[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
__________
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Available via the World Wide Web: http://www.gpo.gov/fdsys
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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
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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
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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:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
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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