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


        EPA'S CO2 REGULATIONS FOR NEW AND EXISTING POWER PLANTS

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

                                HEARING

                               BEFORE THE

                    SUBCOMMITTEE ON ENERGY AND POWER

                                 OF THE

                    COMMITTEE ON ENERGY AND COMMERCE
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED FOURTEENTH CONGRESS

                             FIRST SESSION

                               __________

                            OCTOBER 7, 2015

                               __________

                           Serial No. 114-83
                           
                           
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]                           


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                   COMMITTEE ON ENERGY AND COMMERCE

                          FRED UPTON, Michigan
                                 Chairman

JOE BARTON, Texas                    FRANK PALLONE, Jr., New Jersey
  Chairman Emeritus                    Ranking Member
ED WHITFIELD, Kentucky               BOBBY L. RUSH, Illinois
JOHN SHIMKUS, Illinois               ANNA G. ESHOO, California
JOSEPH R. PITTS, Pennsylvania        ELIOT L. ENGEL, New York
GREG WALDEN, Oregon                  GENE GREEN, Texas
TIM MURPHY, Pennsylvania             DIANA DeGETTE, Colorado
MICHAEL C. BURGESS, Texas            LOIS CAPPS, California
MARSHA BLACKBURN, Tennessee          MICHAEL F. DOYLE, Pennsylvania
  Vice Chairman                      JANICE D. SCHAKOWSKY, Illinois
STEVE SCALISE, Louisiana             G.K. BUTTERFIELD, North Carolina
ROBERT E. LATTA, Ohio                DORIS O. MATSUI, California
CATHY McMORRIS RODGERS, Washington   KATHY CASTOR, Florida
GREGG HARPER, Mississippi            JOHN P. SARBANES, Maryland
LEONARD LANCE, New Jersey            JERRY McNERNEY, California
BRETT GUTHRIE, Kentucky              PETER WELCH, Vermont
PETE OLSON, Texas                    BEN RAY LUJAN, New Mexico
DAVID B. McKINLEY, West Virginia     PAUL TONKO, New York
MIKE POMPEO, Kansas                  JOHN A. YARMUTH, Kentucky
ADAM KINZINGER, Illinois             YVETTE D. CLARKE, New York
H. MORGAN GRIFFITH, Virginia         DAVID LOEBSACK, Iowa
GUS M. BILIRAKIS, Florida            KURT SCHRADER, Oregon
BILL JOHNSON, Ohio                   JOSEPH P. KENNEDY, III, 
BILLY LONG, Missouri                 Massachusetts
RENEE L. ELLMERS, North Carolina     TONY CARDENAS, California7
LARRY BUCSHON, Indiana
BILL FLORES, Texas
SUSAN W. BROOKS, Indiana
MARKWAYNE MULLIN, Oklahoma
RICHARD HUDSON, North Carolina
CHRIS COLLINS, New York
KEVIN CRAMER, North Dakota

                    Subcommittee on Energy and Power

                         ED WHITFIELD, Kentucky
                                 Chairman
PETE OLSON, Texas                    BOBBY L. RUSH, Illinois
  Vice Chairman                        Ranking Member
JOHN SHIMKUS, Illinois               JERRY McNERNEY, California
JOSEPH R. PITTS, Pennsylvania        PAUL TONKO, New York
ROBERT E. LATTA, Ohio                ELIOT L. ENGEL, New York
GREGG HARPER, Vice Chairman          GENE GREEN, Texas
DAVID B. McKINLEY, West Virginia     LOIS CAPPS, California
MIKE POMPEO, Kansas                  MICHAEL F. DOYLE, Pennsylvania
ADAM KINZINGER, Illinois             KATHY CASTOR, Florida
H. MORGAN GRIFFITH, Virginia         JOHN P. SARBANES, Maryland
BILL JOHNSON, Ohio                   PETER WELCH, Vermont
BILLY LONG, Missouri                 JOHN A. YARMUTH, Kentucky
RENEE L. ELLMERS, North Carolina     DAVID LOEBSACK, Iowa
BILL FLORES, Texas                   FRANK PALLONE, Jr., New Jersey (ex 
MARKWAYNE MULLIN, Oklahoma               officio)
RICHARD HUDSON, North Carolina
JOE BARTON, Texas
FRED UPTON, Michigan (ex officio)

                                  (ii)
                             
                             
                             C O N T E N T S

                              ----------                              
                                                                   Page
Hon. Ed Whitfield, a Representative in Congress from the 
  Commonwealth of Kentucky, opening statement....................     2
    Prepared statement...........................................     3
Hon. Bobby L. Rush, a Representative in Congress from the State 
  of Illinois, opening statement.................................     4
Hon. Frank Pallone, Jr., a Representative in Congress from the 
  State of New Jersey, opening statement.........................     5
    Prepared statement...........................................     7
Hon. H. Morgan Griffith, a Representative in Congress from the 
  Commonwealth of Virginia, opening statement....................     8
Hon. Fred Upton, a Representative in Congress from the State of 
  Michigan, prepared statement...................................    59

                                Witness

Janet McCabe, Acting Assistant Administrator, Office of Air and 
  Radiation, Environmental Protection Agency.....................     9
    Prepared statement...........................................    12
    Answers to submitted questions...............................    86

                           Submitted Material

Letter of December 1, 2014, from James M. Perrin, President, 
  American Academy of Pediatrics, et al., to Gina McCarthy, 
  Administrator, Environmental Protection Agency, submitted by 
  Mr. Rush.......................................................    60
Letter of December 1, 2014, from American Lung Association to 
  Gina McCarthy, Administrator, Environmental Protection Agency, 
  submitted by Mr. Rush..........................................    69
Congressional Record, September 15, 2015, pages H5977 to H5980, 
  submitted by Mr. Whitfield.....................................    79
Congressional Record, September 17, 2015, pages S6807 to S6809, 
  submitted by Mr. Whitfield.....................................    83

 
         EPA'S CO2 REGULATIONS FOR NEW AND EXISTING POWER PLANTS

                              ----------                              


                       WEDNESDAY, OCTOBER 7, 2015

                  House of Representatives,
                  Subcommittee on Energy and Power,
                          Committee on Energy and Commerce,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 10:05 a.m., in 
room 2123 Rayburn House Office Building, Hon. Ed Whitfield 
(chairman of the subcommittee) presiding.
    Members present: Representatives Whitfield, Olson, Barton, 
Shimkus, Pitts, Latta, Harper, McKinley, Pompeo, Kinzinger, 
Griffith, Johnson, Long, Ellmers, Flores, Mullin, Upton (ex 
officio), Rush, McNerney, Tonko, Engel, Green, Capps, Doyle, 
Castor, Sarbanes, Welch, Yarmuth, Loebsack, and Pallone (ex 
officio).
    Staff present: Nick Abraham, Legislative Associate, Energy 
and Power; Will Batson, Legislative Clerk; Leighton Brown, 
Press Assistant; Patrick Currier, Senior Counsel, Energy and 
Power; Tom Hassenboehler, Chief Counsel, Energy and Power; A.T. 
Johnston, Senior Policy Advisor; Mary Neumayr, Senior Energy 
Counsel; Chris Sarley, Policy Coordinator, Environment and the 
Economy; Dan Schneider, Press Secretary; Peter Spencer, 
Professional Staff Member, Oversight; Andy Zach, Counsel, 
Environment and the Economy; Jeff Carroll, Democratic Staff 
Director; Timia Crisp, Democratic AAAS Fellow; Caitlin 
Haberman, Democratic Professional Staff Member; Rick Kessler, 
Democratic Senior Advisor and Staff Director, Energy and the 
Environment; Josh Lewis, Democratic EPA Detailee; and Alexander 
Ratner, Democratic Policy Analyst.
    Mr. Whitfield. I would like to call the hearing to order 
this morning, and the subject, of course, is the hearing on 
EPA's CO2 Regulations for New and Existing Power 
Plants. And then, of course, also you all have a proposed rule 
that is part of this relating to a Federal Implementation Plan 
in the event States do not act.
    And, first of all, Ms. McCabe, we appreciate your being 
with us this morning as the Acting Assistant Administrator. 
You've been here many times before, and we genuinely appreciate 
your being here.
    At this time, I would recognize myself for 5 minutes for an 
opening statement.

  OPENING STATEMENT OF HON. ED WHITFIELD, A REPRESENTATIVE IN 
           CONGRESS FROM THE COMMONWEALTH OF KENTUCKY

    Not too many years ago, an autobiography was compiled of 
Harry Truman and it was entitled, ``Plain Speaking,'' and 
that's what I intend to do with my opening statement today, 
just do some plain speaking.
    In July, the United States Supreme Court ruled in the 
Michigan Case that the EPA had acted unreasonably and beyond 
its scope of authority on Utility MACT by not considering cost. 
And I was really taken back a little bit by the response that 
Ms. McCarthy and other spokesmen for EPA gave when they were 
questioned about that Supreme Court decision.
    Basically, every one of them said the regulation was 
finalized 3 years ago, the companies have already spent the 
money, so everything has been accomplished, and so basically 
sort of negating any emphasis on the Supreme Court's decision. 
And we perceive that that's precisely what is going to happen 
with this existing and new coal plant rule, that your goal is 
to have this implemented. Lawsuits we know are going to be 
filed, but you want to have it implemented so that if the 
Supreme Court rules against you, everything has already been 
done.
    Now, on the new coal plant rule we have serious problems 
with it. You know that. Initially, you gave as an example four 
plants that showed that carbon capture sequestration could be 
used in these coal plants. One was in Texas, which has not been 
built; one was in California, which has not been built; one was 
in Mississippi, which has had extensive cost overruns and 
without significant investment from the Federal Government 
never would have been built; and then you've got the Canadian 
plant, which is really a unit, 110 megawatts. It costs over $1 
billion a year. So, there's not any practical way available for 
anyone using reasonable cost figures to comply with this new 
rule, because the emission standard is so low that it simply 
cannot be achieved.
    And then on the existing coal plant rule you all talk 
frequently about oh, we're flexible, and we're maximum 
flexibility to the States, but you arbitrarily set the 
CO2 emission caps for every State, so it's going to 
be extremely difficult for many of the States to reach these 
caps.
    Now, when I go down to the District in Kentucky and around 
the country, I hear a lot about this is a rogue agency out to 
do in the fossil fuel industry. Many people view you as nothing 
but a political arm of the White House today, as a result of 
the President's Georgetown speech in which he said, ``I want 
EPA to act.'' And you all have followed that rule and you've 
acted. You've actually become a legislative arm, because 
Congress considered cap and trade, Congress considered 
CO2 emissions, and Congress did not act. And I've 
heard people at EPA and the President say repeatedly, 
``Congress did not act, so we are going to act.''
    And not only did the Supreme Court invalidate our question 
and call it unreasonable and acting beyond your scope of 
authority under the Michigan Case, but also in the Tailoring 
Rule. It said you went beyond your scope of authority. And then 
on this existing rule, how can we ever forget that one of the 
preeminent constitutional lawyers in the country, Larry Tribe, 
sat right there and said, ``You're burning the Constitution'' 
by these actions. And you had to reverse about 30 years of 
legal opinions of EPA itself in order to say you have the 
authority to act under 111(d).
    So, we are very much concerned about your running roughshod 
over the U.S. House of Representatives, U.S. Senate, the 
Governors, the attorney generals, the utilities, the people in 
the fossil fuel industry, the employees, and the American 
taxpayers. And it's interesting, the EIA recently reported 2014 
electricity rates went up 14 percent, and this year they 
anticipate them going up another 10 percent, but coal prices 
are down, natural gas prices are down, and oil prices are down. 
And, yet, all these independent reports say they're going up 
because of regulations. So, this committee, we're going to 
continue to do everything we can do to stop you. And not only 
that, but we're urging Governors to take action to stop you. 
And we know that lawsuits are going to continue to be filed, 
and this will be a big issue in 2016.
    [The prepared statement of Mr. Whitfield follows:)

                Prepared statement of Hon. Ed Whitfield

    This subcommittee has been examining EPA's carbon dioxide 
regulations for new and existing power plants since they were 
first proposed. Last August, EPA announced the final versions, 
and unfortunately none of the fundamental concerns we've raised 
appear to have been addressed. This EPA has become the 
political arm of the White House issuing regulations by fiat. 
It is time to stop and review what these rules mean for the 
Nation's electricity system and the economy overall. I welcome 
Acting Assistant Administrator Janet McCabe to this 
subcommittee.
    The new and existing source provisions are the most 
significant part of the President's Climate Action Plan, and 
they closely resemble the 2009 Waxman-Markey cap-and-trade bill 
in that they comprehensively control the electric sector well 
beyond the fence line of regulated power plants, and they 
threaten extraordinary costs yet will do almost nothing to 
reduce the earth's temperature. I believe that the regulatory 
version of cap and trade is every bit as inflexible and 
unworkable as the legislative version that I voted against.
    Our Ratepayer Protection Act addressed two major concerns 
with the existing source rule--its legality and its impact on 
ratepayers. First, the bill would have extended the compliance 
deadlines so that the rule's provisions would not take effect 
until after judicial review is complete. On this point, I am 
disappointed that EPA has not learned the lesson from its 
Mercury MACT rule, which the Supreme Court recently found to be 
legally flawed. This decision came too late to avoid serious 
economic damage, including the irreversible decision to close 
several coal-fired power plants in response to this rule. As 
with the Mercury MACT rule, the existing source rule's 
aggressive deadlines would necessitate potentially costly 
compliance measures before we know whether the rule will 
survive judicial scrutiny. And I might add that there are many 
reasons to question the legality of this unprecedented measure.
    The Ratepayer Protection Act also gave State Governors the 
authority to waive the existing source rule's provisions if 
they are determined to have a significant adverse effect either 
on ratepayers or on reliability. According to an analysis of 
the proposed rule by NERA, fully 43 States will experience 
double digit increases in electricity prices--and this is on 
top of rates that are already increasing due in part to other 
EPA regulations. Higher electric bills disproportionately hurt 
low income households and those on fixed incomes.
    On reliability, NERC and others with expertise on 
reliability have warned of the potential adverse impact of the 
existing source provisions. The final rule may be even more 
problematic than the proposed version, especially now that EPA 
has chosen to discourage new natural gas facilities as well as 
coal in favor of less-reliable renewables like wind and solar.
    Few if any of the concerns about the proposed existing 
source rule were addressed in the final version, and the 
reasons for the Ratepayer Protection Act are still applicable. 
And I might add that the new source rule also remains very 
problematic, as it will serve as a de facto ban on new coal 
generation. Today, with natural gas as cheap as it is, a ban on 
new coal may not seem so damaging, but circumstances may 
change, and I believe the Nation will suffer future adverse 
consequences from not having new coal generation as an option.
    In addition to the new and existing source final rules, I 
also have serious concerns with EPA's proposed ``Federal 
Plan,'' which would impose a Federal emissions trading program 
on any State that does not get its own plan approved. Again, I 
welcome Acting Administrator McCabe and look forward to 
learning more about all three rules.

    Mr. Whitfield. So with that, my time has expired and I 
would like to recognize at this time the gentleman from 
Illinois, Mr. Rush.

 OPENING STATEMENT OF HON. BOBBY L. RUSH, A REPRESENTATIVE IN 
              CONGRESS FROM THE STATE OF ILLINOIS

    Mr. Rush. 2016 is right around the corner, Mr. Chairman, 
and let us all buckle our seat with this wild ride to 2016. I 
want to thank you, Mr. Chairman, for holding today's hearing on 
the EPA's carbon rules. Certainly, to me, it feels like deja vu 
all over again.
    I also want to thank Assistant Administrator Ms. McCabe for 
being here today. And as always, I look forward to your 
thoughtful, insightful, and expert testimony on the matter at 
hand.
    Mr. Chairman, today we will examine EPA's carbon regulation 
for the exceedingly umpteenth time. At the very outset, I must 
emphatically commend the agency for its open, its honest 
responsiveness to stakeholders' concerns in issuing its final 
rule.
    Mr. Chairman, since the last time Ms. McCabe testified 
before this subcommittee and after serious consideration of 
thousands of comments from various stakeholders, EPA has made 
significant changes to the Clean Power Plan.
    In regards to timing, the compliance period was pushed back 
from 2020 to 2022. In the interim reduction goals can be 
achieved more gradually between 2022 and 2029, and States are 
provided additional flexibility for reducing their emission 
from year 2022 all the way up to the year 2030.
    Additionally, Mr. Chairman, EPA's final rule provides 
States up to 3 years if necessary to submit a State plan and 
also propose a model rule that makes it easier for States to 
adopt interstate trading as many of them had requested.
    No doubt, Mr. Chairman, in response to concerns voiced here 
repeatedly, EPA's final rule now requires States to consider 
reliability when developing their plans. It allows flexibility 
to include a variety of approaches to achieving their goals, 
and it provides a reliability safety valve for extraordinary 
circumstances. So, Mr. Chairman, after unprecedented public 
outreach and engagement, EPA was able to finalize a rule that 
is fair, that is flexible, and that demonstrates to the world 
that the U.S. is, indeed, serious in its commitment to lower 
its carbon imprint in order to address climate change.
    And why are these rules so necessary and essential? Plainly 
speaking, Mr. Chairman, from the vast majority of the American 
people to the overwhelming majority of the world's 
climatologists and scientists, from the leaders of the world's 
most advanced nations to Pope Francis, it seems that almost 
everyone everywhere understands that climate change is real, 
and is posing an existential threat to the future of our home, 
this great planet that we were given stewardship over. That is 
everyone except the majority party in this Congress.
    Plainly speaking, Mr. Chairman, as Mother Nature continues 
to demonstrate annually year by year, extreme weather patterns 
and catastrophic events occurring more frequently in every 
region of our great Nation, climate change is not a hoax. 
Climate change is not a joke, and climate change is not 
something that this U.S. Government can continue to ignore or 
to take lightly, Mr. Chairman. Mr. Chairman, climate change is 
not a hoax. Let's take it seriously. It's a serious matter.
    Plainly speaking, Mr. Chairman, while the majority party 
continues to put its collective heads in the sand and ignore 
the facts, devastating wildfires burn in the West, the 
Southeast experiencing thousand-year floods. The Midwest and 
Plain States see record drought and crop loss, and the American 
people are standing by anxiously awaiting for some leadership, 
some leadership on this very important issue from you, from me, 
from other elected officials, those of us who are members of 
this Congress.
    Mr. Chairman, I applaud the President and the EPA for 
standing up to protect the environment on behalf of those 
families out there waiting for their Government to act.
    Thank you, and I yield back the balance of my time.
    Mr. Whitfield. Thank you, Mr. Rush.
    At this time, the Chair recognizes the ranking member of 
the full committee, Mr. Pallone, for 5 minutes.

OPENING STATEMENT OF HON. FRANK PALLONE, JR., A REPRESENTATIVE 
            IN CONGRESS FROM THE STATE OF NEW JERSEY

    Mr. Pallone. Thank you, Mr. Chairman.
    I applaud EPA's efforts to finalize the Clean Power Plan, 
which is an historic and important step in our ongoing battle 
against the threat of unchecked climate change.
    According to NOAA, 2014 was the warmest year ever recorded, 
and 9 of the 10 hottest years have occurred since 2000. In 
fact, this past summer was the hottest on record, and 2015 is 
well on its way to surpassing last year's record. Every corner 
of the earth is going to be affected.
    Representing a coastal area that saw firsthand the damage 
done by Superstorm Sandy, I'm particular concerned about 
extreme weather events and sea level rise. We're already 
experiencing warmer and more frequent hot days, more frequent 
and heavier rainstorms, drier and longer droughts, and more 
extreme high sea levels. In the past week, North and South 
Carolina saw unprecedented levels of rain, 16 people have died, 
and early reports estimate billions of dollars in damage. And, 
sadly, extreme weather like this has become the new norm.
    As President Obama recently said and I quote, ``Climate 
change is no longer some far off problem. It's happening here, 
it's happening now. We cannot wait for some future generation 
to take action.'' To that end, EPA finalized a workable plan to 
reduce carbon emissions from power plants which are the largest 
uncontrolled source of manmade greenhouse gases in the U.S.
    Overall, EPA engaged in an unprecedented level of outreach 
and public engagement on the Clean Power Plan. The final rule 
reflects extensive stakeholder input, including over 4.3 
million public comments, a series of listening sessions held 
across the country, and scores of meetings with stakeholders 
across the spectrum.
    As a result of the comments received on the proposal, EPA 
made a number of changes to the final Clean Power Plan to 
insure flexibility, affordability, reliability, and investment 
in clean energy technologies. And the Clean Power Plan is not a 
one-size-fits-all proposal for reducing emissions. It uses a 
flexible State-based approach that takes account of each 
individual State's unique capacity to reduce emissions from its 
electricity sector. And in the final rule, EPA made changes to 
the plan's building blocks to provide more flexibility for 
States when determining the best way to achieve their 
individual goals, while still providing compliance options and 
ample opportunity for the use of energy efficiency to reduce 
carbon pollution from power plants.
    Now, EPA is not proposing the States act overnight. States 
have until 2030 to meet their final goals, and the plan's 
interim goals don't begin until 2022. Further, the final rule 
provides additional flexibility for States to determine their 
own individual compliance pathway. And EPA is encouraging 
States to make early emission reductions by creating a Clean 
Energy Incentive Program that will reward early investments in 
wind and solar generation, as well as demand-side energy 
efficiency programs implemented in low-income communities.
    Ultimately, the Clean Power Plan represents a serious 
commitment to climate action, and will result in climate 
benefits of $20 billion, and health benefits of $14-34 billion. 
Increased levels of carbon dioxide in our atmosphere are 
threatening the health and well-being of all Americans, and 
this plan will protect public health by avoiding 3,600 
premature deaths, 1,700 heart attacks, and 90,000 asthma 
attacks each year.
    Let's not heed the absurd arguments on behalf of companies 
that profit from the status quo. We've already heard from some 
that EPA's plan is not legal, that it's unworkable, and that 
some States may refuse to participate, but as I've said before, 
those making such arguments aren't really interested in finding 
solutions to our carbon pollution problem. They're not 
interested in developing a plan to help us reduce emissions 
while still maintaining a safe, reasonably priced electricity 
system.
    They're more than welcome to ignore the facts and reject 
any reasonable plan to address climate change, but let me tell 
you, history will not treat them kindly. History is on the side 
of those who want to act on climate change, those who believe 
in the power of American innovation, and our ability to 
successfully meet any challenge, and to look to the future 
rather than the past.
    Frankly, we've already wasted enough time on legislation to 
just say no to climate action, and now Congress must move on. 
What we cannot do, as President Obama said, and I'll close, and 
I quote. He said is, ``We cannot condemn our children to a 
planet beyond their capacity to repair.''
    I yield back, Mr. Chairman.
    [The prepared statement of Mr. Pallone follows:)

             Prepared statement of Hon. Frank Pallone, Jr.

    Thank you, Mr. Chairman. I applaud EPA's efforts to 
finalize the Clean Power Plan, which is a historic and 
important step in our ongoing battle against the threat of 
unchecked climate change.
    According to NOAA, 2014 was the warmest year ever recorded, 
and 9 of the 10 hottest years have occurred since 2000. In 
fact, this past summer was the hottest on record, and 2015 is 
well on its way to surpassing last year's record.
    Every corner of the Earth is going to be affected, but, 
representing a coastal area that saw firsthand the damage done 
by Superstorm Sandy, I am particularly concerned about extreme 
weather events and sea level rise.
    We are already experiencing warmer and more frequent hot 
days, more frequent and heavier rainstorms, drier and longer 
droughts, and more extreme high sea levels. In the past week, 
North and South Carolina saw unprecedented levels of rain. 
Sixteen people have died, and billions of dollars of damage has 
occurred. Sadly, extreme weather like this has become the new 
norm.
    As President Obama recently said: ``Climate change is no 
longer some far-off problem; it is happening here, it is 
happening now.'' We cannot wait for some future generation to 
take action.
    To that end, EPA finalized a workable plan to reduce carbon 
emissions from power plants, which are the largest uncontrolled 
source of man-made greenhouse gases in the U.S.
    Overall, EPA engaged in an unprecedented level of outreach 
and public engagement on the Clean Power Plan. The final rule 
reflects extensive stakeholder input, including over 4.3 
million public comments, a series of listening sessions held 
across the country and scores of meetings with stakeholders 
across the spectrum.
    As a result of the comments received on the proposal, EPA 
made a number of changes to the final Clean Power Plan, to 
ensure flexibility, affordability, reliability, and investment 
in clean energy technologies.
    The Clean Power Plan is not a one-size-fits-all proposal 
for reducing emissions. It uses a flexible, State-based 
approach that takes account of each individual State's unique 
capacity to reduce emissions from its electricity sector. And 
in the final rule, EPA made changes to the plan's ``building 
blocks'' to provide more flexibility for States when 
determining the best way to achieve their individual goals, 
while still providing compliance options and ample opportunity 
for the use energy efficiency to reduce carbon pollution from 
power plants.
    EPA is not proposing that States act overnight--States have 
until 2030 to meet their final goals and the plan's interim 
goals don't begin until 2022. Further, the final rule provides 
additional flexibility for States to determine their own 
individual compliance pathway.
    And EPA is encouraging States to make early emissions 
reductions by creating a Clean Energy Incentive Program that 
will reward early investments in wind and solar generation, as 
well as demand-side energy efficiency programs implemented in 
low-income communities.
    Ultimately, the Clean Power Plan represents a serious 
commitment to climate action and will result in climate 
benefits of $20 billion and health benefits of $14-$34 billion. 
Increased levels of carbon dioxide in our atmosphere are 
threatening the health and well-being of all Americans--and 
this plan will protect public health by avoiding 3,600 
premature deaths, 1,700 heart attacks, and 90,000 asthma 
attacks each year.
    Let us not heed the absurd arguments on behalf of companies 
that profit from the status quo. We have already heard from 
some that EPA's plan is not legal, that it is unworkable, and 
that some States may refuse to participate.
    As I've said before, those making such arguments aren't 
really interested in finding solutions to our carbon pollution 
problem. They aren't interested in developing a plan to help us 
reduce emissions while still maintaining a safe, reasonably 
priced electricity system. They are more than welcome to ignore 
the facts and reject any reasonable plan to address climate 
change, but history will not treat them kindly. History is on 
the side of those who want to act on climate change; those who 
believe in the power of American innovation and our ability to 
successfully meet any challenge, and who look to the future 
rather than the past.
    Frankly, we have already wasted enough time on legislation 
to ``just say no'' to climate action, and now Congress must 
move on. What we cannot do, as President Obama said, is 
``condemn our children to a planet beyond their capacity to 
repair.''
    Thank you.

    Mr. Whitfield. At this time, the Chair recognizes the 
gentleman from Virginia, Mr. Griffith, for 5 minutes.

OPENING STATEMENT OF HON. H. MORGAN GRIFFITH, A REPRESENTATIVE 
             IN CONGRESS FROM THE STATE OF VIRGINIA

    Mr. Griffith. Thank you very much, Mr. Chairman.
    You know, it's interesting. To assist States in developing 
State plans, the EPA has proposed model trading rules. Let me 
read you from pages 42 and 43 of your proposed rule setting 
forth a Federal plan. EPA states, ``The EPA strongly urges 
States to consider adopting one of the model trading rules 
which are designed to be referenced by States in their 
rulemaking. Use of the model trading rules by States would help 
insure consistency between and among the State programs which 
is useful for potential operation of a broad trading program 
that spans multi-State regions or operates on a national 
scale.''
    Now, what's interesting about that is, I'm also going to 
reference some quotes from the past, and not the distant past, 
the recent past. ``There is no cap-and-trade scheme provided 
for under the Clean Air Act. For greenhouses gases, I should 
say, sir, what I do know is what--is that we are not planning 
any cap-and-trade regulations or standards.'' Former 
Administrator Lisa Jackson in response to Representative Steve 
Scalise, February 9, 2011, in this room.
    Administrator Jackson and Assistant Administrator McCarthy 
have stated publicly, ``The agency has no intention of pursuing 
a cap-and-trade program for greenhouse gases under the Clean 
Air Act. The agency reaffirms those statements here.'' August 
3rd, 2011.
    ``Both former Administrator Jackson and I have said in the 
past that the EPA has no intention of pursuing a cap-and-trade 
program for greenhouse gases, and I continue to stand by those 
statements.'' May 15, 2013 in a letter to Chairman Upton.
    ``The Clean Power Plan is not a cap-and-trade program. It's 
not going to be designed like a cap-and-trade program. This is 
not an opportunity for us to impose a cap. That's not what it 
looks like.'' Administrator Gina McCarthy in response to 
Senator Heitkamp on March 14 in a panel in the video.
    You know, the problem is, is that it looks like a cap-and-
trade program. You call it a model trading plan. You say that 
if the States don't come up with an appropriate plan, the 
Federal Government will come in and help them develop a plan; 
perhaps a cap-and-trade-type plan.
    I was elected in 2010. A 28-year incumbent went down 
because he voted for a cap-and-trade plan. You're not only 
showing disrespect to the Congress, disrespect to what I 
believe the Supreme Court told you in the Mercury Rule. You're 
also showing disrespect to the voters of this country that 
turned down an awful lot of folks. Cap and trade is not a 
policy this United States should follow, and so I would submit 
to you that you probably need to look someplace else. I don't 
think you have legal authority for this rule, as you know. That 
will be debated in the courts, but just like the Mercury Rule--
which was found that you all had overreached and had to go back 
to the drawing board--those jobs in my district are already 
gone before the Supreme Court could make a ruling.
    With that, Mr. Chairman, I would yield to the gentleman 
from West Virginia, Mr. McKinley.
    Mr. McKinley. Thank you.
    Mr. Chairman, I had the opportunity on Friday to take 
Congressman Welch from Vermont to an underground coal mine in 
West Virginia, and prior to that going underground we had a 
chance to sit down and talk with about 12 unemployed coal 
miners that have lost their job, and to look them in the eye to 
understand what can we do? What's happened? And, universally, 
Ms. McCabe, universally they said it's regulations. Regulations 
are what--we have had seven power plants in West Virginia here 
have been shut down, 45 percent of our coal miner workforce has 
been unemployed. And they were saying watch the regulations, so 
I just want to share with you, here is this list that's 20-some 
pages long--feet long of over 1,500 regulations that have been 
imposed under this administration on coal mines, and coal 
companies, and coal miners.
    It's no wonder they can't find jobs. They're willing to go 
someplace else, but they can't sell their home. They're living 
in communities of 1,000 people and they'll go to another place 
to work someplace else, but they can't sell their home. That's 
their equity.
    This administration has taken us in West Virginia from the 
fifth-best unemployment rate to the 51st unemployment rate in 
the Nation because of these 1,500 regulations. I think it's got 
to stop, and for anyone to testify before us and say this is 
fair, look them in the eye. Look them in the eye, that coal 
miner, and say it's fair that you just lost your job because of 
our regulations. I don't think that you can do that.
    I yield back my time.
    Mr. Whitfield. The gentleman yields back, and that 
concludes the opening statements.
    So, Ms. McCabe, at this time you're recognized for 5 
minutes for your opening statement. Thank you.

  STATEMENT OF JANET McCABE, ACTING ASSISTANT ADMINISTRATOR, 
  OFFICE OF AIR AND RADIATION, ENVIRONMENTAL PROTECTION AGENCY

    Ms. McCabe. Thank you very much, Chairman Whitfield, 
Ranking Member Rush, and members of the subcommittee. I really 
appreciate the opportunity to testify before you today on EPA's 
Carbon Pollution Regulations for New and Existing Power Plants.
    My testimony will focus mostly on the regulations for 
existing plants, also known as the Clean Power Plan. On August 
3rd, President Obama and EPA Administrator Gina McCarthy 
announced the final Clean Power Plan, a historic and important 
step in reducing carbon pollution from power plants that takes 
concrete action to address climate change, as well as final 
standards limiting carbon pollution from new, modified, and 
reconstructed power plants, and a proposal for a Federal plan 
and model rules that demonstrate clear options for how States 
can implement the Clean Power Plan in ways that maximize 
flexibility for power plants in achieving their carbon 
pollution obligations.
    Shaped by a process of unprecedented outreach and public 
engagement that is still ongoing, the final Clean Power Plan is 
fair, flexible, and designed to strengthen the fast-growing 
trend toward cleaner and lower polluting American energy. It 
sets strong but achievable standards for power plants and 
reasonable goals for States to meet in cutting the carbon 
pollution that is driving climate change tailored to their 
specific mix of sources. It also shows the world that the 
United States is committed to leading global efforts to address 
climate change.
    The final Clean Power Plan mirrors the way electricity 
already moves across the grid in this country. It sets 
standards that are fair and consistent across the country and 
that are based on what States and utilities are already doing 
to reduce CO2 from power plants. And it gives States 
and utilities the time and a broad range of options they need 
to adopt strategies that work for them.
    These features of the final rule along with tools like 
interstate trading and emissions averaging mean that States and 
power plants can achieve the standards while maintaining an 
ample and reliable electricity supply and keeping power 
affordable.
    When the Clean Power Plan is fully in place in 2030, carbon 
pollution from the power sector will be 32 percent 2005 levels, 
and the transition to cleaner methods of generating electricity 
will better protect Americans from other harmful air pollution, 
too, meaning we will avoid thousands of premature deaths and 
suffer thousands fewer asthma attacks and hospitalizations in 
2030 and every year beyond.
    States and utilities told us they needed more time than the 
proposal gave them, and we responded. In the final rule, the 
compliance period does not start until 2022, the interim 
reductions are more gradual, States can determine their own 
glide path and any State can get up to 3 years to submit a 
plan.
    We heard the concerns about reliability. We listened, and 
we consulted with the planning and reliability authorities, 
with FERC and the Department of Energy. The final Clean Power 
Plan reflects this input, and it includes several elements to 
assure that the plan requirements will not compromise system 
reliability. In addition, to provide an extra incentive for 
States to move forward with plan investments we're creating a 
Clean Energy Incentive Program that will recognize early 
progress.
    Since issuing the final Clean Power Plan, EPA has continued 
to engage with States, territories, tribes, utilities, industry 
groups, community organizations, health and environmental 
groups, and others. To help States and stakeholders understand 
the Clean Power Plan and to further support States' efforts to 
create plans that suit their needs, EPA has developed a variety 
of tools and resources which are largely available on our Web 
site, and we remain committed to assisting States with 
development and implementation of their State plans.
    We're convinced both by our analyses and our experiences 
that both the carbon pollution reduction called for under the 
Clean Power Plan will extend the trajectory of the last 40 
years when we cut air pollution in this country by 70 percent 
while our economy has tripled.
    I, again, thank the committee for inviting me to speak on 
the Agency's work to implement our Nation's environmental laws 
to protect public health and the environment, and I look 
forward to your questions.
    [The prepared statement of Ms. McCabe follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT] 
    
    Mr. Whitfield. Thank you, Ms. McCabe. And I recognize 
myself for 5 minutes of questions.
    When do you expect the two rules to be published in the 
Federal Register?
    Ms. McCabe. Congressman, we're working with the Office of 
the Federal Register. They will make the decision about when to 
publish it. We expect it to be in the second half of October, 
and we're working with them to resolve all the little 
formatting things that is a routine part of getting a rule 
published in the Federal Register.
    Mr. Whitfield. Now, did you finalize the rule in August? Is 
that right, those two rules?
    Ms. McCabe. That's right.
    Mr. Whitfield. And you're working with the Office of the 
Federal Register.
    Ms. McCabe. Correct.
    Mr. Whitfield. And who makes the decision on when it's 
published?
    Ms. McCabe. The Office of the Federal Register makes the 
decision. There's a routine set of steps that we do whenever we 
finalize a rule. We work on fixing any typos and all that sort 
of thing. We submit it to the Office of the Federal Register, 
and we work with them to resolve any issues that they have, but 
they make the final decision.
    Mr. Whitfield. And how many pages in these rules?
    Ms. McCabe. There are several thousands of pages in the 
rules.
    Mr. Whitfield. I mean, 2,000, 3,000, 4,000?
    Ms. McCabe. I think the 111(d) rule is about 1,500 pages, 
and the other rules are less than that.
    Mr. Whitfield. Well, you know, it's important that they be 
published in the Federal Register because, as you know, 
lawsuits have already been filed, but they were filed before 
they were published.
    Ms. McCabe. Yes.
    Mr. Whitfield. And if they're not published, then there's 
no standing to bring the suit. So, you think they'll be 
published in October?
    Ms. McCabe. Yes, I do.
    Mr. Whitfield. This month?
    Ms. McCabe. Yes. We've moved this along very expeditiously 
given the size of the rule and the number of the rules.
    Mr. Whitfield. Now, under the NAAQS rules, normally EPA 
gives States 3 years to come up with a plan. This 111(d) is 
unprecedented, never been used in this way before. You changed 
your legal opinions because prior to this, your lawyers have 
said we can't operate this way under 111(d). But why are you 
giving States only like 13 months to issue a final plan, when 
under the NAAQS rules you give them up to 3 years?
    Ms. McCabe. Yes.
    Mr. Whitfield. This is more complicated.
    Ms. McCabe. No, they actually do have up to 3 years under 
the----
    Mr. Whitfield. No, no, wait. You give them 1 year to submit 
the plan and then they have to come and ask permission for an 
additional 2 years. Is that correct?
    Ms. McCabe. The rule is clear that States can have up to 3 
years to do their plan.
    Mr. Whitfield. Do you have--OK. So, what is the magic of 
September 2016?
    Ms. McCabe. The rule says that by September of 2013, they 
either submit a plan. Some States indicated to us that they 
were well on their way and could meet an early deadline.
    Mr. Whitfield. The rule says that they have to have the 
plan filed by September 2016.
    Ms. McCabe. Or an initial submittal that gives essentially 
a status report of the work that they're doing, and a request 
for additional time. And we'd made it clear----
    Mr. Whitfield. And who makes the decision that that request 
will be granted?
    Ms. McCabe. The EPA will make that decision.
    Mr. Whitfield. You make that decision.
    Ms. McCabe. We've been very clear of the elements that are 
required.
    Mr. Whitfield. Are you required to give them an extension, 
or is that at your discretion?
    Ms. McCabe. If they meet the elements of an initial 
submittal, we will give them an extension. That's quite clear.
    Mr. Whitfield. Now, let me ask you this. Under the new 
rule, all of us are still scratching our heads. You picked out 
these four sites. The Boundary Dam Facility in Canada appears 
to be the only coal project using CCS, carbon capture 
sequestration, that is actually producing electric power today, 
the only facility in the world. Is that your understanding?
    Ms. McCabe. I wouldn't want to speak to the whole world. 
That one has been operating for a year. As you know, of course, 
the technology is being used in other facilities.
    Mr. Whitfield. Now, let me just say this. I want to note 
for the record, according to an August Department of Energy 
communication to a committee hearing record, DOE confirmed that 
this small Canadian project, 110 megawatts, has and is not 
likely to achieve the technology-readiness level that 
demonstrates a commercial scale power system with CCS can 
operate over the full range of expected conditions. No one 
expects to be able to meet this standard of 1400, what is it, 
1400 pounds of carbon dioxide per megawatt hour. That's the 
standard. Right?
    Ms. McCabe. Well, if I could speak to that, Congressman, 
I'd like to, because you reference the standard itself. I think 
you know that the standard that we finalized in 111(b) is less 
strict than the standard that we proposed. That was based on 
our review of all the information that we----
    Mr. Whitfield. Whether it's less strict or not, the final 
is 1,400 pounds of CO2 per megawatt hour. Is that 
correct?
    Ms. McCabe. That's correct.
    Mr. Whitfield. Now, you know the cleanest plant operating 
in the U.S. today is the Turk plant, Texarkana, Arkansas, built 
about 2 or 3 years ago. It's at 1,800 pounds, so there's no way 
to meet this standard.
    My time has expired, so I'll recognize the gentleman from 
Illinois, Mr. Rush, for 5 minutes.
    Mr. Rush. Madam Assistant Administrator, the last time you 
were here, you and I spoke about the impact that the Clean 
Power Plan would have on minorities and low-income communities, 
and at that time you assured me that the EPA would take into 
account those disadvantaged communities before the final rule 
was issued. Has there been any outreach to disadvantaged 
communities by the EPA before the issuance of this rule? And 
does the EPA provide any guidance to States for how to make 
sure that their plans take into account the impact on 
minorities and low-income communities?
    Ms. McCabe. Yes, indeed, Congressman. I know this is a 
concern that you've asked us about before, so a couple of 
things I want to say in response.
    First of all, we've had extensive outreach with community 
groups. We know, and you reflected in your opening remarks that 
the impacts of climate change and air pollution are severely 
felt by low-income and minority communities across the country. 
They're among the most vulnerable. They are also communities 
that we're concerned about in terms of keeping electric rates 
affordable, and keeping jobs in those communities, so we 
focused on that a lot.
    So, we spent a lot of time listening to community groups 
and talking with States. We made clear in the final rule that 
States needed to pay attention to involving, providing 
opportunities for meaningful involvement for communities all 
across their States. We asked them to tell us how they were 
going to do that. We didn't micro manage and tell them exactly 
how to do it, but we have lots of tools available to help 
States do that.
    We also indicated that we intend in future years after the 
rule is in place and working to go back and take a look at air 
pollution levels in those communities and make sure that the 
public health protections that this rule promises have been 
delivered in a fair way across our States, and truly protect 
those vulnerable communities.
    Mr. Rush. Other rules were supposed to invest in cleaner 
and more efficient energy measures such as the CPP proposes, 
and also provide help to the most vulnerable communities. Are 
there any incentives in the final rule for disadvantaged 
communities who might want to participate in a clean green 
economy? And can you give me an example, say Appalachia, how 
does Appalachia respond to the Clean Power Plan?
    Ms. McCabe. Yes. So, probably the best example of 
incentives that you asked about, Congressman, is the Clean 
Energy Incentive Program, which provides additional incentives 
for States that want to get going early and, in particular, 
invest in wind and solar, but also in energy efficiency 
programs in low-income communities. We felt that it was 
important to provide extra incentives to get those projects 
going early. And, of course, energy efficiency while not a 
basis for the rates that we set in the Clean Power Plan, is a 
very affordable, cost-effective, and positive means that States 
and utilities can build into their compliance plans.
    Your question about coal country, you know, is a very, very 
serious and valid one. The final design of the Clean Power Plan 
is so flexible for States, especially in their ability to work 
regionally, and for the utilities to work regionally. That will 
provide the States the ability to make sure that they're 
preserving and protecting the important things for their 
States. And we predict through this plan that coal will still 
be a very substantial source of energy in this country well 
into the future, and it's partly because of the flexible design 
of the rule.
    Mr. Rush. Thank you, Mr. Chairman.
    Mr. Whitfield. The gentleman yields back. At this time, the 
Chair recognizes the gentleman from Texas, Mr. Barton, for 5 
minutes.
    Mr. Barton. Thank you, Mr. Chairman. It's good to have you 
here, Ms. McCabe. We appreciate your courtesy of coming to talk 
to us.
    I think it's a true statement that back in 1990 when we 
passed the Clean Air Act amendments, Chairman Upton and myself 
were the only two members of the committee currently that were 
also on the committee then. I don't think any of the senior 
Democrats were on the committee at that time, but if they were, 
I apologize. In any event, the full committee chairman was John 
Dingell of Michigan. He spent several years putting together 
the coalition of which I was a small part to move that bill 
through this committee, and through the Congress.
    My recollection is that we spent an inordinate amount of 
time working on the acid rain title which implemented a 
nationwide emissions trading program for SO2. There were 
numerous stakeholder meetings. I remember going to the White 
House to meet with President Bush and Governor Sununu. I 
remember numerous Congressional hearings. I mean, we spent a 
lot of time on that.
    We spent no time on section 111(d) of the Clean Air Act, 
none. Do you have any records at EPA that indicate the Congress 
spent, I mean, any public time at all on this minor provision?
    Ms. McCabe. I really don't know, Congressman.
    Mr. Barton. Yes. Well, they didn't. I mean, I--now you're 
using, not you personally but your Agency is using section 
111(d) to give the EPA basically total authority to create in a 
regulatory fashion a cap-and-trade program for carbon dioxide, 
which there was no intent in the Congress in the early '90s, no 
legislative record, no background at all. Your own attorneys at 
the EPA think it's uncertain. You know there's going to be a 
court case on this, and yet you're trying literally to create 
in a regulatory fashion what the Congress has refused to do in 
a legislative fashion. I think that's just wrong.
    Can you tell this committee or this subcommittee where 
section 111(d) spells out clearly and specifically that the EPA 
has the authority to set mandatory emission limits, 
requirements that extend well beyond the actual sources being 
regulated?
    Ms. McCabe. Well, Congressman, I appreciate you asking this 
question because it's obviously on everybody's minds. So, the 
first thing that I want to make absolutely clear is that the 
Clean Power Plan does not set in place a cap-and-trade program.
    Mr. Barton. I beg the--how can you say that with a straight 
face?
    Ms. McCabe. Well, because that's what the rule sets. The 
rule sets----
    Mr. Barton. With all respect, ma'am, in the State of Texas 
we're going to have to shut down existing coal plants and build 
more wind power than the rest of the world has. If that's not a 
cap-and-trade program, what the heck is it?
    Ms. McCabe. Texas, by the way, is doing an awesome job in 
terms of wind power. It's incredible opportunities to do that.
    The reason that I'm disagreeing with you respectfully, 
Congressman, is because the way the rule works is it 
establishes an emission rate of CO2 emissions for 
coal and gas-fired power plants. That is the way section 111 
has traditionally worked, and that's the way it's working here. 
So, that is the primary starting point, is that rate.
    We then in the rule provide options and flexibilities 
largely in response to input and requests that we got from 
States and the utility industry to provide alternative ways for 
them to comply.
    Mr. Barton. Well, with all respect, my time is about to 
expire, but if this rule goes through, and I hope it doesn't, 
Texas has to build more wind generation than any other nation 
in the world currently has. Now that's a fact. And the problem 
is, even in Texas we can't make the wind blow when the EPA says 
it has to. I mean, it's simply not going to work.
    I respect your integrity, I respect your commitment to what 
you do but, again, I was here in 1990. I voted for the Clean 
Air Act amendments. Your Agency is trying to do with it 
something that it was never intended to. We would have put it 
in, you can guarantee that John Dingell would have put it in if 
that's what the intent of the Congress was.
    With that, Mr. Chairman, I yield back.
    Mr. Whitfield. The gentleman's time has expired. At th is 
time, the Chair recognizes the gentleman from New Jersey, Mr. 
Pallone, for 5 minutes.
    Mr. Pallone. Thank you, Mr. Chairman. And thank you, Ms. 
McCABE, for your testimony.
    The Clean Power Plan is an important step in reducing 
emissions from power plants, the Nation's largest source of 
carbon pollution. And today we've heard about the actions that 
EPA has taken to create strong, fair, and flexible standards 
that will put us on the path to a clean energy future and help 
avoid the worst impacts of climate change.
    However, despite the overwhelming scientific evidence and 
broad public support we continue to hear a litany of arguments 
from the GOP for why we shouldn't act, you know, climate change 
is a hoax. They say carbon dioxide is not a pollutant, EPA is a 
rogue agency with no authority to limit carbon pollution.
    I'd like to give you an opportunity to respond to a few of 
these assertions. And first, you know, yes or no, is carbon 
dioxide a pollutant?
    Ms. McCabe. Yes, it is.
    Mr. Pallone. Can you briefly explain why EPA has the 
authority to address carbon pollution from power plants?
    Ms. McCabe. Well, the Clean Air Act directs EPA to address 
public health and environmental issues that result from air 
pollution. The Supreme Court has confirmed that. One key 
authority in the Clean Air Act that has been used many times to 
address air pollution from industrial facilities is section 
111, which directs us to look at the range of approaches that 
industries are using to control air pollution, in this case 
CO2, and to set emission standards based on what's 
known as the Best System of Emission Reduction. That's things 
that the best companies are doing already, and to require that 
over time that's where everybody end up in terms of their 
emissions. So, that's where our authority comes from to do this 
rule.
    Mr. Pallone. All right. Is there any way we can reduce our 
emissions by enough to avoid the worst impacts of climate 
change without controlling carbon pollution from power plants?
    Ms. McCabe. Power plants are the largest stationary source 
of CO2 in the country. They are substantial. We are 
taking steps to address CO2 emissions from the 
mobile source sector and from other sectors, but this is a 
global problem, of course, and the U.S. cannot solve it alone. 
But for us to take meaningful steps we need to look at the 
power sector, as well as mobile sources.
    Mr. Pallone. I've also heard from my Republican colleagues 
that they say that no one goes to the hospital for breathing in 
carbon pollution so there can't be any real public health 
benefits from limiting carbon pollution from power plants. 
Could you explain how the Clean Power Plan will help protect 
public health and welfare?
    Ms. McCabe. Yes, and there's increasing science every day 
on these issues. CO2 emissions are affecting the 
global climate and are leading to changes in the way our world 
responds to those levels in the atmosphere in a way that 
affects public health very directly. Temperatures get hotter, 
there are droughts, there are wildfires, there are 
unpredictable and more severe storms. These can lead to a 
number of public health issues related to respiratory issues 
when there's more ozone because of hot weather, when the 
allergen seasons are longer because of changes in vegetation, 
vectors change their habitats and the length of their seasons. 
All of these things can lead to significant public health 
issues, as well as the disruption that can occur in our 
communities as a result of more severe flooding, or drought, or 
other severe weather.
    Mr. Pallone. I know that in our previous hearings you've 
discussed the unprecedented outreach efforts undertaken by EPA 
to inform the development, to inform the public about the 
proposed rule. So, I just wanted to hear a little bit now about 
outreach on the final rule. Could you please briefly comment on 
EPA's outreach to both the interested stakeholders and the 
public, and how this engagement has been reflected in the final 
rule?
    Ms. McCabe. Yes, certainly. I mean, I have talked about the 
outreach that we did during the development of the rule, 
literally hundreds of meetings across the country. You referred 
to some of them yourself. We haven't stopped, so as soon as the 
rule was out we started engaging people. We've had numerous and 
continuing opportunities, especially with our State co-
regulators as they're starting to really think about the 
choices that they want to make, so we have regular 
opportunities to meet with them. In fact, I was with a group of 
State air directors just this week, as were some of my staff, 
to talk about these issues.
    We're continuing to engage with the public through 
webinars, and visits with them at appropriate venues that they 
might invite us to. We have robust and ongoing relationships 
with the utility industry, and with all of the various agencies 
on the energy side that help make sure that utilities are 
moving forward in a way that's going to protect reliability, 
and help them plan ahead. So, all of that is well underway, 
very robust, and we intend to continue it.
    Mr. Pallone. Thank you very much. Thank you, Mr. Chairman.
    Mr. Whitfield. The Chair recognizes the representative of 
the Houston Astros for 5 minutes, Mr. Olson.
    Mr. Olson. I thank the Chair.
    I know all of us have former Chairman Dingell in our 
prayers. He is in the hospital with a heart issue, but he'll be 
fine. He was quoted in the paper yesterday saying, ``Being old 
sucks.'' But please lift him up in your prayers.
    My first question, Ms. McCabe, is when fully rolling, EPA 
wants existing coal plants to hit a standard of 1,305 pounds of 
CO2 per megawatt hour. That is pretty aggressive. 
It's a nightmare for some States, and expensive for rate 
payers. But here's what I find more stunning: Your standard for 
new plants is 1,400 pounds per megawatt hour. In other words, 
your new rule says existing coal plants have to be even cleaner 
than a brand new one.
    People I've talked to back home said they've never seen 
this. They know that it's harder and more expensive to retrofit 
a plant than to build a new one from scratch with the best 
controls.
    Don't you agree that it's unusual to make these rules 
tougher for existing plants than new ones? Has EPA ever thought 
it's oK for newer to be dirtier?
    Ms. McCabe. I'm glad you asked that, Congressman, because 
I've heard that, and there's confusion about it, but there's a 
pretty straightforward answer to that, which is the difference 
between a standard for a new plant and a standard under 111(d).
    For existing facilities, there are a variety of 
opportunities that the utilities have through the way they 
manage their fleets and the mix of fuels that they use, and 
moving towards cleaner energy, which they are doing to on 
average bring that carbon intensity down. And they have years 
to do it, and the averaging time for the standard is very long. 
It's measured in years or multiple years.
    A new plant under the Clean Air Act, whether it's a power 
plant or some other kind of plant, in this case power plant, 
needs to meet that emission rate right away as soon as it's 
built, so if a plant started up in a year or two, they would be 
expected to meet that rate all the time on a much shorter term 
averaging time continuously. So, they work very differently in 
a way that if you think about it that way, makes a lot of 
sense.
    Mr. Olson. Ma'am, people back home respectfully disagree, 
but one other question which I'd like to ask with my remaining 
time is, according to IEA, current global emissions of carbon 
are somewhere around 36 billion tons per year, that ballpark. 
Others say it's closer to 40 billion tons per year. Either way, 
we know America is not the top source. As billions of people in 
developing countries get their first cars, their first light 
bulbs, it will keep rising.
    EPA's analysis says the way to approach this rule, reduce 
carbon emissions by 232 million tons per year in the next 
decade. I'm just an old Naval aviator who did math on a knee 
board with a lead pencil in my airplane, but my rough math says 
if we hit that goal tomorrow, we'd decrease carbon by .065 
percent, or 0.58 percent. The world's exposure of carbon will 
dwarf our reductions. The main reason for this rule is climate 
change. Is that correct, yes or no, ma'am?
    Ms. McCabe. Yes.
    Mr. Olson. So, how do you think this rule will impact 
global temperature?
    Ms. McCabe. No one rule is going to address the problem of 
climate change, Congressman. This is going to take a global 
solution. The United States is one of the largest emitters of 
CO2 in the world, and we have a responsibility to 
take the steps that we can take in order to help push in the 
direction of addressing this significant public health issue.
    Mr. Olson. How does it affect sea levels, ma'am, going up, 
down, I mean, how do you know?
    Ms. McCabe. Sea level is rising as a result of this global 
threat. This is a step that the United States is taking in 
order to contribute to addressing this global problem.
    Mr. Olson. One final question. Am I safe to assume that EPA 
could revisit this new source of rules in the future, and that 
rules on natural gas plants might get tougher like coal today, 
natural gas lumped in with coal in the future? Could that 
happen, possibly?
    Ms. McCabe. Well, under the Clean Air Act, EPA is required 
to revisit its technology rules on a regular basis. And we're 
also, as you know, I think looking at rules for the oil and gas 
industry, working with the industry on sensible ways to reduce 
emissions.
    Mr. Olson. I'm out of time. I close by saying Go Astros. I 
yield back.
    Mr. Whitfield. The Chair recognizes the gentleman from 
California, Mr. McNerney, for 5 minutes.
    Mr. McNerney. Thank you, Mr. Chairman. Mr. Chairman, I 
ask--actually, I implore my Republican colleagues to embrace 
carbon sequestration. I do this every time I get a chance to 
talk about it. The atmosphere is not a garbage dump, especially 
in the United States we need to be responsible for what we're 
putting into the air.
    Now, we repeatedly have heard this morning about the 
manifestations of climate change. These are real, they're 
getting more severe. Soon enough these impacts are going to be 
severe enough that the public will demand that high carbon 
emitters such as coal-fired power plants be shut down, so 
ignoring the carbon emission problem until that day will 
condemn the coal industry to extinction. For your own sake, 
especially if you're a coal mine Republican, please embrace 
carbon sequestration.
    Ms. McCabe, in California we've made significant strides 
toward increasing our use of renewable energies and cutting our 
greenhouse gas emissions. California passed legislation to 
reduce greenhouse gas emissions to 1990 levels by the year 
2020, and Governor Brown recently set a goal of an additional 
40 percent reduction in greenhouse gas emissions by the year 
2030. So, when writing the Clean Power Plan, did the EPA look 
at early State actions as a model, as a potential model?
    Ms. McCabe. We certainly looked at everything that all 
States are doing, and California is one that is out ahead on 
this. There are several other States that are moving forward on 
this, and that's our job under the Clean Air Act, is to look at 
what the industry is doing in its current operations, and where 
those technologies and approaches are good at reducing carbon 
emissions to make sure that that's what we build into the 
standard.
    Mr. McNerney. Good. Well, when creating the final rule did 
you insure that each State has the flexibility to implement the 
Clean Power Plan in a way that is most efficient and effective, 
and also insuring reliability?
    Ms. McCabe. We did. And, in fact, we provided a lot of 
flexibility and a lot of choice in the final rule to make sure 
that we could accommodate States like California that already 
had plans in place, and States that did not yet have plans in 
place, and also to accommodate the wide range of energy mix 
across the country from States that are significant coal users 
to States that are not. So, lots and lots of flexibility is 
built in.
    Mr. McNerney. Do you believe that the Clean Power rule has 
given China and India motive to produce their own carbon 
emission reduction plans?
    Ms. McCabe. I think that the United States going forward 
with this rule has been a significant factor in the 
international debate. In fact, as soon as we proposed the rule 
that was the topic of discussion in many international 
conversations. And I do believe it has been influential in the 
international commitments that we're seeing from other 
countries.
    Mr. McNerney. So even though the Clean Power Plan won't 
solve the carbon plan by itself, it's given significant impetus 
worldwide to help other countries reduce their carbon emissions 
and get the world to a better place in terms of the total 
carbon emissions that are being produced.
    Ms. McCabe. I believe so. It's shown real leadership from 
the United States.
    Mr. McNerney. Thank you. How does the final rule address 
States that may need more time to reach their carbon reduction 
goals?
    Ms. McCabe. So, we built more time into the rule in terms 
of the starting date. Through the comment period we heard more 
about that, about the starting date than about 2030, so we 
moved the starting date from 2020 to 2022, and also smoothed 
that glide path down from 2020 to 2022. And based on the 
information we had, we were pretty comfortable that that met 
the needs that we were hearing from the utility industry, in 
particular, about the time that they would need to make the 
investments that they would need to make.
    Mr. McNerney. And that takes into account the reliability 
issue. Reliability is certainly an issue I've heard from----
    Ms. McCabe. Yes.
    Mr. McNerney [continuing]. Utilities across the country. 
They need to make sure that they're not going to be put in a 
position where they lose power for their customers.
    Ms. McCabe. Oh, that's absolutely true. I mean, that was 
made in the context of reliability concerns, and so adding 
additional time was one key part of that. We did some other 
things, too, in the final rule to make sure we were paying 
attention to that, especially in consultation with FERC. We 
included a reliability safety valve in case there's an 
unforeseen situation that folks were very keen to have us 
include. States also have the flexibility to come in partway 
through the plan and say something's happened that we didn't 
expect. We need to adjust our plan. So, lots of things are 
built in to make sure that the reliability of the system is 
protected.
    Mr. McNerney. Thank you, Mr. Chairman.
    Mr. Whitfield. The gentleman yields back. At this time, the 
Chair recognizes the gentleman from Illinois, Mr. Shimkus, for 
5 minutes.
    Mr. Shimkus. Thank you, Mr. Chairman.
    Ms. McCabe, one way to measure the impact of your rule is 
to look at what is expected energy mix would be without the 
rule using what is called a reference or base case, and then 
what the projected energy mix would be with the rule. Do you 
agree?
    Ms. McCabe. Those are the kinds of things that we would 
look at, sure.
    Mr. Shimkus. Yes, you agree, that's how we do it.
    Ms. McCabe. Right.
    Mr. Shimkus. Or that's how you should do it. When EPA 
proposed its rule on June 14, it projected a base case that 
said there would be an estimated 244 gigawatts of coal 
generation in 2020 under existing regulatory and economic 
conditions. Does that sound right to you?
    Ms. McCabe. You know, I----
    Mr. Shimkus. It's right here. Say yes. I can show it to 
you.
    Ms. McCabe. OK.
    Mr. Shimkus. Today, EPA says that the base case shows an 
estimated 208 gigawatts of coal generation capacity by 2020. My 
understanding is there have been no significant regulations or 
economic changes since your first estimate, so can you explain 
why EPA would eliminate 36 gigawatts of coal generation from 
its baseline?
    Ms. McCabe. So, we look to information that's put out by 
other agencies who follow these issues.
    Mr. Shimkus. OK, 244 in June, 208 in August of '15. that's 
72 power plants.
    Ms. McCabe. We know that there are trends in the industry 
that are moving away from the older coal----
    Mr. Shimkus. 36 gigawatts of power.
    Ms. McCabe. And more gigawatts are coming----
    Mr. Shimkus. OK, let me go to the next question. According 
to EPA's data when it eliminated all that coal generation from 
last year's baseline, 31 gigawatts, 70 power plants of coal 
capacity drop off in 2016 alone, 1 year. You're projecting 70 
coal-fired power plants to drop generating in 1 year. Will you 
please explain why EPA in 1 year's time has eliminated that 31 
gigawatts?
    Ms. McCabe. Congressman, we're not eliminating power 
plants. We're reflecting information that we have about 
what's----
    Mr. Shimkus. Your baseline of the initial rule, you dropped 
off 31 gigawatts of generation in a year, 70 power plants.
    Ms. McCabe. But not all of that would be----
    Mr. Shimkus. Could I ask you to give us a detailed 
explanation about this for the record?
    Ms. McCabe. We'd be happy to follow up with that.
    Mr. Shimkus. OK. In total, EPA projects 214 gigawatts of 
coal capacity in 2016, while the Department of Energy's 
Information Agency, administration projections are 261 
gigawatts. Can you explain why the Energy Information Agency 
says 261 gigawatts of power, coal-fired power, and you say 214?
    Ms. McCabe. I'll be happy to get back with you on that, 
Congressman.
    Mr. Shimkus. Thank you very much. For the record, I would 
appreciate that.
    In March of 2015, EPA estimated 238 gigawatts of coal 
generation in its baseline, then just a few months later in 
August that number dropped to 214 gigawatts, in just a few 
months. Will you please explain why EPA according to its own 
documents eliminated between March and August of this year, 23 
gigawatts of coal generation from its baseline. That would be 
about 46 power plants. What possibly could change in a few 
months time?
    Ms. McCabe. Again, Congressman, we'll be happy to provide a 
thorough explanation of----
    Mr. Shimkus. For the record----
    Ms. McCabe [continuing]. All of those numbers for the 
record.
    Mr. Shimkus. OK. Now, the last question. Would you agree 
that if EPA is underestimating coal power capacity in the 
baseline of this rule, the agency is significantly under-
reporting the impacts of its rule on coal generation?
    Ms. McCabe. Congressman, we do our best to use the 
information available to us, and the modeling tools that are 
available to us.
    Mr. Shimkus. OK, but part of this debate is going to be the 
cost to the individual, the companies, the rate increases. So, 
if you're underestimating by your 2014 June analysis and your 
2015, and you drop off 70 coal-fired power plants, base-load 
going to my friend, Jerry McNerney's question, your final 
analysis you're going to under-report the impact because you 
have sliced major gigawatt production of coal in this country 
with no explanation that we can find in any of these documents.
    Ms. McCabe. I would point to the history of the Clean Air 
Act, where it has been proven time and time again that 
compliance comes in----
    Mr. Shimkus. But that's when we had technology to meet it. 
There's no technology right now, as has been already 
identified, that's affordable and accessible to the industry, 
penalizing those existing generations, and make it more 
difficult for new generation. This is a disaster. We're trying 
to help you from yourselves, and if we don't get the real 
numbers, there's no way you can adequately defend this in the 
courts. And I yield back my time.
    Mr. Whitfield. The gentleman yields back. At this time, the 
Chair recognizes the gentlelady from California, Mrs. Capps, 
for 5 minutes.
    Mrs. Capps. Thank you, Mr. Chairman, for holding this 
hearing. Ms. McCabe, thank you very much for your testimony.
    Adapting to and mitigating climate change should be front 
and center in our discussions at every level of society and 
Government. As representatives who should be advocating for the 
best interests of our constituents and future constituents, we 
should be jumping at the chance to pursue avenues to protect 
their health and well-being, and to insure that we provide a 
safe and vibrant world to live in. Fortunately, we seem to be 
having the same discussion over and over again mired in the 
same shortsighted rhetoric.
    So my first question, we've heard the majority repeatedly 
claim that the Clean Power Plan will harm rate payers, and 
particularly disadvantaged and low-income individuals; however, 
both the EPA and independent organizations have demonstrated 
that increase use of renewables and energy efficiency will over 
time lead to significant decreases in the cost of electricity 
for American families. Could you elaborate on how the Clean 
Power Plan will impact cost to rate payers over the short, but 
also particularly over the long term?
    Ms. McCabe. Yes, thank you. And I appreciate your 
mentioning the long view, that's what we're about here. So, 
there are a couple of ways in which I would respond.
    The first way is to look at the information that we got in 
response to our proposal about the costs of cleaner energy, and 
they are coming down. Solar energy, wind energy, those things 
are becoming more affordable which is why people are building 
them, even without our rule they're building them. So, we know 
that that's good for the system.
    We did an analysis. Again, it's illustrative because States 
will design their own plans, utilities will figure out the best 
ways to comply, they always do, the cheapest ways to comply 
because they care about these issues, as well. And what we show 
is, especially because of the increased use of energy 
efficiency which lowers demand, lowers bills, that by 2030 we 
expect to see about a 7 percent drop in energy bills for 
households on average across the country.
    Mrs. Capps. Thank you. I think you partially answered my 
second question, but to emphasize, can you speak to how we 
could accelerate the transition to renewables and energy 
efficiency? I mean, long term it isn't very appetizing to some 
people who are having trouble making it month to month. What 
are some ways we can help to speed up that process?
    Ms. McCabe. Well, one of the elements of the final Clean 
Power Plan that I mentioned already is the Clean Energy 
Incentive Fund. That's intended to be a signal from the Federal 
Government that we want to help support early adoption of 
energy efficiency programs, especially in low-income 
communities. But States and utilities have the ability now to 
front load those types of activities, and we certainly would 
encourage them to do that. We have a lot of information and 
expertise at our agency and there are many other organizations 
and companies that are working right now to invest in these 
sorts of energy-saving technologies.
    Mrs. Capps. OK, thank you. Another topic or aspect to this: 
My colleagues often discuss the issue as a matter of dollars 
and cents, focusing only on the cost to polluters, while 
ignoring the benefits for customers, consumers. And that's 
partly because you can't really put a price tag on human well-
being, but there are definite tangible economic benefits, 
wouldn't you say, both for employers and employees that come 
from having a healthier workforce.
    Ms. McCabe. Yes.
    Mrs. Capps. EPA has projected the climate and health 
benefits of the Clean Power Plan to be between $34-54 billion. 
Could you elaborate on this, or give us some specific examples 
of how cleaner air translates into more money in people's 
pockets?
    Ms. McCabe. Absolutely. We know that that is the case. 
Cleaner air means healthier workforce, it means healthier 
children, it means fewer missed school days, fewer missed work 
days, it means less time at the hospital, less time at the 
doctor, fewer medical bills, fewer hospitalizations for those 
sort of things, and that's just the respiratory issues that 
result from polluted air and the climate change impacts on 
that.
    There are, of course, other expenses and burdens that 
people bear as a result of climate change, especially when we 
see the droughts and the severe storms and flooding that are 
affecting people today.
    Mrs. Capps. Right. I'm going to just put this out there, 
but there's not going to be time for you to answer it. We have 
in my home State of California been very proactive at reducing 
emission rates through our California Air Resources Board. Is 
there a way that the Clean Power Plan and other EPA actions 
like the Ozone Rule could produce similar results nationwide?
    Ms. McCabe. Absolutely. I think we all can learn from one 
another, and we certainly can learn from the States that are 
moving forward with a lot of these programs.
    Mrs. Capps. Thank you very much. I yield back.
    Mr. Whitfield. The Chair recognizes the gentleman from West 
Virginia, Mr. McKinley, for 5 minutes.
    Mr. McKinley. Thank you, Mr. Chairman. I thought there were 
going to be some folks in between, but thank you again for your 
appearance with us.
    I want to follow back up again with some of the earlier 
remarks. There was in Forbes Magazine had said that China and 
India, quoting, ``China and India collectively consume about 60 
percent of all the coal produced in the world, and that in the 
next 10 years Asia will be increasing their demands for coal by 
31 percent.'' They're already at 60 percent, and they want to 
increase 30 percent. I find that incredible.
    And then I want to follow back up again with the remark 
that you made to the Congressman from California. You said 
India may very well be following our lead by making these 
reductions, but yet the quote in this article says that ``India 
has rejected any absolute cuts, and that it needs to emit more 
as it grows to beat poverty.'' So, I'm not sure that anyone is 
following what you think is happening around the world. It goes 
to that old adage, a leader that has no followers is merely a 
man taking a walk. And I think that's what you have here, is no 
one in the country. They may very well go if they did to Kyoto 
and elsewhere, Stockholm and make these agreements, but then 
they don't uphold them. So, I don't know that Paris is going to 
be any better with this. So, I'm looking back at the question 
more directly, what you're trying to propose, you're willing to 
sacrifice the economy of this country. When everyone else is 
going to continue to use coal, you're going to sacrifice our 
economy to this rule, and drive another dagger into the hearts 
of the coal fields of this country, and all across because the 
electricity.
    I think it's curious, and I wanted to hear your explanation 
of why in the initial rule, for example, West Virginia was 
supposed to have a 20 percent reduction, but then when the 
final rule came out, it went to 37 percent. And North Dakota 
went from 11 percent to 45 percent, and Kentucky went from 18 
to 41, and Wyoming 19 to 44. Are you trying to suggest that 
during your hearings in those respective States that the people 
actually said we want more stringent controls on our emissions 
in Kentucky, and Wyoming, and West Virginia?
    I want to hear that answer, but I also want to add one 
more, backdrop information. I just got notice just here just a 
minute ago, that Patriot Coal has just now issued a warn notice 
to the miners in West Virginia that 2,000 more coal miners in 
West Virginia are going to lose their job in the next few days, 
and you all can sit there and just say we need--this is going 
to be good for our air, when other nations are polluting our 
atmosphere far greater than we are. So, can you tell me why you 
doubled and tripled the standards for--when they can't meet the 
first standard, why you've tripled it?
    Ms. McCabe. Absolutely, Congressman. I'd be glad to address 
that. There's a lot in your question there. I'm not sure I'll 
get to respond to everything, but let me focus on the changes 
between the proposal and the final rule, especially as it 
relates to the States that you mentioned.
    Mr. McKinley. Yes.
    Ms. McCabe. Yes, very fair question, and we've been having 
those discussions with State officials and utilities, and 
others since the final rule came out. In fact, I was meeting 
with some West Virginia officials just last week, and had this 
very discussion.
    So, as we do rulemaking, we put out a proposal, we lay out 
our reasoning, our legal support, we lay out the information 
that we have, and then we put it out, and people comment on it, 
people give us additional information, people give us their 
different views. And as I've said, there was just an 
extraordinary amount of input on this rule.
    Mr. McKinley. But that led you to doubling down the 
penalties on West Virginia, Wyoming, Kentucky, all these other 
coal producing--you actually got testimony that we should 
double down the penalty?
    Ms. McCabe. Congressman, I certainly object to the use of 
the word ``penalty.'' That's not an appropriate term for this 
rule.
    Mr. McKinley. Well, I object to your use of the word 
``fair,'' when I'm talking about all these people losing their 
job.
    Ms. McCabe. Can I explain why I used the word ``fair?''
    Mr. McKinley. Good luck.
    Ms. McCabe. OK. In the proposed rule, we took a very State-
centric approach, and that led to a certain proposal which, in 
fact, set differential rates for the same type of plant across 
the country, so a coal rate in one State was significantly 
different than a coal rate in another State. And through----
    Mr. McKinley. OK. I want to hear what's fair when you shut 
down a coal-fired power plant and it destroys the fabric, the 
economic basis to run a school system in a county, when 
millions of dollars are lost. I want to talk, that's fair. Is 
that fair?
    Mr. Whitfield. The gentleman's time has expired. At this 
time, the Chair recognizes the gentleman from Pennsylvania, Mr. 
Doyle, for 5 minutes.
    Mr. Doyle. Thank you, Mr. Chairman.
    Administrator McCabe, when you appeared before this 
committee for previous hearings on the proposed rule, I had 
voiced my concern that only 6 percent of existing nuclear power 
in States would be counted towards developing a State's goal, 
while 100 percent of existing renewable power was credited. 
Now, in the final rule credits for both of those are gone. 
However, I understand that States will have the option to 
choose mass-based goal for compliance that would insure that we 
value all existing zero carbon resources within a State 
similarly. Is that correct?
    Ms. McCabe. Actually, whether a State chooses a mass-based 
approach or a rate-based approach, all new and increasing zero 
emitting generation whether it's renewable or nuclear can be 
part of a compliance----
    Mr. Doyle. New, but there's no credits for existing.
    Ms. McCabe. Well, we start in 2012, so anything that's new 
from that point on. The mix of generation from before 2012 has 
already led to a particular profile for----
    Mr. Doyle. Well, let me ask you this. If a State adopts a 
mass-based goal and implements stringent leakage mitigation 
policy.
    Ms. McCabe. Yes.
    Mr. Doyle. Do you believe nuclear plants will not be able 
to prematurely retire unless they're replaced by equivalent 
zero carbon power or energy efficient measures?
    Ms. McCabe. Well, Congressman, there's a lot more that goes 
into the economic viability of nuclear plants than this rule 
can address, so I really can't speak to----
    Mr. Doyle. Well, if the nuclear plant retires prematurely 
just for cost factor, you know, because it's priced----
    Ms. McCabe. Right.
    Mr. Doyle [continuing]. Out of the market and a State 
adopts a mass-based goal, will they have to replace that with 
zero--you know, will their only choice for replacement of that 
be zero carbon power?
    Ms. McCabe. It really depends on the State's situation and 
how they design their plan.
    Mr. Doyle. What happens if these nuclear plants retire in a 
State with a rate-based plan? What's the difference between 
nuclear plants retiring in a rate-based plan versus in a mass-
based plan?
    Ms. McCabe. So, in a--this is probably a longer 
conversation. We'll be happy to follow-up with you, but in a 
mass-based plan what's counted is the emissions coming out of 
the smokestacks from the fossil fuel generation. In a rate-
based plan, the State is allowed to take account of other types 
of generation and sort of discount that against the emission 
rate of the fossil generation. So, either way they can take 
credit for or count for zero generating facilities, whether 
nuclear or renewable.
    Mr. Doyle. Let me ask you another question. In my State in 
Pennsylvania, our Governor is not a Governor that's saying he 
won't comply. He's looking forward to working to come up with a 
plan. My State is a net exporter of electricity. We could 
benefit from the option to submit multi-State plans.
    Ms. McCabe. Yes.
    Mr. Doyle. So, adopting a mass-based rather than a rate-
based goal may facilitate the kind of a plan, but I've heard 
that this mass-based goal could handicap future economic growth 
as emission limits in total are capped. So, how do you respond 
to the concerns that some States have about that? Could these 
multi-State plans shift to accommodate new sources of power?
    Ms. McCabe. Yes, we believe that that can be fully 
accommodated. And your point about multi-State plans, the final 
rule is very flexible in terms of States working with one 
another either formally or informally. 111(d) of the Clean 
Power Plan does not constrain new growth, and so new power 
plants can be built in this country to meet new load growth, 
just as they always can.
    In terms of a Clean Power Plan that is using a mass-based 
approach, we've given the States some guideposts to use to make 
sure that that plan is not artificially distorting the 
relationship between new generation and existing generation. 
We'd be happy to provide more information to you.
    Mr. Doyle. Yes, I'd appreciate that. And, finally, the 
formula for the first building block of the Clean Power Plan, 
EPA determined that States could reasonably improve coal fleet 
efficiency between 2.1 and 4.3 percent rather than the 6 
percent across the board under the proposed rule.
    Ms. McCabe. Correct.
    Mr. Doyle. Can you elaborate on how the EPA determined this 
range for efficiency improvements in the final rule, and how 
the EPA reached different rates for different parts of the 
country?
    Ms. McCabe. Yes, that's a really good question. And, again, 
that came out of the response and the comments that we got. So, 
as you reflected, in the proposal we looked across the universe 
and came up with our 6 percent number as we thought was a 
reasonable national number, not that every single plant would 
be able to do that. The comments that we got back showed even 
more range of abilities, and what we did was we looked 
regionally across the country in the three interconnects, which 
are the three main sections of the power grid, and we found 
that when we looked at the data on an interconnect basis, we 
actually came up with slightly different capabilities, 
different capacities, because of the age of the fleet, and 
other characteristics of the regional fleet. So, that's how we 
got to those different rates. And to us, that made a lot of 
sense based on that input that we got.
    Mr. Doyle. Thank you, Mr. Chairman. Mr. Chairman, the 
Pittsburgh Pirates this evening, the team that I represent in 
Congress, are going to take the major leagues' best pitcher, 
Mr. Arrieta, and give him a massive beating tonight.
    Mr. Whitfield. Yes, I should have introduced----
    Mr. Doyle. Let me say that for the record.
    Mr. Whitfield. At this time, the Chair recognizes the 
gentleman from Ohio, Mr. Latta, for 5 minutes.
    Mr. Latta. Thanks, Mr. Chairman, and Administrator, thanks 
very much for being with us today.
    Under 111(d) the States must file a State plan by September 
the 6th, 2016 unless it submits an extension request that is 
approved by the EPA. EPA has said that, ``This approval of 
State extension requests is a ministerial action.'' Before 
rejecting a State's extension request will EPA allow for public 
notice and comment?
    Ms. McCabe. The requirements are very straightforward for 
what's required in the extension request, so we're not 
contemplating a formal notice and comment period, but we 
certainly will be in consultation with the State.
    Mr. Latta. OK. If the EPA then rejects a State's extension 
request, EPA believes it can issue a Federal plan for that 
State. In that case, will EPA allow for notice and comment 
before imposing a Federal plan?
    Ms. McCabe. Well, we have a proposed Federal plan out now 
that will be going through notice and comment, so if we are put 
in a position, which I hope we will not be, because I think 
States want to go forward with plans, if we're put in a 
position of finalizing a plan, we will have already gone 
through the proposal process, have gotten people's input on 
that proposed Federal plan.
    Mr. Latta. So, if I understand then, that you won't have a 
notice and comment period then if a State is disallowed. Is 
that correct?
    Ms. McCabe. If a State does not submit a plan, we would go 
forward and finalize a plan.
    Mr. Latta. OK. But in this case, though, if a State 
rejects--if the EPA rejects a State's plan, if it rejects it?
    Ms. McCabe. If we receive a plan from a State and our 
evaluation is that it doesn't meet the requirements of the 
rule, we would propose to disapprove it. We would not----
    Mr. Latta. OK. But in that case, though, are you still 
saying then there won't be a notice and comment period?
    Ms. McCabe. No, there would be.
    Mr. Latta. There would be.
    Ms. McCabe. There would be.
    Mr. Latta. OK. And how long would that be for?
    Ms. McCabe. It would be at least 30 days.
    Mr. Latta. OK.
    Ms. McCabe. That's generally----
    Mr. Latta. At least 30 days. Now, will you be in direct 
contact with the States, or----
    Ms. McCabe. Oh, absolutely.
    Mr. Latta. Ohio--my home State--the Ohio EPA has repeatedly 
asked EPA to consider investments made before 2012 to lower 
CO2 emissions which especially affects the coal 
plants in my State. Would you explain why the original baseline 
date of 2005 was abandoned for the 2012?
    Ms. McCabe. Well, I need to correct the way you stated that 
last part. We've never had a baseline, we've never had a 
baseline of 2005. We've always had our starting point in this 
rule be 2012. This is a technology-based rule, so we always 
pick a year to start from to go forward, and 2012 was the year 
in the proposal, as well as in the final, where we had the most 
current, and complete and accurate data about the generation 
fleet, so that's why we started with that year.
    Mr. Latta. Let me ask, because of that, since we have in 
Ohio, until recently had about 70 percent of our energy is 
coal-fired. What factors did you consider for the State of Ohio 
when you were looking at that 2012 date? Did you look at the 
number of coal-fired plants we have, our manufacturers, our 
consumers? Did you take into, you know, the cost and expense 
that's going to incur out there? Could you explain a little bit 
on that?
    Ms. McCabe. Yes, sure we did. 2012 is the year we use 
nationally. And as I say, that's because we want to have 
everybody starting from the same place. For each State, once we 
established a national uniform rate that was reasonable to 
expect in our view based on our review of the approaches that 
were available, we then took that emission rate and applied it 
to each State, which is why each State ends up with its target 
in the rule. So, a State like Ohio or like my home State of 
Indiana that has a lot of coal-fired generation, ends up with a 
significantly higher rate in the final plan than a State with 
less coal-fired generation.
    Mr. Latta. Well, you say in your testimony that this rule 
sets an achievable standard for power plants, but seeing as 
Ohio has achieved approximately 30 percent reduction in 
CO2 emissions between 2005 and 2014 in its coal-
fired power plants, doesn't your choice of a 2012 baseline mean 
power plants that are not coal-fired at that time then?
    Ms. McCabe. Well, it treats all the States the same, so 
many States and utilities across the country have been moving 
towards cleaner energy. That's what our rule found to be the 
case, and that can continue. So, we took a snapshot in 2012 and 
said oK, going forward what's reasonable to achieve beyond 
where people are in 2012? And it----
    Mr. Latta. Well, let me just--I'm cutting you off because 
my time is running out here. Just real quick, because I know 
since Ohio was over 70 percent coal-fired, my recollection was 
since--I'm right next to Indiana. Wasn't your State about 90 
percent coal-fired just a few years ago?
    Ms. McCabe. 90 plus, I think it still is, Congressman.
    Mr. Latta. Do you think there's going to be a measurable 
impact on industries in the State of Indiana because of what's 
going to happen there, that you are over 90 percent in the 
State?
    Ms. McCabe. I think that with the amount of time in the 
rule and with the options that are out there for cleaner 
energy, that we're going to be able to move forward, implement 
this, and it is not going to have significant impacts on the 
economy, that it's going to be positive.
    Mr. Latta. Thank you, Mr. Chair. I yield back.
    Mr. Whitfield. The gentleman's time has expired. At this 
time, the Chair recognizes the gentlelady from Florida, Ms. 
Castor, for 5 minutes.
    Ms. Castor. Well, thank you, Mr. Chairman, for calling this 
hearing on the Clean Air Act and the Clean Power Plan.
    The Clean Air Act is one of America's bedrock environmental 
protection laws, and it has been for over 40 years. I believe 
the Clean Air Act reflects our values. We value the air that we 
breathe, we are willing here in America to tackle significant 
environmental threats, and to tackle these threats EPA uses the 
best science, public input, examines health impacts. And what 
we understand here in 2015 is that we've got to tackle one of 
the most critical modern challenges yet, the changing climate, 
and the very costly impacts of the changing climate.
    I believe EPA has developed a flexible carbon pollution 
reduction plan that is good for consumers, it's good the 
environment, it's good for the public health, and it will be 
good for our economy. And I think, Ms. McCabe, that EPA is 
right to encourage and spur States to meet the challenges, and 
the rising costs of the changing climate.
    Coming from the State of Florida, these costs are daunting 
looking ahead. You've detailed some of them relating to public 
health, but what I see on the horizon if we do not act: 
increases in property insurance in Florida, flood insurance--
boy, that's really hitting home now, watching what's happening 
in South Carolina.
    I was a county commissioner before I came to Congress. 
Storm water fees, the ability of local governments, what 
they're going to have to do to replace storm water and waste 
water facilities, beach renourishment costs are going to 
increase.
    Another cost unless we act will be the failure to tap into 
these clean energy jobs and innovation. And I noticed in the 
Clean Power Plan you have--EPA has included a Clean Energy 
Incentive Program to reward early investments in renewable 
energy generation, specifically solar and wind during 2020-
2021. Now, coming from Florida where we have huge potential for 
solar projects like other States do, I'm excited about what a 
program like this could mean for my State. Could you please 
elaborate on that initiative?
    Ms. McCabe. Sure. And you're sure right that local 
government is really on the front lines of facing these issues. 
So, the Clean Energy Incentive Program was intended to do 
exactly what you said, which is we know that these projects are 
going forward. They're teed up, they're moving forward, the 
costs are coming down, especially because we moved the start 
date from 2020 to 2022. We didn't want to inadvertently put the 
brakes on any projects that were going forward anticipating the 
Clean Power Plan, so this program would allow States if they 
opt into it, they certainly don't have to, to bring forward 
some of their compliance plan, which the Federal Government 
will then match to encourage, to provide that little bit of 
extra incentive for solar projects, for wind projects, and for 
energy efficiency in low-income areas to get a head start and 
really get rolling.
    Ms. Castor. I wondered, as well, the Union of Concerned 
Scientists recently issued a report as they do routinely, and 
they said that most States are already well on their way to 
complying with the Clean Power Plan. They released an analysis 
in mid-August. They said they find that 31 States are on track 
to be more than halfway to meeting their 2022 emission rate 
benchmark, and that 20 States are on track to be more than 
halfway toward meeting their final 2030 compliance targets. 
They said they see great movement because of renewable energy 
standards, energy efficiency initiatives, nuclear power in 
States, and transition to natural gas. Do you agree with their 
analysis that we've got 31 States on track to be more than 
halfway to 2020, and the other 20 States closing in on halfway 
of 2030 targets?
    Ms. McCabe. I think what this is reflecting is exactly what 
we saw when we looked at the record, which is that States and 
utilities are moving forward to move to cleaner natural gas, to 
build new nuclear facilities, to invest in renewable and solar. 
That's the trend that we're seeing all across the country, 
that's what the rule is built on, that's what we're supposed to 
do in building the rule. So, without speaking to the exact 
numbers in the study, yes, that's exactly the idea, that these 
things are already underway.
    Ms. Castor. Thank you, and I yield back my time.
    Mr. Whitfield. The gentlelady yields back. At this time, 
the Chair recognizes the gentleman from Kansas, Mr. Pompeo, for 
5 minutes.
    Mr. Pompeo. Thank you, Mr. Chairman.
    I want to get to the substance of this rule, but it's 
difficult to do if we can't expect the witness to fulfill 
commitments that they've made to this committee. In June of 
last year when you testified, I asked you a question, I asked 
you a question about how many times you and EPA had spoken with 
Mr. Podesta, who is now the chairman of the Hillary Clinton for 
President campaign. I asked you that question, you said you'd 
take it back and you'd get us an answer. We submitted a formal 
QFR asking you about meetings with the White House, and we got 
a letter back that said we had a lot of meetings, that we met 
with thousands of people. Ms. McCabe, how many times did you 
meet with Mr. Podesta?
    Ms. McCabe. I don't know the answer to that.
    Mr. Pompeo. So, still a year and two months later you 
haven't bothered to go back and look at your records to answer 
a legitimate question presented by this committee.
    Ms. McCabe. Congressman, we do our best to respond to the 
questions that we get from you, and we'll certainly do that in 
the future.
    Mr. Pompeo. So, the best you can do is tell this committee 
that you've met, when asked a direct question about the 
politics of this rule and who you met with, a simple 
administrative question, the best you can do is say we met with 
thousands of people. I have the letter, that's what it says. 
It's your response, it's the EPA's response.
    Ms. McCabe. Without seeing my response, Congressman, I 
can't----
    Mr. Pompeo. I'll read it to you.
    Ms. McCabe [continuing]. What else we might have said in 
response to your question.
    Mr. Pompeo. It says, ``We reached out to thousands of 
people through hundreds of meetings, listening sessions, video 
conferences, phone calls, conference calls, and almost 2,000 
emails.'' No mention of Mr. Podesta in the entire response, no 
mention of any officials from the White House in the entire 
response. You didn't answer the question, Ms. McCabe. It's a 
simple question.
    Ms. McCabe. I will go back and talk with folks about how we 
responded to your question.
    Mr. Pompeo. When you see the frustration and you hear 
Members of Congress talk about the EPA being out of control, 
can you understand when you won't answer simple questions why 
someone might conclude that you don't give a darn what Congress 
thinks?
    Ms. McCabe. Well, it's unfortunate if that's your view, 
because I think that we're all here to serve the public.
    Mr. Pompeo. Not just my view, Ms. McCabe, it's the view 
that you expressed when you said we're not going to give you an 
answer, Mr. Pompeo. We're going to blow you off. Unacceptable, 
unacceptable.
    You said today that if a State needs more time, it's a 
ministerial action, you'll give them an incremental 2 years. At 
the end of those 3 years, if the Governor of Kansas, this one 
or the next Governor, concludes that there'll be massive 
brownouts in Kansas as a result of complying with this rule, 
and writes you a letter to that effect, what will the response 
of the EPA be?
    Ms. McCabe. I can't speak to a future eventuality like 
that. We did ask the States----
    Mr. Pompeo. No, no. You can answer it. This is a legal 
question, this is about the rule. The Governor says we can't 
comply, or we're going to have poor people freezing in the 
winter in Kansas if we comply with this rule. Tell me what the 
EPA's actions will be in response to what I'm sure you will 
view as noncompliance with the State's obligation under this 
rule? Tell me what the Environmental Protection Agency is going 
to do to those poor people in Kansas?
    Ms. McCabe. I cannot speak to a future action of the EPA 
based on facts that we'll need to look at very carefully.
    Mr. Pompeo. All right. But you'll have the right to put a 
Federal plan in place.
    Ms. McCabe. We will go through a process to make a 
determination----
    Mr. Pompeo. That's a yes or no question, Ms. McCabe. You'll 
have the right to put a Federal program in place. You might 
conclude not to do so, but you'd have the right do so under 
this rule.
    Ms. McCabe. If a State submits a plan that we feel does not 
comply with the law, we have the authority. It's not a question 
of right, we have the authority and the responsibility under 
the Clean Air Act.
    Mr. Pompeo. Right. So, you talked earlier about States 
cooperating. You said they're cooperating. I don't view it as 
cooperation. If someone comes up to me on the street and 
threatens my life, and I hand them my money, I just simply 
don't view that as cooperation. These Governors will be under 
enormous pressure. It's not about them cooperating, it's about 
the heavy hand of the EPA forcing them to make decisions that 
they believe are inconsistent with their duty to the State, and 
to protect the citizens of their States. But that's a far cry 
from cooperation, the word that you used three times so far 
this morning.
    Ms. McCabe. Well, I know from conversations that I've had 
and meetings that I've had with people that States are talking 
about working----
    Mr. Pompeo. Because they know what's coming. Let me go down 
a--you said there were fewer missed school days. How many fewer 
missed school days per student per year will there be as a 
result of the Clean Power Plan?
    Ms. McCabe. Well, I'd be happy to get you the numbers that 
we put together, Congressman. No, really. I mean----
    Mr. Pompeo. I'll look forward to it. I mean, this is the 
kind of data. If you're going to make assertions here to this 
committee today about fewer missed school days, and you said 
there will be shorter allergen seasons, it would seem to me, 
response of you to say this allergen season in a particular 
region will be shorter by 7 hours, 26 minutes, plus or minus 
whatever your science can determine. But you throw these things 
out without any foundation in the data set and expect us to 
accept that as a fait accompli. So, I'd just like to know how 
many fewer school days as a result of this. And I'll look 
forward to your letter.
    Mr. Pompeo. Do you have a response? Sure.
    Ms. McCabe. I can answer that.
    Mr. Pompeo. Sure.
    Ms. McCabe. Because we did put that information together.
    Mr. Pompeo. Great. Tell me what it is.
    Ms. McCabe. I just didn't want to fish through a bunch of 
papers while I was listening to you. What we predicted is that 
in 2030 when the plan is in place, there would be 140,000 fewer 
missed school days.
    Mr. Pompeo. Great, thank you very much. I'm way out of 
time. Thank you.
    Mr. Whitfield. At this time, the Chair recognizes Mr. 
Loebsack of Iowa for 5 minutes.
    Mr. Loebsack. Thank you, Mr. Chair. First, I do want to 
thank Administrator McCabe for testifying here today.
    I may not take up the whole 5 minutes. I want to focus on 
the 2012 date that was already mentioned and go to my home 
State, Ms. McCabe. You know that over 28 percent of our 
electricity in Iowa is generated by wind power. We're the 
leader in the country. And I applaud the EPA, of course, for 
working to cut America's carbon pollution. I think it's a great 
idea, and we've got to move our energy and environmental policy 
into the 21st century. But in my State we've made a hell of a 
lot of progress over the years, and I just--I have a concern 
that starting this 2012, doesn't really recognize what States 
like Iowa have already done. Can you talk to me about that, you 
know? I mean, it's really difficult, you know, to sort of start 
it at a particular point when a place like Iowa has made so 
much progress, and then a number gets attached after 2012, and 
it just didn't seem to honor the commitment that folks in Iowa 
have already made up to this point.
    Ms. McCabe. Yes, I'm glad you asked that, Congressman. I 
think that there are a number of States who can legitimately 
make a similar claim and utilities where they have invested 
early. And the way this program works, it actually reflects the 
good work that States who have been forward-looking have 
already done because they have less far to go, ultimately, in 
getting to that 2030, because they're already well along the 
way. So, the way the Clean Power Plan works, since it takes 
into account each State's mix, current mix as of 2012, States 
that are further ahead were further ahead when we took that 
snapshot and projected into the future. So, there's lots of 
opportunity, and for those technologies to continue to be 
invested in, but States, some of them are well along the way. 
It's similar to what the Congresswoman cited before.
    Mr. Loebsack. I've seen a 42 percent number attached to 
Iowa. I don't know if that's accurate or not, but that's going 
to be very difficult, of course, and we've already come a long 
way. If we had set that date back to 2010 or whatever the case 
might be, it would be a less onerous burden certainly on the 
State of Iowa. We all want clean energy, we all want to cut, 
you know, obviously carbon pollution. We all want to do those 
things, and Iowa is going to continue to do the right thing. 
The Governor there is just now putting together a team to try 
to come up with some kind of an energy plan, and I commend him 
for that. And we're going to do the right thing, we're going to 
keep doing it.
    Ms. McCabe. Yes.
    Mr. Loebsack. But it just does seem a bit unfair to start 
it at that 2012 date and not recognize all the progress that 
was already made in a place like Iowa. And, hopefully, we'll be 
able to take advantage of the incentive program, as well. You 
know, we'll continue to work with you on that but, you know, 
I'm making a plea for some degree of flexibility in all this at 
this point.
    Ms. McCabe. Well, I think the fact that the final plan 
focuses much more than the proposal did on the regional nature 
of the power market, goes directly to your point, as well.
    Mr. Loebsack. Right.
    Ms. McCabe. Because it allows the regions, the utilities 
and the regions to work together. And, again, States that are 
further ahead are further ahead, and will benefit from that 
investment that they've made.
    Mr. Loebsack. Right. Well, we'll stay in touch going 
forward, and I just wanted to express the concern that I have 
about that date. And, hopefully, we'll have a little bit of 
flexibility that we'll see from you folks moving down the road. 
Thank you so much.
    Ms. McCabe. Thank you.
    Mr. Loebsack. Thank you, and I yield back the rest.
    Mr. Whitfield. The gentleman yields back. The Chair 
recognizes the gentleman from Virginia, Mr. Griffith, for 5 
minutes.
    Mr. Griffith. Thank you, Mr. Chairman.
    Ms. McCabe, I've heard some confusion here today. I read 
you some quotes out that said on four occasions over the last 
few years it said that you all weren't going to move towards a 
cap-and-trade program. I then read you something that indicated 
you are going to a cap-and-trade program, and then you told 
Congressman Barton that you weren't going to a cap-and-trade 
program. And I find that hard to understand. Is it your 
position that you all are not heading towards a cap-and-trade 
program?
    Ms. McCabe. This rule does not set up a cap-and-trade 
program, Congressman.
    Mr. Griffith. All right. I beg to differ. Let me go through 
some of the documents, and I guess we just have to start with 
your own documents. You know, when you take a look at it in the 
Environmental Protection Agency in the pre-plan that's out 
there and the summary, it says, ``This proposal,'' talking 
about your plan, and I can be glad to give you a copy of this 
after I finish reading it. ``This proposal presents two 
approaches to a Federal plan for States and other jurisdictions 
that do not submit an approvable plan to the EPA: a rate-based 
emissions trading program, and a mass-based emissions trading 
program.`` Now that to me sounds like cap and trade of one form 
or another.
    It goes on to say on page 43, ``As discussed at length in 
the emission guidelines, electric generation units operate less 
as individual isolated entities, and more as multiple 
components of a large interconnected system designed to 
integrate a range of functions that insure an uninterrupted 
supply of affordable and reliable electricity, while also for 
the past several decades maintaining compliance with air 
pollution control programs. Since as a practical matter under 
both the emission guidelines and any Federal plan, emissions 
reductions must occur at the affected electric generation 
units, a broad scale emission trading program would be 
particularly effective in allowing the electric generation 
units to operate in a way that achieves pollution control 
without disturbing the overall system of which they are a part, 
and the critical functions that this system performs. In 
addition, consistency of requirements benefits the affected 
electric generation units, as well as the States, and the EPA 
in their role as administrators and implementers of a trading 
program. The EPA believes that there are,'' skip a line, and 
then, ``The EPA believes there are compelling policy reasons 
that support the provisions of a proposed model trading rule at 
this time.''
    It goes on to talk about the public hearings that you had 
which you didn't have in my district, where you would have 
heard something completely different. As I told you before, I 
was elected on this issue, and a 28-year incumbent who agreed 
with you all isn't here because of this issue, cap and trade. 
And you go on to talk about, ``There's strong interest in 
seeing a model State program,'' and then it goes on to say and 
I find this fascinating. ``In addition, some States have 
indicated that they may prefer to rely on a Federal plan, 
either temporarily or permanently, rather than develop a plan 
of their own. This proposal of a model trading rule addresses 
these policy interests. The approach of proposing model trading 
rules that are identical in all key respects to proposed 
Federal plans that may be promulgated later is consistent with 
prior Clean Air Act Section 111(d).''
    Now, I don't know in what kind of a universe or what 
English language you're looking at, but I just picked out some 
small parts here, and every time I turn around it's talking 
about this rule pushing on the States a trading plan similar to 
cap and trade, if not cap-and-trade-heavy, it's cap and trade 
of some form, and two different versions of it. And then it 
says, and I will--I interpret it differently. It says, ``In 
addition, some States have indicated they may prefer to rely on 
a Federal plan.'' That's because they're not going to do it, 
because isn't it--am I correct that if a State says like we 
heard earlier that one of the States feared blackouts and 
people freezing in their homes, if they choose not to do it, 
you all are going to come in with your Federal trading program 
and do a Federal program. Isn't that correct, yes or no? It's a 
simple yes or no.
    Ms. McCabe. No, it's not, it's not a simple question to 
answer.
    Mr. Griffith. It is a simple question: Are you going to 
make the States do a trading program? If they don't comply with 
your Clean Power Plan, are you coming in there and imposing a 
Federal trading plan on them, and the answer is either yes or 
no.
    Ms. McCabe. We have not finalized a Federal plan. We have a 
proposal out there, so I cannot speak to what the----
    Mr. Griffith. OK. Under this proposal, wouldn't that be the 
natural and logical conclusion, for someone reasonable reading 
the English language that I just read to you out of your own 
document. Would that not be reasonable?
    Ms. McCabe. We have proposed trading programs, a rate-based 
one, and a mass-based one, and I would commend you to the 
comment record, Congressman, where we got overwhelmingly inputs 
from States and utilities saying----
    Mr. Griffith. Where you----
    Ms. McCabe [continuing]. The trading programs were 
effective and efficient, and they were using them, and it 
works.
    Mr. Griffith. And where you disenfranchised the people of 
Appalachia because you didn't come to talk to any of the coal-
producing areas in Central Appalachia. You refused to come and 
have a hearing there. We asked you all to do it, you wouldn't 
do it, didn't have to be my district, could have been Mr. 
Johnson's district, or Mr. McKinley's district, or somebody 
else's district. You wouldn't do it. That's why your comments 
are going to support what you got, because you went out and 
found the people that agreed with you to go put your hearings 
in.
    Mr. Chairman, I apologize. I am over my time. I yield back.
    Mr. Whitfield. The gentleman yields back. At this time, the 
Chair recognizes the gentleman from Texas, Mr. Green, who I 
guess represents part of Houston, as well, Astros.
    Mr. Green. Yes.
    Mr. Whitfield. OK, 5 minutes.
    Mr. Green. I'm proud to be a co-fan with my good friend 
from the South with the Astros. But I want to thank the Chair 
and the ranking member for holding the hearing, and I want to 
thank Acting Administrator McCabe for coming. The EPA's Clean 
Power Plan has been subject to much debate. We're happy to have 
you here today.
    Administrator, the EPA's Clean Power Plan changed 
significantly from the proposed rule to the final product. My 
understanding was the EPA wanted to be responsive to 
stakeholder feedback, including many concerns brought by the 
industry. The final rule included both reliability safety 
valve, and what looks like a reliability assurance mechanism. 
My question is, does the Memorandum of Understanding between 
DOE, EPA, and FERC function as the beginning of a reliability 
assurance mechanism? Can you explain what steps EPA took to 
insure that reliability before the implementation?
    Ms. McCabe. Yes, that's a good question, Congressman. The 
Memorandum between the three agencies is really a continuation 
of the relationship that we've developed, our three agencies, 
to make sure that we're focused collectively on what's going on 
in the power industry as they're responding not just to EPA 
rules, but to the various trends in the industry, and moving 
forward, how it's going so that we're all on the same page, and 
in good communication.
    The variety of things that we built into the Clean Power 
Plan that were directly responsive to the reliability issues 
that we heard were more time, more flexibility in the glide 
path, making sure that the States in developing their plans 
specifically address reliability which may involve, up to them, 
but may involve consulting with their reliability entities or 
with their PUCs, making sure that those conversations are 
happening.
    The reliability safety valve that you mentioned is also 
something that we put in that was very important, the ability 
for States to adjust their plans. So, it's the whole package 
really that collectively addresses the reliability concerns.
    Mr. Green. Both Congressman Olson and Congressman Doyle 
over the past two Congresses and I have worked on legislation 
to address the must-run orders. Through a strange twist in the 
law, the DOE told a power plant to run even in violation of the 
Clean Air Act, the operator could be civilly liable. Does CPP 
include your reliability safety valve that allows 90-day must-
run orders in the event of an emergency? Would an operator face 
potential litigation for following those orders?
    Ms. McCabe. We actually think it's very unlikely that an 
operator would be put in that position because of the 
flexibility in the plan, and how States can set up their plans. 
But in the event that an operator was put in that position, 
that's the purpose of the reliability safety valve, to give 
them the ability to go forward without being worried about 
being in violation of the Clean Air Act.
    Mr. Green. EPA stated that Federal implementation has not 
been finalized. EPA is deciding between rate-based or mass-
based Federal implementation plan. The final rule indicated a 
90-day comment period. How many comments has the agency 
received thus far?
    Ms. McCabe. We actually--that comment period will start 
when the Federal Register publishes the rule, which we expect 
to be later this month, so we haven't gotten any formal 
comments yet.
    Mr. Green. Does the agency anticipate extending the comment 
period? I guess will that depend on the amount of comments you 
receive?
    Ms. McCabe. If we get those requests, Congressman, we'll 
take a look at them and decide. We wanted to start out with 
quite a lengthy comment period to make sure that people had 
time to put their thoughts together.
    Mr. Green. The final rule changed the way EPA views nuclear 
power. Can you explain further how existing or under 
construction nuclear could be counted?
    Ms. McCabe. Yes. So, any under construction or upgraded 
nuclear power since 2012 can be included by a State as part of 
its compliance plan, just like any--it's treated just the same 
as any other zero emitting generation, which was a lot of the 
feedback that we got from folks.
    Mr. Green. OK. Well, in Texas we have invested significant 
amounts in wind power, and I'd like to see the same done with 
solar. How does EPA envision the Clean Energy Incentives 
Program encouraging new construction of solar?
    Ms. McCabe. It allows States, if they choose, to sort of 
front load by providing some extra incentive to those projects. 
And in order to make that an incentive, the Federal Government 
will match the investment that the State would put in in terms 
of compliance allowances or credits, however they choose to do 
it.
    Mr. Green. My last 20 seconds, how does EPA envision the 
Clean Energy Incentive Program encouraging new construction? 
The EPA wants to establish a credit reserve, and will run into 
problems of verification, authenticity issues before, but how 
is EPA going to do that?
    Ms. McCabe. So, we proposed an approach for people to have 
accountability systems. It's very important, as you recognize, 
that everybody be following a good set of rules, and there's a 
lot of information out there because of the renewable energy 
markets that already exist. So, we'll work with all of that 
information and get a set of guidelines out there for people 
that everybody's comfortable with.
    Mr. Green. OK. Thank you, Mr. Chairman.
    Mr. Whitfield. The Chair recognizes the gentleman from 
Texas, Mr. Flores, for 5 minutes.
    Mr. Flores. Thank you, Mr. Chairman. I appreciate the 
opportunity to have this important hearing today. Thank you for 
being here, Ms. McCabe.
    States have to file, if they want an extension to produce 
plan, they've got to file before 2016. Correct?
    Ms. McCabe. In September of 2016. Yes, sir.
    Mr. Flores. OK. If the Texas legislature doesn't meet until 
2017, how are they supposed to file a plan in 2016?
    Ms. McCabe. Well, every State is different, but in many 
States it's the environmental agency or on behalf--the Governor 
through the environmental agency that has the responsibility 
for filing the plan.
    Mr. Flores. But the representatives of people really don't 
have any input into it, because the legislature doesn't meet. 
Did cap and trade pass Congress?
    Ms. McCabe. Well----
    Mr. Flores. No, it didn't.
    Ms. McCabe. For acid rain, it did. This is not a cap-and-
trade rule, Congressman.
    Mr. Flores. Well, I think, Mr. Griffith, if you look at 
pages 1174 and 1775 of the rulemaking, it's pretty clear that 
Mr. Griffith was right. He was on to something. EPA is going to 
have cap and trade in this, and we both know that that's the 
direction you're trying to go.
    Let's talk about new natural gas EGUs for a minute. Do 
those improve the emissions profile of the country?
    Ms. McCabe. Sure they do. Yes, that's clean energy.
    Mr. Flores. OK. Does EPA support the construction of new 
natural gas EGUs?
    Ms. McCabe. We support the move towards cleaner energy. 
Natural gas is a very important part of our diverse energy mix.
    Mr. Flores. OK. On page 346 of the 111(d) rule, it says in 
the second full paragraph, the EPA says, ``Unlike emission 
reductions achieved through the use of any of the building 
blocks, emission reduction is achieved through the use of,'' 
and I'm going to put parenthetically here, ``natural gas 
combined cycle plants require the construction of additional 
CO2 emitting generating capacity, a consequence that 
is inconsistent with the long-term need to continue reducing 
CO2 emissions beyond the reduction that will be 
achieved by the rule.'' So, can you explain what that means?
    Ms. McCabe. I think what that's reflecting is that natural 
gas is a fossil fuel. It does have CO2 emissions, 
and there's a range of options that this country has to make 
sure that we're always moving towards a cleaner energy supply. 
Natural gas and some coal is part of that, but there are also 
even cleaner types of energy that we want to encourage.
    Mr. Flores. So, does the EPA support or oppose the 
construction of natural gas EGUs?
    Ms. McCabe. We do not oppose the construction of clean 
energy in this country.
    Mr. Flores. OK, thank you. Because solar is not going to 
produce base load, wind is not going to produce base load 
power, but natural gas EGUs do produce base load power, as coal 
does, as nuclear, but you're not giving any credits for nuclear 
power.
    This is going to be fully implemented by 2030 according to 
your present plan. What will the emissions reduction be across 
the Nation for CO2 in the year 2050 versus today?
    Ms. McCabe. I don't have that number. We'd be glad to get 
some information back to you on that.
    Mr. Flores. Yes, that would be good. I mean, you give us 
these metrics about 140,000 fewer lost school days, and a 
shorter allergy season. You know, it seems to me like you start 
with what's the sort of the headline number, we're going to 
have experts that said reduction. It seemed like that that 
would be a number that would be on top of your mind.
    In order to get to this 2030 standard, how much of the 
technology exists today to get to that standard?
    Ms. McCabe. All of it.
    Mr. Flores. All of it, every bit of it.
    Ms. McCabe. Yes, sir.
    Mr. Flores. OK. What's the mean cost per reduced ton of 
CO2 emissions to get there?
    Ms. McCabe. I don't have that number off the top of my 
head.
    Mr. Flores. That would be a really good number to have.
    Ms. McCabe. Sure.
    Mr. Flores. So, when we have--let's roll back out to 2050 
again. So, what's the change in the mean temperature going to 
be around the world?
    Ms. McCabe. Again, we'd be happy to provide you more 
information about the specific metrics.
    Mr. Flores. OK. And what's the change in sea levels going 
to be?
    Ms. McCabe. Again, that's something----
    Mr. Flores. But we talk about school days, but the whole 
thing here--all the arguments I've heard, particularly from the 
other side of the aisle, about how this is going to make the 
world a better, happier place.
    Ms. McCabe. Yes.
    Mr. Flores. But you don't have the information we need, so 
I'd really like to know.
    So the other thing that would be nice to know, what's the 
economic impact of reduced reliability? I mean, you've heard 
the States say that there's going to be reduced reliability. 
The only people in this room that say we're going to have 
improved reliability are the folks in the EPA.
    Ms. McCabe. Respectfully, I disagree with that. There are 
many people who weighed in on the climate plan that have taken 
just the opposite view and gave us advice about how to make 
sure that our rule would not impair reliability.
    Mr. Flores. Well, I can tell you in the winter of 2013, and 
this plan had been in effect in Texas where we had a record 
cold snap, there would have been a lot of school days missed 
because there was no power for schools because a big chunk of 
the coal-powered plants would have been offline because of 
this. And I'm at the end of my time, I yield back.
    Mr. Whitfield. The gentleman yields back. At this time, the 
Chair recognizes the gentleman from New York, Mr. Tonko, for 5 
minutes.
    Mr. Tonko. Thank you, Mr. Chair. And thank you, Assistant 
Administrator McCabe, for joining us today. Thank you for your 
patience and your responses, which are very much governed by 
civility, so I appreciate that.
    The Clean Power Plan has the goal of reducing carbon 
emissions by 32 percent below 2005 levels by 2030. States will 
have 15 years to achieve those goals under this plan. This is 
definitely achievable, in my opinion. New York's experience 
demonstrates that it, indeed, is possible. Since 2005, New York 
and the other States participating in the Regional Greenhouse 
Gas Initiative, or REGGI, have seen a decrease in carbon 
emissions of more than 45 percent. And we have not sacrificed 
economic growth or reliability to achieve those given 
reductions. And according to several reports done by an 
independent group, New York's auction proceeds generated over 
$1 billion in savings for New Yorkers, so this can be done. So, 
I look at a charge of 32 percent over 15 years, and look at a 
record achieved of 45 percent over 10 years in contrast.
    Ms. McCabe, one of the current statements the opposition to 
the Clean Power Plan is making is that the rule mandates an 
emissions trading scheme. As I read it, there is no mandate to 
use emissions trading as the way to meet the standard. Is that 
correct?
    Ms. McCabe. That's correct.
    Mr. Tonko. And as I understand it, it was utilities and 
system operators who advocated for including this compliance 
option in the final rule, not just State governments that were 
already participating in these systems. Is that correct?
    Ms. McCabe. Yes, we heard from many utilities that this was 
a preferred way that they're already operating.
    Mr. Tonko. What reasons did the utilities and system 
operators offer in support of including this option?
    Ms. McCabe. Well, trading has been shown through the acid 
rain program and a number of other programs to be the most 
flexible way for operators to manage their assets. Many utility 
companies operate in multiple States. They have a range of 
assets, they may have coal, they may have renewables, they may 
have gas, and having a system where they can average, they can 
trade back and forth, it just makes sense. They're going to 
have more ability to make the investments where they are the 
most cost-effective, and not make them in places where they 
won't. And then they can use the system to average over. And if 
they can trade with other companies, it just broadens the 
capacity for the system to find the cheapest and most cost-
effective technologies and approaches.
    Mr. Tonko. Was it just about that cost, or was reliability 
also a consideration?
    Ms. McCabe. Reliability is--the more flexible and open the 
system is, the easier it is for companies to feel confident 
that they have play in the system, and they'll be able to meet 
the load needs.
    Mr. Tonko. Thank you. I also want to express my 
appreciation for the agency's efforts at outreach, outreach to 
State governments, and to the wide range of stakeholders in 
this effort.
    One of the things that the original proposal did not 
include was a reliability safety valve. This was something 
mentioned by a number of witnesses at our hearings on the 
original proposal. The final rule does include a safety valve, 
and I heard you exchanging with Representative Green a few 
moments ago. Can you further develop or describe for us how 
that would work?
    Ms. McCabe. Yes. So, as I mentioned, States can certainly 
design plans that will minimize the chance that an operator 
will be put in the position of having to choose between 
complying with a must-run order and violating the Clean Air 
Act. But if that should occur, what the reliability safety 
valve does, is it allows that plant to continue running. In 
fact, our expectation is that if a plant gets a must-run order 
in an emergency situation, it will run. And it sets up a period 
of 90 days for the company to take a breath, do what they need 
to do, and figure out whether there's a problem with the State 
plan, whether this is a situation that's going to resolve 
itself, and what it needs to do long term. So, for that safety 
valve period of time, they can do what they need to do, relax, 
and figure out the next steps.
    Mr. Tonko. Thank you. I believe the final rule addresses a 
number of the concerns raised and provides an achievable, 
affordable path for reducing emissions. And, you know, it's 
been stated time and time again that there are many concerns 
about climate change in this Nation, and for our world. And I 
believe that the leadership that we can all provide will 
inspire responses around the world to make certain that we, in 
fact, will have a global response to what is a critical 
situation that faces not only this generation, but the many to 
follow. So, thank you very much, again, for our appearance 
here.
    Ms. McCabe. Thank you.
    Mr. Whitfield. At this time, the Chair recognizes the 
gentleman from Ohio, Mr. Johnson, for 5 minutes.
    Mr. Johnson. Thank you, Mr. Chairman.
    Assistant Administrator McCabe, I'm incensed and I think 
the American people are incensed, and I'm certain that the 
people that I represent in Eastern and Southeastern Ohio are 
incensed at the logic that's being used by the EPA as it 
addresses the concerns around employment. The logic that seems 
to be applied to coal regions of the country where we've got 
communities of 1,000, 1,500 people that are all coal miners, 
and such, that they can just plant seeds like a seasonal garden 
and all of a sudden industries and new job opportunities might 
crop up. The logic that the EPA is using in their rationale, I 
certainly understand it because every time a new Government 
regulation by the EPA comes out, new offices are stood up, 
employees are hired, and the Washington bureaucracy grows ad 
nauseam. It happens like that at the expense of the American 
taxpayer.
    I'm concerned about that, and if you look at page 47 of the 
Clean Power Plan, and the heading that reads, ``Addressing 
Employment Concern,'' on page 47 your agency states, ``The EPA 
encourages States in designing their State plans to consider 
the effect of their plans on employment and overall economic 
development to assure that the opportunities for economic 
growth and jobs that the plans offer are realized. To the 
extent possible, States should try to assure that communities 
that can be expected to experience job losses can also take 
advantage of the opportunities for job growth or otherwise 
transition to healthy, sustainable economic growth.''
    You're obviously not familiar with Appalachia, Ohio, and 
rural America, and how these rules will affect places like 
that. So, I'm trying to understand what you mean by economic 
development. You're asking States to prematurely retire and 
replace existing plants with new energy infrastructure, and 
then claim this as a net benefit for jobs and economic growth. 
This is like breaking a window and then claiming the spending 
on the replacing of that window as a net benefit. So, what 
would the EPA do if a State chooses to show it could use the 
funds that the EPA wants it to spend on replacing perfectly 
good and reliable energy infrastructure by putting those funds 
toward a more productive economic use?
    Ms. McCabe. Congressman, our job under the Clean Air Act is 
to implement the Clean Air Act, and we believe that we put 
forward----
    Mr. Johnson. I've heard that, Assistant Administrator 
McCabe. That incenses me even more. You work for the President 
of the United States, who was elected by the American people 
with a mandate to care for all of the American people. For the 
EPA to blindly like a mule going down a furrow say that we 
don't have to look to the right and the left, and our job is to 
keep the air clean, or job is not to consider the economic 
viability of the communities that we're affecting, that is not 
only irresponsible, it is incomprehensible that an agency in 
the United States Federal Government would do that to its own 
people. So, I'm not even going to engage in that dialogue 
because it doesn't make any sense.
    Ms. McCabe. Could I reply?
    Mr. Johnson. I'll give you----
    Ms. McCabe. I wasn't able to get very many words out.
    Mr. Johnson. Quickly.
    Ms. McCabe. The President and the administration absolutely 
cares about these issues. That's a key reason why he put 
forward the Power Plus Plan, which is specifically targeted at 
the transitions that are happening in coal country, and----
    Mr. Johnson. All right. Let me ask you a specific question. 
If that's what the President really believes, and that's what 
Administrator McCarthy really believes, and if that's what you 
really believe, tell me what you're going to do in Beallsville, 
Ohio, when you shut down that coal mining operation that 
employs about 1,500 people. Tell me what you're going to do to 
establish a new industry there and create economic growth.
    Ms. McCabe. These are the conversations that----
    Mr. Johnson. No, it's not a conversation. It's not a 
conversation that needs to be had. A conversation is not going 
to put food on the table, clothes on the kids, pay for school 
supplies. A conversation is not going to solve this problem. 
And I don't understand how you folks in the administration do 
not see the devastating impacts that it's going to wreak on--
you know, I'm totally off my questions, Mr. Chairman, but I'm 
just so incensed by the answers to these questions. And I've 
extended my time, and I apologize. I yield back.
    Mr. Whitfield. The gentleman's time has expired. At this 
time, the Chair recognizes the gentleman from Vermont, Mr. 
Welch, for 5 minutes.
    Mr. Welch. Well, I want to in a way take up where Mr. 
Johnson was speaking. I had a chance to go to West Virginia and 
go into a coal mine with Mr. McKinley, and I'll tell you, it 
was a really powerful experience. Those folks work hard, as you 
know, and we don't have coal in Vermont, but we have 
electricity, and those coal miners, many from the UMW, they 
kept the lights on for us, kept our farms humming, kept the 
factories going. And there is dislocation. It happens to be the 
case that I am a strong supporter of efforts to clean our air 
and to move away from fossil fuels, but that trip really 
brought home to me that there is an impact on real people who 
are proud, who are hard-working, who approach things in a 
patriotic and team-oriented way, and are doing good work.
    And what I think this whole committee has to do, not just 
the administration, is get behind some legislation that my 
friend, Mr. McKinley, is sponsoring. Two things, in particular. 
One, a lot of folks who have paid into their health care and 
the retirement benefits are in jeopardy of having them be lost, 
and Mr. McKinley and others have legislation that would protect 
that. And I strongly support it, and I hope a lot of my 
colleagues, whatever side of the debate they are on on the 
Clean Air rule, support Mr. McKinley in that.
    And the second is, there is that kind of economic 
dislocation that my colleagues who are from coal country are 
acutely aware of. And it's amazing to meet those coal miners, 
and I saw Mr. McKinley in his heartfelt relationship with them 
in real world understanding. One very vivid example, we were 
there on Friday. Friday night the big custom down there is to 
go to the high school football games. They used to have--in 
this region they used to have eight high schools, now they have 
three. So, it's really, really tough.
    So, I'm a supporter. I think that climate change is a real 
issue, and some of my colleagues disagree. But there in my view 
can't be any disagreement about the reality that there is 
dislocation. These are good people, and somehow, some way we've 
got to help them, and Mr. McKinley has two ways to do it.
    But it also suggests to me that to the extent that you in 
doing your job at EPA can also have some flexibility, I think 
it's worthy of as much consideration as possible because while 
we have to make this transition, in my view, we also have to 
mitigate the real world consequences of what's happening.
    So, I appreciate you being here, I appreciate the work that 
you're doing. I say to my colleagues that this is not just an 
EPA issue, because whatever impact is occurring because of 
rules, there are also market forces that are very much at work. 
The price of natural gas is a big factor, efficiency which is a 
good tool is reducing the demand in some cases from what it 
would be. So, this is a kind of all-of-the-above approach that 
we have to take.
    And I just want to end by saying thank you for the work you 
do, but I also want to say to my colleagues from coal country 
that you've got some allies on our side who want to be there to 
help you help those extraordinary people who have kept the 
lights on in Vermont, kept our farms running, kept our 
factories operating. So, thank you.
    Mr. Whitfield. The gentleman yields back. At this time, the 
Chair recognizes the gentleman from Mississippi, Mr. Harper, 
for 5 minutes.
    Mr. Harper. Thank you, Mr. Chairman. Ms. McCabe, thank you.
    You know, I come from a State where we rely heavily on 
electric co-ops to help keep lights on. I've been in close 
contact with them as the Clean Power Plan has been discussed, 
and I would like to share just one of their concerns today, if 
I may.
    South Mississippi Electric. One of South Mississippi 
Electric's biggest concerns is the drastic and unproven shift 
to renewables in the final version of the Clean Power Plan that 
would require that 21 percent of SMEs generation come from 
renewables by 2030. If I could put that in perspective, SME 
just executed a power purchase agreement for all of the output 
of a 52 megawatt solar facility being constructed in Lamar 
County, Mississippi. The capital cost associated with this one 
solar facility is $102 million with a 30 percent tax credit. 
The output of the facility will total less than 1 percent of 
SME's total generation in a year. Therefore, to meet the 2030 
emissions rate, over 21 of these facilities would be required 
at a cost in excess of $2 billion. To put that further in 
perspective, SME currently has just over $2 billion in assets 
that have been accumulated over about a 50-year time frame, and 
under this rule it would double in a mere decade.
    So my question for you is, how will people in my State be 
able to afford costs associated with the dramatic shift from 
fossil generation to renewable energy generation set forth in 
the Clean Power Plan?
    Ms. McCabe. Yes. We've spent a lot of time with co-ops, and 
they have some particular concerns that they've raised to us. I 
think the important thing to think about in response to that 
question is that the way the Clean Power Plan, no individual 
company needs to do it on its own, no individual State needs to 
do it on its own. The regional approach, ability to average and 
trade allows people to make appropriate choices so that the 
most cost-effective and achievable----
    Mr. Harper. Trade as in cap and trade?
    Ms. McCabe. Trading as in trading. Trading as in trading.
    Mr. Harper. OK.
    Ms. McCabe. Which is a perfectly reasonable approach to use 
whether you're in a rate-based approach, or whether a State 
chooses to go with a mass-based approach.
    Mr. Harper. Here's what it appears. It appears that the 
President and the Environmental Protection Agency have, in 
effect, declared war on affordable energy for families in my 
State and throughout the country. And I want to remind you, and 
I know you know it, is what then Candidate Obama said in 2008. 
And I just want to repeat what he said, because we've addressed 
this on concerns on coal plants, as well. He said, ``So, if 
somebody wants to build,'' and this is President Obama when he 
was running in '08. ``So, if somebody wants to build a coal-
powered plant, they can. It's just that it will bankrupt them 
because they're going to be charged a huge sum for all that 
greenhouse gas that's been emitted.'' Further, he said, ``Under 
my plan of a cap-and-trade system, electricity rates would 
necessarily skyrocket, even regardless of what I say about 
whether coal is good or bad, because I'm capping greenhouse 
gases, coal-powered plants, you know, natural gas, you name it, 
whatever the plants were, whatever the industry was, they would 
have to retrofit their operations. That will cost money. They 
will pass that money on to consumers, pass that cost on.''
    So, when you were asked earlier by Mr. Pompeo about 
meetings that you would have had that were political meetings 
within the administration, have you ever had a political 
meeting with anyone in the administration, not the number, but 
have you ever had any?
    Ms. McCabe. We certainly meet with staff from the White 
House on major rulemakings that we do.
    Mr. Harper. I'm just curious, have you ever discussed this 
with President Obama himself?
    Ms. McCabe. I've had the pleasure of meeting the President 
only a couple of times.
    Mr. Harper. Was this discussed?
    Ms. McCabe. No.
    Mr. Harper. My remaining time that I have, I'm going to 
yield to Mr. Griffith from Virginia.
    Mr. Griffith. Thank you very much. The overarching policy 
of the Clean Power Plan is to limit the amount of carbon that 
an individual State can put out. Isn't that correct?
    Ms. McCabe. The overarching approach of the rule is to set 
emission rates for power plants that----
    Mr. Griffith. And certain limit on the emissions.
    Ms. McCabe. The amount of carbon they emit per megawatt 
hour.
    Mr. Griffith. And isn't another word of saying that a cap?
    Ms. McCabe. No, it is not.
    Mr. Griffith. All right. We're going to disagree on that. I 
will say this: I appreciate very much Mr. Welch's comments, 
appreciate his help. We are having problems. I also agree with 
Mr. Johnson, it's not something you just have a conversation 
on. I've got a county where they fight over flat land because 
there's only about three pieces of it in the whole county that 
don't already have something built on them, or in a floodway, 
so it's not something you just easily say we're going to be 
able to create jobs.
    And with that, Mr. Chairman, I yield back.
    Mr. Whitfield. At this time, the Chair recognizes the 
gentleman from Kentucky, Mr. Yarmuth, for 5 minutes.
    Mr. Yarmuth. Thank you very much, Mr. Chairman. Ms. McCabe, 
thank you for being here, and I want to thank you in advance--
well, thank you initially for the responsiveness you've had 
both to our State officials in Kentucky, but also to me 
personally and our office. We certainly appreciate the goals of 
this plan.
    Before I get to the question I have, I have to set the 
record straight, or at least revisit history a little bit about 
cap and trade, because I was here in 2009 when we passed 
Waxman-Markey in the House. No, it didn't pass the Senate, it 
didn't get 60 votes. It had a majority of Senators for it, but 
when Waxman-Markey was introduced, those of us who were from 
States where a significant majority of our power was produced 
by coal couldn't support the initial plan because it was going 
to cost our consumers a lot of money. So, a group of us led by 
Rick Boucher, who's the incumbent that Mr. Griffith defeated, 
went to our leadership and said, ``We can't support this, and 
you need our votes in order to do it.'' And what we were able 
to do was change Waxman-Markey in a way that made it very, very 
reasonable for our States to comply, was not going to have an 
undue impact on our consumers. As a matter of fact, when I 
surveyed our businesses and our utility company, they said it 
would have minimal impact. It might raise rates 15 percent over 
10 years if the users did nothing else, and it would also 
create tens of thousands of new jobs in Kentucky. So, the 
reason we did that was because we didn't want to be here today, 
because we didn't want EPA to have a plan that might unduly 
impact our States.
    We had no way of guaranteeing that that wouldn't happen, 
and we knew that because of the Supreme Court decision and so 
forth, the obligation of EPA was to regulate carbon emissions. 
So, that's where we were. We're here today because Republicans 
stopped Waxman-Markey. That's why we're here. So, if they have 
a complaint about that, they can blame themselves.
    Now to my question, and this relates to the line of 
questioning that Mr. McKinley raised earlier. Kentucky is one 
of those States, as he mentioned, that in the initial plan we 
were supposed to reduce our emissions by 18 percent. We felt 
comfortable with that. We thought that was doable. In the final 
plan, we're up--it wasn't 41. I think we're closer to 30, but 
still it's a significant increase. And I understand the 
rationale for doing that, the way the utilities deliver power 
is not commensurate with a State-specific target. But what I am 
concerned about is that with this increase, while the 
projections for long-term cost-savings seem attractive, there's 
the possibility of short term price increases to rate payers, 
and certainly, if I were not in the United States Congress, I 
would say I'm all for the plan. I'm for clean air, I'm a tree 
hugger, you know. I'm fine, but I do have responsibilities to 
my constituents to make sure that this doesn't unduly impact 
them.
    So, my fear is that if in our regional network, whatever 
that region might be, in our mix, that the way that the 
ultimate resolution of this, or accomplishment of this goal is 
something that Kentucky's utilities bear the brunt of, and that 
our prices rise disproportionately to those other areas in our 
region that are affected by this mix. So, my question is, is 
there any analysis, or is there any consideration in your 
Agency about how we would, if we're going to spread the 
responsibility over regions, how we might spread the increased 
costs so that one State doesn't have their rates go up 30, 40, 
50 percent, and another State doesn't have their rates go up at 
all?
    Ms. McCabe. Well, our analysis doesn't show that even if 
you look at smaller regions than the whole country or the 
interconnect that there would be a wide range of increases. But 
I think everybody's concerned about this, everybody wants to 
protect against that. And now that the plan is out and people 
are starting to dig in and think about, there's a lot of 
discussion going on about how to manage this in a way that 
would avoid that situation. So, the reliability entities are 
talking, the States are talking to find those ways to make sure 
that that doesn't happen.
    Mr. Yarmuth. OK. Well, I appreciate that. I look forward to 
being a part of those conversations.
    Ms. McCabe. Absolutely.
    Mr. Yarmuth. And once again, I thank you for your 
consideration in our dealings together. And thank you for 
appearing today. I yield back.
    Ms. McCabe. Thank you, Congressman.
    Mr. Whitfield. The Chair recognizes the gentleman from 
Missouri, Mr. Long, for 5 minutes.
    Mr. Long. Thank you, Mr. Chairman. And, Ms. McCabe, in 
terms of complexity, the rules contain hundreds of pages 
regarding variations in State plans and emissions trading. For 
example, you could turn to page 65 of the proposed Federal 
plan/model trading rule, beginning at the top of the page EPA 
states, and I quote, ``In the final emissions guidelines the 
EPA also discussed a concern that CO2 emissions 
reductions would be eroded in situations where an effective EGU 
in a rate-based State counts the megawatt hours for measures 
located in a mass-based State, but the generation from that 
measure acts solely to serve load in the mass-based State. In 
that scenario, expected CO2 emissions reduction 
actions in the rate-based State are foregone as a result of 
counting the megawatt hours that resulted in CO2 
emissions reductions in a mass-based State.'' Can you decipher 
that for me?
    Ms. McCabe. I think you're reflecting that there is some 
complexity in this rule. It's partly because of the choices and 
the flexibility that we provided in response to people's 
requests on it, but that's reflecting particular situations 
where States have been asking how do we deal with one another 
because power does flow across State borders.
    Mr. Long. Well, what does that have to do with standards of 
performance of a power plant? I mean, how does that relate to 
the States trying to work together? How does this relate?
    Ms. McCabe. It's all about the flexibility, and it's 
reflection that the power sector works as an integrated system. 
So, a system that demanded that each individual unit meet a 
specific rate would be more costly, would be more difficult, 
would have more reliability implications than a system that 
affords a lot of flexibility across the system, recognizing the 
way it actually works.
    Mr. Long. OK, I've got another question here, and this has 
been reflected today by other members that have used coal to 
supply a lot of their electricity. But in my home State of 
Missouri, we rely on coal for 83 percent of our energy 
generation, and I know that's not true on the east coast and 
the west coast, but in Missouri it is, and that's what the 
folks I represent are concerned about.
    The Clean Power Plan places a huge burden on coal-fired 
power plants, and this rule also restricts, and I don't 
understand this, the construction of new natural gas plants as 
a compliance measure. Could you explain to me why the EPA 
restricts the construction of natural gas-fired power plants as 
a compliance measure?
    Ms. McCabe. So, new generation to meet new load is subject 
to its own set of rules. This particular rule which addresses 
existing facilities is intended to manage that existing fleet 
of power plants and bring those emissions down. So, there's 
some provisions in there to make sure that that's what the rule 
is focused on, and those plans are actually delivering the 
reductions from that existing fleet.
    Mr. Long. I still don't understand the restriction on new 
construction of natural gas-fired plants.
    Ms. McCabe. Well, we'd be happy to follow-up with you or 
your staff and walk through it a little bit in more detail, 
Congressman.
    Mr. Long. OK. My staff is here today, so if we can do that, 
that would be greatly appreciated.
    And the final rule's interim and final goals for Missouri 
are even more stringent than the proposed rule's. What factors 
did the EPA consider when reaching this adjustment?
    Ms. McCabe. So, in the final rule there was adjustment 
across the board, across all States, and some of the States' 
targets went up, and some of them went down. It's a reflection 
of a couple of things. One is that, as I mentioned earlier 
today, in the final rule we set a uniform emission rate for all 
coal plants across the country. That's not the way the proposal 
was designed. And another key feature was information that we 
got from commenters, from States, and utilities, and others 
really suggesting that the appropriate way to look at this was 
on a regional basis because that's the way the power system 
worked. So, when you look at it across a regional basis, States 
have, and utilities in those States have, more opportunities to 
invest in renewables and cleaner energy than if they were 
restricted to looking within their State borders, which is an 
artificial boundary when it comes to the way the industry 
works.
    Mr. Long. OK, so we end up with more stringent rules in 
flyover countries, so we're used to that.
    Mr. Chairman, I yield back. Thank you.
    Mr. Whitfield. The Chair at this time recognizes the 
gentleman from New York, Mr. Engel, for 5 minutes.
    Mr. Engel. Thank you, Mr. Chairman, and I appreciate your 
courtesy very much. Hello, Administrator. It's good to see you 
again. Last time we spoke, the Clean Power Plan was still a 
proposed rule, and now it's been finalized. And I really just 
want to applaud you for your commitment to this important 
issue. So, thank you.
    Ms. McCabe. Thank you.
    Mr. Engel. We know the U.S. emits more carbon pollution 
than any nation except China, and existing power plants are the 
country's largest single source of carbon pollution. And before 
now, most power plants could emit unlimited amounts of carbon 
dioxide, and those emissions have significant health impacts. 
They've threatened the lives and well-being of all people 
across America.
    I say this because my district has some of the highest 
rates of asthma in the United States. I'm from New York City, 
from the Bronx, and death rates from asthma in the Bronx are 
about three times higher than the national average, and 
hospitalization rates are about five times higher. And the EPA 
estimates that the climate and public health benefits of the 
Clean Power Plan will range between $34-54 billion in 2030, and 
it will help avoid between 1,500 and 3,600 premature deaths, 
and 90,000 asthma attacks in children in the year 2030 alone. 
So, I believe that the Clean Power Plan is important because of 
the public health benefits associated with reductions in 
domestic emissions, and also because it signals to the 
international community that the U.S. is serious about reigning 
in its contribution to global greenhouse gas pollution.
    So, let me ask you this. When President Obama entered 
office, he set out to reduce our greenhouse gas emissions 17 
percent below 2005 levels by the year 2020. The intended 
nationally determined contribution that we submitted to the 
U.N. Framework Convention on Climate Change says that we plan 
to reduce our emissions by 26 to 28 percent below 2005 levels 
by 2025. Do you think we'll hit those targets, and would we hit 
them without the Clean Power Plan? And how does implementation 
of the Clean Power Plan impact the international climate 
negotiations coming up in Paris in December?
    Ms. McCabe. Well, the Clean Power Plan along with a number 
of the other programs that we have underway across the Federal 
Government are critical to the United States meeting that 
ambitious goal that we've set for ourselves, and it would be 
extremely difficult to get to those targets without the 
reductions from the power sector, which as you said is the 
largest stationary source of emissions in the country. So, it's 
really important.
    And as I mentioned earlier this morning, putting the Clean 
Power Plan out even in proposal really changed the debate 
internationally, and showed that the U.S. is really serious 
about doing this in a way that really counted, and would really 
result in reduced emissions. So, we think it has been hugely 
beneficial.
    Mr. Engel. Thank you. I certainly agree with you. And let 
me ask you this question. Since 1990, a vast majority of the 
new electric generation capacity in the United States has been 
built to burn natural gas, the second largest source of new 
capacity has been wind power which creates no air pollution at 
all, as we all know.
    I understand that with State flexibility built into the 
Clean Power Plan it's impossible to know the precise mix of 
fuels that will result, but do you anticipate the Clean Power 
Plan changing the fuel trends that we've seen emerging over the 
last 25 years? And if so, how?
    Ms. McCabe. What we see is that the Clean Power Plan will 
continue and enhance the momentum that you've already 
reflected, which is moving towards greater reliance on natural 
gas, and greater reliance on renewables, recognizing that you 
need a diverse supply, and you need a variety of sources to 
provide base-load power, and increased use of renewables, which 
is becoming more and more affordable. So, we see a greater 
percentage becoming renewables of all sorts, a greater 
percentage becoming natural gas reliant over the period of time 
of this Clean Power Plan.
    Mr. Engel. Well, thank you very much. I'm happy to hear 
that, and keep up your good work. We really appreciate it. And 
thank you, Mr. Chairman.
    Ms. McCabe. Thank you, Congressman.
    Mr. Whitfield. Well, that concludes the hearing. I have one 
additional question, and you may or may not have an additional 
question, Mr. Rush. But, Ms. McCabe, we will be electing a new 
Governor in Kentucky next month. The Democratic candidate who 
is currently attorney general, is one of those that filed the 
lawsuit against EPA. Of course, the lawsuit was dismissed for 
lack of standing because the rule has not been published in the 
Register yet, but he's indicated that he will not be submitting 
a State implementation plan. The Republican candidate for 
Governor said if he wins, he would not submit a State 
implementation plan. My question is, what would be the earliest 
if that occurred that EPA could impose a Federal plan?
    Ms. McCabe. So, the rule requires that, by September 6th of 
2016, the State either submit a plan or a request for an 
extension. If the State does not submit something on September 
6th, EPA would then look to the steps that it needs to take in 
order to fulfill our responsibilities under the Clean Air Act. 
So, that would be the first event that could trigger our 
consideration.
    Mr. Whitfield. So, what do you think it would be, like 30 
days after September 6th?
    Ms. McCabe. I really couldn't speak to the timing, 
Congressman.
    Mr. Whitfield. I mean, you don't have any idea?
    Ms. McCabe. Well, I think we will work to----
    Mr. Whitfield. Would it be a year, or would it be 30 days?
    Ms. McCabe. I think we will look to work with those States 
and move in a prompt manner, but as to a specific calendar, I 
don't have one.
    Mr. Whitfield. Do you have any questions?
    Mr. Rush. No, I don't have any.
    Mr. Whitfield. All right. That concludes today's hearing. 
Thank you very much.
    Ms. McCabe. Thank you.
    Mr. Rush. Mr. Chairman?
    Mr. Whitfield. Yes.
    Mr. Rush. I would like to ask unanimous consent to entering 
two letters entered in the record, one being a letter from the 
Medical and Health Community Organization supporting the Clean 
Power Plan. This is numerous organizations, community health 
organizations. And two, the letter from the American Lung 
Association urging the EPA to adopt strong standards to reduce 
carbon pollution from existing power plants.
    Mr. Whitfield. Without objection, and the record will 
remain open for 10 days. That concludes today's hearing.
    [Whereupon, at 12:37 p.m., the subcommittee was adjourned.]
    [Material submitted for inclusion in the record follows:]

                 Prepared statement of Hon. Fred Upton

    It has been nearly 5 years since a Democratically 
controlled Congress last rejected cap-and-trade legislation. At 
the time, the American people recognized cap and trade for what 
it was--a massive, economy-wide energy tax--and Congress wisely 
listened to them. And since that time, neither the House nor 
the Senate has made a serious effort to revive this discredited 
approach. But now, the Obama administration is attempting to 
regulate where it failed to legislate with EPA issuing final 
rules to regulate carbon dioxide from new and existing fossil 
fuel-fired plants.
    These two rules, which exceed 3,000 pages, as well as the 
proposed Federal plan that imposes a cap-and-trade scheme on 
States that don't have their own approved plans, raise all the 
same issues we had with the legislative version. And since it 
is being done through the regulatory route, it also raises 
questions about the legal authority to impose such sweeping 
measures on the States under Clean Air Act provisions never 
intended for this purpose.
    I didn't support the legislative version of cap and trade, 
and I don't feel any better about today's regulatory 
equivalent. This is especially true given the predicted double-
digit impact on electricity prices for most States, according 
to a study conducted by NERA, as well as the risks to 
reliability.
    In my home State of Michigan, 54 percent of electricity 
generated comes from coal, and electricity rates are expected 
to increase 12 percent between 2020-2029. And access to 
affordable and reliable electricity can be a matter of life or 
death in the winter months. Additionally, manufacturing States 
like mine need low energy costs in order to remain globally 
competitive. And for all of the costs of these rules, the 
payoff is a change in future global temperatures that will be 
no more than a few hundredths of a degree by 2100 based on 
EPA's prior modeling.
    The threat of being subject to a Federal plan is putting 
States between a rock and a hard place--either devote 
significant State resources to develop a State plan in response 
to a rule that is likely to be struck down by the courts, or 
become subject to mandatory Federal controls in less than a 
year after the rule's publication.
    As it is, electricity rates have risen in recent years, and 
other EPA regulations have been a contributor. The rules we're 
examining today will further add to this burden that 
disproportionately hurts low-income households and will 
continue to threaten grid reliability across the country. At a 
time when our fragile economic recovery is teetering on the 
edge amidst global market volatility, EPA's regulations on 
their own do significant damage--but cumulatively they will 
break the camels back.
    It is important that Congress, who is charged with writing 
laws, continues to demand answers on behalf of those impacted 
by the new and existing rules, especially now that EPA is 
beginning the process of implementing their provisions.

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