    [Senate Hearing 114-362]
    [From the U.S. Government Publishing Office]

                                                            S. Hrg. 114-362

         IMPLICATIONS OF THE SUPREME COURT STAY OF THE CLEAN POWER PLAN

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

                                    HEARING

                                   before the

                                  COMMITTEE ON
                          ENVIRONMENT AND PUBLIC WORKS
                              UNITED STATES SENATE

                        ONE HUNDRED FOURTEENTH CONGRESS

                                 SECOND SESSION

                                   __________

                                  JUNE 9, 2016

                                   __________

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

    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

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

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                              Washington, DC 20402-0001

                   COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS

                        ONE HUNDRED FOURTEENTH CONGRESS
                                 SECOND SESSION

                      JAMES M. INHOFE, Oklahoma, Chairman
    DAVID VITTER, Louisiana              BARBARA BOXER, California
    JOHN BARRASSO, Wyoming               THOMAS R. CARPER, Delaware
    SHELLEY MOORE CAPITO, West Virginia  BENJAMIN L. CARDIN, Maryland
    MIKE CRAPO, Idaho                    BERNARD SANDERS, Vermont
    JOHN BOOZMAN, Arkansas               SHELDON WHITEHOUSE, Rhode Island
    JEFF SESSIONS, Alabama               JEFF MERKLEY, Oregon
    ROGER WICKER, Mississippi            KIRSTEN GILLIBRAND, New York
    DEB FISCHER, Nebraska                CORY A. BOOKER, New Jersey
    MIKE ROUNDS, South Dakota            EDWARD J. MARKEY, Massachusetts
    DAN SULLIVAN, Alaska

                     Ryan Jackson, Majority Staff Director
                   Bettina Poirier, Democratic Staff Director

                                C O N T E N T S

                                  ----------
                                                                       Page

                                  JUNE 9, 2016
                               OPENING STATEMENTS

    Inhofe, Hon. James M., U.S. Senator from the State of Oklahoma...     1
    Boxer, Hon. Barbara, U.S. Senator from the State of California,
      prepared statement.............................................    75

                                   WITNESSES

    Dykes, Katie, Deputy Commissioner for Energy, Connecticut
      Department of Energy and Environmental Protection..............     4
        Prepared statement...........................................     6
    Revesz, Richard, Lawrence King Professor of Law and Dean
      Emeritus, Director, Institute for Policy Integrity, New York
      University School of Law.......................................    15
        Prepared statement...........................................    17
    Wood, Allison, Partner, Hunton & Williams LLP....................    43
        Prepared statement...........................................    45
    Bondon, Jack, Representative, 56th District, Missouri House of
      Representatives................................................    57
        Prepared statement...........................................    59
    McInnes, Michael, CEO, Tri-State Generation and Transmission
      Association, Inc., on behalf of the National Rural Electric
      Cooperative Association........................................    69
        Prepared statement...........................................    71

         IMPLICATIONS OF THE SUPREME COURT STAY OF THE CLEAN POWER PLAN

                                  ----------

                             THURSDAY, JUNE 9, 2016

                                           U.S. Senate,
                     Committee on Environment and Public Works,
                                                        Washington, DC.
        The committee met, pursuant to notice, at 9:30 a.m. in room
    406, Dirksen Senate Office Building, Hon. James M. Inhofe
    (chairman of the committee) presiding.
        Present: Senators Inhofe, Barrasso, Capito, Crapo, Boozman,
    Wicker, Fischer, Rounds, Sullivan, Carper, Cardin, Whitehouse,
    Gillibrand, and Markey.

              OPENING STATEMENT OF HON. JAMES M. INHOFE,
                U.S. SENATOR FROM THE STATE OF OKLAHOMA

        Senator Inhofe. The hearing will come to order.
        We are going to do something a little bit differently. I
    just talked to Senator Boxer. She is stuck in traffic and said
    to go ahead and start without her, so we will do that.
        I will do my opening statement, and what we will do is I
    will introduce all of our witnesses. Thank you very much, all
    of you, for being here today. This will be a well attended
    hearing. I am going to be asking something very special of you
    guys, and that is do as I do, and that is stay within your 5-
    minute limit because we will have a full panel here, and we
    have a vote at 11:15, so we want to accommodate both of those
    if that is all right.
        So we are here today to talk about the status of the Clean
    Power Plan in the wake of a historic decision by the U.S.
    Supreme Court to stay the rule.
        The stakes are high when it comes to the Power Plan. An
    agency charged with protecting human health and environment is
    attempting to restructure the entire energy system on imagined
    legal authority in a manner that will cost billions of dollars,
    is based on unreasonable assumptions, will increase energy
    bills, puts grid reliability at risk, and has no impact on the
    environment.
        If the EPA can convince the courts to uphold their approach
    to regulating the utility industry through the means Congress
    never authorized, then they will take these same arguments and
    use them to restructure every industrial sector in this country
    in a manner that appeases the political obligations of the
    President.
        Neither the Clean Air Act nor the regulatory system was
    meant to operate this way, and the President knows that. That
    is why he first attempted to progress his climate agenda--as
    was tried before he was President, going back as far as 2002--
    to do this through legislation, and what the President is very
    famous for is doing things that he can't do through legislation
    through regulation. That is what this is all about.
        So without the requisite support of Congress, the President
    has tasked unelected bureaucrats who are insulated from the
    consequences. So that is where we are today.
        Republicans are not the only ones who rightfully question
    the agency's persistent attempts to blur legal lines.
    Democrats, leading environmentalists, Governors, well respected
    economists, attorneys general, State air officials, economic
    directors, utilities, manufacturers, American businesses,
    unions, labor unions, and many more have joined the charge.
    Some have testified before this committee, including the former
    chief counsel of the Sierra Club, that the Clean Power Plan is
    legally unsound. President Obama's own law professor testified
    before the House that what the President and his EPA are doing
    is akin to ``burning the Constitution.''
        And the latest institution to join the charge is the
    Supreme Court of the United States. On February the 9th, 2016,
    the Supreme Court issued a historic stay, which puts the Clean
    Power Plan on hold until the completion of judicial review and
    accordingly extends all related deadlines. This is the relief
    that was requested and the relief that was granted, which even
    the EPA acknowledged when the Agency thought a stay would never
    happen.
        Yet EPA is attempting to downplay the significance of the
    stay and argue against the clean legal precedence as a last-
    ditch effort to scare States into spending scarce resources
    complying with a rule that could very well be overturned. It is
    important to note that a key consideration of the Court when
    assessing a stay is whether the parties requesting the relief
    will prevail on the merits. While a stay is not a final
    decision, it makes clear that the highest court in the country
    has serious reservations on the legal soundness of the rule.
        Like much of the Clean Power Plan, how the stay actually
    plays out is up to the States. We have a chart here. If you
    look at the States in red are the ones that have stopped their
    work altogether, the yellow is the ones who have slowed down
    their work, and then the green are those States, only 11
    States, that have continued their work.
        So, my message to the States and stakeholders and impacted
    entities is simple and clear: the highest court in the country,
    the Supreme Court of the United States, put a hold on the Clean
    Power Plan and all associated deadlines because it has serious
    concerns over the legal legality of this rule. As such, no
    State should fear any penalty for heeding the Court's decision.
        So, I thank the witnesses for being here. We are going to
    start, and we are going to try to adhere to our deadlines. But
    as soon as Senator Boxer gets here I will interrupt this
    proceeding and recognize her for her opening statement.
        We have witnesses today: Ms. Katie Dykes, Deputy
    Commissioner for Energy, Connecticut Department of Energy and
    Environmental Protection. Nice to have you here, Katie.
        Professor Richard Revesz, Lawrence King Professor of Law
    and Dean Emeritus, Director, Institute for Policy Integrity,
    New York University School of Law; Mrs. Allison Wood, Partner,
    Hunton & Williams; Mr. Michael McInnes, CEO of Tri-State
    Generation and Transmission Association, Incorporated, on
    behalf of the National Rural Electric Cooperative Association;
    and Representative Jack Bondon from the State of Missouri,
    around the Kansas City area, I believe.
        It is nice to have all of you here.
        We will start on this side with you, Ms. Dykes. And do try.
    I will be rude if you don't adhere to your 5 minutes. Thank
    you.
        [The prepared statement of Senator Inhofe follows:]

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

        We are here today to talk about the status of the Clean
    Power Plan in the wake of a historic decision from the Supreme
    Court of the United States to stay the rule.
        The stakes are high when it comes to the Power Plan. An
    agency charged with protecting human health and the environment
    is attempting to restructure the entire energy system on
    imagined legal authority in a manner that will cost billions of
    dollars, is based on unreasonable assumptions, will increase
    energy bills, puts grid reliability at risk, and have no impact
    on the environment.
        If EPA can convince the Courts to uphold their approach to
    regulating the utility industry through means Congress never
    authorized, then they will take these same arguments and use
    them to restructure every industrial sector in this country in
    a manner that appeases the political obligations of a
    President.
        Neither the Clean Air Act nor the regulatory system was
    meant to operate this way, and the President knows it. That is
    why he first attempted to progress his climate agenda and the
    predecessor of his Clean Power Plan through Congress in the
    form of cap-and-trade legislation. The problem the President
    ran into is that cap-and-trade is a bad deal for this country,
    and elected officials who are accountable to their
    constituencies will not support it.
        Without the requisite support of Congress, the President
    and his EPA have tasked unelected bureaucrats who are insulated
    from the consequences of progressing on all pain, no gain
    regulation and their legal allies to craft creative arguments
    to support it. The result of this is an oft repeated mantra
    from the EPA that the Clean Power Plan is built on a ``solid
    legal foundation.'' While the agency often makes eloquent,
    compelling legal arguments, they tend to be wrong.
        Republicans are not the only ones who rightfully question
    the agency's persistent attempts to blur legal lines.
    Democrats, leading environmentalists, Governors, well respected
    economists, attorneys general, State air officials, economic
    directors, utilities, manufacturers, American businesses,
    unions, and many, many more have all joined the charge. Some
    have testified before this committee, including the former
    chief counsel of the Sierra Club, that the Clean Power Plan is
    legally unsound. President Obama's own law professor testified
    before the House that what the President and his EPA are doing
    is akin to ``burning the Constitution.''
        And the latest institution to join the charge: the Supreme
    Court of the United States.
        On February 9, 2016, the Supreme Court issued a historic
    stay, which puts the Clean Power Plan on hold until completion
    of judicial review and accordingly extends all related
    deadlines. This is the relief that was requested, and the
    relief was granted, which even the EPA acknowledged when the
    agency thought a stay would never happen.
        Yet EPA is attempting to downplay the significance of the
    stay and argue against clear legal precedence as a last-ditch
    effort to scare States into spending scarce resources complying
    with a rule that could very well be overturned. It is important
    to note that a key consideration of the Court when assessing a
    stay is whether the parties requesting the relief will prevail
    on the merits. While a stay is not the final decision, it makes
    clear that the highest court in this country has serious
    reservations on the legal soundness of the rule.
        Like much of the Clean Power Plan, how the stay actually
    plays out is up to the States. Over half of the States--29 to
    be exact--have completely stopped work associated with the
    Power Plan, and 7 have slowed work. For the 11 States that
    continue to work on the CPP, a closer look reveals that their
    decision is more a matter of politics than prudent reason.
        My message to States, stakeholders and impacted entities is
    simple and clear: the highest court in this country, the
    Supreme Court of the United States, put a hold on the Clean
    Power Plan and all associated deadlines because it has serious
    concerns over the legality of this rule. As such, no State
    should fear any penalty for heeding the Court's direction.
        I thank the witnesses for their time and look forward to
    their statements.

       STATEMENT OF KATIE DYKES, DEPUTY COMMISSIONER FOR ENERGY,
     CONNECTICUT DEPARTMENT OF ENERGY AND ENVIRONMENTAL PROTECTION

        Ms. Dykes. Thank you.
        Good morning, Chairman Inhofe and members of the committee.
    I appreciate the opportunity to be able to be with you and
    speak here today. My name is Katie Dykes. I serve as the Deputy
    Commissioner for Energy at the Connecticut Department of Energy
    and Environmental Protection. This year I also have the
    privilege of serving as the Chair of the Board of Directors of
    the Regional Greenhouse Gas Initiative, or RGGI for short.
        The EPA has recognized multi-State, mass-based trading
    programs like RGGI as a compliance option for the Clean Power
    Plan, so I think it is relevant to share a little bit of the
    successes we have been having from implementing this program
    over the past several years.
        The RGGI program caps covered emissions from new and
    existing power plants by determining a regional budget of
    carbon allowances. The nine States participating in RGGI
    distribute a majority of our carbon allowances through
    quarterly auctions, and we reinvest the proceeds. Collectively
    the nine RGGI participating States represent 16 percent of the
    U.S. economy and generate a total GDP of $2.4 trillion.
        Connecticut is proud to be a charter member of RGGI, and we
    are pleased that EPA has recognized our approach as an option
    for Clean Power Plan compliance. Participation in RGGI has
    enabled our State to make significant reductions in carbon
    pollution already. Since 2005 the RGGI States collectively have
    reduced carbon emissions by 45 percent from the electric
    sector, and we are on track to meet a 50 percent reduction by
    2050. We have done all this while growing our GDP by 8 percent
    and while maintaining system reliability of the electric
    system.
        In Connecticut we have embarked on a clean energy
    transition in our State and our region because we are
    experiencing the threats of climate change. I will be delighted
    to share some of the examples that we see already, the hundreds
    of millions of dollars that we have been asking ratepayers to
    invest to address hardening our electric system, restoring
    power as a result of massive storms that rolled through our
    State and our region in 2011 and 2012. We have coastal
    substations that are facing the possibility of inundation by
    flood waters now that they are within the 100-year flood zone,
    and that is not because we moved those substations. So this is
    a real reliability threat for us.
        But we are also pursuing this because it provides
    tremendous benefits to our electric grid and our economy.
    Investments in energy efficiency save customers money.
    Renewables enhance reliability by diversifying our generation
    fuel mix and help to moderate electricity market prices.
    Independent reports by the Analysis Group have found that the
    RGGI program produced $1.4 billion in net benefits to the RGGI
    region between 2012 and 2014, creating 14,000 job-years and
    $460 million in consumer energy bill savings. That is net
    economic benefits from reducing carbon emissions.
        In spite of litigation uncertainty around the Clean Power
    Plan, Connecticut is one of several States that believe that
    having more information from EPA about how we might comply with
    the Clean Power Plan if it is upheld will better inform our
    decisionmaking. In April we were proud to join 13 other States
    in a letter to EPA requesting additional information and
    assistance related to the final CPP. Specifically we asked EPA
    to provide a final model rule or rules. We asked EPA to provide
    additional information about the Clean Energy Incentive
    Program, tracking systems for allowances or credits, and so on.
        We asked for this information to assist not only with our
    continued preparation for CPP compliance, but also to assist us
    with near-term immediate decisions that we need to make and
    that we are making about grid planning, about our own State
    obligations related to our State statutory mandate to reduce
    carbon emissions by 80 percent by 2050, how to comply with the
    revised ozone standards, and many other regulatory requirements
    that we have within our State.
        We are making decisions today using the best information
    that we have available. As energy planners we engage in
    modeling, we consult forecasts, and we make assumptions around
    the possibilities related to environmental compliance
    obligations, even when they may be uncertain due to litigation.
    And that extends not just to the Clean Power Plan, but also
    deciding decisions, nuclear relicensing, a whole host of
    administrative decisions that need to be factored into
    planning.
        Finalization of a model rule and other information that we
    have requested from EPA would not impose any new requirements
    on States or other parties, but it will provide us critical
    information about what kind of State plans will be approvable
    should the CPP be upheld. Given the interconnected nature of
    the electric grid, it is important for us in Connecticut to
    have information about how we might comply, how our sister
    States in RGGI might comply, as well as States outside of RGGI,
    so that we can continue with our planning.
        Connecticut and the other RGGI States have some of the most
    aggressive Clean Power Plan targets in the country, but we are
    well placed to meet them because we have taken proactive
    action, and we encourage others to do the same.
        Thank you so much.
        [The prepared statement of Ms. Dykes follows:]

       [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Senator Inhofe. Right on target. Thank you very much. I
    appreciate you.
        Professor Revesz.

    STATEMENT OF RICHARD REVESZ, LAWRENCE KING PROFESSOR OF LAW AND
     DEAN EMERITUS, DIRECTOR, INSTITUTE FOR POLICY INTEGRITY, NEW
                     YORK UNIVERSITY SCHOOL OF LAW

        Mr. Revesz. Mr. Chairman and members of the committee, I am
    very grateful to have been invited to testify and will address
    three issues today.
        First, the State does not prevent EPA from continuing work
    related to the implementation of the Clean Power Plan. Before
    the Supreme Court's stay, EPA had issued a proposed rule
    outlining Model Trading Rules, which will provide a framework
    for States that want to use emissions trading programs to
    achieve the Plan's emissions limits.
        EPA has said that it plans to finalize the Model Trading
    Rules this summer. EPA is also at work on other implementation
    related matters, including a proposal for a Clean Energy
    Incentive Program, which will provide States with an optional
    framework for rewarding early investments in renewable energy
    and demand-side energy efficiency.
        Even though these implementation related activities do not
    create enforceable obligations for States or sources opponents
    of the Clean Power Plan claim that EPA is required to cease
    work on them. But there is ample precedent for EPA continuing
    to work on implementation related matters during a stay of a
    regulation. Indeed EPA has done so under the last three
    Presidential administrations, both Republican and Democratic.
    In arguing that EPA must put its pencil down, opponents confuse
    the effects of a stay with those of an injunction, which the
    Supreme Court did not issue.
        In addition to being legal EPA's continued work on
    implementation related matters will have a number of salutary
    effects. For one it will aid the many States that during the
    pendency of the stay are voluntarily preparing to comply with
    the Clean Power Plan. EPA's guidance will also inform the plans
    of electric utilities and provide more energy predictability to
    the industry. Finally, if the plan is ultimately upheld the
    finalization of the Model Trading Rules will make the
    development and submission of implementation plans easier for
    all States.
        Second, a decision on the proper timeline for compliance
    will be made when the stay is lifted and should then take into
    account the public's interest in timely emissions reductions
    and developments in the electric power sector.
        Opponents of the Clean Power Plan have also argued that the
    stay has resulted in automatic tolling of all deadlines in the
    Clean Power Plan, not just the September 2016 and September
    2018 deadlines for the submission of plans but also the
    deadlines for sources to reduce their emissions, which begin
    2022 and end in 2030. The litigation will undoubtedly be
    resolved long before these performance deadlines, and the
    Supreme Court stay does not say anything about how they should
    be treated.
        Nonetheless earlier this year the U.S. Chamber of Commerce
    released a white paper arguing if the Clean Power Plan is
    upheld by the courts, EPA is required to move all of its
    deadlines into the future by at least the amount of time
    between the stay's issuance and its expiration. The Supreme
    Court stay does not mention any such tolling, and by its terms
    is explicitly limited to the duration of judicial review and is
    silent on what will happen after that.
        Here too there is history under administrations of both
    parties that makes clear that tolling decisions are made when a
    stay is lifted, not when it is put in place. And the tolling
    period is not necessarily equal to the period during which the
    stay was in effect.
        If the Clean Power Plan is upheld any court considering a
    request to toll deadlines would surely give substantial weight
    to the public benefit of adhering as closely as possible to the
    original timetable that EPA developed to best serve the rule's
    objectives. The court would also likely take into account
    developments in the electric power sector, such as faster-than-
    expected growth in renewable generation, which may make it
    possible for States and sources to comply with the plan more
    quickly than foreseen when the Clean Power Plan was promulgated
    and therefore make tolling not necessary.
        Third, the Clean Power Plan is a reasonable exercise of
    EPA's rulemaking authority and is consistent with both the
    Clean Air Act and the Constitution.
        None of the three main arguments made by opponents of the
    Plan are persuasive. Opponents argue the Clean Power Plan
    represents an enormous and transformative expansion of EPA's
    regulatory authority because the rule's guidelines are not
    based on technological changes that each regulated source can
    implement independently and assume generation shifting from
    high emitting to low emitting electricity generators. But here
    too there is precedent for each of these aspects under other
    regulations conducted by EPA under administrations of both
    parties.
        And the other two arguments that EPA is precluded from
    regulating the greenhouse gas emissions of power plants because
    it regulates the mercury emissions of power plants and the
    constitutional argument about commandeering are similarly
    erroneous, and in my written testimony I explore these issues
    in detail.
        Thank you very much.
        [The prepared statement of Mr. Revesz follows:]

     [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Senator Inhofe. Thank you, Professor Revesz.
        Ms. Wood.

                  STATEMENT OF ALLISON WOOD, PARTNER,
                         HUNTON & WILLIAMS LLP

        Ms. Wood. Good morning. It is an honor to appear before
    this committee to offer testimony on the implications of the
    Supreme Court stay of EPA's Clean Power Plan. My name is
    Allison Wood, and I am a partner in the law firm of Hunton &
    Williams. I have practiced environmental law for almost 18
    years, and for over the past decade my practice has focused
    almost exclusively on climate change.
        I represent several electric utility clients in the
    litigation involving the Power Plan, including in connection
    with the electric utility industry's application to the Supreme
    Court for a stay. I am not representing anyone with regard to
    this testimony, however; I am testifying in my own personal
    capacity.
        A stay of an administrative action such as the Power Plan
    maintains the status quo during the time that the court
    considers the legality of the action. During the stay, the
    Power Plan has no legal effect. Any and all obligations are
    effectively void, and neither States nor regulated entities can
    be penalized for refusing to comply with any requirement or
    deadline in the Power Plan.
        Stays are very rarely granted by any court. The Supreme
    Court only grants a stay where, one, there is a reasonable
    probability that four justices would consider the issue one on
    which they would grant review; two, there is a fair prospect
    that a majority of the Court would vote to strike down the rule
    at issue; and three, there is a likelihood that irreparable
    harm will result without a stay. To grant the stay of the Power
    Plan, five justices had to find that all of these things were
    present.
        If the Power Plan is ultimately found to be unlawful, which
    a majority of the Supreme Court has indicated is a fair
    prospect, then the Power Plan would cease to exist and would
    have no legal effect whatsoever. Questions have arisen,
    however, regarding what happens with the deadlines and
    obligations in the Power Plan if it is found to be lawful.
    Typically all of the deadlines are tolled and are then extended
    by the period of time of the stay.
        So for example if the stay were in effect for 500 days, you
    would then extend all of the deadlines in the Power Plan by at
    least 500 days. This is exactly what has happened with other
    EPA rules that were the subject of a judicial stay.
        Tolling all of the deadlines in the Power Plan was
    explicitly sought in some of the applications before the
    Supreme Court. Even for those stay applications that were not
    explicit, however, the solicitor general of the United States
    noted to the Supreme Court on behalf of EPA that the request to
    toll all of the deadlines was inherent. The Supreme Court
    granted every stay application without any qualification,
    meaning that the Court gave the applicants--including those who
    were explicit in their request--the relief that they sought.
        Statements that insinuate that not all of the deadlines
    will be tolled have a deleterious effect on States and
    regulated entities who become fearful that if they do not
    continue to plan and work toward compliance with the Power Plan
    that they will not have enough time to do so if the rule is
    ultimately upheld by the courts. This fear effectively negates
    the relief provided by the stay.
        States and regulated entities should be able to rest secure
    in the knowledge that if the Power Plan is ultimately upheld
    that all of the deadlines will reset and that they will not
    have any less time to prepare than they would have had in the
    absence of the stay. That is what status quo means.
        Some States have decided to continue to work on the Power
    Plan for a variety of reasons, which they are free to do.
    States that do not want to work on the Power Plan, however,
    should not be forced to do so, something that EPA has
    acknowledged.
        The problem is that in trying to provide additional tools
    to the States that want to continue to work EPA ends up forcing
    States and regulated entities that do not want to work during
    the stay to do so. For example if EPA issues a proposed rule,
    which it is planning to do with the Clean Energy Incentive
    Program, States and regulated entities need to comment on the
    proposal or risk not having any say in the design or
    implementation of aspects of the Power Plan. In addition with
    any final rule EPA may issue, such as the Model Trading Rules,
    the States and regulated entities have to decide whether to
    litigate those rules or waive their right to judicial review.
        The providing of tools to States that want to continue to
    work cannot force action by those States and regulated entities
    that do not want to act during the stay.
        Thank you again for the opportunity to testify today.
        [The prepared statement of Ms. Wood follows:]

       [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Senator Inhofe. Thank you very much, Ms. Wood.
        Representative Bondon.

               STATEMENT OF JACK BONDON, REPRESENTATIVE,
            56TH DISTRICT, MISSOURI HOUSE OF REPRESENTATIVES

        Mr. Bondon. Good morning, Mr. Chairman, esteemed members
    and Senators of the committee. My name is Jack Bondon, and I
    serve the people of Missouri's 56th Legislative District,
    including my home town of Belton and parts of southern Kansas
    City, in the Missouri State House of Representatives.
        Thank you for inviting me today to share my perspective as
    a State legislator on the implication of the Supreme Court's
    stay on the Clean Power Plan.
        My State of Missouri benefits in many ways by having
    affordable electricity prices. In fact our electricity prices
    are more than 10 percent below the national average. Currently
    Missouri relies on coal for nearly 80 percent of its
    electricity. But at the same time Missourians recognize the
    need for an affordable, sustainable, and reliable mix of energy
    sources. To achieve the right mix for our State Missouri
    released our own State comprehensive energy plan last fall, in
    October 2015, that includes a renewable efficiency provision
    and a renewable portfolio standard.
        In addition in 2014 the Missouri legislature passed a bill,
    signed by our Governor Nixon, which establishes how Missouri
    should set its own CO2 standard for power plants. In
    short Missouri has taken the lead in deciding its own energy
    future.
        Unfortunately, the Clean Power Plan would substitute the
    EPA's energy preferences for the well thought out choices made
    by Missourians. Not only will the Plan override Missourians'
    choices about their electricity mix, it will almost certainly
    increase our electricity prices. A quick, rough calculation
    using the EPA's own $37-per-ton estimate equates to a cost of
    over $6 billion by 2020, which could increase electricity
    prices in Missouri by double digits.
        Now, I am a legislator, too. I understand there are many
    interested parties to this discussion--the energy sector,
    economists, ecologists, scientists, State agencies, and more.
    But I don't work for them. I work for the people that I serve,
    and I look at the Clean Power Plan from their perspective--the
    perspective of the ratepayer, the consumer, the single parent,
    the retiree on a fixed income, the small business owner
    struggling to make payroll for their employees. I am their
    voice in Jefferson City, and I am their voice here today.
        Missouri is home to more than 1.2 million low-income and
    middle-income families, about half of our State's households,
    that already spend 18 cents of every dollar they take home on
    energy, and my constituents tell me they cannot afford to pay
    higher utility prices.
        In Missouri opposition to the Clean Power Plan has been a
    bipartisan effort. Attorney General Chris Koster, a Democrat,
    joined 26 other States in challenging the Clean Power Plan, and
    legislatively I introduced a bill that would suspend all State
    activity on the Clean Power Plan until the issue has been
    resolved by the courts. To further demonstrate our
    legislature's opposition to the Clean Power Plan, Missouri's
    fiscal year 2017 budget strictly prohibits the use of any funds
    to implement the Plan. The final vote approving that piece of
    the budget was bipartisan in the House and unanimous in the
    Senate.
        In addition to introducing legislation, I authored a letter
    which was cosigned by 16 of my fellow House colleagues,
    inquiring Governor Nixon as to whether the Missouri Department
    of Natural Resources intends to continue to take steps to
    implement the Clean Power Plan while the stay is in effect, and
    I have not yet received a response.
        In summation I believe that the Clean Power Plan is bad for
    the people that I represent, and, in Missouri many of my
    colleagues on both sides of the aisle agree. So I am pleased
    that the Clean Power Plan has been stayed by the Supreme Court,
    and it is my hope that the Plan will be withdrawn or
    overturned.
        With that, Mr. Chairman, esteemed Senators, thank you for
    the opportunity to testify before you today, and I look forward
    to your committee's discussion.
        [The prepared statement of Mr. Bondon follows:]

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        Senator Inhofe. Thank you, Representative Bondon.
        Mr. McInnes.

      STATEMENT OF MICHAEL MCINNES, CEO, TRI-STATE GENERATION AND
    TRANSMISSION ASSOCIATION, INC., ON BEHALF OF THE NATIONAL RURAL
                    ELECTRIC COOPERATIVE ASSOCIATION

        Mr. McInnes. Mr. Chairman, members of the committee, I am
    Mike McInnes. I am the CEO at Tri-State Generation and
    Transmission Association. Thanks for the opportunity to come
    and discuss the effects of the Clean Power Plan on my
    organization, on our consumers, and the implications of the
    Supreme Court stay.
        Tri-State is a wholly member-owned generation and
    transmission cooperative serving in Colorado, Nebraska,
    Wyoming, and New Mexico. We are owned and governed by our
    members and operate on a not-for-profit basis. To serve our
    members we have more than 5,300 miles of high voltage
    transmission system and generation sources that include coal,
    natural gas, hydroelectric, wind, and solar power.
        Despite significant investments in renewables, energy
    efficiency, and distributed generation projects, which is
    projected to make up about 25 percent of energy that we will
    distribute to our members in 2016, Tri-State relies heavily on
    coal and natural gas generation to maintain reliability and to
    control costs. Our reliance on coal and our business model
    force us to be active in the regulatory and legal arenas, which
    is what I am here to discuss.
        As a cooperative Tri-State operates differently and has
    different risks compared to investor owned and municipal
    utilities, a fact that EPA ignored in the proposed Clean Power
    Plan and why Tri-State and other cooperatives were active in
    the rulemaking process and challenged the rule in court.
        Let me just give you a couple of examples. Cooperatives
    have different financial goals. Our primary goal and
    contractual obligation is to provide reliable, affordable, and
    responsible power to our members. This is different than
    investor owned utilities whose rate of return is tied to
    equity, which gives them an incentive to build new
    infrastructure. The more new infrastructure they build, the
    more returns they receive. These incentives do not exist for
    Tri-State and other cooperatives.
        Our costs are spread over fewer customers. Tri-State and
    its members have fewer consumers per mile than other types of
    utilities, which means we have fewer consumers over which to
    spread those costs. Typically, cooperatives have 1 to 11
    customers per mile of infrastructure, as compared to investor
    owned and municipals, which have over 35.
        When Tri-State needed generation, coal was our only option.
    In the late 1970s and early 1980s, when the cooperatives were
    growing, in that same period the Power Plant and Industrial
    Fuel Act was passed by Congress, and construction of natural
    gas and oil plants wasn't allowed. We had to choose between
    nuclear and coal. We chose coal because it was proven, and it
    was affordable. On the positive size our fleet is relatively
    new compared to other utilities.
        Cooperative plants have longer remaining useful life. Tri-
    State has invested hundreds of millions of dollars in our
    plants to improve efficiency and add-on pollution control
    upgrades. Because of these investments and the fact that our
    plants are a little newer they still have significant remaining
    life, and we face large stranded costs if we are forced to shut
    them prematurely.
        Since the EPA failed to address these issues and other
    legal issues we raised during the rulemaking process our board
    of directors felt it necessary to challenge the rule in court
    that resulted in the current stay. While the rule is stayed
    Tri-State has continued discussions with State regulators to
    ensure that our concerns are heard. The five States we operate
    in have taken different approaches to the stay--two States are
    continuing to develop the Plan a little bit slower; three of
    them have taken the approach to ``put the pencils down.''
        Several State regulators justify moving forward based on
    EPA's gentle threat that deadlines may remain the same if the
    rule is ultimately upheld. We feel it is wasteful to spend
    taxpayer and ratepayer money developing a plan for an unknown
    target. There are so many variables that could change: a new
    rule, a modified rule, a new President withdraws the rule or
    proposes a new one; markets could change, new technology could
    be developed. So any plan developed today will likely have to
    be redone. And as we realized with the Clean Power Plan early
    investments don't always receive credit in the future.
        I am often asked, if you don't support the Clean Power
    Plan, what would you suggest? We are already achieving
    reductions in carbon emissions as a result of maintaining
    highly efficient power plants and investing in renewable
    projects, and we continue to support research and development.
        In the end although Tri-State and other cooperatives are
    different, we do have a desire to protect the environment while
    continuing to provide affordable and reliable energy to our
    members. We simply believe a different approach is needed to
    mitigate CO2 emissions.
        Thank you.
        [The prepared statement of Mr. McInnes follows:]

     [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

        Senator Inhofe. Well, thank you very much, Mr. McInnes.
        Let me compliment all five of you; you stayed within your 5
    minutes. Maybe we can do the same thing up here.
        I was just notified that Senator Boxer is not going to be
    able to be here. At this time I will go ahead and submit her
    statement, without objection, for the record.
        [The prepared statement of Senator Boxer follows:]

                       Statement of Hon. Barbara Boxer,
                   U.S. Senator from the State of California

        This committee is once again holding a hearing on the Clean
    Power Plan--the rule that targets carbon pollution from the
    Nation's biggest source of climate pollution--power plants. The
    Clean Power Plan, which was finalized in August 2015, is an
    historic step forward in the effort to address climate change.
        Unchecked climate change poses a threat to the health and
    safety of children and families. That is why it is urgent that
    we take action to reduce dangerous carbon pollution from all
    sources, including power plants.
        Climate change is happening all around us. The predictions
    scientists made about climate change--higher temperatures, more
    extreme weather events, severe droughts, increased wildfires,
    decreasing polar ice, and rising sea levels--have become our
    reality. Here are just a few examples.
         2015 was the hottest year on record, and 15 of the 16
    warmest years on record have occurred in the 21st century.
         Earlier this year, scientists reported that sea levels
    are rising many times faster than they have in the last 2800
    years.
         The 2015 wildfire season was the costliest on record,
    with $1.71 billion spent.
        The American public understands the need to act. A League
    of Conservation Voters poll found that 70 percent of voters
    want their State to cooperate and develop a plan to implement
    these new standards. And a Yale University poll found 70
    percent of voters support setting strict carbon dioxide
    emission limits on existing coal-fired power plants to address
    climate change and improve public health.
        And we know that the Clean Power Plan will have significant
    public health benefits. By fully implementing the Clean Power
    Plan, we can avoid:
         3,600 premature deaths;
         1,700 heart attacks;
         90,000 asthma attacks; and
         300,000 missed work days and school days by 2030.
        We know that the EPA has the authority to regulate carbon
    pollution. In its 2007 landmark decision, Massachusetts v. EPA,
    the U.S. Supreme Court found very clearly that carbon pollution
    is covered under the Clean Air Act--and it has upheld this
    authority in two subsequent opinions.
        It is disappointing that the Supreme Court, in a narrow 5
    to 4 decision, decided to stay implementation of the Clean
    Power Plan. But it is important to remember that the Clean
    Power Plan has not been overruled and will be reviewed on the
    merits.
        Despite this delay, many States are moving toward clean
    energy because the American people want it. On April 28th, 14
    States, including my State of California, sent a letter asking
    EPA to continue working with them to provide information and
    technical assistance related to the Clean Power Plan. EPA says
    it will respond to and meet the needs of States that ask for
    help in a manner that is consistent with the stay. EPA will
    continue to provide information, tools, and support States but
    will not enforce requirements associated with the Clean Power
    Plan. This is the right approach and is consistent with the
    long standing practice in both Republican and Democratic
    administrations.
        The Clean Power Plan will have its day in court. Until
    then, States that understand the threat posed by climate
    change, see the opportunities for clean energy, and want to
    protect the health of their citizens should have the right to
    do so--and receive EPA's help.
        Those people who want to stop all progress on reducing
    dangerous carbon pollution are ignoring the will of the
    American public. The American people want action because they
    know that moving to clean energy will be beneficial for the
    health of our families and our economy.

        Senator Inhofe. Representative Bondon, I am going to read a
    quote, and I want to make sure that Senator Capito hears this
    quote, too. EPA Administrator McCarthy recently stated, ``I
    can't find one single bit of evidence that we have destroyed an
    industry or significantly impacted jobs other than in a
    positive way.''
        Is that true in your district?
        Mr. Bondon. Well, I would take exception to that, Senator.
    Missouri is home to two large coal companies, Peabody Coal and
    Arch Coal, both out of St. Louis, Missouri, who have recently
    filed for bankruptcy. Now, there certainly are a number of
    reasons why a company does that, but the uncertainty created by
    the Clean Power Plan and the future of moving away from coal
    has real impact to their employees.
        Senator Inhofe. They filed bankruptcy, and this happened
    after they were aware of the rule?
        Mr. Bondon. That is correct.
        Senator Inhofe. What is going to happen to those jobs,
    then, if they go under?
        Mr. Bondon. Well, they are trying to figure out how to
    reorganize right now. But almost certainly some people will
    lose their job.
        Senator Inhofe. Mr. McInnes, along the same line,
    yesterday, an environmental organization released a report
    concluding the judicial stay is economically unjustified
    because the coal industry will not experience any irreparable
    harm.
        What is your response to that?
        Mr. McInnes. Mr. Chairman, I am not sure how a statement
    like that could be made. As you have just asked about, the coal
    industry has almost collapsed; there is no ability to make
    future plans based on that. And I would say that whether or not
    the industry has been, or a specific instance, certainly the
    continued onslaught of regulations against generation resources
    has increased costs to the point that plants are uncompetitive.
        Senator Inhofe. Very good.
        Now, Ms. Wood, you spent a long time during your opening
    statement talking about the most controversial parts of this
    whole thing, and that is tolling. Is there anything you want to
    add to that?
        Ms. Wood. Senator, I guess the one thing I would add is,
    when you look at any instance of where an environmental rule
    has been stayed, the timelines have always been tolled. To the
    extent they were not done on a day-for-day basis with the
    period of the stay it is not that they were shorter than the
    stay; they would be longer.
        So, for example with the cross-State air pollution rule,
    that was stayed for a little more than 2 and a half years. But
    then all of the deadlines were extended by 3 years. And the
    reason for that was because a lot of those deadlines started
    on, say, January 1st, so just adding the days on would have
    pulled it off the calendar. But you didn't shorten them; you
    lengthened it. And saying that this rule won't be tolled or
    couldn't be tolled at the end of the day I think is just a
    scare tactic to make people work.
        Senator Inhofe. Thank you for that clarification.
        Mr. McInnes, Tri-State has made a significant investment in
    pollution control technology due to other EPA air rules. Now,
    what is the purpose of these investments if the Clean Power
    Plan forces the premature closure of these plants, and how
    would your members recover their costs?
        Mr. McInnes. In this instance, there are no investors to
    share the costs; the owners of these generation facilities will
    pay that entire cost. And on that point we have some of the
    most controlled resources in the country because of these
    upgrades that we have made, and now to have to walk away from
    those before they have lived their useful lives will be a
    significant burden on our customers.
        Senator Inhofe. Thank you.
        Representative Bondon, you and I talked about this.
    Although the rule is now stayed, how has the Clean Power Plan
    already impacted coal plants and utilities in your State? In
    other words, is the damage already done?
        Mr. Bondon. Well, I believe that the coal industry sees the
    writing on the wall, and to that extent I do believe that there
    is some damage already done. But more than that, Senator, the
    State of Missouri took this into its own hands; we created our
    own State comprehensive energy plan to try to create that
    energy mix in the future. And to the extent that the Clean
    Power Plan has interfered with our State plans, it has thrown a
    lot of uncertainty into the mix.
        Senator Inhofe. All right, I appreciate that. I have
    another question, but I am going to stay within my 5 minutes
    and give it to one of the other members up here to respond to.
        Senator Cardin.
        Senator Cardin. Thank you, Mr. Chairman, and thank you for
    this hearing.
        First, let me make an observation. I listened to the
    Chairman's opening statement, and to say the least, we have
    some different views as to the impact here. It seems to me that
    when we complain about regulations, a lot of times it would be
    better if Congress did its responsibility and did its work.
    This is going to be the first Congress which will not have a
    legacy of passing legislation to help protect our environment.
    Instead, what we seem to do is always have bills that prevent
    the Administration from moving forward rather than looking at
    ways that we can help build upon the environmental legacy of
    this country.
        Senator Inhofe. I don't very often do this. Let me
    interrupt. We'll extend your time.
        Senator Cardin. Thank you.
        Senator Inhofe. We passed the most significant
    environmental bill in 25 years just 2 days ago.
        Senator Cardin. I will be glad to yield to the Chairman.
        Senator Inhofe. No. The TSCA bill.
        Senator Cardin. Oh, well, Mr. Chairman, some of us have
    different views on that. And I applaud you for that. It is
    always good when we move together. That deals with chemicals.
    And I think it is important that we have laws that work. I
    regret, though, that we did prevent the States from fully being
    able to fill the void until the Federal Government actually has
    an effective regulation. That was part of the problem, I think,
    on that issue. But that is the system working.
        We have not done that with the Clean Water and defining the
    Waters of the U.S. Instead, we have seen the Supreme Court
    decisions many years ago, and we have been blocked from trying
    to get constructive legislation to deal with clean water.
        In the clean air issues we have not been able to pass
    additional legislation. The President's regulation, the
    Administration's regulation on clean air really yields to the
    States to figure out how it is best for them to comply with the
    national standard, and States are able to do that.
        Before the President's or before the Administration's Power
    Plan Rule, Maryland, along with other States, entered into
    RGGI. They were moving forward in trying to deal with the
    issues.
        I guess my point is this--that rather than looking at ways
    to stop the Administration from moving forward with
    regulations, it would be good if Congress just passed laws as
    to how we can meet our obligations for clean air. Maryland has
    done its job; it did its job without the Federal Government
    telling us what we had to do.
        But the problem is we are downwind, so we can only do
    certain things. We need an effective national strategy on this,
    and that is what the Administration's regulations are
    attempting to do.
        And I would welcome my colleagues working with me, as we
    did in TSCA, in figuring out how we can provide a greater
    legacy on the clean air and clean water, but we haven't done
    that. And the Administration is carrying out its
    responsibilities. The Supreme Court decision is a stay. We will
    see where the courts end up, and we will see how the Supreme
    Court rules on the merits of the regulation. But a stay is a
    stay, and States are still moving forward.
        I guess my question is to either Ms. Dykes or Professor
    Revesz. If Maryland needs advice from the EPA as to how to move
    forward on its efforts to deal with clean air, as I understand
    it, the Supreme Court decision does not prevent a State from
    continuing to move forward in its efforts, and the
    Administration can provide that guidance so that they can do
    what they think is right for the health of their citizens, and
    under federalism, provide some help for our Nation in
    developing the right policies for clean air.
        Mr. Revesz. That is correct, Senator.
        Ms. Dykes. And while I am not here to speak for my sister
    RGGI State of Maryland, we were pleased to be signing on to the
    letter to EPA in April along with our counterparts in the State
    of Maryland requesting that assistance.
        Senator Cardin. So my concern, Mr. Chairman, is that if you
    are saying that if you interpret a stay to say that we can't
    move forward, first of all, that is not what a stay does. But
    second, that is preventing us from doing what we think is
    right. Maryland was able to move forward in reducing its carbon
    footprint on its generation of electricity. We were able to do
    that in a way that benefited the people of Maryland, benefited
    our economy, and I think provides a model for what can be done
    in a sensible way to deal with clean air.
        The good news about the Administration's regulation, as I
    understand it, is that our regional effort is taken into
    consideration in meeting our goals and that Maryland has the
    flexibility to determine how it meets its goals; it is not
    mandated under regulation. Am I correct on that?
        Ms. Dykes. That is the hallmark of the Clean Power Plan and
    of the RGGI program, that mass-based, multi-State programs
    provide tremendous flexibility to States to determine exactly
    how they will meet their goals, and a number of the measures
    that we have used to achieve the success in RGGI has depended
    on not only our RGGI program, but also renewable portfolio
    standards, energy efficiency programs, which I think some of
    the witnesses here have mentioned that although their States
    may not be working on Clean Power Plan, they are working on
    advancing those types of measures, which will only contribute
    to their ability to comply.
        Senator Cardin. Thank you.
        Mr. Chairman, I will yield back the last 18 seconds.
        Senator Inhofe. Thank you, Senator Cardin.
        Senator Capito.
        Senator Capito. Thank you, Mr. Chairman. I want to thank
    our witnesses today for their great testimony.
        I just want to make a few comments before I ask my question
    specific to my State of West Virginia. First of all, when I
    hear that no irreparable harm has been done because of some of
    the regulatory measures that have been taken, come and visit
    the State of West Virginia. No joblessness? We have lost over
    20,000 jobs in the coal mining industry. We have suffered
    irreparable harm, and I keep repeating it in this committee
    meeting, but I am going to keep repeating it because the folks
    of West Virginia are seriously hurting.
        We have also--I just asked my staff to find out, from 2006
    to 2014, our per-kilowatt hour cost of electricity in a cheap
    State much like Missouri in terms of cheap energy has already
    gone up 47 percent. This is without the Clean Power Plan. But
    we are one of the 29 States that has chosen not to move forward
    for obvious reasons, but an official from the Department of
    Environmental Protection has stated that based on his
    experience, ``I have determined that implementing this will be
    extremely complicated and time consuming.'' I think everybody
    on the panel would admit that it is complicated and time
    consuming.
        Since 2014 the State has devoted five employees with 27
    hours or more of implementing and trying to understand this
    section 11(d) rule, and they estimate that to move forward
    would be another 9 senior staff employees with another 7,100
    hours of effort.
        This is in the middle of a budget crisis in our State, due
    in large part to the impact of the coal industry. We are over
    $360 million in the hole. What is going to happen is we are
    losing our teachers, but we are also losing our DEP employees.
    Our State can no longer afford the measures that are going to
    be required. So we have stopped, to wait and see what happens.
        So, Representative Bondon, you talked about the impact
    monetarily in a large way of what you think this would be, $6
    billion by 2030, and then we talk about cost-benefit analysis.
    You know, we hear that if the Clean Power Plan goes forward
    there will be a minuscule result in terms of what effect it
    would have on the global environment in terms of temperature
    change. So we have to look at that as a cost-benefit analysis.
        And I would like to say one thing in response that I forgot
    to say in the beginning, whether Congress has acted or not.
    Congress did act. I led the way with a Congressional Review Act
    that basically said the majority of the Senate and the majority
    of the House do not agree with the Clean Power Plan. Went to
    the President's desk, which he promptly vetoed, to nobody's
    surprise.
        So would you have a comment on the cost-benefit, where you
    see this for your State and maybe the Nation?
        Mr. Bondon. Yes, Senator, and thank you for the question.
    As I mentioned in my testimony, a rough estimate, but the best
    that we could come up with using the EPA's own $37 per ton
    estimate, with the mass-based reduction goals that would have
    to happen in Missouri, it would cost, on the low end, $6
    billion.
        Now, it is very, very hard to figure out how that would be
    distributed across the State because some of the IOUs, some of
    the munis, some of the co-ops have different mixes and they
    would have to change at different rates. So to put it toward an
    individual customer is hard to do. But some of the best
    estimates that I have is that it would be a double-digit
    increase in utility prices.
        Senator Capito. Right.
        Mr. Bondon. And I think, Senator, to your larger point, we
    have to ask ourselves where is the balance.
        Senator Capito. Right.
        Mr. Bondon. How do we strike the balance between moving
    into cleaner energy and more reliable energy versus the cost
    that it is going to take to do that, and when our consumers and
    our constituents are able to afford that.
        Senator Capito. Right. Thank you.
        Ms. Wood, in a recent letter from EPA Acting Administration
    McCabe, she stated that, ``During the pendency of the stay,
    States are not required to submit anything to EPA, and EPA will
    not take any action to impose or enforce obligations.'' I know
    there is a bit of a disagreement on what this really means. Is
    this the case as the EPA continues its work, in your opinion,
    on the Clean Energy Incentive Program and Model Trading Rules?
        Ms. Wood. Thank you, Senator. Before I answer your
    question, I wanted to just commend your State for its
    leadership in the litigation challenging this rule. Your
    citizens are very lucky to have Attorney General Patrick
    Morrisey and Solicitor General Elbert Lin leading the State
    effort. I think in large part due to them is why we have the
    stay that we have.
        In terms of is what EPA is doing, does it impact those
    States that don't want to act? Yes, it does. And it will impact
    those man-hours that you were talking about in your State
    because when EPA publishes its proposed rule on the Clean
    Energy Incentive Program, West Virginia is going to have a
    choice to make, which is either comment on that part of that
    rule or forego that opportunity.
        And if at the end of the day the rule is ultimately upheld,
    and West Virginia decided not to comment on it, then they have
    lost a valuable right. Yet by forcing them to read and digest
    and comment on a rule would be more man-hours devoted to a plan
    that the Supreme Court thinks has a fair prospect of being
    struck down.
        Senator Capito. Thank you.
        Senator Inhofe. Thank you, Senator Capito.
        Senator Whitehouse.
        Senator Whitehouse. Senator Carper is not before me? OK,
    very well, then. Thank you.
        Mr. Chairman, this hearing marks an anniversary. Exactly 30
    years ago this week, in June 1986, Senator John Chafee,
    Republican of Rhode Island, then Chairman of the EPW
    Subcommittee on Environmental Pollution, convened a 2-day,
    five-panel hearing on ozone depletion, the greenhouse effect,
    and climate change. His opening remarks warned of, and I will
    quote him here, ``the build up of greenhouse gases which
    threaten to warm the Earth to unprecedented levels. Such a
    warming could, within the next 50 to 75 years, produce enormous
    changes in a climate that has remained fairly stable for
    thousands of years.'' He went on to say, ``There is a very real
    possibility that man, through ignorance or indifference, or
    both, is irreversibly altering the ability of our atmosphere to
    perform basic life support functions for the planet.''
        The contrast is stark between what Senate Republicans and
    their witnesses were saying 30 years ago and what the GOP is
    saying today. Thirty years ago Senator Chafee declared, ``This
    is not a matter of Chicken Little telling us the sky is
    falling. The scientific evidence is telling us we have a
    problem, a serious problem.''
        Thirty years ago Senator Chafee said, ``By not making
    policy choices today, by sticking to a wait and see approach,
    by allowing these gases to continue to build in the atmosphere,
    this generation may be committing all of us to severe economic
    and environmental disruption, without ever having decided that
    the value of business as usual is worth the risks. Those who
    believe that these are problems to be dealt with by future
    generations are misleading themselves,'' he said. ``Man's
    activities to date may have already committed us to some level
    of temperature change.''
        Thirty years ago Senator Chafee knew there was much yet to
    learn about climate change. Scientists will agree that there
    still is. He said then that we have to face up to it anyway. He
    said, ``We don't have all the perfect scientific evidence.
    There may be gaps here and there. Nonetheless, I think we have
    got to face up to it. We can't wait for every shred of evidence
    to come in and be absolutely perfect. I think we ought to start
    to try and do something about greenhouse gases, and certainly
    to increase the public's awareness of the problem and the
    feeling that it is not hopeless. We can do something.''
        Senator Chafee was an optimist. He used to say, ``Given
    half a chance, nature will rebound and overcome tremendous
    setbacks. But we must, at the very least, give it that half a
    chance.'' But he also knew, Mr. Chairman, that nature's
    tolerance is not unlimited. At those hearings 30 years ago,
    Senator Chafee warned, ``It seems that the problems man creates
    for our planet are never-ending. But we have found solutions
    for prior difficulties, and we will for these as well. That is
    required is for all of us to do a better job of anticipating
    and responding to today's new environmental warnings before
    they become tomorrow's environmental tragedies.''
        That was 30 years ago. Of course, all of this predated the
    Supreme Court's Citizens United decision, which has allowed the
    fossil fuel industry to effect a virtual hostile takeover of
    the Republican party, rendering that party today the de facto
    political wing of the fossil fuel industry and producing
    hearings like today's, after 30 years.
        Senator Inhofe. Thank you, Senator Whitehouse.
        Senator Fischer.
        Senator Fischer. Thank you, Mr. Chairman.
        Mr. Chairman, I believe my job as a United States Senator
    is to look at policies that are before us, look at the issues
    that are before us, and try to determine what that best policy
    would be. And I think good policy requires balance. Good policy
    has to look at the issue, but it also has to look at the
    impacts of what is being presented to us.
        Under the Clean Power Plan, the State of Nebraska is facing
    a 40 percent reduction in its carbon emissions rate, and that
    makes the State of Nebraska rank as one of the 10 biggest
    losers. I was on that list as well. Nebraska is a public power
    State, 100 percent public power. So our ratepayers, which means
    our families in the State of Nebraska, are going to be harmed
    by this policy.
        Iowa is a leader in wind energy, a leader in this country.
    Yet under the Clean Power Plan, you know what? They don't get
    any credit for having that wind power. You tell me how that
    makes good policy. It does not.
        Nebraska's families are going to face affordability and
    reliability uncertainties. In fact, our DEQ in Nebraska, the
    employees there have already expended 2,000 hours on
    interpreting and preparing for the implementation of this Plan.
    That consumes vital State resources that I believe should be
    devoted to addressing pressing issues in our State that are
    affecting the citizens of our State.
        Mr. McInnes, in your testimony you discuss the location and
    population density challenges that Tri-State must overcome in
    order to supply members with that reliable and affordable
    energy, and you certainly, as a cooperative, understand public
    power; you understand the cost to families. And you serve in
    the panhandle of Nebraska, which is extremely rural. In some
    counties there is less than 1 person per square mile. My county
    is one of those.
        Mr. McInnes, can you tell me, on average, how many
    consumers per mile your member systems in Nebraska serve?
        Mr. McInnes. Thank you, Senator. I will follow the lead of
    Ms. Wood and congratulate you and your State for being public
    power. I believe electricity is important to modern society,
    should be supplied to everyone at cost base. Those members that
    we serve in the panhandle of Nebraska average 1 to 2 consumers
    per mile of infrastructure.
        Senator Fischer. And how does that compare nationwide to
    the average density?
        Mr. McInnes. If you look at the nationwide, it is somewhere
    more in the high 20s. But as you get in the urban areas, that
    can exceed 35 or 40.
        Senator Fischer. Right. So as I believe public power,
    whether it is cooperatives or the public power MPPD, OPPD, LES
    in the State of Nebraska, and many of our rural electric
    cooperatives, in my opinion, you are providing a public service
    because it gets more expensive when you have to provide to
    rural areas, correct?
        Mr. McInnes. It certainly does. And we only have to look at
    history. When the IOUs were unwilling to go out into the rural
    areas, and that was what formed the public power districts and
    cooperative.
        Senator Fischer. Right. And under this Clean Power Plan, if
    you have to shut down one of your plants that you built because
    of policies at the Federal level when you built those plants
    and built those coal-fired plants, it was a decision that
    impacted your choice, if you have to shut them down or curtail
    any of them, how is that going to affect the cost to Nebraska
    families?
        Mr. McInnes. Interestingly enough, Senator, because we
    serve in multiple States, if one of the States--and it has been
    mentioned here several times today that each State can go
    whichever way they want to--if the State of New Mexico makes us
    shut down one of our resources, it is going to affect the
    consumers in Nebraska because we serve on a postage stamp rate
    across our four States.
        Senator Fischer. And the power plants in general, they run
    most efficiently and with the highest environmental controls at
    peak operation, and it is my understanding that curtailing
    production is going to decrease that efficiency, it is going to
    increase emissions. Is it true that Tri-State you won't be able
    just to ramp down your coal plants; you are going to have to
    shut them down in order to comply with the Clean Power Plan?
    And since you still need to supply your customers, won't you
    need to ensure that you have another baseload resource in order
    to maintain that? And I think it is educational to people to
    explain what a baseload resource is.
        Mr. McInnes. Thank you, Senator. What you have said is
    certainly true. Baseload facilities are designed for that very
    thing, to operate all the time, and those are the backup. As
    you get into what we call peak loads, when people come home at
    night, turn on their TVs, coffee pots, that sort of thing, we
    can use other resources. And there are certainly limits to
    which you can take them as you back them down, and they will
    have to be shut down at some point.
        Senator Fischer. Thank you very much, sir.
        Thank you, Mr. Chairman.
        Senator Inhofe. Thank you, Senator Fischer.
        Senator Wicker, Senator Carper has graciously said that you
    can go ahead and go first.
        Senator Wicker. Well, Senator Carper is a gracious
    colleague, and I appreciate that.
        Let me say this about the process, Mr. Chairman, and I want
    to measure my words. Senator Whitehouse is a friend of mine; we
    work together on the Ocean Caucus. We work together on treaties
    and have gotten them ratified together.
        It is insulting for a member of this Senate to come in here
    and to suggest that this hearing, the very holding of this
    hearing somehow demonstrates that Members of the Congress are
    wholly owned by the fossil fuel industry. And I resent that,
    and I think it is beneath my friend from Rhode Island to have
    done so. He has left the room, but I am going to say it anyway,
    because I know that he will be able to hear this.
        Presumably it is improper for Senator Capito, for example,
    to raise the question in light of the 40 percent increase in
    power rates for her constituents, what difference is this going
    to make if it is implemented anywhere? What difference does it
    make on world temperatures? Supposedly, it is improper for us
    to even have a hearing and ask those questions.
        This hearing today complies with the procedures that we
    have always had. There are two minority witnesses; there are
    three majority witnesses; questions being asked on both sides.
    So I resent the implication that somehow this hearing shouldn't
    be held at all and that it indicates we are wholly owned.
        Now, let me ask you this, Ms. Wood. If the State of
    Maryland needs advice about implementing a voluntary plan that
    they have, they can go to the EPA for advice without the
    necessity of the Clean Energy Incentive Program, or CEIP, is
    that correct?
        Ms. Wood. Yes, that is correct.
        Senator Wicker. Now, Ms. Wood, is CEIP a separate
    regulation, or was it part of the Clean Power Plan rule as it
    was finally submitted to the Congress and to the public for
    implementation?
        Ms. Wood. It was part of the final rule. I believe, without
    having seen it, that the proposed rule might be flushing it
    out, but it is part of the final rule.
        Senator Wicker. OK. And if EPA wants to go back, now that
    there is a stay, and implement a separate Clean Energy
    Incentive Program, then they can do so by implementing a new
    rule and sending it through all the process, is that correct?
        Ms. Wood. Absolutely, as long as it wasn't connected to the
    Clean Power Plan. In other words, if they wanted to have a
    separate program that achieved what the Clean Energy Incentive
    Program does, they could.
        Senator Wicker. But for now it has been stayed.
        Ms. Wood. Yes.
        Senator Wicker. Now, let me also ask you, Ms. Wood, with
    regard to the effect of the stay application on the deadlines
    throughout, it is a fact that EPA actually conceded your point
    in their pleadings, is that not correct?
        Ms. Wood. Yes, the Solicitor General of the United States
    conceded that point.
        Senator Wicker. In his opposition to the stay, and this is
    on page 6 of your testimony, the Solicitor General of the
    United States noted that the stay applicants explicitly or
    implicitly asked this court to toll all relevant deadlines set
    forth in the rule. That is the statement of the
    Administration's principal lawyer with regard to the effect of
    the stay.
        Ms. Wood. Yes, it is.
        Senator Wicker. And he went on to say a request for such
    tolling is inherent in the applications that do not explicitly
    address this subject, is that correct?
        Ms. Wood. Yes, that is correct.
        Senator Wicker. So it is not only your position, it is the
    position of the chief lawyer of the Administration that all of
    the deadlines are tolled.
        Ms. Wood. Yes.
        Senator Wicker. And there is precedent to back you and the
    solicit general up in this regard, is that correct?
        Ms. Wood. Yes.
        Senator Wicker. Thank you very much.
        Let me just ask, in the few seconds I have remaining, Mr.
    McInnes and Representative Bondon, the President went before
    the voters in 2008 and said we can have clean coal. He said
    that, didn't he? I think you nodded, Representative Bondon, but
    you gave an affirmative answer.
        As a matter of fact, the plan that Missouri has put
    forward, as a matter of fact, attempts to make that promise
    come true by using coal, by eliminating particulate emissions
    into the environment, and actually fulfilling the promise that
    the President has now gone back on, to have clean coal as a
    reliable source of power, is that correct?
        Mr. Bondon. That is correct, and that is our hope as a
    State.
        Senator Wicker. Thank you very much.
        Mr. Bondon. Thank you, Senator.
        Senator Inhofe. Thank you, Senator Wicker.
        Again, Senator Carper has agreed to let Senator Barrasso go
    ahead of him.
        Senator Barrasso.
        Senator Barrasso. Thanks, Senator Carper. Thanks, Mr.
    Chairman.
        Ms. Wood, there is a belief by some environmental advocates
    in the EPA that this Supreme Court stay on the Clean Power Plan
    doesn't include all the aspects of the so-called Clean Power
    Plan. The advocates in the EPA seem to believe that the Court
    somehow meant to allow the EPA to continue working on aspects
    of the rule despite the Court's ordering that the rule itself
    be stayed at the request of the States and the utilities, and
    it seems to me that these advocates and the EPA want to debate
    what the meaning of the word ``is'' is.
        As you say in your written testimony, the stay preserves
    the status quo. New work on aspects of the so-called Clean
    Power Plan is not preserving the status quo to me it means
    except in the minds of this out of control EPA. The idea that
    the Supreme Court would issue a stay in this case really is
    extraordinary, and the justices wouldn't take such an action if
    there weren't really serious concerns.
        David Doniger, Senior Natural Resources Defense Council
    attorney, a liberal group, said in January of this year that if
    the Supreme Court issued a stay on the Clean Power Plan, he
    said it would be an extraordinary step. In fact, in an Energy
    and Environmental Daily article in January, he said it is
    extraordinary to get a stay from the D.C. Circuit; it is extra,
    extra, extraordinary to get one from the Supreme Court.
        So we all know the Supreme Court made that extra, extra,
    extraordinary step, and they did it for a good reason. So could
    you share with us why you think the Supreme Court took this
    extraordinary step to block the EPA's Clean Power Plan rule
    with a stay to preserve the status quo? And how do you believe
    the Michigan v. EPA case may have played a role in this?
        Ms. Wood. Thank you, Senator. You are correct that this was
    an extraordinary step. To my knowledge, the Supreme Court has
    never stepped in before and stayed an EPA rule before the lower
    court had ruled on the merits of it. So it was an extraordinary
    step.
        I think there were really two primary reasons why the
    Supreme Court took the step. The first is that there are many
    legal infirmities with the rule, and those were laid out for
    the justices to see. And the other is accompanying the stay
    applications were 84 declarations from a wide number of
    sectors, from States, from electric utilities, from coal
    producers, from business interests, talking about how they were
    going to suffer irreparable harm in the absence of a stay.
        So when you talk about the Michigan v. EPA case and how
    that may have played in, that was a rule, the mercury and air
    toxic standards NAAQS rule, where power plants were required to
    put on very, very costly control equipment. That rule had not
    been stayed. It eventually worked its way up to the Supreme
    Court. The Supreme Court struck the rule down, but by that
    point almost all of the plants had already spent the money and
    put the controls on. And indeed, EPA Administrator McCarthy
    then made the statement that, you know, this really wasn't a
    loss for EPA.
        Senator Barrasso. I appreciate your comments.
        Mr. McInnes, in your testimony you mention the integrated
    test center in Wyoming. Could you spend a little time
    describing the center, how the center is going to help develop
    technologies that can make burning coal cleaner for everyone;
    it can protect coal jobs not just in Wyoming, but in other
    States, and make sure that coal is not a stranded asset for our
    Nation?
        Mr. McInnes. Thank you, Senator. Tri-State has been
    involved with the concept of this center for a number of years.
    In fact, our board had indicated a desire to significantly
    invest in that prospect for that very reason. This test center
    will find a home at the Basin Electric Cooperative Dry Fork
    Station near Gillette, Wyoming. The purpose of this test center
    is to try and find ways that carbon can be utilized. If it is
    an issue, then let's see if we can find some way to use it
    productively and still allow the all-of-the-above fuel
    selection that I think we need in this country.
        The purpose of the test center will be to provide a place
    for those entrepreneurs who want to come test these
    technologies, see if they can improve better ways of capturing
    and ways of commercialization of these carbon emissions. In
    fact, it is going to be the home of the XPRIZE carbon prize, so
    we are very excited to be a participant in that. We look
    forward to being able to continue utilizing coal as a resource.
        Senator Barrasso. Well, thank you very much for that and
    for your commitment.
        I would mention, Mr. Chairman, that at the opening
    ceremonies for that Dry Fork Station in Wyoming there was
    bipartisan joining in the celebration and participation. Both
    Senator Heitkamp from North Dakota and I were there, along with
    Senator Enzi.
        Thank you very much, Mr. Chairman.
        Senator Inhofe. Thank you, Senator Barrasso.
        Senator Carper, you have been patient, and you have been
    very generous. I have counted the time that we have gone over,
    and it is about 3 minutes, so feel free to take what time you
    need.
        Senator Carper. Thanks so much, Mr. Chairman.
        I just want to start off today welcoming all of our
    witnesses. It is good of you to come.
        I want to take a minute and just commend Senator Inhofe for
    his leadership. When a major environmental laws signed 40 years
    ago by then President Gerald Ford, something called the Tax
    Exemptions Control Act, which he held as maybe one of the
    foremost environmental pieces of legislation of a generation. I
    think he was proud to sign it into law.
        It turned out not to be that good. And instead of actually
    regulating toxic substances in our environment, out of the
    hundreds of toxic chemicals, potentially harmful chemicals
    could have been regulated by EPA, I think over 46 were
    regulated; in the last 20 years maybe none. And under this
    man's leadership----
        Senator Inhofe. Would you yield just for a moment? When
    Senator Cardin made the statement that nothing is coming out
    for a period of 2 years out of this committee that would be
    environmental progress, you and I shared the podium at a news
    conference yesterday where several declared that the action
    that we took in passing the TSCA bill on chemicals could go
    down as the most significant environmental improvement in 25
    years. So that is the reason I was making that correction.
        And I appreciate very much working so closely with you and
    with many of the more progressive members of your party in
    making that become a reality. We did a good job in this
    committee.
        Senator Carper. We did a great job, and thank you for your
    leadership.
        Senator Markey stood up at the press conference. An
    interesting array of Democrats and Republicans from fairly well
    to the left and fairly far out there to the right who had
    banded together and worked with Environmental Defense Fund,
    National Wildlife Federation, and chemicals groups and business
    groups to come up with that. That was very, very good, and
    compromise is going to actually be good for our environment and
    be good for the health of our citizens.
        I said at the close of the press conference maybe if we
    could take on an issue as complex and as difficult as toxic
    substances control, maybe we could actually make progress in
    some other areas, and one of the areas that we need to make
    progress is the area that we have been talking about here
    today.
        I have been working on Senator Inhofe on this committee for
    about 15 years. We worked very closely together on something
    called Diesel Emissions Reduction Act, which I think is another
    good piece of environmental legislation that George Voinovich
    and I, former Governor and former Senator from Ohio, worked on
    before he retired. So my hope is that those two good examples
    of areas where we could work together.
        The issue of multi-pollutants, something that is near and
    dear to our hearts in Delaware, we are the lowest lying State
    in America, lowest lying State in America. I was a Naval flight
    officer in the Vietnam war and moved to Delaware, got an MBA
    and ended up getting elected as the State treasurer,
    Congressman, Governor, and now Senator, so I have been around
    the State for a while and love the place, and the people have
    been great to let me serve them.
        We have a bunch of beaches. I am told we have more five-
    star beaches in little Delaware, 26 miles of coastline with the
    Atlantic. I am told we have more five-star beaches than any
    State in America. Tourism is really important for us.
    Agriculture is really important for us. Chemical industry is
    important for us. Financial services is important for us.
        But if you drive south in Delaware on State Route 1 past
    Dover and head on down almost to the town of Milford and make a
    left turn, head east, you drive out toward Prime Hook Beach. It
    used to be you would drive east toward Prime Hook Beach, and
    you go through Prime Hook National Wildlife Refuge, and then
    you get to the Delaware Bay. And there is a place to park cars
    or your boat, trailers or whatever, and people put their boats
    in the water.
        And they don't do that anymore. And the reason why they
    don't do that anymore is because where they get to where the
    boat ramp and everything and the parking lot used to be, it is
    water; and somewhere under that water is what used to be a
    parking lot. And you can stand there by the edge of the water
    and look off an area about 1 o'clock looking east toward New
    Jersey, and you see what looks like part of a concrete bunker
    sticking up out of the water.
        I was born in 1947. I have a photograph from 1947 that
    shows that concrete bunker not almost submerged in water, but
    500 feet west of the waterline. West, toward Maryland.
        Now, for a State that really depends a lot on tourism and
    our beaches, Maryland is a similar situation, Virginia and
    others, this really gets our attention. Something is happening
    here. With apologies to Stephen Stills, something is happening
    here, and what it is is pretty clear to me, pretty clear to us
    in Delaware.
        When I was Governor, I used to say that I could literally
    shut down my State's economy and we would still be out of
    compliance with respect to clean air standards, and it was
    because all the bad stuff was being put up from States like my
    native West Virginia, Ohio, Indiana, Illinois, Tennessee, and
    so forth. Bad stuff they put up in the air creates cheap energy
    for themselves. They use these smokestacks that go up 500 feet
    in the air. The currents just bring the stuff to the East Coast
    and those of us--Ben Cardin here in Maryland and others--we are
    at the end of America's tailpipe because the bad stuff would
    just come to us.
        And it wasn't really fair because we would have to clean up
    our emissions more and more and more all the time, and at the
    same time the States we competed with for jobs would end up
    with cheap energy, and we would have expensive energy. They
    would have cleaner air, better health, and we would have
    dirtier air, and it just wasn't fair. It just wasn't right.
        I remember getting involved in a discussion with a bunch of
    utility CEOs maybe 10 years ago. I worked for years on Clear
    Skies legislation. Remember George W. Bush had a proposal they
    called Clear Skies, and Lamar Alexander and I worked on
    legislation. We called it Really Clear Skies. It involved
    sulfur dioxide, nitrogen oxide, mercury, and CO2,
    multi-pollutant legislation. And we worked on it for years,
    worked on it with George Voinovich for years.
        I remember meeting with a bunch of utility CEOs--gosh, it
    might have been 10 years ago, 8 years ago. They came from all
    over the country to my office to talk with me about Really
    Clear Skies, and they said, here is what we need, Senator, here
    is what we need you to do.
        A guy from a utility down south, he was kind of a
    curmudgeon guy, pretty plain spoken. He said, here is what you
    need to do, Senator. You need to tell us what the rules are
    going to be, you need to give us a reasonable amount of time
    and some flexibility, and get out of the way. That is what he
    said. You need to tell us what the rules are going to be, give
    us some flexibility, a reasonable amount of time, and get out
    of the way.
        I have known Gina McCarthy for a good while. She is not a
    hair-on-fire kind of person. Before she came here, she worked,
    I think, not for one Republican Governor, I think for two. And
    one of the reasons why the Administration asked her to do this
    job--it is a tough job at EPA, as you know--is because she is
    able to work with people of both parties, with the business
    community, try to find the reasonable middle. And I honestly
    believe she has worked hard to do this.
        And I think in crafting the Clean Power Plan, I think what
    they actually tried to do at EPA is take the advice of that
    curmudgeon, the old utility CEO from 10 years ago, and put into
    a proposal something that meets those four criteria.
        I would just ask Katie, if you would, just react to all
    that. It is a lot to throw at you, but sort of react to what I
    have just said.
        And I appreciate the chance to go on for a little bit here,
    Mr. Chairman.
        Katie, please.
        Ms. Dykes. Well, I can say that we are really proud in
    Connecticut to be part of RGGI, including with Delaware, and
    the experience that we have shown in that program really
    demonstrates that States can comply with the Clean Power Plan
    without challenging the cost and the reliability of their grid.
        All of the things that have been said about the Clean Power
    Plan are things that were said about RGGI when we were standing
    up that program many years ago. People said that it would drive
    up rates, and yet in Connecticut we have seen some of the
    lowest rates ever in the last decade, just announced coming
    into play this summer.
        And part of that is because of RGGI and the cap that we
    placed on carbon, but also it is because we have seen the
    writing on the wall and harnessed these economic trends that
    are already driving lower carbon reductions. We are retiring
    the last coal plant in Connecticut. It just announced its
    retirement a couple months ago, and that is because the
    economics of natural gas, the incredible efficiency of new
    combined cycle gas power plants and the low cost of
    domestically produced natural gas make that generation a source
    of carbon reduction and lower costs, lower electric rates for
    our citizens.
        So we see the benefits of compliance. We have seen $1.3
    billion in net benefits from implementing this program, and we
    are excited to share the lessons that we have learned in our
    States with others.
        Senator Carper. Thanks so much.
        Mr. Revesz, would you just react briefly to what I have
    said? Just very briefly.
        Mr. Revesz. Excuse me, Senator?
        Senator Carper. Would you just react briefly to what I have
    just said?
        Mr. Revesz. Yes, Senator. I completely agree and was very
    moved by what you said concerning Delaware's inability to meet
    the national ambient air quality standards were it not for
    reductions that have to take place in upwind States. There is
    nothing Delaware can do. There is nothing that any of the
    northeastern States can do unless States that are upwind from
    them take measures.
        Actually, administrations of both parties over a long
    period of time have been working on this. Finally, the Supreme
    Court upheld the Transport Rule after prior rules had been
    struck down by the D.C. Circuit. And now the efforts to bring
    those emissions under control are under strong legal footing.
        And it is important to emphasize that administrations of
    both parties have been working on this. The Clinton
    administration had a NAAQS rule, the administration of
    President George W. Bush had the Clean Air Care program, and
    then the Obama administration had CSAPR, the Transport Rule.
    And finally those rules are under strong legal footing.
        These rules are enormously important for the health of
    Americans, and EPA has done these rules paying attention to
    both the costs and the benefits. Each rule has a regulatory
    impact analysis that shows that the benefits of these rules
    significantly exceed the costs. I don't mean to de-emphasize
    the costs. There are costs, but the benefits are much greater
    than those costs.
        Senator Carper. Thanks so much.
        Mr. Chairman, could I just----
        Senator Inhofe. Can I come back to you?
        Senator Carper. That would be great. Thanks so much.
        Senator Inhofe. Let's do it that way.
        Senator Carper. Thanks so much for all this time.
        Senator Inhofe. And we will hear from Senator Sullivan now.
        Senator Sullivan.
        Senator Sullivan. Thank you, Mr. Chairman. Thank you for
    calling this hearing. I think it is a really important hearing.
        Thanks for the witnesses. I know it is a very distinguished
    panel.
        You know, one of the things that comes up very frequently
    in this committee is the commitment that we all have to clean
    air, clean water. My State of Alaska has a lot of water and a
    lot of air and a very pristine environment, so we are certainly
    a State that is very committed to that. Matter of fact, we have
    some of the cleanest water and cleanest air in the country, in
    the world.
        But one of the things that I have always been concerned
    about is that we also need to abide by the law or the
    Constitution, especially Federal agencies. And in my view the
    EPA is creating a record on their major rules that they have
    been promulgating as not abiding by the law, and a number of us
    have been concerned about it. We raise it. I think everybody
    should be raising it on both sides of the aisle; not just
    Republicans, Republicans and Democrats, because part of our
    oversight jurisdiction here is making sure that agencies do
    what is required by the law.
        And as all of you know, being legal professionals and
    experts in your field, Federal agencies cannot just undertake
    actions because they feel like it; they have to have a
    statutory or constitutional authority to act. Would everybody
    on the panel agree with that very basic premise of
    administrative law?
        [Affirmative nods.]
        Senator Sullivan. Is that a nod from everybody? I am
    showing that everybody is nodding.
        I want the EPA officials to make sure they see this because
    it is a pretty uncontroversial statement but sometimes doesn't
    always seem to make it over to the agency.
        So it is not just me or others saying that. If you look at
    the history in the last couple years, Utility Air Regulators v.
    EPA, they lost that Supreme Court case; EPA v. Michigan, they
    lost that Supreme Court case; the WOTUS rule right now has been
    stayed; and pretty incredibly, the Clean Power Rule has been
    stayed.
        My team did a little bit of research, and we asked CRS.
    They said looking at a review of treaties on the Supreme Court
    practice and Supreme Court previous decisions, this is the
    first time of any Supreme Court case that they have ever found
    where the Supreme Court of the United States placed a stay or
    injunction of a Federal regulation before a lower court had
    ruled on the merits where the lower court had not granted a
    stay previously. First time in the Supreme Court's history.
        So my question to you is, why do you think they did that?
    Very, very dramatic. And I am going to give you a little hint
    of why I think they may have done that. It is not just the
    track record where they lose in every case, but not too long
    before that case was announced Gina McCarthy was asked on TV
    show if she thought she was going to win the EPA v. Michigan
    case. And that was a Supreme Court case.
        Of course, it is normal for an Administrator to say, of
    course we are going to win, we did a good job. But then she
    went on, and she should have just stopped, because then she
    went on to say publicly, which is a statement I still find
    stunning from a Federal official, to say, ``But even if we
    don't win, the rule was promulgated 3 years ago. Most of them
    are already in compliance,'' meaning the American people and
    private sector companies. ``Investments,'' hundreds of
    millions, ``have been made, so we'll catch up. We're still
    going to get to the toxic pollution of these facilities.''
        So she is saying even if we don't win, we win. Even if we
    lose in court, we win anyways because we promulgated this, and
    the poor sucker companies have had to abide by it even if they
    are going to get the rule overturned.
        So I would like your views. Ms. Wood, I will start with
    you. Why do you think the Supreme Court took really historic
    action to stop the Supreme Court? And, again it is not just
    Republicans talking about this. Lawrence Tribe, when he was
    asked and was arguing against this rule, was very critical,
    saying it was unconstitutional and was quoted as saying burning
    the Constitution should not be part of our national energy
    policy.
        Do you think the EPA has been burning the Constitution?
        Ms. Wood. I think that the historic nature of the stay--and
    you are correct that it is historic--does definitely stem from
    all of the things that you have noted, which is the fact that
    the Michigan v. EPA case, billions had been spent to put on
    control equipment for a rule that was then found unlawful.
        Senator Sullivan. And the Administrator seems to view that
    as part of her strategy. Even if we lose later, it took 5 years
    to get to the Supreme Court, everybody had to comply anyway, so
    who cares about the rule of law.
        Ms. Wood. Right. And at least in that rule, if that was her
    strategy, it worked, and the Supreme Court may have been very
    dismayed by that. And the statements that she made were part of
    the stay briefing. And also as you note, and as Professor Tribe
    had noted, there are a lot of legal infirmities with this rule
    that I am sure got the attention of the Supreme Court.
        Senator Sullivan. Any other members just want to comment on
    why they think the Supreme Court took this historic action?
        Mr. Revesz. Senator, I think EPA's record before the
    Supreme Court is not nearly the one that you characterized.
        Senator Sullivan. They are zero for three in the last
    Supreme Court.
        Mr. Revesz. No. They won EME Homer City Generation v. EPA,
    the Cross-State Air Pollution Rule.
        Senator Sullivan. What year was that?
        Mr. Revesz. That was in 2014.
        Senator Sullivan. OK.
        Mr. Revesz. The UR case, they lost one issue; they won one
    issue. The one issue they won on affected the vast bulk of the
    emissions.
        Senator Sullivan. Utility Air Regulators, they lost that
    big time.
        Mr. Revesz. No, the Utility Air Regulators case, the UR
    case, Utility Air Regulator case, there were two issues in that
    case.
        Senator Sullivan. Justice Scalia said they were violating
    the separation of powers.
        Mr. Revesz. On one issue. And that issue affected 50
    percent of the emissions.
        Senator Sullivan. Well, a pretty big deal.
        Mr. Revesz. And they won on 87 percent of the emissions, or
    some number in the high eighties.
        Senator Sullivan. The WOTUS rule, they are losing that.
        Professor, why do you think the Supreme Court took this
    historic action against the EPA? They have never done this
    before. It is a big, big deal. Why do you think they did it? Do
    you think it had anything to do with Gina McCarthy's outrageous
    statement?
        Mr. Revesz. I don't know why they did it, Senator. It is an
    important rule. But I wanted to address the issue of the track
    record. The WOTUS rule, the recent decision last week was a
    procedural decision; it did not affect the merits of the case
    at all.
        Senator Sullivan. They stayed the entire rule. Why do you
    think 31 States in the United States are suing the EPA?
        Mr. Revesz. Well, some States are hurt by the rule; other
    States are supporting the rule. There are States on both sides.
        Senator Sullivan. Thirty-one States. That is a lot of
    States.
        Mr. Revesz. Senator, the numbers are somewhat in flux. It
    is 27, it is 29. There are quite a number of States on the
    other side as well.
        Senator Sullivan. Not 31.
        Mr. Revesz. That is true. As I said, some States would like
    to see this issue not addressed at all; others would like to
    see it addressed----
        Senator Sullivan. But don't you think it has to be legal?
    Everything the EPA has to do has to be based in statute or the
    Constitution.
        Ms. Woods, do you think what the EPA is doing is based in
    statute or the Constitution?
        Mr. Revesz. I do, Senator.
        Senator Sullivan. No, I asked Ms. Woods. Sorry.
        Ms. Woods. No, I don't think it is, and five justices on
    the Supreme Court appear to agree with me. Also, just to follow
    back, I represented the Utility Air Regulatory Group in that
    case, Utility Air Regulatory Group v. EPA, and I absolutely
    count it as a victory for my client.
        Senator Sullivan. Absolutely.
        Ms. Woods. And in the EME Homer case, that was a split
    victory between EPA and the people challenging that rule, and I
    would like to note that it went back down to the D.C. Circuit
    to look at the ``as applied'' challenges to those States, and
    it was thrown out in 13 States by the D.C. Circuit.
        Senator Sullivan. Thank you.
        Thank you, Mr. Chairman.
        Senator Inhofe. Thank you, Senator Sullivan.
        What I would like to do is go back for a short time for
    Senator Carper and then get to Senator Markey, if that is
    acceptable.
        Senator Carper. I will be Senator Markey's warm-up act
    here.
        I would say to Senator Sullivan it is always good to have
    you here in these deliberations.
        Sometimes EPA can't win for losing. When it comes to
    enforcement of the Clean Air Act, they get sued because they
    are not doing enough. When it comes to enforcement of the Clean
    Air Act, they get sued because they are not doing enough. When
    it comes to updating ambient air quality standards, they get
    sued because they are not going far enough fast enough. They
    get it coming and going. They get it coming and going. They
    have a hard job to do because they are going to get sued either
    way.
        I think they are trying to do their job, and I am just
    reminded that we need to do our job. It shouldn't be left up to
    the agencies to try to find a way through regulations to a
    policy that protects our health, protects our environment, but
    also provides certainty and predictability that businesses
    need.
        One of the things I know we all agree on is the major job
    that we have here is to provide certainty and predictability
    for businesses so that they can go forward, be successful, not
    at our harm, but in order to have a strong economy. And the
    question always before this committee has been can we have
    cleaner air, cleaner water, and also have a strong economy. I
    think we can have both.
        The other thing it would be nice to do is actually--if the
    Supreme Court had a full complement of justices, and my hope is
    that somehow before the end of this year they can have a
    starting lineup. It is like trying to have a baseball team and
    not have a shortstop, or have a baseball team and not have a
    right fielder. So I think they need the full team on the field.
        Thank you very much.
        Senator Inhofe. Thank you, Senator Carper.
        Senator Markey, before you ask your questions, we have been
    talking about the great environmental success that you and I,
    Senator Carper, and others on this committee had 2 days ago, so
    this is very significant, I think, that we recognize that we
    have made some great progress.
        Senator Markey.
        Senator Markey. Thank you, Mr. Chairman, very much.
        And TSCA is an historic achievement. We all came together.
    We all stood together to produce that historic environmental
    bill. And I look forward to the day where we all stand together
    on climate science and stand together on the new energy policy
    for the future and hope that that day may be arriving in the
    near future, perhaps after a Supreme Court decision on the
    Clean Power Plan. But my ability to prognosticate the future is
    more limited than my ability to talk about the past and the
    proud past that we just had yesterday.
        Senator Inhofe. Well, yes. Let me just interrupt for a
    moment here and say that Senator Whitehouse, in his time this
    afternoon, was talking about one of our colleagues said 30
    years ago, and I was thinking to myself it was 7 years ago that
    Al Gore said there would be no more ice on the North Cap in 5
    years. I can remember in my other committee that I had, the
    Armed Services Committee, it was 20 years ago because I was
    sitting there when they said in 10 years we would no longer
    need ground troops. So I think it is better to kind of look
    into the future and evaluate the present.
        Senator Markey. I agree with you. Predicting the future is
    a very perilous terrain for politicians. We work toward
    creating the future without knowing exactly how it is going to
    play out. And how the Supreme Court acts is obviously something
    in the future.
        In 2007 in the most important environmental decision that
    has ever been decided, Massachusetts v. EPA, it was a 5 to 4
    decision, which, by the way, makes the case for not having a 4
    to 5 Supreme Court; otherwise perhaps we might not have had a 5
    to 4 decision. But Justice Kennedy voted in the majority, 5. So
    that is where we are going to be today, predicting the future,
    where these justices are going to be and even who will be on
    the Supreme Court. We don't even quite know that when that case
    might be argued. So as Yogi Berra used to say, making
    predictions is a very hard thing to do, especially about the
    future.
        So my view is that we should just look at the case as it
    sits before us and just look back a little bit in time because
    many of the complaints that come from members about the impact
    on the coal industry, well, in the Waxman-Markey bill, we built
    in $200 billion for carbon capture and sequestration. We built
    in billions of dollars for coal miners if they needed it; that
    is, if carbon capture and sequestration was not possible. We
    built all that money in, $200 billion.
        You know what Peabody Coal said? You know what Alpha Coal
    said? Do you know what Arch Coal said? They said no, we don't
    want it. That was the money that could have been there for
    carbon capture and sequestration. They said no. The Edison
    Electric Institute endorsed Waxman-Markey, but the coal
    industry exercised their veto power in the Senate, rejecting
    $200 billion for carbon capture and sequestration, rejecting
    the money for the coal miners.
        So as we hear today the concern about the coal miners, just
    remember that. It was Peabody Coal that made that decision. All
    of their stocks, of course, now are down in single digits or
    lower, in the negative.
        But that is a little bit of history. I just want to say
    that it was an attempt to solve this issue, work together on
    that issue in a way that dealt with all of the interests, all
    of the parties. It wasn't going to be all or nothing, 100
    percent versus zero; it was going to be something that tried to
    deal with the legitimate need to create a bridge for each and
    every technology to make it to this cleaner energy future.
        But it was Peabody Coal that said no. And it is Peabody
    Coal that is funding the brief at the Supreme Court. Peabody
    Coal funding the brief in the Supreme Court. Just remember
    that. Same company. Same interest. Same money. Same short-term
    perspective. So that is what we are talking about.
        And nothing, to use one of my father's terms, nothing
    frosts me more than having these very same people still arguing
    that it can't be done and we can't make the transition, even as
    we are going to have 16,000 new megawatts of solar and 9,000
    new megawatts of wind installed in the United States this year.
    It is going to be the vast majority of all new electricity in
    the country.
        But we weren't leaving coal behind, I just want to say
    that. Carbon capture and sequestration is a technology that
    could have been invested in by public monies that Peabody Coal
    said they did not want. So I just don't want to hear the
    crocodile tears from Peabody Coal and Arch Coal and Alpha Coal.
        So, Professor Revesz, the stay issued by the Supreme Court
    does not prohibit the EPA from working on activities related to
    the Clean Power Plan; it only prohibits it from enforcing the
    requirements; is that correct?
        Mr. Revesz. That is correct, Senator.
        Senator Markey. Thank you. Now, during the stay, the EPA is
    allowed to issue guidance and tools to help States that have
    decided to continue their plans; is that correct?
        Mr. Revesz. That is also correct. And it has also been the
    practice of administrations of both parties in the three last
    Presidential administrations when stays like this were issued.
        Senator Markey. And critics have accused the EPA that by
    not announcing the effects the stay will have on all of the
    complying States forces States to continue work toward the
    Clean Power Plan using time and resources toward a rule that
    may be overturned. However, whether or not to change the
    compliance deadlines, and by how much has traditionally been
    decided on a case-by-case basis and not issued until the
    ruling; is that correct?
        Mr. Revesz. That is correct. It has always been issued when
    the stay was lifted at the end of the litigation.
        Senator Markey. So from my perspective, the EPA has been
    very flexible in its dealings with the States. I know that
    there are some States that perhaps don't like this idea. I am
    sure there were many, many States that weren't happy with Brown
    v. Board of Education. Might have even been 31 States that were
    unhappy with Brown v. Board of Education; and they would have
    sued to overturn if they could get away with it. And I am sure
    there are many other decisions in history that 31 States might
    have sued to say we don't want to move to the future; we don't
    want to change the way in which we do business.
        But it doesn't mean that that case is going to get
    overturned in the Supreme Court. It doesn't mean that enough
    justices aren't going to come together to look at the accuracy
    of the argument being made by the Administration that they are
    upholding existing law and acting under existing law. That is
    what the Supreme Court did in 1954. That is what this Court
    also will have to decide.
        And I just think it is premature and not a good use of our
    time to be projecting what the Supreme Court is actually going
    to decide. This is just a discussion of the law. And I think
    that the law, as it is being interpreted by the Administration,
    is right on the money.
        So, Professor, I am just going to give you a final minute.
    Just tell us how we should be viewing this issue now, going
    forward over the next year. What is the perspective that we
    should have, in your opinion, in viewing this historic case as
    it moves to the Supreme Court?
        Mr. Revesz. Thank you, Senator. I think we should
    understand that there is a lot of strength in the
    Administration's position that the arguments that EPA is using
    unprecedented regulatory techniques, so, for example, that the
    rule is assuming there will be some fuel shifting going on or
    that the rule is imposing certain obligations that a plant
    cannot meet within the four walls of its plant, that all of
    those techniques have been used in the past not only by
    Democratic administrations but also by Republican
    administrations. They are part and parcel of all of these
    efforts that Senator Carper referenced concerning the effort to
    control interstate emissions. Those are all the standard
    toolkit of EPA.
        There is another big argument about why EPA shouldn't be
    able to regulate the greenhouse gas emissions of power plants
    under section 111(d) because it is regulating the hazardous
    emissions of power plants under section 112. What EPA is doing
    in this case is essentially consistent with the approaches of
    administrations of both parties going back to 1990, going back
    to 25 years.
        And on the constitutional side, Professor Tribe was
    mentioned several times. He made three arguments very
    forcefully at a House hearing. I was a Democratic witness at
    that hearing. Two of those arguments aren't even being made
    anymore by the opponents of the Clean Power Plan.
        Senator Inhofe. OK, we are going to have to cut this off.
        I would like say, Senator Markey, they will all be glad to
    know that we have just been saved by the bell.
        [Laughter.]
        Senator Inhofe. There is a vote that is underway and----
        Senator Markey. Thirty seconds, if I may?
        Senator Inhofe. Thirty seconds, and that is it, and then I
    have an idea. Go ahead.
        Senator Markey. And I look forward to that.
        Senator Inhofe. See, if you guys don't know, we really like
    each other.
        Senator Markey. We do. We are good friends. We are good
    friends.
        Senator Inhofe. Really. And he has every right to be wrong.
        [Laughter.]
        Senator Markey. You know what my father used to say? If two
    people agree upon absolutely everything, then you don't need
    one of those people. So we need each other on climate science.
    We need each other to have this debate.
        So, again, Waxman-Markey, EEI endorsed, General Electric,
    DuPont, Applied Materials, Timberland, Dow Corning, Alcoa,
    Johnson & Johnson. We had this broad base of support. General
    Motors, Chrysler, all the auto industry, they all endorsed
    Waxman-Markey. The outlier was the coal industry, the people
    paying for this brief before the Supreme Court, Peabody Coal.
    It is the same culprit. It is the same rear view look at
    history, and we were trying to give them a bridge to the future
    so they did not have to go into bankruptcy.
        Do you think they wish they could go back to 2009 again and
    grab that money? You know they would. OK? They made a big
    historic mistake. The Supreme Court will not make a historic
    mistake.
        Senator Inhofe. Thank you, Senator Markey.
        Now I am going to take the Chair's prerogative and ask Ms.
    Wood. You have heard this back and forth. Do you have any
    comments to make about the legal characterization of what we
    are in the middle of right now? One minute, and then we are out
    of here.
        Ms. Wood. One thing I would note is that Peabody Energy is
    only one of 149 different entities that are challenging the
    Power Plan. And I think the thing that we need to remember is
    going back to the administrative law principle that we all
    agreed to, which is that EPA can only act within the bounds of
    the statute. And five justices on the Supreme Court have
    indicated in a historic stay that they think that EPA is not
    acting within the bounds that you all, Congress, have set for
    them to operate.
        Senator Inhofe. That is good.
        We are adjourned.
        Again, thank you, all the witnesses, for enduring this.
        [Whereupon, at 11:18 a.m. the committee was adjourned.]

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