[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]





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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:]
    
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    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:]
    
    
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    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:]
    
    
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    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


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              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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                                 [all]