Thank you, Mr. Chairman.
        Chairman Shaw, the Supreme Court recently ruled that the
    EPA erred in issuing its proposal to limit mercury emissions
    from fossil-fuel-fired power plants. Unfortunately, a number of
    states had already implemented control technologies and shut
    down plants in order to comply. What I'd like to ask you, and
    Mr. Butler, you can respond as well, and we've only got a
    couple of minutes, so if you can, make it brief, should this
    give states pause when considering whether to comply with the
    Clean Power Plan?
        Dr. Shaw. Certainly, Congressman, that's one of the great
    concerns. As I refer to it, it's the camel's nose getting under
    the tent, and that is the impacts of this rule will be
    irreversible in that decisions are already being made and the
    uncertainty is leading to decisions, and if this rule is not
    stayed, there are going to have to be decisions that are being
    made and frankly, coal-fired power plants are going to be
    making determinations, do I invest in some of the other
    regulations, some of which Mr. Butler talked about, in hopes
    that I'll still be allowed to operate under the Clean Power
    Plan. And so it's a great concern.
        Mr. Palmer. Because I've only got a minute, let me direct
    this question to you, Chairman Butler. Would it be your opinion
    that submitting a state implementation plan would potentially
    put your state and other states in a position of implementing
    costly regulations which might be struck down later by the
    Court?
        Mr. Butler. Representative Palmer, that's exactly the point
    that we were making as well with a group of states asking U.S.
    EPA to stay the execution of this until all these legal
    challenges and uncertainty have been resolved. The MATS rule is
    a clear example in Ohio. It caused 6,100 megawatts of power to
    be turned off this year and it's irreversible. The Clean Power
    Plan is far more sweeping than the MATS rule. We would expect
    an even greater result if that were to go forward.
        Mr. Palmer. I want to thank the Chairman and the Ranking
    Member Bonamici for allowing the additional questions. I yield,
    sir.
        Chairman Bridenstine. I'd like to thank the gentleman from
    Alabama, thank the witnesses for their valuable testimony. You
    want an additional two minutes as well? All right. The
    gentleman from Texas is recognized for two minutes.
        Mr. Weber. Thank you, Mr. Chairman. I appreciate your
    overriding generosity.
        Chairman Shaw, as you know, in Texas in the 81st or 82nd
    session we passed a law the Governor signed into effect that
    says the TCEQ in promulgating rules and regulations has to take
    into account the effect on industry and the economic impact. So
    I think we get right in Texas. A lot of people are moving to
    Texas as everybody recognizes, and we do create a lot of jobs.
    What advice would you give us in this last minute or so about
    the EPA, how they might could do things better, making the air
    cleaner, the water cleaner but still helping our economy? What
    advice would you offer?
        Dr. Shaw. Well, thank you, Congressman. I think I'll start
    with our mission. Our mission statement is effectively that
    we're to provide for clean air, clean water and the safe
    disposal of waste in keeping with sustainable economic
    development, and that's a recognition that we're not choosing
    the environment or the economics, one or the other; we're
    choosing to have both because we recognize that we have to have
    a strong economy to make further environmental investments and
    we have to have a clean environment to be able to track the
    kinds of jobs and businesses that people want to work in and
    raise their families around. And so my advice would be that if
    the EPA would focus and partner with states, recognizing that
    we want to protect our environment. We're looking for largely
    market-based approaches but certainly we want to be able to
    maintain our state's ability to customize those regulatory
    approaches to fit the specific dynamics of our state. We end
    up--and I think Texas is a great example. We're able to get
    greater results faster and more economically, and that helps to
    share them not only across the United States but even across
    the world as we do things more efficiently, others adopt those
    same techniques.
        Mr. Weber. Thank you, Chairman.
        Mr. Chairman, I yield back. Thank you.
        Chairman Bridenstine. You've got 15 more seconds if you'd
    like it.
        Mr. Weber. Director Butler, this is a question----
        Chairman Bridenstine. Okay. Now I recognize myself to
    close.
        I thank the witnesses for their valuable testimony and the
    Members for their questions. The record will remain open for
    two weeks for additional comments and written questions from
    the Members.
        This hearing is adjourned.
        [Whereupon, at 11:05 a.m., the Subcommittee was adjourned.]

                                   Appendix I

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                       Additional Material for the Record

                 Documents submitted by Representative Bonamici

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

               Documents submitted by Representative Bridenstine

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                  Document submitted by Representative Edwards

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                  Documents submitted by Representative Palmer

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                                 Appendix II

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                                     Slides

                 Slide submitted by Represenative Birdenstine

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                    Slide submitted by Represenative Foster

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