[Senate Hearing 114-53]
[From the U.S. Government Publishing Office]




                                                        S. Hrg. 114-53

 THE IMPACTS OF EPA'S PROPOSED CARBON REGULATIONS ON ENERGY COSTS FOR 
AMERICAN BUSINESSES, RURAL COMMUNITIES AND FAMILIES, AND A LEGISLATIVE 
                           HEARING ON S. 1324

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

                                HEARING

                               before the

                       SUBCOMMITTEE ON CLEAN AIR 
                           AND NUCLEAR SAFETY

                                 of the

                              COMMITTEE ON
                      ENVIRONMENT AND PUBLIC WORKS
                          UNITED STATES SENATE

                    ONE HUNDRED FOURTEENTH CONGRESS

                             FIRST SESSION

                               __________

                             JUNE 23, 2015

                               __________

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


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


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

                               __________

                         U.S. GOVERNMENT PUBLISHING OFFICE 

95-744 PDF                     WASHINGTON : 2015 
-----------------------------------------------------------------------
  For sale by the Superintendent of Documents, U.S. Government Publishing 
  Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; 
         DC area (202) 512-1800 Fax: (202) 512-2104 Mail: Stop IDCC, 
                          Washington, DC 20402-0001                               
   
   
   
   
   
   
   
                               
                               

               COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS

                    ONE HUNDRED FOURTEENTH CONGRESS
                             FIRST 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
                              ----------                              

              Subcommittee on Clean Air and Nuclear Safety

             SHELLEY MOORE CAPITO, West Virginia, Chairman
DAVID VITTER, Louisiana              THOMAS R. CARPER, Delaware
JOHN BARRASSO, Wyoming               BENJAMIN L. CARDIN, Maryland
MIKE CRAPO, Idaho                    BERNARD SANDERS, Vermont
JEFF SESSIONS, Alabama               SHELDON WHITEHOUSE, Rhode Island
ROGER WICKER, Mississippi            JEFF MERKLEY, Oregon
DEB FISCHER, Nebraska                EDWARD J. MARKEY, Massachusetts
JAMES M. INHOFE, Oklahoma (ex        BARBARA BOXER, California (ex 
    officio)                             officio)
    
    
    
    
    
    
    
    
    
    
    
    
    
                            C O N T E N T S

                              ----------                              
                                                                   Page

                             JUNE 23, 2015
                           OPENING STATEMENTS

Capito, Hon. Shelley Moore, U.S. Senator from the State of West 
  Virginia.......................................................     1
Carper, Hon. Thomas R., U.S. Senator from the State of Delaware..    98
Inhofe, Hon. James M., U.S. Senator from the State of Oklahoma, 
  prepared statement.............................................   264

                               WITNESSES

Trisko, Hon. Eugene M., Attorney at Law, on behalf of the United 
  Mine Workers of America........................................     4
    Prepared statement...........................................     6
    Response to an additional question from Senator Capito.......    21

Cicio, Paul, President, Industrial Energy Consumers of America...    25
    Prepared statement...........................................    27

Alford, Harry, President and CEO, National Black Chamber of 
  Commerce.......................................................    65
    Prepared statement...........................................    67

Martens, Joseph J., Commissioner, New York State Department of 
  Environmental Conservation.....................................    75
    Prepared statement...........................................    77

Rice, Mary B., M.D., MPH, Instructor in Medicine, Harvard Medical 
  School, Division of Pulmonary, Critical Care and Sleep Medicine    84
    Prepared statement...........................................    86

 
 THE IMPACTS OF EPA'S PROPOSED CARBON REGULATIONS ON ENERGY COSTS FOR 
AMERICAN BUSINESSES, RURAL COMMUNITIES AND FAMILIES, AND A LEGISLATIVE 
                           HEARING ON S. 1324

                              ----------                              


                         TUESDAY, JUNE 23, 2015

                               U.S. Senate,
         Committee on Environment and Public Works,
              Subcommittee on Clean Air and Nuclear Safety,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 2:05 p.m. in 
room 406, Dirksen Senate Building, Hon. Shelley M. Capito 
(chairman of the subcommittee) presiding.
    Present: Senators Capito, Carper, Barrasso, Crapo, 
Sessions, Fischer, Merkley, Markey, and Inhofe.

        OPENING STATEMENT OF HON. SHELLEY MOORE CAPITO, 
          U.S. SENATOR FROM THE STATE OF WEST VIRGINIA

    Senator Capito. I am going to go ahead and begin.
    I know Senator Carper is planning to be here. When he gets 
here, we will make time for him to make his opening statement. 
In the interest of the panelists and other Senator, I think it 
would be best to go ahead and move on.
    I want to welcome everyone to the hearing of the Clean Air 
and Nuclear Safety Subcommittee. The hearing is entitled The 
Impacts of EPA's Proposed Carbon Regulations on Energy Costs 
for American Businesses, Rural Communities and Families, and a 
Legislative Hearing on my bill, S. 1324, better known as the 
ARENA Act, Affordable Reliable Electricity Now Act.
    I introduced ARENA in May and am proud to have more than 30 
co-sponsors, including Leader McConnell, Chairman Inhofe, and 
all my fellow Environment and Public Works Committee 
Republicans. I introduced ARENA and am holding this hearing 
today because of the devastating impact that EPA's proposed 
regulations will have on the families and businesses in my home 
State of West Virginia and across the Nation.
    I am not exaggerating when I say almost every day back home 
in West Virginia, there are new stories detailing closed 
plants, lost jobs, and price increases. I have a letter here 
sent to me by Ammar's Inc., a family owned company that 
operates 19 Magic Mart stores in West Virginia, Virginia and 
eastern Kentucky. The letter is accompanied by a petition 
signed by 26,000 Magic Mart customers, calling on EPA to end 
its war on coal and catastrophic impact on local economies.
    Ammar's Inc. has been active in the region for 95 years, 
and according to this letter, the present economic crunch is 
the most difficult challenge the company has faced. Let me 
quote directly: ``There was a time when your greatest obstacle 
was your competitor, but if you worked hard, took care of your 
customers and offered quality merchandise at a fair price, you 
could compete successfully. Unfortunately, that is now not the 
case. The largest impediment we have to operating our business 
successfully is our own government, particularly the EPA. The 
rulings issued by the EPA have devastated our regional 
economy.''
    Coal provided 96 percent of West Virginia's electricity 
last year. West Virginia had among the lowest electricity 
prices in the Nation. The average price was 27 percent below 
the national average, but that advantage will not survive this 
Administration's policies. Studies project our electricity 
prices will between 12 and 16 percent.
    Earlier this month, 450,000 West Virginians learned of a 16 
percent increase in the cost of electricity. While there were 
multiple factors that contributed to this rate increase, 
compliance with previous EPA regulations played a significant 
part. If we allow EPA's plan to move forward, last week's rate 
increase will only be the tip of the iceberg.
    Affordable energy matters. The 430,000 low and middle 
income families in West Virginia, nearly 60 percent of our 
State's households, take home an average of less than $1,900 a 
month and spend 17 percent of their after-tax income on energy. 
These families are especially vulnerable to the price increases 
that will result from the Clean Power Plan.
    This is not just about the impacts on coal producing States 
like West Virginia. This is about the impacts across the United 
States.
    It is important to note that all electricity has to come 
from somewhere. In many States, odds are that it is being 
imported from a State that relies on coal, but no one talks 
about that.
    We will learn from some of the testimony about the Regional 
Greenhouse Gas Initiative, RGGI. One of the witnesses we will 
hear from today, Mr. Martens, thank you for coming, is 
affiliated with RGGI, a program of nine northeastern States 
that uses market principles to reduce greenhouse gas emissions 
from the power sector.
    Mr. Martens may not mention that RGGI's nine States consume 
five times more energy than they produce. My little State of 
West Virginia produces twice as much energy as all nine of the 
RGGI States combined.
    There are energy-producing States and there are energy-
consuming States. Only 13 States produce more energy than they 
consume. West Virginia ranks second and Wyoming ranks first. 
For 10 of the 13 States that export energy, coal is critical to 
maintaining that net positive result.
    Put simply, there is no way that this massive, largely EPA-
driven reduction in coal-fired electricity generation is going 
to impact only coal States. It is going to impact the majority 
of States, the families and businesses within them. Often, the 
poorest and most vulnerable populations will bear the brunt of 
this increase.
    I look forward to hearing in greater detail from our 
witnesses about the impact of these proposed regulations and 
the need for clean air policies that do not overburden our 
States and cripple our economy.
    With that, we will begin testimony of our panelists. Our 
first panelist is Mr. Eugene M. Trisko. Welcome and thank you 
for coming.
    [The prepared statement of Senator Capito follows:]

                Statement of Hon. Shelley Moore Capito, 
              U.S. Senator from the State of West Virginia

    Welcome to this hearing of the Clean Air and Nuclear Safety 
Subcommittee entitled ``The Impacts of EPA's proposed Carbon 
Regulations on Energy Costs for American Businesses, Rural 
Communities and Families, and a legislative hearing on S. 
1324''. S. 1324 is better known as the Affordable Reliable 
Electricity Now Act, or ARENA. I introduced ARENA in May and am 
proud to have more than 30 cosponsors, including Leader 
McConnell, Chairman Inhofe, and all my fellow EPW Republicans.
    I introduced ARENA and am holding this hearing today 
because of the devastating impact that EPA's proposed 
regulations will have on the families and businesses in my home 
State and across the Nation. I am not exaggerating when I say 
almost every day back home in West Virginia, there are new 
stories detailing plants closed, jobs lost, and price 
increases.
    I have a letter here sent to me yesterday from Ammar's 
Inc., a family owned company that operates 19 Magic Mart stores 
in West Virginia, Virginia and Kentucky. The letter is 
accompanied by a petition signed by 26,000 Magic Mart 
customers, calling on EPA to end its war on coal and 
catastrophic impact on local economies.
    Ammar's Inc. has been active in the region for 95 years, 
and according to this letter, the present economic crunch is 
the most difficult challenge the company has faced. Let me 
quote directly:
    ``There was a time when your greatest obstacle was your 
competitor, but if you worked hard, took care of your customers 
and offered quality merchandise at a fair price, you could 
compete successfully. Unfortunately, that is now not the case. 
The largest impediment we have to operating our business 
successfully is our own government, particularly the EPA. The 
rulings issued by the EPA have devastated our regional 
economy.''
    Coal provided 96 percent of West Virginia's electricity 
last year. West Virginia has among the lowest electricity 
prices in the Nation: last year, the average price was 27 
percent below the national average. But that advantage will not 
survive this Administration's policies. Studies have projected 
the Clean Power Plan will raise electricity prices in West 
Virginia by between 12 and 16 percent.
    Earlier this month, 450,000 West Virginians learned of a 16 
percent increase in the cost of electricity. While there were 
multiple factors that contributed to this rate increase, 
compliance with previous EPA regulations played a significant 
part. If we allow EPA's plan to move forward, last week's rate 
increase will only be the tip of the iceberg.
    Affordable energy matters. The 430,000 low and middle 
income families in West Virginia--nearly 60 percent of our 
State's households--take home an average of less than $1900 a 
month and spend 17 percent of their after tax income on energy. 
These families are especially vulnerable to the price increases 
that will result from the Clean Power Plan.
    But this isn't just about the impacts on coal producing 
States like West Virginia. This is about the impacts across the 
United States.
    It is important to note that all electricity has to come 
from somewhere. In many States, odds are that it is being 
imported from a State that relies on coal. But no one is 
talking about that.
    Turning to the Regional Greenhouse Gas Initiative (RGGI) 
States. One of the witnesses we will hear from today, Mr. 
Martens, is affiliated with RGGI, a program of nine 
northeastern States that uses market principles to reduce 
greenhouse gas emissions from the power sector. Mr. Martens 
probably won't mention that RGGI's nine States consume five 
times more energy than they produce. Or that my little State of 
West Virginia produces twice as much energy as all nine of the 
RGGI States combined.
    There are energy producing States, and there are energy 
consuming States. Only 13 States produce more energy than they 
consume. West Virginia ranks second, behind only Wyoming. And 
for 10 of the 13 States that export energy, coal is critical to 
maintaining that net positive result.
    Put simply, there is no way that this massive, largely EPA-
driven reduction in coal fired electricity generation is going 
to impact only coal States. It's going to impact the majority 
of States, and the families and businesses within them. Often, 
the poorest and most vulnerable populations will bear the brunt 
of this increase.
    I look forward to hearing in greater detail from our 
witnesses about the impact of these proposed regulations and 
the need for clean air policies that don't over burden our 
States and cripple our economy.

STATEMENT OF HON. EUGENE M. TRISKO, ATTORNEY AT LAW, ON BEHALF 
             OF THE UNITED MINE WORKERS OF AMERICA

    Mr. Trisko. Thank you very much, Chairman Capito, Chairman 
Inhofe and distinguished members.
    I am Eugene Trisko, an energy economist and attorney in 
private practice. I am here today to summarize the findings of 
a study of the impacts of energy costs on American families.
    I have conducted household energy cost studies periodically 
since 2000 for the American Coalition for Clean Coal 
Electricity and its predecessor organizations. The study I will 
summarize today, Energy Cost Impacts on American Families, 
estimates consumer energy costs for households in 2016.
    The principal findings of this study are as follows. One, 
some 48 percent of American families have pre-tax annual 
incomes of $50,000 or less, with an average after-tax income 
among these households of $22,732 or a take-home income of less 
than $1,900 per month.
    Second, 48 percent of households earning less than $50,000 
devote an estimated average of 17 percent of their after tax 
incomes to residential and transportation energy. Energy costs 
for the 29 percent of households earning less than $30,000 
before taxes represent 23 percent of their after-tax family 
incomes, before accounting for any energy assistance programs. 
This 23 percent of income is more than three times higher than 
the 7 percent of gross income paid for energy by households 
earning more than $50,000 per year.
    Third, American consumers have benefited recently from 
lower gasoline prices, but higher oil prices are now reducing 
consumer savings at the gas pump. Meanwhile, residential 
electricity prices are continuing to rise. Residential 
electricity represents 69 percent of total household utility 
bills.
    A 2011 survey of low-income households for the National 
Energy Assistance Directors Association reveals some of the 
adverse health and welfare impacts of high energy costs. Low-
income households reported these responses to high energy 
bills.
    Twenty-four percent went without food for at least 1 day. 
Thirty-seven percent went without medical or dental care. 
Thirty-four percent did not fill a prescription or took less 
than the full dose. Nineteen percent had someone become sick 
because their home was too cold. The relatively low median 
incomes of minority and senior households detailed in the study 
attached to my statement indicate that these groups are among 
those most vulnerable to energy price increases.
    Recent and prospective increases in residential energy 
costs should be assessed in the context of the long-term 
declining trend of real income among American families. The 
U.S. Census Bureau reports that the real pre-tax incomes of 
American households have declined across all five income 
quintiles since 2001, measured in constant 2013 prices. The 
largest percentage losses of income are in the two lowest 
income quintiles. In 2014, the average price of residential 
electricity in the U.S. was 32 percent above its level in 2005, 
compared with the 22 percent increase in the Consumer Price 
Index.
    DOE projects continued escalation of residential 
electricity prices due to the cost of compliance with 
environmental regulations and other factors. Moreover, DOE, 
EPA, NERA and others project that electricity prices will 
increase even more because of EPA's proposed Clean Power Plan.
    Lower income families are more vulnerable to energy cost 
increases than higher income families because energy represents 
a larger portion of their household budgets. Energy costs 
reduce the amount of income that can be spent on food, housing, 
health care and other basic necessities.
    Fixed income seniors are among the most vulnerable to 
energy cost increases due to their relatively low average 
incomes and high per capital energy use. Senior citizens and 
other low income groups will bear the burden of higher energy 
costs imposed by EPA's Clean Power Plan but will be among the 
least likely to invest in or to benefit from the energy 
efficiency programs the proposed rule envisions.
    Thank you for the opportunity.
    [The prepared statement of Mr. Trisko follows:]
    
    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    
    
    Senator Capito. Thank you very much.
    Our next witness is Paul Cicio, President of the Industrial 
Energy Consumers of America. Welcome.

STATEMENT OF PAUL CICIO, PRESIDENT, INDUSTRIAL ENERGY CONSUMERS 
                           OF AMERICA

    Mr. Cicio. Thank you, Chairman Capito, Ranking Member 
Carper and members of the subcommittee. Thank you for this 
opportunity.
    The Industrial Energy Consumers of America is a trade 
association whose members are exclusively large companies who 
are energy intensive trade exposed. These industries, often 
referred to as EITE industries, consume 73 percent of the 
manufacturing sector's use of electricity and 75 percent of the 
natural gas. As a result, small changes in energy prices can 
have relatively large impacts to our global competitiveness.
    As a manufacturing sector, we use 40 quads of energy and 
this has basically not changed in 40 years. Meanwhile, 
manufacturing output has increased 761 percent. This is a true 
success story.
    The industrial sector is the only sector of the economy 
whose greenhouse gas emissions are 22 percent below 1973 
levels. These industries are very energy efficient. IECA 
supports action to reduce greenhouse gas emissions so long as 
it does not impact our competitiveness. We must have a level 
playing field with our global competitors.
    Several countries we compete with control electric and 
natural gas prices to their industrials. Two of them are China 
and Germany. They provide subsidies and practices to give them 
competitive advantages.
    If we were military, one would say we are engaged in hand 
to hand combat in competitiveness. All costs of unilateral 
action by the United States through the Clean Power Plan will 
be passed on to us, the consumer.
    As proposed, the Clean Power Plan will dramatically 
increase the costs of power and natural gas, accomplish little 
to reduce the threat of global climate change and provide 
offshore competitors an economic advantage, potentially 
creating an industrial greenhouse gas emission leakage with 
harmful effect to the middle class, the economy and the 
environment.
    The EPA cannot look at the Clean Power Plan in isolation 
from the significant cumulative cost that it will impose on the 
industrial sector either directly or indirectly through a 
number of recent rulemakings.
    Since 2000, the manufacturing sector is still down 4.9 
million jobs. Since 2010, manufacturing employment has 
increased 525,000 jobs. We are still in the early stages of 
recovery. We do fear that the Clean Power Plan and also the 
ozone rule are going to threaten this recovery.
    In contrast, for example, China, our primary competitor, 
has increased employment by 31 percent since 2000. The U.S. 
manufacturing trade deficit since 2002 has grown $524 billion, 
70 percent with one country, China.
    China's industrial greenhouse gas emissions have risen over 
17 percent since 2008 alone. China produces 29 percent more 
manufactured goods than we in the United States and emits 317 
percent more CO2. That is over three times the 
amount of CO2 than the U.S. industrial sector.
    Despite our low greenhouse gas emission levels, the EPA 
will increase our costs and will make it easier for China's 
carbon intensive products to be imported, which means the Clean 
Power Plan will be directly responsible for increasing global 
emissions.
    There are consequences to increasing energy costs on the 
industrial sector and it is called greenhouse gas leakage. The 
EPA has failed to address this issue and thus, the costs are 
under-estimated. For example, when a State's electricity costs 
rise due to the Clean Power Plan, companies with multiple 
manufacturing locations will shift their production to States 
with lower costs, along with the greenhouse gas emissions 
creating State winners and losers. When they do, it will 
increase the price of electricity to the remaining State 
ratepayers, including the households.
    If these companies cannot be competitive, they move 
offshore, moving jobs and greenhouse gas emissions, 
accomplishing nothing environmentally. One only needs to look 
at California.
    Since AB32, to our knowledge, there is not a single energy-
intensive trade-exposed company that has built a new facility 
in California. The same goes for the EU under the ETUS. 
California is importing their energy intensive products and 
they are losing or forfeiting jobs.
    It is for this reason we would urge policymakers to hold 
offshore manufacturing competitors to at least the same carbon 
content standard as we in the United States.
    Thank you.
    [The prepared statement of Mr. Cicio follows:]
   
   [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
   
    Senator Capito. Thank you very much.
    Our next witness is Mr. Harry Alford, President and CEO of 
the National Black Chamber of Commerce. Welcome.

 STATEMENT OF HARRY ALFORD, PRESIDENT AND CEO, NATIONAL BLACK 
                      CHAMBER OF COMMERCE

    Mr. Alford. Good afternoon, Chairman Capito, Ranking Member 
Carper and distinguished members of the subcommittee.
    My name is Harry Alford. I am President and CEO of the 
National Black Chamber of Commerce.
    The NBCC represents 2.1 million Black-owned businesses 
within the United States. I am here today to testify about the 
Environmental Protection Agency's proposal to regulate 
greenhouse gas emissions from power plants and the potential 
impacts of those proposed regulations on energy costs for 
American businesses, rural communities and families.
    In particular, I would like to focus on the potential 
adverse economic and employment impacts of the Clean Power Plan 
on low income groups and minorities, including individuals, 
families and minority businesses.
    While increased costs often come with increased regulation, 
the Clean Power Plan in particular seems poised to escalate 
energy costs for Blacks and Hispanics in the United States. 
According to a recent study commissioned by the National Black 
Chamber of Commerce, the Clean Power Plan would increase Black 
poverty by 23 percent, Hispanic poverty by 26 percent, result 
in cumulative job losses of 7 million for blacks, nearly 12 
million for Hispanics in 2035, and decrease Black and Hispanic 
median household income by $455 to $550, respectively, in 2035.
    For these minority and low income groups, increased energy 
costs have an even greater impact on their lives, jobs and 
businesses because a larger percentage of their incomes and 
revenues are spent on energy costs.
    What may seem like a nominal increase in energy costs to 
some can have a much more harmful effect on minorities and low 
income groups. Our members are very concerned about these 
potentially devastating economic impacts of the Clean Power 
Plan. We appreciate the opportunity to highlight them for the 
committee. In light of these concerns, the National Black 
Chamber of Commerce undertook an effort to examine the 
potential economic and employment impacts of the Clean Power 
Plan on minorities and low income groups.
    On June 11, 2015, the NBCC released a study on the threat 
of the EPA regulations to low income groups and minorities. The 
study finds that the Clean Power Plan will inflict severe, 
disproportionate economic burdens on poor families, especially 
minorities. In particular, the rule imposes the most harm on 
residents of seven States with the highest concentrations of 
Blacks and Hispanics.
    The EPA's proposed regulation for greenhouse gas emissions 
from existing power plants is a slap in the face to poor and 
minority families. These communities already suffer from high 
unemployment and poverty rates compared to the rest of the 
Country. Yet, the EPA's regressive energy tax threatens to push 
minorities and low income Americans even further into poverty. 
I want to highlight some of the key findings of the study.
    The EPA rule increases Black poverty by 23 percent and 
Hispanic poverty by 26 percent. In 2035, job losses will total 
7 million for Blacks and 12 million for Hispanics. In 2035, 
Black and Hispanic median household income will be $455 and 
$515 less respectively.
    Compared to Whites, Blacks and Hispanics spend about 20 and 
90 percent more of their income on food, 10 percent and 5 
percent more on housing, 40 percent on clothing and 50 percent 
and 10 percent more on utilities, respectively. The rule will 
especially harm residents of seven States with the highest 
concentration of Blacks and Hispanics. Those States are 
Arizona, California, Florida, Georgia, Illinois, New York and 
Texas.
    The study demonstrates that the EPA Clean Power Plan would 
harm minorities' health by forcing tradeoffs between housing, 
food and energy. Inability to pay energy bills is second only 
to the inability to pay recent as the leading cause of 
homelessness.
    Business groups like the NBCC are not the only entities 
expressing concerns about the Clean Power Plan. States, which 
would be responsible for implementing the Clean Power Plan, 
have criticized the plan for numerous deficiencies.
    Officials from 28 States say the EPA should withdraw its 
proposal citing concerns such as higher energy costs, threats 
to reliability and lost jobs. Officials from 29 States have 
said EPA's proposed rule goes well beyond the agency's legal 
authority under the Clean Air Act and 50 States have already 
joined in lawsuits.
    The NBCC totally supports the ARENA Act, S. 1324. We 
certainly encourage all members of this committee to put the 
bill to vote and make it law.
    Thank you so much.
    [The prepared statement of Mr. Alford follows:]
    
    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    
    Senator Capito. Thank you very much.
    Our next witness is Joseph J. Martens, Commissioner, New 
York State Department of Environmental Conservation. Welcome, 
Mr. Commissioner.

 STATEMENT OF JOSEPH J. MARTENS, COMMISSIONER, NEW YORK STATE 
            DEPARTMENT OF ENVIRONMENTAL CONSERVATION

    Mr. Martens. Thank you, Chairman Capito, Ranking Member 
Carper and members of the subcommittee. Thank you for providing 
the opportunity for me to testify this afternoon.
    My name is Joseph Martens and I am the Commissioner of the 
New York State Department of Environmental Conservation. I am 
also Vice-Chair of the Board of Directors of RGGI Inc., which 
administers the Regional Greenhouse Gas Initiative, a program 
of nine northeastern States that uses market principles to 
reduce greenhouse gas emissions from the power sector.
    I thank the committee for providing me the opportunity to 
discuss the success we have had in reducing carbon emissions in 
New York, while creating jobs and keeping energy bills in 
check.
    I have spoken with many of my colleagues from other States 
across the Country and have heard many of them discuss their 
concerns about the rule. I recognize that each State faces 
different circumstances but I think in RGGI, we have a 
successful model for reducing emissions while creating jobs and 
reducing energy bills. Other States can use similar approaches 
to comply with the Clean Power Plan tailored to their own 
circumstances.
    RGGI was started in 2005 by a bipartisan group of 
Northeastern and Mid-Atlantic Governors. It sets a declining 
cap on emissions and allows the market to determine efficiently 
where the emission reductions will occur.
    In addition to their participation in RGGI, each of the 
RGGI States has aggressive energy efficiency and renewable 
energy programs. The RGGI cap collects the reductions from 
these efforts under a single emission cap and shares the carbon 
reductions from these programs are realized and accounted for.
    Proceeds from RGGI allowance options helps fund many of 
these initiatives, creating a virtual cycle of consumer 
benefits for taxpayers and ratepayers. Our program has been a 
resounding success.
    The State greatly exceeded the original 10 percent 
reduction target, achieving a 40 percent reduction by 2012. To 
achieve even greater reduction, the RGGI States acted to 
further reduce the cap to 50 percent below 2005 levels in 2020.
    We achieved this reduction in an economy that grew 8 
percent over the period from 2005 to 2013, adjusted for 
inflation. In New York, we have realized economic benefits from 
RGGI and associated programs, including creating jobs and 
reducing energy bills. For example, Governor Cuomo's New York 
Sun program has made New York fourth in the Nation for solar 
jobs.
    As of the end of 2014, we have committed more than $550 
million in proceeds from the auction of RGGI emission 
allowances to programs that will provide energy bills savings 
of over $1 billion or other benefits to over 130,000 households 
and 2,500 businesses.
    Beneficiaries of programs funded by RGGI proceeds include 
low income families and businesses. For example, two energy 
efficiency programs targeted specifically at income eligible 
families are providing 100,000 low and moderate income families 
with more than $80 million in cumulative energy bill savings.
    To those who say reducing emissions will cause electric 
rates for businesses to rise, we have actually reduced 
industrial electricity rates while reducing carbon emissions 
from 50 percent over the national average to 13 percent below.
    We have enjoyed similar outcomes across the RGGI region. An 
independent analysis undertaken by the highly respected 
Analysis Group concludes that the reinvestment of auction 
proceeds from the first 3 years of the program is reducing 
total energy bills in the RGGI regions by $1.3 billion, adding 
$1.6 billion to regional economy and creating an estimated 
16,000 jobs.
    Reducing emissions also provides substantial public health 
benefits, including saving lives, reducing illness, health care 
costs and lost work days. Our experience demonstrates that a 
group of States can substantially reduce emissions and grow the 
economy at the same time. Therefore, instead of asking whether 
we can afford to reduce that pollution, a more pertinent 
question is whether we can afford not to act now to reduce the 
emissions that are causing our climate to change.
    In New York, we are already experiencing the destructive 
effects of climate driven extreme weather. Three years ago, 
Hurricane Sandy decimated many communities and tens of 
thousands of homes in New York and New Jersey at a cost of $67 
billion. Over 70 lives were lost in the area struck by the 
storm. A year earlier, Hurricanes Irene and Lee caused 66 
deaths and $17 billion in damage. These storms 
disproportionately harmed low income families and small 
businesses in communities located in low lying areas most 
vulnerable to flooding.
    Our choice as a Nation is straightforward. We can invest in 
clean energy, creating jobs as a result at little or no net 
cost and reap the benefits of better health, lower health costs 
and reduced risk of climate change or we can ignore the science 
and expect more frequent storm events causing tens of billions 
of dollars in damages.
    To New York, the answer is clear. We have demonstrated it 
is possible to use energy more efficiently, stimulate economic 
growth, provide healthier air and reduce the potential damage 
from climate change.
    That concludes my testimony. Thank you.
    [The prepared statement of Mr. Martens follows:]
    
    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    
    Senator Capito. Thank you.
    Our final witness is Mary B. Rice, M.D., MPH, Instructor in 
Medicine, Harvard Medical School, Division of Pulmonary, 
Critical Care and Sleep Medicine. Welcome.

 STATEMENT OF MARY B. RICE, M.D., MPH, INSTRUCTOR IN MEDICINE, 
 HARVARD MEDICAL SCHOOL, DIVISION OF PULMONARY, CRITICAL CARE 
                       AND SLEEP MEDICINE

    Dr. Rice. My name is Dr. Mary Rice. I am an adult 
pulmonologist and critical care physician at Beth Israel 
Deaconess Medical Center and Harvard Medical School in Boston.
    I care for adults with lung disease, most of whom have 
asthma or emphysema. I also care for critically ill adults in 
the intensive care unit.
    My message is simple. Climate change is becoming the worst 
public health crisis of modern medicine. Hundreds of research 
studies have demonstrated that greenhouse gas emissions have 
already changed our climate over the past several decades, 
causing heat waves that last longer and happen more frequently, 
dangerous spikes in ground level ozone, increased wildfire 
activity and longer, more potent pollen seasons. These effects 
hurt American families.
    My physician colleagues and I are already seeing these 
health effects among our patients. The American Thoracic 
Society recently conducted a survey of our U.S. members who are 
doctors from all around the Country, caring for children and 
adults.
    We found that the vast majority of doctors said climate 
change is affecting their patients today. Let me describe just 
a few of the health effects that my colleagues and I see.
    Consider heat waves. Several doctors commented that their 
patients with emphysema, already struggling to breathe, cannot 
handle extreme heat. Studies have found that people with asthma 
and emphysema visit their doctors more often and get 
hospitalized more often during heat waves. The elderly, who may 
already be weakened by heart and lung disease, die during heat 
waves.
    Extreme heat also increases ozone to levels that are 
harmful to the lungs of people, not only people with asthma and 
emphysema but also the lungs of babies and young children, and 
even healthy adults. Ozone spikes during heat waves have been 
found to contribute to premature mortality.
    The hot conditions promoted by climate change favor forest 
fires and grassland fires, which are at a great cost to human 
health. During a heat wave in May 2014, for example, multiple 
wildfires broke out simultaneously in San Diego County, causing 
$60 million in damage.
    This estimate does not capture the damage to the health of 
families who were affected by those fires. Wildfires can travel 
great distances and release a mixture of toxins that are 
especially irritating to the lung making it harder for people 
to breathe.
    A colleague of mine in San Diego told me that he advised 
all his patients to stay inside and keep the air conditioning 
on. Is this the future we want for American families, one where 
it is not safe to go outside? There is no doubt that wildfires 
increase hospitalization for asthma in children and adults and 
for respiratory illness among the elderly.
    Climate change is also bad for people with seasonal 
allergies, about 30 percent of all Americans and for the 
roughly 10 percent of Americans with asthma. Warmer 
temperatures lengthen the pollen season because plants bloom 
earlier in the spring and also higher levels of carbon dioxide 
increase the amount of pollen that is produced.
    In the northern States of the U.S., pollen seasons have 
lengthened by more than 2 weeks to date than they were in 1995. 
They are also more powerful. Studies have found that when 
pollen levels are higher, people use more medications, visit 
their doctors more for allergies and emergency room visits for 
asthma among children and adults go up.
    One of my patients, a single mother with a teenage son, 
both of whom have severe asthma, called me on a weekly basis 
this spring because of trouble breathing. Between the missed 
days of school for her son and missed days of work for her, 
this allergy season was a disaster for her family.
    I am a physician and a researcher, but my most important 
job is my role as a mother to three children under the age of 
6. My 1-year-old son has had two emergency room visits and a 
hospitalization for respiratory illness.
    When my son develops a cough or wheeze, I am terrified 
because this could mean the next ambulance ride. When he is 
sick, I cannot go to the hospital and take care of my patients 
or my husband cannot work.
    We are more fortunate than many Americans, many of whom 
risk losing their job or struggle to pay for the next emergency 
room visit when they or a loved one suffers an acute 
respiratory illness. My son and every American deserves clean 
air.
    I have only described a few of the threats to the health of 
Americans from climate change. Experts predict that we can 
avoid the most frightening scenarios if we reduce greenhouse 
gas emissions and better yet, when we address climate change, 
we redeem immediate health benefits right here in the U.S. When 
we reduce greenhouse gas emissions, we also reduce air 
pollutants that trigger heart attacks, asthma and emphysema 
attacks, stroke and death.
    As a mom, a doctor and a representative of the American 
Thoracic Society, I favor taking firm steps to address climate 
change because I support clean air and a healthy future for all 
Americans.
    Thank you.
    [The prepared statement of Dr. Rice follows:]
    
    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
    
    
    Senator Capito. Thank you, Doctor.
    I want to thank you all. We will begin the questions and I 
will begin.
    Mr. Trisko, you mentioned in your remarks the impacts of 
the conservation building block of the Clean Power Plan and how 
elderly citizens and those on fixed incomes would probably be 
least likely to be the ones to benefit from that or be able to 
afford to make those changes.
    It says the Energy Information Administration projects that 
consume energy prices will go up by 4 percent by 2020 which 
seems rather low since we just had a 16 percent rise in our 
prices in West Virginia.
    How do you see these two converging, the rising price and 
the lack of the conservation and deficiency aspects of this 
Clean Power Plan for the elderly citizen and those on fixed 
incomes?
    Mr. Trisko. Let me first address the observation I offered 
with respect to senior citizens being least likely to benefit 
from the energy efficiency aspects of the Clean Power Plan.
    That observation derives from two facts. First is the 
payback period that is required to support major investments in 
energy efficiencies such as replacement of windows and heating 
and ventilating systems.
    Those payback periods typically are too long to be 
economically feasible for lower income senior citizens. It is 
also true in general for the population that American houses 
tend to be owned for a period of about 7 years on average.
    If you are a homeowner looking at a $10,000 window 
replacement project that is going to save a few hundred dollars 
a year on your energy bills, that payback period is not 
consistent with the period that typical homeowners expect to 
live in those dwellings.
    Second, I have heard this from senior utility executives as 
well. One of the difficulties in securing energy efficiency 
gains from lower income consumers is the quality of the housing 
stock, the relatively poor quality of the housing stock, will 
not support investments in fairly high cost energy efficiency 
upgrades such as windows and HVAC systems.
    Certainly lower cost options, the simple things such as 
better attic insulation, weather stripping and the like have 
short payback periods and are feasible. The magnitude of the 
energy efficiency investments EPA is projecting in the Clean 
Power Plan, which NERA estimates to cost some $500 billion for 
American consumers, those investments simply will not be made 
by the elderly and the lower income consumers.
    I hope that is responsive to your question.
    Senator Capito. Thank you.
    Mr. Alford, the Energy Information Administration recently 
concluded the Clean Power Plan could reduce the GDP by $1 
trillion. Based on the analysis that you just did and 
explained, could you reemphasize for us how you think that is 
going to impact low income or even minority citizens across the 
Country?
    Mr. Alford. It is going to be very critical and tragic. As 
far as the 2.1 million Black-owned businesses we represent, 
their customer base is going to whither and I think the quality 
of life is going to hurt in our communities. I think people 
will start to short-shrift moneys that would be used for health 
care or education. I think people who would resort to crime and 
violence because they are poor and broke would increase.
    I think it would hurt our communities severely.
    Senator Capito. A final question very quickly, Mr. Trisko. 
Part of the ARENA Act says we should not move forward with 
these regulations until all the legal aspects are settled. As 
you know, States are challenging this and will challenge when 
the final rule comes out.
    If States begin to make changes in the meantime, what kind 
of scenario does that present to you in terms of how States are 
going to be able to react not knowing whether the legal issues 
have been settled as yet?
    Mr. Trisko. Senator, you have hit upon one of the most 
desirable aspects of the ARENA Act. Let me put it in the 
context of the current situation that the electric utility 
industry faces.
    With respect to EPA's 2011 Mercury and Air Toxic Standard 
Rule or the MATS rule, the MATS rule is currently before the 
Supreme Court. A decision is expected shortly within a matter 
of days.
    It is possible the Supreme Court decision could result in 
vacating the rule. And yet, utilities, in order to comply with 
that rule already have retired dozens of power plants across 
the United States and are scheduled to retire even more over 
the course of the next year.
    Wouldn't it be advisable as a matter of public policy 
before implementation of the most expensive rule ever imposed 
on the electric utility sector, $9.5 billion a year, to know up 
front whether the rule is legal?
    Senator Capito. Thank you.
    To our Ranking Member, Senator Carper, a fellow West 
Virginian, I want to say welcome and also ask if he could do 
his opening statement and then do questions which I say most 
certainly you can.
    Senator Carper.

          OPENING STATEMENT OF HON. THOMAS R. CARPER, 
            U.S. SENATOR FROM THE STATE OF DELAWARE

    Senator Carper. Thank you, Madam Chairman. Thanks for 
holding the hearing.
    To all of our witnesses, it is great to see you and thank 
you for joining us, some of you not for the first time.
    Dr. Rice, I will think about your son and hope he grows up 
to be 101 or 102 years old and has a great life.
    One of the issues we always wrestle with here is, is it 
possible to have cleaner air, cleaner water and at the same 
time, have a strong economy. For most of my life after the 
Navy, I focused on job creation and job preservation and what 
we do to foster a nurturing environment for job creation and 
job preservation.
    If you go back to January 2009, the week Barack Obama and 
Joe Biden were sworn into office, that week 628,000 people 
filed for unemployment insurance. Think about that, 1 week in 
January 2009. In the last 6 months of 2008, we lost 2.5 million 
jobs. The first 6 weeks in 2009, we lost another 2.5 million 
jobs. That is 5 million jobs literally in a 12-month period of 
time.
    Since 2010, we have adopted new mercury regulations on 
power plants. We have adopted new carbon pollution or fuel 
economy standards on cars and trucks. We have also adopted 
across State air pollution standards. Since 2010, we have added 
762,000 manufacturing jobs and millions other jobs, but three-
quarters are manufacturing jobs.
    This leads me to believe that maybe it is possible to have 
cleaner air and cleaner water and at the same time actually do 
better by virtue of our economy and economic growth. I would 
ask that we keep that in mind.
    As the Chairman said, I was born in Beckley, West Virginia, 
a coal mining town. I grew up there in Roanoke and Danville, 
Virginia. Now I represent the State of Delaware, the lowest 
lying State in the Country. We see every day the effects of 
climate change and global warming. Sea level rise creeps up 
higher and higher on the east coast of my State. It is very, 
very real to us.
    For decades, the fear of the cost to combat climate change 
prevented any real action on this issue in Congress. Since 
coming here, I have tried to work with my colleagues on a 
climate compromise that would harness market forces to reduce 
carbon pollution and reduce the cost of compliance.
    As part of that compromise, I worked with Senator Byrd and 
a handful of other coal State Senators on language that would 
have provided more than $10 billion in incentives to support 
the deployment of clean coal power plants.
    This language, along with other language, intended to 
buffer impacts to the coal industry, was included in the Kerry-
Boxer bill which regrettably was not enacted into law. Instead, 
in coming to a compromise on climate change, Congress came to a 
stalemate. All the while, it is becoming clear that the price 
of inaction is much greater than the price of action.
    The EPA just released a comprehensive report that outlines 
the alarming truth that failure to act on climate change will 
result in dramatic costs for our environment and for our 
economy. Findings are pretty clear concerning low lying States 
like Florida, Delaware and others up and down the east coast.
    Without action on climate change, we are going to need to 
spend billions of dollars in this century to protect States 
from rising sea levels and extreme storms.
    The study also projects that inaction on climate change 
could lead to extreme temperatures and cause thousands of 
deaths throughout the northeast and the mid-Atlantic regions of 
our Country.
    At least it is clear to me that as each year passes without 
action, the more severe, the more costly and perhaps more 
irreversible the effects of climate change are becoming. For 
those of us who come from States already being impacted by 
climate change, I think the message is clear and that is, we 
can no longer afford inaction.
    Many States such as New York, represented here today and 
welcome, and Delaware have already taken action to reduce the 
emissions of the largest emitters of carbon pollution, power 
plant.
    As we will hear today, the economics of these States 
continue to grow at a faster rate than the States that have yet 
to put climate regulations in place. However, we need all 
States to do their fair share to protect the air we breathe and 
stem the tide of climate change.
    The EPA's Clean Power Plan attempts to do that. Under the 
Clean Power Plan, States are given their own carbon pollution 
targets and allowed to find the most cost effective way to find 
reductions. In fact, it sounds similar to the compromise I 
tried to foist on my colleagues here a number of years ago.
    I believe instead of undercutting the Clean Power Plan, we 
should be working in good faith with the agency to find ways to 
improve the regulation. For example, the regulation could be 
improved in several ways.
    One, to ensure early action, States are not penalized for 
being climate inefficiency leaders. Two, ensure that all clean 
energy, including nuclear, is treated equitably. Three, ensure 
we meet our carbon reduction goals.
    No compromise is ever perfect. The worse thing we can do is 
to do nothing while we try to find the perfect solution. We 
must act now while the ability to mitigate the most harmful 
impact is still within our grasp.
    The choice between curbing climate change and growing our 
economy is, as I have suggested here many times, a false one. 
Instead, we must act on curbing climate change in order to 
protect the future economy prosperity of our Country.
    [The prepared statement of Senator Carper follows:]

                  Statement of Hon. Thomas R. Carper, 
                U.S. Senator from the State of Delaware

    Thank you, Chairman Capito, for holding this hearing today. 
I want to welcome the witnesses to the subcommittee. In today's 
hearing we will focus on the costs and benefits of the 
Environmental Protection Agency's (EPA's) proposed carbon 
regulations, known as the Clean Power Plan.
    I was born in Beckley, West Virginia, and have spent most 
of my adult life in Delaware. As a native of a small town 
supported by coal mining, and now as a Senator representing the 
lowest-lying State in the Nation, I have a unique perspective 
on the balance that we must strike to make climate regulations 
work for each State.
    The debate on the costs and benefits of climate change 
action is not a new one. For decades, fears of the costs to 
combat climate change have prevented any real action on this 
issue in Congress.
    Since coming to the Senate I have tried to work with my 
colleagues on a climate compromise that would use market forces 
to reduce carbon pollution and reduce the costs of compliance. 
As part of a compromise, I worked with Senator Byrd and a 
handful of other coal-State Senators on language that would 
have provided more than $10 billion in incentives to support 
the deployment of clean coal power plants. This language--along 
with other language intended to buffer impacts to industry--was 
included in the Kerry-Boxer bill, which regrettably did not 
pass into law.
    Instead of coming to a compromise on climate change, 
Congress came to a stalemate. All the while, it is becoming 
clearer that the price of inaction is much greater than the 
price of action.
    The EPA just released a comprehensive report that outlines 
the alarming truth that failure to act on climate change will 
result in dramatic costs for our environment and for our 
economy. The findings are particularly concerning for low-lying 
coastal States like Delaware. Without action on climate change, 
we will need to spend billions of dollars in this century to 
protect our State from rising sea levels and extreme storms. 
The study also projects that inaction on climate change could 
lead to extreme temperatures and cause thousands of deaths 
throughout the Northeast and Mid-Atlantic regions.
    It is clear that as each year passes by without action the 
more severe, the more costly, and perhaps irreversible, the 
effects of climate change are becoming. For those of us from 
States that are already being impacted by climate change, the 
message is clear--we can no longer afford inaction.
    Many States, such as New York and Delaware, have already 
taken action to reduce the largest emitter of carbon 
pollution--power plant emissions. As we will hear today, the 
economies of these States continue to grow at a faster rate 
than the States that have yet to put climate regulations in 
place. However, we need all States to do their fair share to 
protect the air we breathe and stem the tide of climate change. 
The EPA's Clean Power Plan attempts to do just that.
    Under the Clean Power Plan, States are given their own 
carbon pollution targets and allowed to find the most cost-
effective way to find reductions. In fact, it sounds similar to 
the compromises I tried to find with my colleagues.
    I believe instead of undercutting the Clean Power Plan we 
should be working in good faith with the agency to find ways to 
improve the regulation. For example, the regulation could be 
improved to:
    (1) ensure early action States are not penalized for being 
climate and efficiency leaders;
    (2) ensure all clean energy is treated equitable; and
    (3) ensure we meet our carbon reduction goals.
    No compromise is ever perfect, but the worst thing we can 
do is to do nothing while we try to find the perfect solution. 
We must act now while the ability to mitigate the most harmful 
impacts is still within our grasp. The choice between curbing 
climate change and growing our economy is a false one. Instead, 
we must act on curbing climate change in order to protect the 
future economic prosperity of our Country. Thank you.

    Senator Carper. Madam Chairman, thank you for letting me 
give my statement and ask some questions.
    I was delayed today because we had a caucus lunch. Part of 
our caucus lunch discussion, you would be interested to know, 
was about the transportation bill, the 6-year transportation 
bill authored by Chairman Inhofe, Senator Boxer, Senator Vitter 
and myself which I think is going to be well received. We are 
excited about that. We had a discussion about that and I got 
here a little late and I apologize for that.
    I like to joke around a bit and I thought I was going to 
come in and say I had taken a call from the Pope but I am not 
Catholic and he rarely calls me. I must say I am impressed with 
this guy.
    I am impressed with him because I think he actually read 
the New Testament and has a real commitment to the least of 
these in our society. You know, when I was hungry, did you feed 
me? When I was thirsty, did you give me drink? When I was 
naked, did you clothe me? When I was sick in prison, did you 
come to visit me? He gets that and really calls on all of us to 
do the same.
    The other thing that he gets, for those of you familiar 
with Scripture, most of you probably more than me, is we have a 
moral obligation to make sure we have a planet with a decent 
quality of life. He believes and a lot of folks believe that 
there is a real serious problem here. We have a moral 
imperative to do something about it.
    We can talk about all these other studies and everything 
until the cows come home, but I would have us keep that thought 
in mind. Now I have a couple of questions.
    First, I ask unanimous consent to submit for the record two 
items. One is the latest report from the Lancet and the 
University College London Commission on Health and Climate 
Change entitled Health and Climate Change Policy, Responses to 
Protect Public Health.
    I would also ask unanimous consent to submit the EPA's 
peer-reviewed report entitled Climate Change, the United States 
Benefit of Global Action.
    Senator Capito. Without objection.
    [The referenced information follows:]
   
   [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
       
    Senator Carper. Thank you, Madam Chair.
    Dr. Rice, mother of three, you mentioned in your testimony 
the many different ways that climate change is already 
impacting the health of Americans. Who would you say are the 
most vulnerable to the health effects of climate change and who 
would have the most to gain from reductions in carbon 
pollution?
    Dr. Rice. Thank you for this question, Senator Carper.
    A number of groups are especially vulnerable to the health 
consequences of climate change. The ones I would identify would 
be the elderly because many of them already have chronic health 
conditions like heart and lung disease that makes them 
especially vulnerable to the health effects of high heat and 
high air pollution levels.
    Another very important group is low income people. People 
who have less income have less access to air conditioning 
during heat waves. There have been a number of studies looking 
at cities which suffer the most in some ways from extreme heat 
because of an island effect of the buildings in the cities. The 
poor neighborhoods of cities have been found to have the worse 
urban heat problem.
    People who have low income also are the same people who are 
often exposed more to higher levels of air pollution to begin 
with and have less access to health care and resources to help 
them manage climate change.
    There is a third group. I know I am short on time, but that 
is children. Asthma is especially prevalent in children. They 
are at high risk from all of the issues I identified, high 
heat, high ozone levels, air pollution from wildfire, and 
higher pollen levels. It is going to be a major consequence for 
American children.
    Senator Carper. One quick yes or no answer, if you will. In 
a study released last week by the Lancet, one of the world's 
oldest and best known German medical journals concluded that 
the impacts of climate change threaten to undermine the last 
half-century of gains in development and global health. Would 
you agree with this conclusion, yes or no?
    Dr. Rice. I certainly agree it is a major public health 
problem facing the planet.
    Senator Carper. Thank you.
    My time has expired. Thank you.
    Senator Capito. Thank you.
    Senator Fischer.
    Senator Fischer. Thank you, Madam Chairman and Ranking 
Member Carper.
    Mr. Cicio, Nebraska is a public power State. One hundred 
percent of our power is owned by the people of Nebraska. We are 
going to be hit especially hard by these regulations proposed 
in the Clean Power Plan. We are going to see rate increases 
that I believe will be substantial.
    What do you believe will be the impact of the increase we 
are going to have in the electricity rates on business 
operations like manufacturing? What will be the impact there?
    Mr. Cicio. All of these companies compete globally. There 
is almost no exception anymore. As I specifically alluded, the 
competition is very fierce. Companies win or lose business 
based on a cents a pound or pennies on a ton of product they 
make, so all of these costs are additive.
    When we get to the Clean Power Plan, it is not just the 
cost of the Clean Power Plan. Embedded in those electricity 
rates that give your State a problem, there is already the cost 
of PM2.5 and there is already the mercury rule cost.
    For us in industrials, there is already the industrial 
boiler MATS cost. Now there is the Clean Power Plan cost. On 
top of that is coming the ozone cost. It is a cumulative cost 
of doing business that our competitors do not have overseas.
    There is no way around higher costs and loss of 
competitiveness. Eventually it impacts jobs. Most of our jobs 
are middle class jobs.
    Senator Fischer. What is the impact then on American 
families? When we see these costs on businesses continue to 
increase, that has a direct cost on American families, correct? 
How would you say the ARENA Act will address some of these 
issues? What specifically is in the proposed legislation?
    Mr. Cicio. I would like to say from a commonsense 
standpoint, everyone in the Country that has followed this 
knows this is going to be litigated, 100 percent sure. There is 
no doubt about it.
    The EPA knows there are costs. The EPA does not want to 
hurt people by higher energy costs but this rule will. It is 
commonsense to say let us wait until we have this settled by 
the courts before States act to particularly shut down, as the 
EIA report of last month said, they are not going to shut down 
40,000 gigawatts, it is now 90,000 gigawatts of coal fired 
power plants prior to 2020. That will have a dramatic impact on 
increasing electricity costs.
    Senator Fischer. Thank you.
    Mr. Alford, I think most of us in this room take our 
ability to have electricity for granted. As you mentioned, 
there is a large number of Americans who are balancing whether 
they can afford an electric bill or pay rent or put food on the 
table for their families. As you mentioned, that is going to 
lead, I think, to those hard choices that people make and send 
some of them to the streets where they become homeless.
    Can you talk more about those tough choices that low income 
families have to make when they look at their electricity 
bills, why you think the costs are going to be driven up 
through this action by EPA, and why it will be so harmful?
    Mr. Alford. Dr. Rice is a mother of three. I am a father of 
six. I guess I am up to 11 grandchildren. My wife and I have 
been the godmothers and godfather of the very extended family.
    There are a lot out there who need help and we do all we 
can to connect them with some of our members who can create 
jobs for them, but it is an ongoing task. It is rough out 
there.
    I have children in Mobile, Atlanta and Los Angeles and it 
gets worse and worse and worse. Lord knows what happens to 
someone who does something wrong and gets into the judicial 
system, they will never have a job unless I create a job for 
them. It is very rough out there.
    I think we need a government that is sensitive to what is 
going on in these communities and will come up with some policy 
that builds a greater America and a more secure America and not 
put people on thin ice.
    Senator Fischer. Well said, well said. We all want clean 
air, we all want clean water, but we need to be aware of what 
these regulations will do to American families.
    Thank you, sir.
    Mr. Alford. I have been having discussions with the Omaha 
Black Chamber of Commerce too.
    Senator Fischer. Great. Thank you.
    Senator Capito. Senator Merkley.
    Senator Merkley. Thank you very much, Madam Chair.
    I wanted to follow up with Dr. Rice. The statistics that I 
have seen say that 78 percent of African-Americans live within 
30 miles of a coal-fired power plant and that an African-
American child is three times more likely to go to an emergency 
room for an asthma attack than a White child and twice as 
likely to die from an asthma attack.
    Is there a correlation or connection between the coal-fired 
power plants and the higher death rate for African-American 
children?
    Dr. Rice. The health effects of air pollution from coal-
fired power plants and other sources of particle air pollution 
are very well documented. It is now well established in the 
scientific community that air pollution causes increases in 
hospitalization for asthma, asthma attacks, and more medication 
to treat the asthma symptoms.
    There are also inequities in where people live and where 
the sources of air pollution are located. That is an issue 
called environmental justice. Communities of color and low 
income communities are disproportionately exposed to air 
pollution from coal-fired power plants and other sources of air 
pollution. Therefore, if we reduce greenhouse gas emissions, 
those communities stand the most to benefit locally, right 
there where the pollution is emitted.
    Senator Merkley. To summarize, you are saying yes, there is 
a connection between the coal-fired power plant pollution and 
the illnesses and deaths that are disproportionately occurring?
    Dr. Rice. The simple answer is yes. I do agree with you.
    Senator Merkley. It sounded like you were withdrawing the 
explanation of why that was indeed the case.
    You ended on the note that disproportionate benefits from 
changing the quality of the air go to those who are most 
affected and that would be those closest to sources of 
pollution. Public health and climate benefits from this law are 
estimated to be somewhere between $55 billion to $93 billion 
per year 15 years from now. That is compared to the estimates 
of $7.3 billion to $8.8 billion for the rule.
    On the order of 8 to 1 or 10 to 1 of health benefits versus 
cost, that seems a pretty good tradeoff for an investment when 
you can get an eightfold return. It is a huge quality of life 
issue. Would you share that opinion?
    Dr. Rice. Senator, I agree that the public health benefits 
of reducing greenhouse gas emissions are tremendous. They have 
been studied in a number of different ways, including the 
report you just cited that showed the public health benefits 
for mortality and other health issues far outweighed the 
implementation costs.
    That is just one study but there have been many other 
studies. There is one done by Jason West and a group at UNC, 
Chapel Hill, looking at just the mortality benefits of the 
better air quality from reducing greenhouse gas emissions, not 
even looking at all the health effects I talked about from 
climate change, but just the air pollution benefits that would 
be gained right away. They estimated that those mortality 
benefits would exceed abatement costs by 2030.
    Senator Merkley. In your testimony, you noted the impact of 
forest fires. This is particularly occurring out west where we 
have large coniferous forests that are a major part of our 
rural lifestyle with our lumber and timber industries.
    In the last 40 years, we have seen an increase in the fire 
season by about 60 days with a huge correlation of more acres 
of timber burning. In your testimony, you pointed out the 
health impacts of that smoke and the smoke plumes basically 
traveling across the Nation.
    Dr. Rice. Senator, I can give an example. Wildfire smoke 
can travel very far distances. There are health effects for 
communities right there where the fires take place, but there 
are also respiratory and heart health effects in very distant 
places.
    The wildfires that affected Russia some years ago, those 
plumes traveled the distance from Chicago to San Francisco, 
that equivalent difference. That means that thousands and 
thousands of people in the regions of wildfires are 
experiencing health effects due to the reduced air quality.
    Senator Merkley. Since the prevailing winds go from west to 
east, when our forests are burning out in Oregon, California 
and Washington State, the rest of the Nation is experiencing 
those impacts. There is also an impact on our rural economy 
because when we lose both to fire and pine beetles, and I 
realize that is not your expertise, but with the warmer 
winters, the pine beetles are doing very well and the timber 
not so well.
    I am over my time, so thank you very much for your 
feedback.
    Senator Capito. Thank you.
    I would like to turn it over to the Chairman of our full 
committee, Chairman Inhofe.
    Senator Inhofe. Thank you, Madam Chairwoman.
    I remember when we had the first appointed Director of the 
EPA, Lisa Jackson in the room. It was during the COP in 
Copenhagen. I asked her, if we are to pass the legislation that 
has been proposed here, let us keep in mind it started way back 
in 1997 when we passed the Byrd-Hagel rule by 95 to zero, that 
if you come back from Rio de Janeiro or one of these places 
with a treaty that either hurts our economy or does not require 
the same thing from China and other countries, then we would 
not ratify it. Consequently, they never put it forward for 
ratification.
    I said if we were to pass either by regulation or by 
legislation these reductions, is this going to have the effect 
of lowering CO2 emissions worldwide? Her answer was 
no, because it only affects us here in the United States. This 
is not where the problem is. The problem is in India, China, 
Mexico and other places.
    In fact, would you say, Mr. Cicio, that it would actually 
have the effect of increasing CO2 worldwide 
emissions if we were to unilaterally reduce our emissions here 
by an amount that is going to be driving our manufacturers 
overseas, where do they go, they go to places where they have 
the least restrictions. Am I missing something there?
    Mr. Cicio. No, you are not missing anything. As a matter of 
fact, I testified before the House Energy and Power 
Subcommittee, and one of the key points I made is if we want to 
be serious about reducing global greenhouse gas emissions, the 
single most important thing we need to do is increase the 
manufacturing of products in the United States versus China, 
for example.
    Senator Inhofe. Exactly.
    Mr. Cicio. When China produces goods, they emit 300 percent 
more CO2 than we do here. If energy cost goes up 
here, then it is going to result in more imports of these 
energy intensive products. As a reminder, 70 percent of our 
manufacturing imports is from one country, China.
    Senator Inhofe. That is right.
    Mr. Alford, it is good to see you again. I asked for the 
printed copy of your study. The key findings are fascinating. 
It concentrates on the regressive nature of this type of 
legislation or rule. Is that right?
    Mr. Alford. That is absolutely correct, sir.
    Senator Inhofe. I have not seen it done specifically like 
this before, so this is something we will use. Was this done 
for you by an outside group?
    Mr. Alford. It was done by Dr. Roger Bezdek of Management 
Information Systems. We do a study about every two or 3 years 
with that group. They are very on the money.
    Senator Inhofe. I appreciate that.
    Mr. Trisko, I think you made a vague reference to a study 
of decisions to middle or low income people. I asked to get the 
written copy. Could you elaborate a bit on that? I do not think 
you had a chance to do that in your opening statement.
    Mr. Trisko. The study I attached to the statement is one of 
a long running series going back to the time of the Kyoto 
Protocol. We wanted to know what American families spent on 
energy defined as residential utilities and gasoline. I have 
been updating that study more or less on annual basis ever 
since. We found, as a general matter, the percentage of after 
tax income that American households spend on energy has more 
than doubled over the course of the last 10 to 15 years.
    You mentioned the regressive aspects of energy costs and 
energy price increases. The study I have attached to my 
statement today looks in particular at the percentage of after 
tax income for energy spent by households with gross incomes of 
$30,000 or less. That is about 30 percent of our population. 
Those households are spending 23 percent of their after tax 
income on energy.
    Senator Inhofe. Of their expendable income?
    Mr. Trisko. Twenty-three percent of their after tax income 
goes to residential utilities and gasoline. That compares with 
an average of 7 percent for households earning more than 
$50,000 a year, so it is three times greater for the low income 
category of $30,000 or less.
    The impact of energy price increases is three times greater 
on those households than it is for households making $50,000 or 
more per year.
    Senator Inhofe. That is good and is almost exactly what you 
are saying, Mr. Alford, that it is regressive in that respect.
    Mr. Alford. Yes, it is. You brought up asthma. If you look 
at the Mayo Clinic, there is no prevention for asthma and there 
is no correlation of asthma and air. Asthma has been increasing 
even though through the Clean Air Act, we have been good 
stewards and decreasing and decreasing ozone and all the 
emissions, asthma continues to rise. No one knows why.
    There is this big false projection that global warming 
causes asthma. We do not know what is causing asthma. Most of 
the people who have it get out of it by the time they are 
adults because their lungs and bodies are strong enough to 
fight it off.
    I am getting very sick of people saying asthma and dirty or 
global warming. It is a myth.
    Senator Inhofe. Thank you, Mr. Alford.
    My time has expired.
    [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 President's climate 
agenda with a particular focus on its impacts to American 
businesses and families. There is no doubt, and wide reaching 
consensus that the price of power would increase under the 
President's latest regulations, with primary attribution to the 
so-called Clean Power Plan.
    Despite the rhetoric from President Obama and his EPA, his 
domestic climate agenda has nothing to do with improving the 
environment or the lives of American citizens. His carbon 
regulations for new, modified and reconstructed, and existing 
power plants are nothing more than high-cost, unprecedented 
power grabs. The Clean Power Plan alone would cost $479 
billion, result in double digit electricity price increases in 
43 States and reduce grid reliability. Some regions would not 
only be dealing with cascading outages and voltage collapse, 
but paying for long-term investments in power generation that 
is prematurely shut down.
    Although these policies make up the core components of 
President Obama's climate agenda they would have a negligible 
impact on the environment--impacts the EPA did not even bother 
to measure--and would be rendered completely pointless by 
business as usual in India in China. Further, both of these 
countries stand to inherit the economic activity and jobs that 
would be shipped overseas, which has the projected result of 
actually increasing overall emissions.
    When it comes to the climate science this President relies 
on, I would like to remind everyone that he is using the same 
science from the same institution that was caught up in the 
Climategate scandal of 2009. The UK Telegraph described 
Climategate as ``the ``worst scientific scandal of our 
generation'' when it was discovered scientists were 
manipulating temperature data to produce the outcomes they 
wanted.
    When it comes to health benefits, much of what the EPA 
relies on comes from benefits associated with reductions in 
particulate matter (PM), not carbon. Further, PM is already 
regulated under the Clean Air Act and set at a standard the EPA 
itself identifies as safe.
    When it comes to the legality of this proposal, it is on 
equally questionable ground. The EPA relies on a reimagined 
interpretation of the Clean Air Act that is counter to the 
law's historical application and extends far beyond what 
Congress ever intended.
    It makes sense that 32 States oppose the President's 
climate proposals and 16 have already challenged the EPA in 
court. While preliminary challenges have hit a minor, technical 
speed bump, once the rule is final and the courts get to the 
merits of these legal challenges, the Clean Power Plan will not 
withstand judicial scrutiny. It does not make sense for States 
to spend limited resources planning out how to comply with a 
rule that we know will ultimately be stricken down.
    As an original cosponsor to the Clean Air Act Amendments of 
1990, I know what good environmental policy looks like. It 
balances environmental improvements with economic growth. It 
improves our standard of living while strengthening access to 
the American dream. It builds on existing partnerships and 
opens up the doors for new ones. Most importantly, it comes 
from Congress.
    Good environmental policy looks nothing like the Clean 
Power Plan or any of the climate regulations this 
Administration has proposed. I thank Senator Capito for 
drafting S. 1324, the Affordable Reliable Electricity Now Act 
of 2015 to address these problems. Her bill sends the EPA back 
to the drawing board and provides a host of new requirements 
that will ensure future proposals actually improve the 
environment in a balanced and healthy way. Her bill increases 
transparency, protects the role of States, and provides 
certainty to the regulated community. Finally, it protects 
energy consumers--from industrial manufacturers to the kitchen 
table--from unnecessary costs and unjustified price increases.
    I have no doubt this Country will continue down the path of 
an ever improving and healthier environment, but these gains 
will be achieved through American ingenuity and innovative 
advancements, not Government mandates.
    I thank the witnesses for being here today and I look 
forward to your testimony.

    Senator Capito. Thank you.
    Senator Markey.
    Senator Markey. Thank you very much.
    Dr. Rice, you are here from Harvard Medical School. People 
are getting sick, are they not? They are not getting sick the 
way Harry Alford is getting sick. They are really getting sick, 
aren't they?
    Maybe you can bring to us a little bit of your information 
about the increased hospitalizations, the respiratory related 
diseases and all of the things that are actually implicated in 
having this additional pollution in our atmosphere. Can you 
talk a bit about how it is impacting especially children in our 
Country?
    Dr. Rice. Thank you, Senator Markey.
    This is certainly an area where I feel I have a lot to add 
to the discussion because I am a lung doctor, I take care of 
patients with lung disease and I also study air pollution when 
I am not taking care of patients.
    In addition to my personal observations as a doctor, I see 
patients come to see me more often because the pollen level is 
worse or the ozone levels in Boston sometimes get very high on 
very hot days.
    We also have the observations of the physicians of the 
American Thoracic Society and the survey I mentioned. Of the 
doctors completing the survey, the vast majority of them 
commented they have personally observed that their patients' 
lung function is worse and their symptoms are worse during high 
air pollution days.
    Senator Markey. There are real implications for the 12 
million Americans who already have respiratory illnesses?
    Dr. Rice. Certainly. We can look back at the incredible 
success story of the Clean Air Act. The reductions in air 
pollution as a result of the Clean Air Act have been 
astounding. We have really come a long way.
    When we look back, researchers look back at the health 
benefits of the Clean Air Act, they have been astounding, not 
just for respiratory illness or asthmatic symptom control, but 
also mortality and heart disease.
    Senator Markey. Earlier in your testimony, you mentioned 
your own son who has a respiratory illness. What can additional 
pollution that we send up, uncontrolled mean for him and for 
those others of millions of victims across the Country?
    Dr. Rice. There are a variety of sources of air pollution. 
One is the power plants through the burning of greenhouse 
gases. There is also traffic and other things.
    The reality is that if we do not do anything about 
greenhouse gas emissions, the EPA report looked at just that 
piece of the pie and found that ozone levels will increase, 
predict that we will actually have increases in ozone whereas 
ozone levels have actually declined and we have experienced 
health benefits as a result of those gains.
    Senator Markey. Thank you for putting that out there. There 
is real sickness, not metaphorical sickness, that is occurring 
because of global warming.
    Mr. Martens, you are here representing New York and one of 
the RGGI States, the Regional Greenhouse Gas Initiative States, 
all of New England, those six States, New York, Maryland and 
Delaware, nine States that banded together.
    Over the last 7 years, Massachusetts has actually seen a 40 
percent reduction in the greenhouse gases that we are sending 
up while we are seeing a 22 percent growth in our economy.
    Can you talk a bit about that virtuous cycle that seems to 
elude the observation of those who are critical of our ability 
to be able to increase the health of individuals and the 
economy simultaneously?
    Mr. Martens. As I said in my testimony, the RGGI experience 
has been an extraordinarily successful one. We had an 
independent study done by the Analysis Group that quantified 
the benefits over a 3-year period from 2009 to 2011.
    There was $1.3 billion in reductions in bills over the RGGI 
region; $1.6 billion in extra or incremental economic activity. 
It has been an extraordinarily positive experience, all the 
while, as you said, the region has experienced economic growth. 
We have reduced bills for low and moderate income families.
    Senator Markey. Say that again. You have reduced the 
electricity bills for low and moderate income people?
    Mr. Martens. Yes. The cumulative benefit to just New York 
low and moderate income bill payers has been $60 million to 
date through the first quarter of this year. Those benefits 
will continue on into the future because New York has specified 
income eligible ratepayers in two of its programs.
    The beauty of the program is that States have the 
flexibility to target the revenue from the sale of those 
allowances to a variety of programs. Industrial customers can 
benefit; low and moderate income ratepayers can benefit; 
businesses and your average homeowners can benefit. It has been 
a tremendous success story.
    Senator Markey. It is my understanding, Mr. Martens, that 
under the proposed rulemaking, for example, New Jersey or 
Pennsylvania could join our Regional Greenhouse Gas Initiative. 
They can plug into an already existing system that is working, 
that is lowering costs for low and moderate income, lowering 
the amount of greenhouse gases while seeing tremendous growth 
in our GDP. I think there is a reason to be very optimistic.
    Listening to the Pope's admonitions to us that we should be 
the global leader on this, we can use market forces to 
accomplish the goal while still enjoying tremendous economic 
growth and taking care of the poor and the moderate income 
people in our Country.
    Mr. Martens. I agree with you entirely, Senator. I think 
there are places around the Country that could benefit from 
that model. It may not be identical to the RGGI model but 
certainly States cooperating makes great sense because the 
efficiencies of dealing with multiple States and energy systems 
that cross State boundaries has obviously been a great 
advantage in the RGGI States. I think it could be elsewhere 
also.
    Senator Markey. I am afraid too many people are just 
pessimistic in general. They are just not optimistic about our 
ability as Americans to be the global leader, to use new 
technologies, to invest in the future, protect young people and 
our economy at the same time. Unfortunately, they harbor a 
great doubt about our Country's ability to do that.
    I thank the two of you for your testimony because you point 
out the problems and the solutions. You all have done it in a 
way which I think should really give people some hope.
    Thank you, Madam Chair.
    Senator Capito. I think that concludes our hearing. I want 
to thank the witnesses for bringing forth some great 
information and facts and lots for us to think about. I 
appreciate you all taking time today to be with us.
    I want to thank my Ranking Member.
    With that, we will conclude the hearing. Thank you.
    [Whereupon, at 3:19 p.m., the subcommittee was adjourned.]

                                 [all]