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





                                                        S. Hrg. 114-362

     IMPLICATIONS OF THE SUPREME COURT STAY OF THE CLEAN POWER PLAN

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

                                HEARING

                               before the

                              COMMITTEE ON
                      ENVIRONMENT AND PUBLIC WORKS
                          UNITED STATES SENATE

                    ONE HUNDRED FOURTEENTH CONGRESS

                             SECOND SESSION

                               __________

                              JUNE 9, 2016

                               __________

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



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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

                              ----------                              


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

              STATEMENT OF ALLISON WOOD, PARTNER, 
                     HUNTON & WILLIAMS LLP

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

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

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

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

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