[House Report 114-171]
[From the U.S. Government Publishing Office]


114th Congress }                                          {  Report
                        HOUSE OF REPRESENTATIVES
 1st Session   }                                          {  114-171

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



 
                    RATEPAYER PROTECTION ACT OF 2015

                                _______
                                

 June 19, 2015.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

  Mr. Upton, from the Committee on Energy and Commerce, submitted the 
                               following

                              R E P O R T

                             together with

                            DISSENTING VIEWS

                        [To accompany H.R. 2042]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Energy and Commerce, to whom was referred 
the bill (H.R. 2042) to allow for judicial review of any final 
rule addressing carbon dioxide emissions from existing fossil 
fuel-fired electric utility generating units before requiring 
compliance with such rule, and to allow States to protect 
households and businesses from significant adverse effects on 
electricity ratepayers or reliability, having considered the 
same, report favorably thereon without amendment and recommend 
that the bill do pass.

                                CONTENTS

                                                                   Page
Purpose and Summary..............................................     2
Background and Need for Legislation..............................     2
Hearings.........................................................    19
Committee Consideration..........................................    21
Committee Votes..................................................    21
Committee Oversight Findings.....................................    26
Statement of General Performance Goals and Objectives............    26
New Budget Authority, Entitlement Authority, and Tax Expenditures    26
Earmark, Limited Tax Benefits, and Limited Tariff Benefits.......    26
Committee Cost Estimate..........................................    26
Congressional Budget Office Estimate.............................    26
Federal Mandates Statement.......................................    27
Duplication of Federal Programs..................................    27
Disclosure of Directed Rule Makings..............................    28
Advisory Committee Statement.....................................    28
Applicability to Legislative Branch..............................    28
Section-by-Section Analysis of the Legislation...................    28
Changes in Existing Law Made by the Bill, as Reported............    29
Dissenting Views.................................................    30

                          PURPOSE AND SUMMARY

    H.R. 2042, the ``Ratepayer Protection Act,'' was introduced 
by Rep. Ed Whitfield (R-KY) on April 28, 2015, together with 
Rep. Sanford Bishop (D-GA), Rep. Morgan Griffith (R-VA), and 
Rep. Collin Peterson (D-MN). The legislation addresses the 
Environmental Protection Agency's (EPA) pending carbon dioxide 
regulations for existing fossil fuel-fired electric utility 
generating units under section 111(d) of the Clean Air Act 
(CAA). Key provisions of H.R. 2042 include the following:
     The bill would extend the compliance dates for any 
final regulation to allow for completion of judicial review 
before States or other affected entities would be required to 
comply with the rule.
     The bill also would provide that a State would not 
be required to implement a state or Federal plan under any 
final rule if the State's Governor determined it would have a 
significant adverse effect on electricity ratepayers or 
reliability.

                  BACKGROUND AND NEED FOR LEGISLATION

    EPA's proposed carbon dioxide (CO2) rule for existing 
fossil fuel-fired power plants, also referred to by the agency 
as its ``Clean Power Plan'' or ``111(d) Rule,'' was announced 
in June 2014.\1\ The rule is being advanced pursuant to the 
President's Climate Action Plan and a Presidential Memorandum 
issued on June 25, 2013.\2\ EPA plans to finalize the rule 
later this summer.
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    \1\The proposed rule, which is entitled ``Carbon Pollution Emission 
Guidelines for Existing Stationary Sources: Electric Utility Generating 
Units,'' was published in the Federal Register on June 18, 2014. See 79 
Fed. Reg. 34830 (June 18, 2014). The proposal does not apply to 
Vermont, the District of Columbia, tribal lands, or U.S. territories. 
Id. at 34895, n. 258. On October 8, 2014, EPA announced a supplemental 
proposed rule for Indian Country and U.S. territories. See 79 Fed. Reg. 
65482 (Nov. 4, 2014).
    \2\The President's Climate Action Plan issued in June 2013 is 
available at https://www.whitehouse.gov/sites/default/files/image/
president27sclimateactionplan.pdf. The Presidential Memorandum is 
available at https://www.whitehouse.gov/the-press-office/2013/06/25/
presidential-memorandum-power-sector-carbon-pollution-standards.
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    The EPA's proposal is unprecedented in the history of the 
agency. In the rule, EPA asserts authority under a rarely 
invoked provision of the CAA, known as section 111(d), to set 
mandatory CO2 ``goals'' for each State's power sector.\3\ 79 
Fed. Reg. 34830. For each State, EPA specifically proposes a 
unique ``interim goal'' for the period 2020 to 2029, and a 
``final goal'' beginning in 2030.\4\ Id. at 34957-34958. While 
EPA describes the rule as ``flexible,'' the ``goals'' would be 
fixed and could not be changed. Id. at 34835.
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    \3\The mandatory ``goals'' derived by EPA for each State are based 
on four ``building block'' measures including: (1) making heat rate 
improvements at coal-fired power plants, which EPA assumes for each 
State could result on average in a six percent CO2 emissions reduction 
from the affected units; (2) shifting away from coal-fired generation 
and operating the State's natural gas combined cycle plants at a 
seventy percent capacity factor; (3) shifting away from coal-fired 
generation and expanding use of existing nuclear and renewable energy 
generation; and (4) reducing the use of electricity through energy 
efficiency programs that EPA assumes for each State could improve 
electricity savings by up to 1.5 percent annually. 79 Fed. Reg. 34830, 
34855-34892.
    \4\EPA describes these as ``rate-based goals.'' 79 Fed. Reg. at 
34837. As an alternative, EPA also has proposed that a State could 
convert its assigned ``rate-based goals'' into an equivalent ``mass-
based goal.'' Id. at 34953; see also 79 Fed. Reg. 67406 (Nov. 13, 
2014).
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    To comply, States would be required to submit plans to EPA 
for approval. 79 Fed. Reg. 34951-34954. EPA directs States to 
consider including in their plans a ``mix of strategies'' and 
programs such as:

        Demand-side energy efficiency programs; Renewable 
        energy standards; Efficiency improvements at plants; 
        Dispatch changes; Co-firing or switching to natural 
        gas; Construction of new Natural Gas Combined-Cycle 
        plants; Transmission efficiency improvements; Energy 
        storage technology; Retirements; Expanding renewables 
        like wind and solar; Expanding nuclear; Market-based 
        trading programs; Energy conservation programs\5\
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    \5\See http://cleanpowerplanmaps.epa.gov/CleanPowerPlan/. EPA also 
encourages States to consider cap-and-trade programs. See e.g., 79 Fed. 
Reg. at 34834, 34848, 34880, 34900.

    Under the rule, State plans would be due within only 
thirteen months of a final rule, with a possible 1-year 
extension for individual State plans and 2-year extension for 
plans that include a multi-State approach. 79 Fed. Reg. at 
34951-53. Once approved, the plan would become federally 
enforceable and could not be revised without approval from the 
EPA Administrator. Id. at 34844, 34954.
    If a State fails to submit a plan, or EPA finds a submitted 
plan unsatisfactory, the agency would impose a Federal plan, a 
model of which EPA has announced it will propose this summer 
and finalize in the summer of 2016. 79 Fed. Reg. at 34954. EPA 
has indicated the Federal plan would apply directly to electric 
utility generating units in States that do not develop a 
sufficient State plan.\6\
---------------------------------------------------------------------------
    \6\See EPA Notice Regarding ``SPAR Panel #47: Federal Plan for 
Regulating Greenhouse Gas Emissions from Electric Generating Units'' 
available at http://www.epa.gov/rfa/cpp-federal-plan.html (``The 
affected EGUs in the [S]tates that do not develop a sufficient [S]tate 
plan as part of the emission guidelines are the entities that will be 
subject to this rulemaking'').
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    While EPA projects that nationwide by 2030 this rule would 
achieve CO2 emission reductions from the power sector of 
approximately 30 percent from CO2 levels in 2005 (see 79 Fed. 
Reg. 34832), the EPA used 2012 data to determine State goals. 
79 Fed. Reg. at 34895-34896. The EPA does not project that 
these reductions would have any measurable impact on global 
temperatures, sea rise levels, or other climate indicators.\7\ 
Also, based on Energy Information Administration (EIA) 
estimates, the emissions reductions in the United States would 
be offset by increased CO2 emissions abroad.\8\
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    \7\In response to an Additional Question for the Record (QFR) 
following the June 19, 2014 hearing, EPA Acting Assistant Administrator 
McCabe stated that EPA did not model the impacts of the proposed rule 
on global temperatures or sea rise levels. See QFR Response available 
at http://docs.house.gov/meetings/IF/IF03/20140619/102346/HHRG-113-
IF03-Wstate-McCabeJ-20140619-SD003.pdf. In the proposed 111(d) rule, 
EPA indicated that the CO2 reductions under this rule would be 
approximately half of the reductions under the 2012-2016 Light Duty 
Vehicle Rule and one-quarter of the reductions under the 2017-2025 
Light Duty Vehicle rule for which EPA did model such impacts. In 
particular, EPA states in the proposed rule:

      Although the GHG emissions reductions projected for this 
      proposal are large (the highest estimate is reductions of 
      555 MMT of CO2 in 2030--see Table 10 above), the EPA 
      evaluated larger reductions in assessing this same issue in 
      the context of the light duty vehicle GHG emission 
      standards for model years 2012-2016 and 2017-2025. There 
      the agency projected emission reductions roughly double and 
      four times those projected here over the lifetimes of the 
      model years in question.
[citation omitted].

    For the 2012-2016 vehicle rule, EPA projected global mean 
temperature will be reduced by 0.006-0.015 +C and global mean sea level 
rise will be reduced by 0.06-0.14 cm by 2100 (see Regulatory Impact 
Analysis (RIA) at p. 7-124 available at http://epa.gov/otaq/climate/
regulations/420r10009.pdf). For the 2017-2025 rule, EPA projected 
global mean temperature will be reduced by 0.0074--0.0176 +C and global 
mean sea level rise will be reduced by 0.071-0.159 cm by 2100 (see RIA 
at p. 6-115 available at http://epa.gov/otaq/climate/documents/
420r12016.pdf).
    \8\In the coming decades, more than two-thirds (sixty-nine percent) 
of the World's energy-related CO2 emissions will come from non-OECD 
countries according to EIA. See International Energy Outlook 2013 
available at http://www.eia.gov/forecasts/ieo/pdf/0484(2013).pdf. 
According to the EIA, non-OECD countries' CO2 emissions are expected to 
grow to 120 percent above 2005 levels by 2040. See ``EIA world carbon 
dioxide emissions by region, Reference case'' available at http://
www.eia.gov/oiaf/aeo/tablebrowser/#release=IEO2013&subject=3-
IEO2013&table=10-IEO2013&region=0-0&cases=Reference-d041117.
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    The agency has received over 4.3 million comments on the 
proposed rule. According to a summary of comments submitted by 
States: ``32 states made legal objections, 28 raised 
significant concerns regarding compliance costs and economic 
impacts, 32 warned of electricity reliability problems, and 34 
states objected to EPA's rushed regulatory timelines.''\9\ 
Electric utilities, as well as numerous national, regional, and 
State organizations or other entities have also raised broad 
concerns relating to the rulemaking.\10\
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    \9\See U.S. Chamber of Commerce, Institute For 21st Century Energy, 
January 2015 report, at p. 3.
    \10\These comments are available at http://www.regulations.gov/
#!docketDetail;D=EPA-HQ-OAR-2013-0602.
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Potential legal challenges

    EPA's rule is widely viewed as raising significant legal 
issues and any final rule is expected to be challenged. There 
are numerous legal issues that have been raised, including 
threshold issues about whether EPA has authority at all to 
proceed with the rulemaking under section 111(d) of the CAA.
    In particular, section 111(d) has had only limited 
application and scope and has been applied to only a few 
emissions sources, primarily in the 1970s and 1980s.\11\ 
President Obama, however, directed EPA to regulate greenhouse 
gas emissions from existing power plants under this 
provision.\12\ EPA Acting Assistant Administrator Janet McCabe 
testified at a June 19, 2014 hearing before the Subcommittee on 
Energy and Power that the proposed rule ``is completely within 
the four corners of 111(d).''
---------------------------------------------------------------------------
    \11\Section 111(d) of the Clean Air Act authorizes the EPA 
Administrator to prescribe regulations establishing a procedure under 
which States submit to the Administrator a plan establishing standards 
of performance (also known as ``Existing Source Performance 
Standards'') for certain existing sources and certain air pollutants. 
See 42 U.S.C. Sec. 7411(d). Over the past 40 years, the agency has 
regulated pollutants under CAA section 111(d) from only five source 
categories: phosphate fertilizer plants (1977) (fluorides), sulfuric 
acid plants (1977) (acid mist), Kraft pulp mills (1979) (total reduced 
sulfur), primary aluminum plants (1980) (fluorides), and municipal 
solid waste landfills (1996) (landfill gas). See 79 Fed. Reg. at 34844, 
n. 43. EPA has also regulated sewage sludge incinerators under section 
111(d) in conjunction with CAA section 129. Id. at 34845, n. 44.
    \12\See Presidential Memorandum dated June 25, 2013 available at 
http://www.whitehouse.gov/the-press-office/2013/06/25/presidential-
memorandum-power-sector-
carbon-pollution-standards.
---------------------------------------------------------------------------
    Despite this assertion, the express language of the CAA, as 
set forth in the U.S. Code, provides that EPA does not have the 
legal authority to regulate CO2 emissions from existing power 
plants under section 111(d). Specifically, section 111(d) 
excludes the regulation of any pollutant emitted from a source 
category that is being regulated under section 112 of the CAA. 
See 42 U.S.C. Sec. 7411(d)(A).\13\ Because EPA now regulates 
electric utility generating units as sources under CAA section 
112 pursuant to the agency's 2012 ``Mercury and Air Toxics'' 
rule,\14\ this language prohibits EPA from setting standards 
for these sources of emissions under section 111(d).
---------------------------------------------------------------------------
    \13\Section 111(d)(A)(1) provides:
---------------------------------------------------------------------------
      (d) Standards of performance for existing sources; 
      remaining useful life of source (1) The Administrator shall 
      prescribe regulations which shall establish a procedure 
      similar to that provided by section 7410 of this title 
      under which each State shall submit to the Administrator a 
      plan which (A) establishes standards of performance for any 
      existing source for any air pollutant (i) for which air 
      quality criteria have not been issued or which is not 
      included on a list published under section 7408(a) of this 
      title or emitted from a source category which is regulated 
      under section 7412 of this title but (ii) to which a 
      standard of performance under this section would apply if 
      such existing source were a new source, and (B) provides 
      for the implementation and enforcement of such standards of 
      performance. Regulations of the Administrator under this 
      paragraph shall permit the State in applying a standard of 
      performance to any particular source under a plan submitted 
      under this paragraph to take into consideration, among 
      other factors, the remaining useful life of the existing 
      source to which such standard applies.
See Sec. 42 U.S.C. 7411(d)(A).
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    \14\See National Emissions Standards for Hazardous Air Pollutants 
From Coal- and Oil-Fired Electric Utility Steam Generating Units and 
Standards of Performance for Fossil-Fuel-Fired Electric Utility, 
Industrial-Commercial-Institutional, and Small Industrial-Commercial-
Institutional Steam Generating Units, 77 Fed. Reg. 9304 (Feb. 16, 
2012).
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    EPA maintains that, notwithstanding the express language 
set forth in the U.S. Code, the agency ``may reasonably 
construe the provision to authorize regulation of [greenhouse 
gases] under CAA section 111(d).''\15\ EPA asserts its 
interpretation is permissible due to ambiguities that stem from 
``apparent drafting errors that occurred during enactment of 
the 1990 Clean Air Act Amendments, which revised section 
111(d).''\16\ Specifically, EPA contends that a conflicting 
Senate provision that remained in the legislation enacted by 
Congress creates ambiguities that allow for the current 
proposed regulation because the language appears to exclude 
only section 112 pollutants from regulation under section 
111(d), not section 112 sources as provided in the U.S. Code 
referenced above. Although EPA notes the presence of this 
language appears to be a ``drafting error,'' because both 
provisions are presented in the Statutes at Large\17\ EPA 
argues that ``[u]nder these circumstances, the EPA may 
reasonably construe the provision to authorize the regulation 
of GHGs under CAA section 111(d).''\18\
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    \15\See 79 Fed. Reg. at 34853. Nevertheless, EPA notes that ``the 
pertinent language [in the U.S. Code] in CAA section 111(d) would 
exclude the regulation of any pollutant which is `emitted from a source 
category which is regulated under section 112.''' Id.
    \16\Id. See also 70 Fed. Reg. 15994, 16031 (Mar. 29, 2005) (``While 
it appears that the Senate amendment to section 111(d) is a drafting 
error and therefore should not be considered, we must attempt to give 
effect to both the House and Senate Amendments as they are both part of 
the current law.'').
    \17\Although the provisions at issue occur some 100 pages apart in 
the Statutes at Large, they have been presented as bracketed text in 
statutory compilations used by EPA to show the apparent conflict, with 
CAA Section 111 (d)(1)(A) reading: ``. . . establishes standards of 
performance for any existing source for any air pollutant (i) for which 
air quality criteria have not been issued or which is not included on a 
list published under section 108(a) [or emitted from a source category 
which is regulated under section 112] [or 112(b)]. . . .'' An 
accompanying footnote on the brackets states ``The amendments, made by 
section 108(g) and 302(a) of P.L. 101-549, appear to be duplicative or 
conflicting; both, in different language, change the reference to 
section 112.'' See http://legcounsel.house.gov/Comps/
Clean%20Air%20Act.pdf. 
    \18\See 79 Fed. Reg. at 334853.
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    Despite EPA's position, the evidence indicates Congress 
intended the language in the U.S. Code to be the law. Committee 
staff has reviewed the legislative history relating to the 1990 
Amendments to the CAA. The legislative history shows (a) the 
provisions of section 111(d) reflected in the U.S. Code 
originated as specific language proposed by the President in 
legislation formally submitted to Congress in the summer of 
1989,\19\ which was subsequently incorporated into legislation 
considered and passed by the House; (b) the Senate and House 
conferees considered and amended the section containing House 
statutory language providing that sources regulated under 
section 112 cannot be regulated as existing sources under 
section 111; and (c) the Senate expressly receded to the House 
with respect to these substantive provisions regarding section 
111(d).
---------------------------------------------------------------------------
    \19\See Proposed Legislation ``Clean Air Act Amendments of 1989,'' 
Message from the President and accompanying papers referred to the 
Committee on Energy and Commerce, at p. 112 of Committee print 
available at http://docs.house.gov/meetings/IF/IF03/20140619/102346/
HHRG-113-IF03-20140619-SD012.pdf.
---------------------------------------------------------------------------
    The Statement of Senate Managers states as follows:\20\
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    \20\The Statement of Managers accompanying the conference report 
was expressly described in the Congressional Record as an authoritative 
source of legislative intent. See, e.g., November 2, 1990 Congressional 
Record, Statement by the Honorable Henry A. Waxman in the House of 
Representatives, Saturday, October 27, 1990 and available at http://
docs.house.gov/meetings/IF/IF03/20140619/102346/HHRG-113-IF03-20140619-
SD013.pdf:

      Mr. Speaker, as chairman of the Health and Environment 
      Subcommittee of the Committee on Energy and Commerce, which 
      is the subcommittee with legislative jurisdiction over the 
      Clean Air Act Amendments of 1990, I wish to clarify the 
      legislative history of the Clean Air Act Amendments of 
      1990.
      The clean air legislation (S. 1630) reflects a series of 
      bipartisan compromises. These compromises are embodied 
      primarily in the conference report on the clean air bill 
      (S. 1630) and the statement of managers accompanying the 
      conference report. To the extent that provisions in the 
      conference report track provisions in the House-passed bill 
      (H.R. 3030), the report of the Committee on Energy and 
      Commerce is also an authoritative source of the legislative 
      intent of the House. On the other hand, accurate 
      legislative intent is not necessarily reflected in the 
      commentary of individual House Members on S. 1630.

        SECTION 108--MISCELLANEOUS PROVISIONS. Senate bill. In 
        section 103 of the Senate bill revises sections 108(e) 
        and (f) of the Clean Air Act to require the 
        Administrator and the Secretary of Transportation to 
        update air quality/transportation planning guidance and 
        to add to the transportation control measures to be 
        evaluated by the Administrator after consultation, when 
        appropriate, with the Secretary.
        House amendment. The House amendment contains a similar 
        provision to the one in the Senate bill regarding 
        amendments to section 108 of the Clean Air Act. In 
        addition, the House amendment contains provisions for a 
        technology clearinghouse to be established by the 
        Administrator, for amending section 111 of the Clean 
        Air Act relating to new and existing sources, for 
        amending section 302 of the Clean Air Act which 
        contains definitions, to provide a savings clause, to 
        state that reports that are to be submitted to Congress 
        are not subject to judicial review, and for other 
        purposes.
        Conference agreement. The Senate recedes to the House 
        except that with respect to the requirement regarding 
        judicial review of reports, the House recedes to the 
        Senate, and with respect to transportation planning, 
        the House recedes to the Senate with certain 
        modifications. 

[Emphasis added]\21\

    \21\See CHAFEE-BAUCUS STATEMENT OF SENATE MANAGERS, S. 1630, THE 
CLEAN AIR ACT AMENDMENTS OF 1990, A Legislative History of the Clean 
Air Act Amendments of 1990, William S. Hein & Co. Inc. (1998), Volume 
I, Book 2 at p. 885 (emphasis added). See excerpts available at http://
docs.house.gov/meetings/IF/IF03/20140619/102346/HHRG-113-IF03-20140619-
SD011.pdf. 
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    By receding to the House language, the conferees 
effectively removed obsolete references to section 112(b)(1)(a) 
in the underlying CAA. The legislative history indicates 
further that the language in the Statutes at Large from the 
Senate-originated provision, a ``conforming amendment,'' was 
essentially an editing oversight that inadvertently remained in 
the enacted statute.\22\ This language was not expressly 
considered by the conferees because such consideration was 
unnecessary. The language served as a technical correction, the 
point of which was to replace a statutory reference that had 
been rendered obsolete by amendments to section 112 with a 
reference that would accurately conform to the revised section 
112. This technical edit inadvertently remained in the 
legislation taken up by Congress. Once the substantive House 
provisions were adopted, this technical edit was rendered non-
executable because the reference it replaced no longer existed. 
Subsequent review by the authoritative Office of Law Revision 
Counsel\23\ correctly identified this obsolete provision and 
corrected it in the U.S. Code.\24\
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    \22\The Senate conforming language can be traced to Senate bill S. 
816. Provisions of S. 816, introduced in the U.S. Senate on April 18, 
1989, were subsequently incorporated into S. 1630, the legislation that 
passed the Senate and became the vehicle for the Clean Air Act 
Amendments of 1990. Identical provisions were included in H.R. 2585, 
introduced in the U.S. House on June 8, 1989, which was subject along 
with a competing legislative proposal, H.R. 4, to legislative hearings 
by the Energy and Commerce Committee. See Hearings Before the 
Subcommittee on Health and the Environment of the Committee on Energy 
and Commerce House of Representatives, One Hundred First Congress, 
First Session entitled ``June 22, 1989 TOXIC AIR POLLUTANTS--H.R. 4 and 
H.R. 2585, July 24, 2989 ADMINISTRATION'S AMENDMENTS,'' Serial No. 101-
116. Neither H.R. 2585 nor H.R. 4 were reported out of Committee. 
Subsequently, H.R. 3030, which was introduced on July 27, 1989, 
specifically incorporated language proposed by the President that 
served to prohibit the application of section 111(d) to pollutants 
emitted from source categories regulated under section 112. See A 
Legislative History of the Clean Air Act Amendments of 1990, William S. 
Hein & Co. Inc. (1998), Volume II, Book 2 at pp. 3467-3468. The 
Committee eventually considered and reported favorably H.R. 3030, which 
was passed in the U.S. House and was then inserted in lieu of the 
Senate language as the House amendments to S. 1630. Id. at pp. 3430. 
See also, Volume II, Book 1 at page 3019.
    \23\The Office of Law Revision Counsel is an independent, 
nonpartisan office in the U.S. House of Representatives under the 
authority of the Speaker of the House that prepares and conducts the 
codification process for the U.S. Code. While the Statutes at Large 
serve as legal evidence of laws (1 U.S. C. Sec. 112), the subsequent 
codification process of the U.S. Code serves to correct technical 
errors in the law, eliminate obsolete provisions, and ultimately 
replaces, once enacted as positive law, the Statutes at Large as legal 
evidence of laws (1 U.S. C. Sec. 204 and 2 U.S. C. Sec. 285b(1)).
    \24\The U.S. Code notes specifically that the amendment ``could not 
be executed, because of the prior amendment by Pub. L. 101-549, 
Sec. 108(g),'' which contained the substantive House language.
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    In short, based on review of the legislative history, it 
does not appear that this rulemaking falls within ``the four 
corners of 111(d).'' When corrected for technical drafting 
imperfections, as the U.S. Code revisions have done, EPA cannot 
regulate existing power plants under section 111(d) because 
these plants are already regulated as sources under section 
112.
    This threshold issue has already been raised in litigation 
in the U.S. Court of Appeals for the District of Columbia.\25\ 
Even assuming that EPA has authority under section 111(d) to 
regulate existing power plants, there remain fundamental issues 
regarding the scope of such authority, including whether EPA 
can require actions ``beyond-the-fence'' of the electric 
generating units that are the subject of the regulation.\26\ In 
particular, while the sources to be regulated under the 
proposal are limited to ``existing fossil-fuel fired electric 
generating units,''\27\ EPA is seeking to set emissions limits 
that would not be achievable through emissions controls or 
other actions at the units subject to regulation.\28\ Rather, 
to meet EPA's proposed emissions limits, States would need to 
undertake measures outside the boundaries of those units.
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    \25\See In Re Murray Energy Corporation, U.S. Court of Appeals for 
the District of Columbia, Case No. 14-1112; State of West Virginia v. 
United States Environmental Protection Agency, U.S. Court of Appeals 
for the District of Columbia, Case No. 14-1146. While the Court issued 
on order on June 9, 2015, dismissing the legal challenges as premature, 
these issues are expected to be raised in legal challenges to any final 
rule.
    \26\See e.g., Letter of 15 Governors available at http://
www.scribd.com/doc/239195664/Republican-Governors-Urge-President-Obama-
to-Promote-Reliable-Affordable-Energy-Policy (``In attempting to 
regulate outside the fence, the Agency's proposal not only exceeds the 
scope of Federal law, but also, in some cases, directly conflicts with 
established [S]tate law.''); see also, e.g., ``EPA's Section 111(d) 
Carbon Rule: What if States Just Said No?'' available at http://
www.insideronline.org/summary.cfm?id=23304 (``EPA has `creatively' 
reinterpreted its Section 111 authority for adopting performance 
standards and, for the first time, has proposed standards based on 
`outside-the-fence' actions.'').
    \27\See 79 Fed. Reg. at 34830.
    \28\See, e.g. 79 Fed. Reg. at 34888-34889 (In response to concerns 
raised by stakeholders that EPA's authority is limited to measures that 
may be undertaken at the affected units, and does not include ``beyond-
the-unit'' or ``beyond-the-fenceline'' measures, EPA states: ``As 
discussed above, we propose that the provisions of CAA section 111 do 
not by their terms preclude the [best system of emissions reduction] 
from including [building blocks 2, 3 and 4]'').
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    In addition to issues relating to regulating ``beyond the 
fence,'' other questions relate to what legal authority the 
agency would have to include its various building blocks in a 
Federal implementation plan. There are also questions regarding 
the potential need for State or Federal implementing 
legislation, as well as the consistency of the Clean Power 
Plan's approach with State laws or pending legislation.\29\ For 
example, a number of States have passed laws that provide that 
any CO2 performance standards established by the State for 
existing power plants be based on ``inside the fence'' measures 
and/or require State legislative approval of a plan.\30\
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    \29\See e.g. ``EPA's CO2 Rule and 18 States' Resolutions and 
Legislation, EPA's Proposed CO2 Rule Collides with Flexibility Asserted 
By States,'' Raymond L. Gifford et al. (August 2014) available at 
http://www.wbklaw.com/uploads/file/
EPA's%20CO2%20Rules%20and%2018%20States'%20Resolutions%20and%20Legislati
on.pdf. 
    \30\States that have passed legislation include Kansas, Kentucky, 
Louisiana, Missouri, Ohio, Pennsylvania, and West Virginia.
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    Other legal and regulatory issues include specific 
questions about how the regulation affects the jurisdiction of 
the Federal Energy Regulatory Commission (FERC) or 
jurisdictional issues under the Federal Power Act, how the rule 
affects States that have exclusive jurisdiction over intrastate 
electricity matters, as well as interstate compliance and 
enforcement issues, and other matters such as the implications 
of the proposal for cooperatives and municipal utilities over 
which States may have limited or no jurisdiction.
    Legal questions raised by the proposed rule were addressed 
in testimony before the Committee's Subcommittee on Energy and 
Power from legal experts. For example, Laurence Tribe, the Carl 
M. Loeb University Professor and Professor of Constitutional 
Law at Harvard University, testified at a March 17, 2015 
hearing that ``EPA's proposal raises grave constitutional 
questions, exceeds EPA's statutory authority, and violates the 
Clean Air Act.'' He further testified:

        EPA possesses only the authority granted to it by 
        Congress. It lacks ``implied'' or ``inherent'' powers. 
        Its gambit here raises serious questions under the 
        separation of powers, Article I, and Article III, 
        because EPA is attempting to exercise lawmaking power 
        that belongs to Congress and judicial power that 
        belongs to the Federal courts. The absence of EPA legal 
        authority in this case makes the Clean Power Plan, 
        quite literally, a power grab.

    He also testified:

        I taught the first environmental law course in this 
        country, and I have won major victories for 
        environmental causes, but I am committed to doing it 
        within the law. And there is a legal way to address 
        these problems. They tried to get cap and trade with 
        this Administration, didn't work. And I guess the EPA 
        is now following a kind of marching order saying, well, 
        if you can't do it through the lawful way, just take an 
        agency and tell it to bend and twist and tear and rip 
        the law.

    At the March 17, 2015 hearing, Ms. Allison Wood, a Clean 
Air Act lawyer also testified:

        Section 111(d) of the Clean Air Act has always been an 
        insignificant provision designed to be used rarely. 
        Indeed, it has been used only five times since 1970. 
        EPA's proposed section 111(d) rule turns this notion on 
        its head and seeks to regulate an enormous part of the 
        economy. The rule suffers from numerous legal 
        deficiencies, including whether EPA even has authority 
        to issue it given that electric generating units are 
        regulated under section 112 of the Clean Air Act. . . .
        . . . EPA proposes for the first time a standard of 
        performance that is based on not operating the source. 
        EPA claims for the first time, based on the dictionary 
        definition of the word system, that it can regulate any 
        set of things that leads to reduced emissions from the 
        source category overall, even if those things go beyond 
        the fence line of the plant.\31\
---------------------------------------------------------------------------
    \31\In EPA's FY 2016 budget documents submitted to Congress earlier 
this year, the agency noted that the proposed rule would go far beyond 
the EPA's traditional authority, stating:

      The breadth and uniqueness of the Clean Power Plan 
      rulemakings will require that the agency devote significant 
      resources to its implementation. Traditionally, the EPA's 
      regulatory analysis would focus on only emitting sources 
      and ``end of pipe'' controls. The existing power plant rule 
      requires that the EPA look at the emission control 
      strategies that many States and companies are currently 
      employing that are either shifting generation away from 
      higher emitting plants or reducing the need for generation 
      in the first place (through energy efficiency). Evaluating 
      and capturing these strategies requires the agency to tap 
      into technical and policy expertise not traditionally 
      needed in EPA regulatory development . . . and to 
      understand and project system-wide approaches and trends in 
      areas such as electricity transmission, distribution and 
---------------------------------------------------------------------------
      storage.

    See EPA Congressional Justification for FY 2016 Budget Request, at 
p.225, available at http://www2.epa.gov/sites/production/files/
20150902/documents/epa_fy_2016_congressional_justification.pdf.

---------------------------------------------------------------------------
    She further testified:

        To use an illustration that may help people better 
        understand what EPA is proposing to do here, it is as 
        if EPA were requiring car owners not only to have 
        catalytic converters on their cars, but also to travel 
        a certain amount of days per week by bus, purchase a 
        certain number of electric vehicles, and work from home 
        one day a week. All of these things would reduce 
        overall car emissions, but they do nothing to reduce 
        the rate at which those cars emit pollutants per mile, 
        and most people would surely agree that the Clean Air 
        Act would not allow EPA to require these types of 
        things from car owners, yet, this type of regulation is 
        exactly what EPA is trying to do to power plants in the 
        Section 111(d) rule.

    State regulators also highlighted legal concerns. For 
example, at the March 17, 2015 hearing, the Secretary of the 
North Carolina Department of Environment and Natural Resources, 
Donald van der Vaart, testified:

        There is universal agreement that the 111(d) rule will 
        fundamentally restructure how energy is generated and 
        consumed in America. I would argue that EPA's Section 
        111(d) rule is to energy what the Affordable Care Act 
        is to healthcare. This fundamental change to America's 
        electricity model will come at the hands of a rule that 
        few consider legally firm. The EPA acknowledges in the 
        rule that it is structured to survive even if portions 
        of the rule are struck down. In my more than 20 years 
        of implementing air quality rules, I am not aware of 
        any rule where the EPA has made an a priori 
        acknowledgement of legal infirmity.

    Other regulators have also testified to the legal issues 
surrounding the rule.\32\
---------------------------------------------------------------------------
    \32\See, e.g., March 17, 2015 Testimony of Craig Butler, the 
Director of the Ohio Environmental Protection Agency (``[T]he proposal 
seeks to overhaul the Nation's power generation, transmission, 
distribution systems, by reducing coal-based electricity, and 
instituting federally-mandated reliance on energy efficiency, renewable 
energy under the guise of global climate protection. . . . It is no 
secret, as we have heard today, that many [S]tates including Ohio, that 
the Clean Power Plan is encumbered with significant legal problems and 
should not go forward.''); see also September 9, 2014 Testimony of 
Henry R. Darwin, Director, Arizona Department of Environmental Quality 
(``I do not believe the Clean Air Act provides EPA with the authority 
to regulate greenhouse gases as it proposes to do so in its Clean Power 
Rule.'').
---------------------------------------------------------------------------

Potential impacts on electricity prices

    The proposed rule has raised broad concerns among States, 
affected entities and other stakeholders because it would raise 
the price of electricity. EPA estimates annual costs of 
compliance over the next fifteen years would range from $5.5 
billion and $7.5 billion in 2020 to $7.3 billion and $8.8 
billion in 2030,\33\ and that there would be ``a [four] to 
[seven] percent increase in retail electricity prices, on 
average, across the contiguous U.S. in 2020,'' Id. at 34948. 
According to other estimates, the potential costs could be 
significantly higher, and could range from $366 billion to $479 
billion over the period 2017-2031.\34\
---------------------------------------------------------------------------
    \33\See 79 Fed. Reg. at 34934-34935.
    \34\See, e.g., NERA Economic Consulting report entitled ``Potential 
Energy Impacts of the EPA Proposed Clean Power Plan,'' October 2014 
available at http://www.nera.com/content/dam/nera/publications/2014/
NERA_ACCCE_CPP_Final_10.17.2014.pdf. With respect to costs, the North 
American Electric Reliability Corporation (NERC), which collects energy 
efficiency program data, also has concluded that EPA has overstated 
efficiency savings. See NERC Report entitled ``Potential Reliability 
Impacts of EPA's Proposed Clean Power Plan, Initial Reliability 
Review,'' November 2014 available at http://www.google.com/
url?sa=t&rct=j&q=&esrc=s 
&source=web&cd=2&ved=0CCUQFjAB&url=http%3A%2F%2Fwww.nerc.com%2Fpa%2FRAPA
%2 
Fra%2FReliability%2520Assessments%2520DL%2FPotential_Reliability_Impacts
_of_EPA _Proposed_CPP--
Final.pdf&ei=ep2BVaGuIcjksAWRjqW4BA&usg=AFQjCNFkuP7LTMVQjCdr wchQ-
vpaq1ij7Q&sig2=UBZ3AC1spN9fOlef3o17Aw&bvm=bv.96041959,d.b2w NERC 
stated: ``NERC, EIA, EPRI, and various utilities, have published 
reports, analysis, and forecasts for energy efficiency that do not 
align with the CPP's assumed declining demand trend.'' Further, NERC 
stated that ``[t]he CPP assumption appears to underestimate costs and 
does not reflect the capital investments that would otherwise be 
required by utilities to meet growing electricity demand or energy 
efficiency program implementation.''
---------------------------------------------------------------------------
    At the April 14, 2015 hearing on a discussion draft of H.R. 
2042, witnesses provided testimony indicating that costs of 
electricity could increase substantially for ratepayers in the 
majority of States during the fifteen year period in which the 
rule would be implemented. For example, Energy Economist and 
Attorney Eugene Trisko, who has assessed energy costs for 
households, projected that in thirty-one geographically-diverse 
States electricity rates could be fifteen percent higher each 
year than they would be without the rule during the period 2017 
through 2031. He testified: ``These average price increases 
mean that electricity prices for consumers will be [fifteen 
percent] higher, on average, each year under the Clean Power 
Plan than they would be without the CPP. Peak year electric 
price increases during this period average [twenty-two percent] 
for the [thirty-one] states.'' The President of Industrial 
Consumers of America, Paul Cicio, also testified that with the 
Clean Power Plan, together with other rules, industrial 
customers could expect up to a 33.7 percent increase in 
electricity prices by 2025.
    State officials also testified before the Subcommittee that 
the proposed rule could result in large rate increases in their 
individual States. For example, at the March 17, 2015 hearing, 
the Chairman of the Florida Public Service Commission, Art 
Graham, testified: ``potential increases of [twenty-two to 
fifty percent] in some retail electric rates is a credible 
estimate of the level of Florida's Clean Power Plan costs.'' 
The Director of the Ohio EPA, Craig Butler, also testified: 
``One stunning statistic I will share with you is that the 
Public Utilities Commission of Ohio conducted a detailed 
analysis of the Clean Power Plan and predicted wholesale market 
energy prices to be 39 percent higher in calendar year 2025, 
costing Ohioans approximately $2.5 billion.'' Other State 
analyses also have underscored the potentially significant 
adverse effects on ratepayers in their individual States.\35\
---------------------------------------------------------------------------
    \35\See e.g., Kansas Corporation Commission Comment (``The KCC 
estimates a base case that the EPA's CPP as proposed would cost the 
[S]tate of Kansas $8.75 billion with a possible range of costs between 
$5 billion and $15 billion. The corresponding increase in rates is 
between [ten percent] and [thirty percent] over [thirteen] years. . . 
.''); Virginia State Corporation Commission Comment (noting that:

      the incremental cost of compliance for one utility alone 
      (Dominion Virginia Power) would likely be between $5.5 
      billion and $6.0 billion on a net present value basis. . . 
      . Contrary to the claim that `rates will go up, but bills 
      will go down', experience and costs in Virginia make it 
      extremely unlikely that either electric rates or bills in 
      Virginia will go down as a result of the Proposed 
---------------------------------------------------------------------------
      Regulation).

    Witnesses also testified that the costs of the rule would 
fall disproportionally on lower-income households. For example, 
at the hearing on the discussion draft of H.R. 2042, Mr. Trisko 
testified:

        Lower-income families are more vulnerable to energy 
        costs 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. Data presented in the 31 State reports 
        show that minorities and senior citizens are 
        disproportionately represented among lower-income 
        households.

    He further testified that EPA envisions that consumers will 
spend $560 billion on energy efficiency.\36\ Such investments, 
he testified, are unlikely to be made by lower-income 
households, stating: ``Senior citizens and other lower-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 benefit from--the energy efficiency programs that 
the proposed rule envisions.''
---------------------------------------------------------------------------
    \36\Mr. Trisko testified:

    Witnesses also raised concerns that EPA has significantly 
understated the costs to the extent the agency has failed to 
account for the significant stranded costs associated with 
compliance with the rule. For example, Lisa Johnson, CEO and 
General Manager of Seminole Electric Cooperative, Inc., 
testified that its 1,300 megawatt Seminole Generating Station 
(SGS), in which over $530 million in state-of-the-art 
environmental control technology have been invested, would be 
forced to retire over twenty years before the end of its 
remaining life. She testified:
      Now, NERA's analysis using the four building blocks of the 
      EPA rule, and this is the cost to consumers of investments 
      in energy efficiency to meet EPA targets, indicates a cost 
      to consumers, and this is in net present value terms, of 
      $560 billion. That means Americans will be asked by this 
      rule, American consumers will be asked to spend $560 
      billion in investments in energy efficiency.

    He further testified:

      Congressman, I believe that estimate of that extent of 
      energy efficiency investment is simply fatuous. As of just 
      a few years ago, the most recent data--and these don't 
      change very quickly--the average American house is owned 
      for a period of seven to eight years. You cannot recover a 
      major investment such as in replacing sliding glass doors 
      or an HVAC, a heat pump system, you cannot recover those 
      costs in the space of seven to eight years. You can do 
      relatively simple things like attic insulation and weather-
      stripping and that sort of thing, but those don't get you 
      close to the targets that EPA is advocating for [States] in 
---------------------------------------------------------------------------
      this rule.


        If SGS were retired prior to the end of its useful 
        life, the remaining net book value (stranded asset) 
        would be required to be written off and the expense 
        would be paid by our Members. The Members would 
        continue to pay the fixed costs related to SGS without 
        receiving any energy or capacity from its operation. 
        Seminole will still have to serve the full requirements 
        of our Members, and the replacement capacity related to 
        the early retirement of SGS will either have to be 
        constructed or purchased. This will cause our Members 
        to pay for both the stranded asset and the replacement 
        capacity at the same time.

    In addition to questions about the compliance costs, 
commenters on the rule also have raised questions relating to 
the climate related benefits. While EPA maintains there will be 
climate benefits based on ``social cost of carbon'' 
estimates,\37\ on February 26, 2015, Senior Vice President of 
NERA Economic Consulting, Anne Smith testified before the House 
Committee on Oversight and Government Reform that EPA's 
presentation of its benefits estimate was overstated and 
misleading: ``When correctly presented, USEPA's estimates 
indicate the present value of CPP spending through 2030 will 
exceed $180 billion while the climate benefits are not expected 
to exceed that cost until about 100 to 125 years after the 
spending has been sunk.''\38\ Further, she noted that the 
agency's estimates of the benefits relate to global rather than 
domestic benefits, and testified: ``The CPP's estimated 
benefits to U.S. populations is not expected to exceed the 
CPP's costs under even the most pessimistic projections of 
climate impacts.''\39\
---------------------------------------------------------------------------
    \37\See, e.g., 79 Fed. Reg. at 34839-34840.
    \38\See Testimony of Anne E. Smith, Ph.D. available at http://
oversight.house.gov/wp-content/uploads/2015/02/ASmith-Oversight-
Committee-Testimony-2-2-15.pdf.
    \39\Id.
---------------------------------------------------------------------------

Potential impacts on electric reliability

    In addition to impacts relating to the high costs of the 
rule, there are significant concerns about the rule's potential 
impact on reliability because the effect of the regulation 
would be to shut down a significant amount of the nation's 
existing coal-fired electricity generation.\40\ EPA projects 
that up to fifty gigawatts (GW) of additional coal-fired 
generation may become uneconomic by 2030, with the vast 
majority retiring by 2020. EPA specifically estimates that in 
2020, the amount of additional coal-fired generation that may 
be removed from operation would represent nineteen percent of 
all coal-fired capacity (and 4.6 percent of total generation 
capacity in 2020). 79 Fed. Reg. at 34935. The EIA has also 
projected that approximately fifty GW of coal-fired generation 
would retire under the Clean Power Plan, nearly all by 2020, 
which would be over and above the approximately forty GW EIA 
currently projects will retire (most before 2017).\41\
---------------------------------------------------------------------------
    \40\EIA reports that in 2014, energy sources and the percentage 
share of total electricity generating were as follows: Coal thirty-nine 
percent; Natural Gas twenty-seven percent; Nuclear nineteen percent; 
Hydropower six percent; Other Renewable seven percent, including 
Biomass (1.7 percent), Geothermal (0.4 percent), Solar (0.4 percent), 
Wind (4.4 percent); Petroleum one percent; and Other Gases < one 
percent. See http://www.eia.gov/tools/faqs/faq.cfm?id=427&t=3.
    \41\See EIA Analysis of the Impacts of the Clean Power Plan dated 
May 26, 2015 available at http://www.eia.gov/analysis/requests/
powerplants/cleanplan/pdf/powerplant.pdf, at p. 16. In August 2014, the 
Government Accountability Office (GAO) estimated that over forty-two GW 
``has either been retired since 2012 or is planned for retirement by 
2025.'' See GAO Report entitled ``EPA Regulations and Electricity: 
Update on Agencies' Monitoring Efforts and Coal-Fueled Generating Unit 
Retirements,'' August 2014, available at http://www.gao.gov/assets/670/
665325.pdf.
---------------------------------------------------------------------------
    Concerns relating to electric reliability were raised in 
testimony before the Committee, including FERC Commissioners 
and State regulators from Arizona, Florida, Indiana, Montana, 
North Carolina, Ohio, and Texas.\42\ The North American 
Electric Reliability Corporation (NERC), which develops and 
enforces electric reliability standards, has also released two 
reports to date that identify concerns regarding bulk power 
system reliability risks associated with the proposed rule.\43\
---------------------------------------------------------------------------
    \42\See September 9, 2014 Testimony of Kenneth W. Anderson, Jr., 
Commissioner, Public Utility Commission of Texas; Travis Kavulla, 
Commissioner, Montana Public Service Commission; Henry R. Darwin, 
Director, Arizona Department of Environmental Quality; Thomas W. 
Easterly, Commissioner, Indiana Department of Environmental Management; 
March 17, 2015 Testimony of Art Graham, Chairman, Florida Public 
Service Commission; Craig Butler, Director, Ohio Environmental 
Protection Agency; and Donald van der Vaart, Secretary, North Carolina 
Department of Environment and Natural Resources.
    \43\See ``Potential Reliability Impacts of EPA's Proposed Clean 
Power Plan, Initial Reliability Review, November 2014'' and is 
available at http://www.nerc.com/pa/RAPA/ra/
Reliability%20Assessments%20DL/
Potential_Reliability_Impacts_of_EPA_Proposed_CPP_ Final.pdf; see also 
``Potential Reliability Impacts of EPA's Proposed Clean Power Plan, 
Phase I, April 2015'' available at http://www.nerc.com/pa/RAPA/ra/ 
Reliability%20Assessments%20DL/
Potential%20Reliability%20Impacts%20of%20EPA%E2%80%9 
9s%20Proposed%20Clean%20Power%20Plan%20-%20Phase%20I.pdf. NERC is the 
electric reliability organization (ERO) for North America, subject to 
oversight by FERC and governmental authorities in Canada. On November 
12, 2014, NERC also released a long-term reliability assessment that 
raised similar concerns relating to the ``Clean Power Plan.'' http://
www.nerc.com/pa/RAPA/ra/Reliability%20Assessments%20DL/2014LTRA.PDF; 
see also Announcement available at http://www.nerc.com/news/
Headlines%20DL/LTRA%2012NOV14_FINAL.pdf.
---------------------------------------------------------------------------
    Reliability concerns were also underscored during 
conferences before the FERC. In particular, FERC convened four 
technical conferences focused on EPA's proposed rule and issues 
related to electric reliability, wholesale electric markets, 
and operations, and energy infrastructure. These conferences on 
February 19, 2015 and March 11, 2015 in Washington, DC, 
February 25, 2015 in Denver, and March 31, 2015 in St. Louis, 
included numerous submitted oral and written testimony that 
raised concerns relating to the Clean Power Plan.

Need for legislation

    While there are numerous legal, cost, and reliability 
issues associated with EPA's proposed 111(d) rule, submittal of 
State plans would be required before the legality of the rule 
would be established. The Secretary of the North Carolina 
Department of Environment and Natural Resources testified at 
the March 17, 2015 hearing:

        Given the certain litigation that will ensue if the 
        proposed rule under 111(d) is promulgated, states such 
        as North Carolina are at risk of investing unnecessary 
        time and resources, developing and enacting state 
        111(d) plans prior to the resolution of litigation. 
        North Carolina recommends that the EPA amend the rule's 
        submittal deadline to require states to submit a 111(d) 
        plan only after the conclusion of the judicial review 
        process. Traditionally, when the EPA promulgates a new 
        rule that sets forth requirements designed to address 
        some aspect of the Clean Air Act, each state must take 
        action, usually in the form of legislation and 
        rulemaking, to avoid sanctions directly or avoid 
        sanctions on its sources. The state then submits a 
        demonstration to the EPA for approval, which can take 
        anywhere from a few months to many years, during which 
        time the states implement their rules. If the rule is 
        struck down, however, the state is forced to uproot its 
        earlier work and begin a new planning process; 
        legislation, rulemaking, implementation and 
        enforcement, and the process must often be amended 
        again when EPA revises its illegal rule in an attempt 
        to satisfy the courts.

    Other States have also urged EPA in comments that 
implementation of any final rule be stayed pending judicial 
review, including in the comments of seventeen State attorneys 
general, as well as in individual comments from the States of 
Alabama, Florida, and North Dakota.\44\
---------------------------------------------------------------------------
    \44\See, e.g. Comment of 17 Attorneys General at p. 26 available at 
http://www.ok.gov/oag/documents/EPA%20Comment%20Letter%20111d%2011-24-
2014.pdf; Alabama Dept. of Environmental Management Comment at p. 2 
available at http://www.csg.org/aapca_site/news/documents/AL11-21-
2014EPASDBADEMCAA111dcomments.pdf; North Dakota Dept. of Health Comment 
at p. 6 available at http://www.csg.org/aapca_site/news/documents/
NDDHComments12-1-14.pdf; and Florida Dept. of Environmental Protection 
Comment at p. 3 available at http://docs.house.gov/meetings/IF/IF03/
20150414/103312/HHRG-114-IF03-20150414-SD005.pdf.
---------------------------------------------------------------------------
    At the March 17, 2015 hearing, Ms. Wood also addressed the 
significant resources required to be expended, and testified:

        The plans that states will need to prepare are 
        extremely complicated. In the West Virginia litigation, 
        for example, the State of Alabama described preparation 
        of the plan that will be needed for the section 111(d) 
        rule as ``the most complex air pollution rulemaking 
        undertaken by [Alabama] in the last 40 years.'' 
        [citation omitted] The rule essentially requires a 
        complete overhaul of each state's energy portfolio. In 
        addition, many states are going to have to enact laws 
        and regulations to enable them to do the things 
        contemplated by the proposed rule. All of this will be 
        completed before litigation over the rule is complete. 
        If the rule is ultimately held to be unlawful, the 
        states will have already expended enormous amounts of 
        resources to develop the plan, and any laws or 
        regulations that have been enacted cannot be easily 
        reversed.

What the legislation would do

    The continued affordability and reliability of electricity 
supplies is critical to the nation's future economic growth, 
job creation, and to all American households and businesses. 
The bill includes the following provisions to protect States 
and ratepayers.
    First, H.R. 2042 would extend the compliance dates of any 
final rule pending judicial review, including the dates for 
submission of State plans. The bill would extend the compliance 
dates for the period of time that begins sixty days after a 
final rule appears in the Federal Register, and would end when 
all final legal challenges filed during that period have been 
resolved, and are no longer subject to legal review. While the 
bill would extend compliance dates, nothing would prevent those 
States that wanted to move forward with implementation prior to 
the completion of judicial review from submitting plans or 
otherwise complying.
    Second, H.R. 2042 also would provide a safe harbor for 
States to protect ratepayers in the event that the rule was 
upheld. In particular, the bill would provide that no State 
shall be required to implement a State or Federal plan that the 
State's governor determines, in consultation with other 
relevant State officials and taking into account rate increases 
associated with other Federal or State regulations, that it 
would have a significant adverse effect on (i) retail, 
commercial, or industrial ratepayers; or (ii) the reliability 
of the State's electricity system. In making such a 
determination, a Governor would be required to consult with the 
State's energy, environmental, public health, and economic 
development departments or agencies, as well as with NERC.
    The extension of time provided in H.R. 2042 to allow for 
judicial review of a legally controversial and vulnerable rule 
is reasonable. EPA's accelerated schedule requiring submission 
of plans within thirteen months of a final rule is not mandated 
by statute and is unreasonable given the fundamental changes 
that EPA envisions States would commit to under its rule. At 
the same time, completion of judicial review typically requires 
approximately three years,\45\ which is a relatively short 
period of time in the context of major EPA CAA rulemakings.\46\ 
Allowing for completion of judicial review would ensure that 
States and other affected stakeholders would not have to 
undertake extensive planning and activities to comply with the 
rule's unprecedented requirements or to make other related and 
costly decisions that may not easily be reversed if the rule is 
struck down or modified.
---------------------------------------------------------------------------
    \45\In response to a QFR following the March 17, 2015 hearing, 
Allison Wood estimated that the time to complete judicial review likely 
ranges from approximately three years to three years and eight months, 
depending upon the nature of the Supreme Court's review. See QFR 
Response available at http://docs.house.gov/meetings/IF/IF03/20150317/
103073/HHRG-114-IF03-Wstate-WoodA-20150317-SD007.pdf. She also stated 
that it was possible that the Supreme Court could return the case to 
the D.C. Circuit for further action. Id.
    \46\The agency announced in December 2010 that it had entered into 
a settlement and would propose and finalize a greenhouse gas regulation 
under section 111(d) for existing power plants by 2012 (see 2010 
proposed settlement announced Dec. 23, 2010, available at http://
www2.epa.gov/sites/production/files/2013-09/documents/
boilerghgsettlement.pdf), but did not propose the rule until June 2014.
---------------------------------------------------------------------------
    At the same time, such a delay would have no adverse effect 
on the climate given the negligible impact of the rule's 
projected reductions in global greenhouse gas emissions. As a 
practical matter, U.S. energy-related carbon-dioxide emissions 
have declined and are expected to remain below 2005 levels in 
the coming decades. The EIA recently reported that U.S. energy-
related CO2 emissions will remain flat through 2040, and below 
2005 levels, without the ``proposed Clean Power Plan or other 
actions beyond current policies to limit or reduce CO2 
emissions.''\47\
---------------------------------------------------------------------------
    \47\EIA, Annual Energy Outlook 2015 available at http://
www.eia.gov/forecasts/AEO/section_carbon.cfm.
---------------------------------------------------------------------------
    Given the complex and extraordinary burdens a final rule 
may impose, and the potential that the rule may not be upheld 
or may be modified, extension of the compliance timelines is 
warranted to protect States and ratepayers. Further, by 
providing an additional safe harbor for States, H.R. 2042 also 
would address concerns that have been raised by many 
stakeholders, ranging from State regulators to electric 
utilities, including public power utilities and rural 
cooperatives, to ratepayers and consumers, about the potential 
impacts of EPA's proposed rule on electricity prices and 
reliability. In view of the potentially substantial rate 
increases that would fall on households and businesses, such 
relief is also appropriate.

Supporters of the legislation

    Supporters of H.R. 2042 include:
Action 22 Southern Colorado
AFFORD Group
Agricultural Council of Arkansas
Air-Conditioning, Heating, and Refrigeration Institute
Alabama Automotive Manufacturer's Association
Alabama Coal Association
Alaska Chamber of Commerce
American Coalition for Clean Coal Electricity
American Coke and Coal Chemicals Institute
American Farm Bureau Federation
Americans for Prosperity
Americans for Tax Reform
American Foundry Society
American Fuel & Petrochemical Manufacturers
American Knife Manufacturers Association
American Petroleum Institute
American Public Power Association
American Road and Transportation Builders Association
American Waterways Operators
Ames Chamber of Commerce
Arkansas State Chamber of Commerce
Associated Builders and Contractors
Associated Builders and Contractors of Wisconsin
Associated Equipment Distributors
Associated Industries of Florida
Associated Industries of Missouri
Association of American Railroads
Association of Louisiana Electric Cooperatives, Inc.
Automotive Recyclers Association
Balanced Energy Arkansas
Balanced Energy for Texas
Baltimore Washington Corridor Chamber
Bettisworth North Architects and Planners
Billings Montana Chamber of Commerce
Bismarck Mandan Chamber of Commerce
Brick Industry Association
Bryant Area Chamber of Commerce
Business Council of Alabama
California Cotton Ginners Association
California Cotton Growers Association
California Manufacturers & Technology Association
Caterpillar
Colorado Association of Commerce and Industry
Colorado Mining Association
Consumer Energy Alliance
Copper and Brass Fabricators Council
Council of Industry of Southeastern New York
CropLife America
Dallas Regional Chamber
East Feliciana Chamber of Commerce
Electric Reliability Coordinating Council
Energy Equipment and Infrastructure Alliance
Exotic Wildlife Association
Florida State Hispanic Chamber of Commerce
Forging Industry Association
Fort Worth Chamber of Commerce
Foundry Association of Michigan
Georgia Association of Manufacturers
Georgia Chamber of Commerce
Georgia Motor Trucking Association
Georgia Railroad Association
Greater Burlington Partnership
Greater Houston Partnership
Greater North Dakota Chamber of Commerce
Greater Omaha Chamber
Greater Phoenix Chamber of Commerce
Greater Pittsburgh Chamber of Commerce
Greater Shreveport Chamber of Commerce
Gulf Coast Lignite Coalition
Illinois Coal Association
Illinois Manufacturers' Association
INDA: Association of the Nonwoven Fabrics Industry
Independent Cattlemen's Association of Texas
Independent Petroleum Association of America
Independent Women's Voice
Indiana Cast Metals Association
Indiana Chamber of Commerce
Indiana Manufacturers Association
Industrial Minerals Association--North America
Institute for 21st Century Energy
International Liquid Terminals Association
Iowa Association of Business and Industry
Kansas Chamber of Commerce
Kentucky Coal Association
Kerrville Area Chamber of Commerce
Lignite Energy Council
Lincoln Employers Coalition
Lincoln Independent Business Association
Longview Chamber of Commerce
Louisiana Association of Business and Industry
Louisiana Propane Gas Association
Lubbock Chamber of Commerce
Metals Service Center Institute
Michigan Manufacturers Association
Michigan Railroads Association
Midwest Electric Cooperative Corporation
Midwest Food Processors Association Inc.
Minnesota Chamber of Commerce
Mississippi Energy Institute
Mississippi Manufacturers Association
Missouri Chamber of Commerce and Industry
Monroe Chamber of Commerce
Montana Chamber of Commerce
Montana Coal Council
Montana Contractors' Association
Motor & Equipment Manufacturers Association
Myrtle Beach Area Chamber of Commerce
National Association of Home Builders
National Association of Manufacturers
National Cattlemen's Beef Association
National Electrical Contractors Association
National Federation of Independent Business
National Marine Manufacturers Association
National Mining Association
National Oilseed Processors Association
National Rural Electric Cooperative Association
National Taxpayers Union
National Tooling and Machining Association
Natural Gas Supply Association
Nebraska Chamber of Commerce & Industry
Nebraska Farm Bureau Federation
Nebraska Power Association
Non-Ferrous Founders' Society
North American Die Casting Association
North Carolina Chamber
North Carolina Energy Forum
Ohio Cast Metals Association
Ohio Chamber of Commerce
Ohio Coal Association
Ohio Manufacturers' Association
Ohio Rural Electric Cooperatives, Inc.
Oklahoma Railroad Association
Oklahoma State Chamber of Commerce
Partnership for Affordable Clean Energy
Pennsylvania Chamber of Business & Industry
Pennsylvania Coal Alliance
Pennsylvania Foundry Association
Pennsylvania Independent Oil & Gas Association
Pennsylvania Manufacturers Association
Pennsylvania Waste Industries Association
Petroleum Equipment Suppliers Association
Portland Cement Association
Precision Machined Products Association
Precision Metalforming Association
Printing Industries of America
Railway Supply Institute, Inc.
Rocky Mountain Coal Mining Institute
San Diego East County Chamber
Siouxland Chamber of Commerce
Small Business & Entrepreneurship Council
South Carolina Chamber of Commerce
South Louisiana Electric Cooperative Association
Southwest Louisiana Economic Development Alliance
SPI: The Plastics Industry Trade Association
State Chamber of Oklahoma
Styrene Information & Research Center
Tempe Chamber of Commerce
Tennessee Chamber of Commerce & Industry
Texas Aggregates and Concrete Association
Texas Association of Business
Texas Cast Metals Association
Texas Cotton Ginners' Association
Texas Mining and Reclamation Association
Texas Poultry Federation
Texas Railroad Association
The Chamber of Reno, Sparks and Northern Nevada
The Fertilizer Institute
The Siouxland Initiative
U.S. Chamber of Commerce
United States Hispanic Chamber of Commerce
Valve Manufacturers Association of America
Virginia Chamber of Commerce
Virginia Coal and Energy Alliance
Virginia Manufacturers Association
Western Agricultural Processors Association
West Virginia Coal Association
West Virginia Chamber of Commerce
Wisconsin and Minnesota Petroleum Council
Wisconsin Cast Metals Association
Wisconsin Independent Businesses
Wisconsin Industrial Energy Group
Wisconsin Manufacturers & Commerce
Wisconsin Motor Carriers Association
Wyoming Chamber Partnership
Wyoming Mining Association

                                HEARINGS

    The Subcommittee on Energy and Power held a legislative 
hearing on the discussion draft of H.R. 2042 on April 14, 2015, 
and held four prior hearings relating to EPA's pending 
regulation of existing power plans under section 111(d) of the 
Clean Air Act. The hearings and witnesses included the 
following:
           On April 14, 2015, the Subcommittee held a 
        hearing entitled ``EPA's Proposed 111(d) Rule for 
        Existing Power Plants, and H.R. ___, Ratepayer 
        Protection Act,'' and received testimony from:
                   The Honorable Janet McCabe, 
                Acting Assistant Administrator for the Office 
                of Air and Radiation, U.S. Environmental 
                Protection Agency;
                   Eugene M. Trisko, Energy 
                Economist and Attorney on behalf of the 
                American Coalition for Clean Coal Electricity;
                   Lisa D. Johnson, CEO and General 
                Manager, Seminole Electric Cooperative, Inc. on 
                behalf of National Rural Electric Cooperative 
                Association;
                   Kevin Sunday, Manager, 
                Government Affairs, Pennsylvania Chamber of 
                Business and Industry;
                   Paul Cicio, President, 
                Industrial Energy Consumers of America;
                   Susan F. Tierney, Senior 
                Advisor, Analysis Group; and
                   Melissa A. Hoffer, Chief, Energy 
                and Environment Bureau, Office of the Attorney 
                General, Commonwealth of Massachusetts.
           On March 17, 2015, the Subcommittee held a 
        hearing entitled ``EPA's Proposed 111(d) Rule for 
        Existing Power Plants: Legal and Cost Issues'' and 
        received testimony from:
                   Laurence H. Tribe, Carl M. Loeb 
                University Professor and Professor of 
                Constitutional Law, Harvard Law School;
                   Richard L. Revesz, Lawrence King 
                Professor of Law, Dean Emeritus, Director, 
                Institute for Policy Integrity, New York 
                University School of Law;
                   Allison D. Wood, Partner, Hunton 
                & Williams;
                   Art Graham, Chairman, Florida 
                Public Service Commission;
                   Kelly Speakes-Backman, 
                Commissioner, Maryland Public Service 
                Commission;
                   Craig Butler, Director, Ohio 
                Environmental Protection Agency; and
                   Donald van der Vaart, Secretary, 
                North Carolina Department of Environment and 
                Natural Resources.
           On September 9, 2014, the Subcommittee held 
        a hearing entitled ``State Perspectives: Questions 
        concerning EPA's Proposed Clean Power Plan'' and 
        received testimony from:
                   Kenneth W. Anderson, Jr., 
                Commissioner, Public Utility Commission of 
                Texas;
                   Travis Kavulla, Commissioner, 
                Montana Public Service Commission;
                   Henry R. Darwin, Director, 
                Arizona Department of Environmental Quality;
                   Tom W. Easterly, Commissioner, 
                Indiana Department of Environmental Management;
                   Kelly Speakes-Backman, 
                Commissioner, Maryland Public Service 
                Commission; and
                   David W. Danner, Chairman, 
                Washington Utilities and Transportation 
                Commission.
           On July 29, 2014, the Subcommittee held a 
        hearing entitled ``FERC Perspectives: Questions 
        Concerning EPA's Proposed Clean Power Plan and other 
        Grid Reliability Challenges'' and received testimony 
        from:
                   Cheryl A. LaFleur, Acting 
                Chairman, Federal Energy Regulatory Commission;
                   Philip D. Moeller, Commissioner, 
                Federal Energy Regulatory Commission;
                   John R. Norris, Commissioner, 
                Federal Energy Regulatory Commission;
                   Tony Clark, Commissioner, 
                Federal Energy Regulatory Commission; and
                   Norman C. Bay, Commissioner, 
                Federal Energy Regulatory Commission.
           On June 19, 2014, the Subcommittee held a 
        hearing entitled ``EPA's Proposed Carbon Dioxide 
        Regulations for Power Plants'' and received testimony 
        from:
                   Janet McCabe, EPA Acting 
                Assistant Administrator for Air and Radiation.

                        COMMITTEE CONSIDERATION

    On April 21, 2015 and April 22, 2015, the Subcommittee on 
Energy and Power met in open markup session to consider H. R. 
___, Ratepayer Protection Act, and forwarded the bill to the 
full Committee, without amendment, by a record vote of 17 ayes 
and 12 nays. During the markup, three amendments were offered 
and rejected by a record vote.
    On April 28, 2015 and April 29, 2015, the Committee on 
Energy and Commerce met in open markup session to consider H.R. 
2042, which was substantially similar to the bill forwarded by 
the Subcommittee. During the markup, five amendments were 
offered, of which two were offered and rejected by voice vote, 
and three were offered and rejected by record votes. A motion 
by Mr. Upton to order H.R. 2042, reported to the House, without 
amendment, was agreed to by a record vote of 28 ayes and 22 
nays.

                            COMMITTEE VOTES

    Clause 3(b) of Rule XIII of the Rules of the House of 
Representatives requires the Committee to list the record votes 
on the motion to report legislation and amendments thereto. A 
motion by Mr. Upton to order H.R. 2042 reported to the House, 
without amendment, was agreed to by a record vote of 28 ayes 
and 22 nays. The following reflects the record votes taken 
during the Committee consideration:


                      COMMITTEE OVERSIGHT FINDINGS

    Pursuant to clause 3(c)(1) of rule XIII of the Rules of the 
House of Representatives, the Committee made findings that are 
reflected in this report.

         STATEMENT OF GENERAL PERFORMANCE GOALS AND OBJECTIVES

    H.R. 2042 provides direction to EPA to improve the 
transparency and timeliness of the preconstruction permit 
process under the Clean Air Act.

   NEW BUDGET AUTHORITY, ENTITLEMENT AUTHORITY, AND TAX EXPENDITURES

    In compliance with clause 3(c)(2) of rule XIII of the Rules 
of the House of Representatives, the Committee finds that H.R. 
2042, would result in no new or increased budget authority, 
entitlement authority, or tax expenditures or revenues.

       EARMARK, LIMITED TAX BENEFITS, AND LIMITED TARIFF BENEFITS

    In compliance with clause 9(e), 9(f), and 9(g) of rule XXI 
of the Rules of the House of Representatives, the Committee 
finds that H.R. 2042 contains no earmarks, limited tax 
benefits, or limited tariff benefits.

                        COMMITTEE COST ESTIMATE

    The Committee adopts as its own the cost estimate prepared 
by the Director of the Congressional Budget Office pursuant to 
section 402 of the Congressional Budget Act of 1974.

                  CONGRESSIONAL BUDGET OFFICE ESTIMATE

    Pursuant to clause 3(c)(3) of rule XIII of the Rules of the 
House of Representatives, the following is the cost estimate 
provided by the Congressional Budget Office pursuant to section 
402 of the Congressional Budget Act of 1974:

                                     U.S. Congress,
                               Congressional Budget Office,
                                      Washington, DC, May 13, 2015.
Hon. Fred Upton,
Chairman, Committee on Energy and Commerce,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 2042, the 
Ratepayer Protection Act of 2015.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Susanne S. 
Mehlman.
            Sincerely,
                                              Keith Hall, Director.
    Enclosure.

H.R. 2042--Ratepayer Protection Act of 2015

    This legislation would postpone the dates by which states 
and operators of existing fossil-fuel fired power plants must 
comply with any existing or future rules addressing emissions 
of carbon dioxide proposed by the Environmental Protection 
Agency (EPA). Such rules include:
           Carbon Pollution Emission Guidelines for 
        Existing Stationary Sources: Electric Utility 
        Generating Units, published in the Federal Register on 
        June 18, 2014; and,
           Carbon Pollution Emission Guidelines for 
        Existing Stationary Sources: EGUs in Indian Country and 
        U.S. Territories; Multi-Jurisdictional Partnerships, 
        published in the Federal Register on November 4, 2014.
    Those rules would require states, territories, and Indian 
tribes to meet individual goals for reducing carbon dioxide 
emissions set by EPA by considering a broad array of actions 
related to energy efficiency by certain dates.
    Under H.R. 2042, the compliance dates for such rules would 
be postponed while a judicial review is pending. The 
postponement would last until a judgment becomes final and is 
no longer subject to further appeal or review. In addition, 
under this bill, a state would not be required to develop any 
plans to meet emissions goals or comply with a federal plan 
under a final rule if the governor of that state determines 
that implementing a state plan or complying with a federal plan 
under a final rule would have an adverse effect on electricity 
ratepayers or on the reliability of the state's electricity 
system.
    Although enacting this legislation would postpone 
compliance dates for rules related to carbon emissions, it 
would not prohibit EPA from working on activities required for 
implementing such rules over the next several years. Those 
activities include developing guidance and providing technical 
assistance to states. Thus, CBO estimates that implementing 
this legislation would not have a significant effect on the 
federal budget. However, to the extent that state plans 
required under those rules are postponed because of actions 
initiated by state governors, EPA's expenditures for state 
grants could be postponed for a few years.
    Enacting H.R. 2042 would not affect direct spending or 
revenues; therefore, pay-as-you-go procedures do not apply.
    H.R. 2042 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act.
    The CBO staff contact for this estimate is Susanne S. 
Mehlman. The estimate was approved by Theresa Gullo, Assistant 
Director for Budget Analysis.

                       FEDERAL MANDATES STATEMENT

    The Committee adopts as its own the estimate of Federal 
mandates prepared by the Director of the Congressional Budget 
Office pursuant to section 423 of the Unfunded Mandates Reform 
Act.

                    DUPLICATION OF FEDERAL PROGRAMS

    No provision of H.R. 2042 establishes or reauthorizes a 
program of the Federal Government known to be duplicative of 
another Federal program, a program that was included in any 
report from the Government Accountability Office to Congress 
pursuant to section 21 of Public Law 111-139, or a program 
related to a program identified in the most recent Catalog of 
Federal Domestic Assistance.

                  DISCLOSURE OF DIRECTED RULE MAKINGS

    The Committee estimates that enacting H.R. 2042 
specifically directs to be completed no specific rulemakings 
within the meaning of 5 U.S.C. 551 that would not otherwise be 
issued by the agency.

                      ADVISORY COMMITTEE STATEMENT

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act were created by this 
legislation.

                  APPLICABILITY TO LEGISLATIVE BRANCH

    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of section 
102(b)(3) of the Congressional Accountability Act.

             SECTION-BY-SECTION ANALYSIS OF THE LEGISLATION

Section 1. Short title

    This section provides the short title of ``Ratepayer 
Protection Act of 2015.''

Section 2. Extending compliance dates of rules addressing carbon 
        dioxide emissions from existing power plants pending judicial 
        review

    This section would extend the compliance dates of any final 
rule issued under section 111(d) of the CAA addressing CO2 
emissions from existing fossil fuel-fired electric utility 
generating units, including for submittal of State plans.
    Section 2(a) provides that the term ``compliance date'' 
means the date by which any State, local, or tribal government 
or other person is first required to comply with the rule, 
including the date for submittal of State plans to the EPA.
    Section 2(b) provides that the final rules subject to the 
Act include any final rule that addresses CO2 emissions from 
existing sources that are fossil fuel-fired electric utility 
generating units under section 111(d) of the CAA, including any 
final rule that succeeds the EPA's proposed rules published at 
79 Fed. Reg. 34830 (June 18, 2014) or 79 Fed. Reg. 65482 
(November 4, 2014).
    Section 2(c) provides that the time period by which the 
compliance dates would be extended would be the period of time 
that begins sixty days after the final rule appears in the 
Federal Register, and ends on the date on which judgment 
becomes final, and no longer subject to further appeal or 
review, in all actions filed during the initial sixty days 
after the rule appears in the Federal Register seeking review 
of the rule, including actions pursuant to CAA section 307.

Section 3. Ratepayer protection

    This section provides that no State shall be required to 
adopt a State plan, and no State or entity within a State shall 
become subject to a Federal plan, pursuant to any final rule 
described in section 2(b), if the Governor of the State makes a 
determination, and notifies the EPA Administrator, that 
implementation of the State or Federal plan would have a 
significant adverse effect on 1) the State's residential, 
commercial, or industrial ratepayers, taking into account the 
rate increases necessary to implement the State or Federal 
plan, and other rate increases that have been or are 
anticipated to be necessary to implement other Federal or State 
environmental requirements; or 2) the reliability of the 
State's electricity system, taking into account the effects on 
the State's existing and planned generation and retirements, 
transmission and distribution infrastructure, and projected 
electricity demands.
    This section further provides that, in making such a 
determination, the Governor consult with the State's energy, 
environmental, public health, and economic development 
departments or agencies, and the Electric Reliability 
Organization, as defined in section 215 of the Federal Power 
Act.

         CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

    This legislation does not amend any existing Federal 
statute.

                            DISSENTING VIEWS

    Issued by the EPA on June 2, 2014, the proposed ``Clean 
Power Plan'' rule establishes emission guidelines for states to 
follow in developing plans to control carbon pollution from 
existing coal-fired and natural gas-fired power plants under 
section 111(d) of the Clean Air Act.\1\
---------------------------------------------------------------------------
    \1\U.S. Environmental Protection Agency, Carbon Pollution; Emission 
Guidelines for Existing Stationary Sources: Electric Utility Generating 
Units, 79 Fed. Reg. 34830 (June 18, 2014) (Proposed Rule) (online at 
www.gpo.gov/fdsys/pkg/FR-2014-06-18/pdf/2014-13726.pdf) [hereinafter 
U.S. Environmental Protection Agency Clean Power Plan].
---------------------------------------------------------------------------
    H.R. 2042 would adversely impact the Clean Power Plan in 
two very significant ways. First, the bill would suspend 
implementation of the final Clean Power Plan and would extend 
all final compliance and submission deadlines by the amount of 
time needed to complete judicial review. And second, the bill 
allows governors to effectively exempt their respective states 
from any requirements of a federal plan to reduce carbon 
pollution from existing power plants. Under current law, EPA is 
required to develop and implement a federal section 111(d) plan 
for any state that fails to submit its own state plan. H.R. 
2042 would overturn this existing Clean Air Act requirement as 
it relates to the Clean Power Plan.

        EPA ACTIONS ON POWER PLANT EMISSIONS OF CARBON POLLUTION

    Fossil fuel-fired power plants are by far the largest 
emitters of greenhouse gases from stationary sources in the 
United States; they are responsible for about one-third of 
total U.S. greenhouse gas emissions.\2\ There are currently no 
federal limits on their emissions of carbon pollution.
---------------------------------------------------------------------------
    \2\Id. at 34833; U.S. Environmental Protection Agency, Clean Power 
Plan, Proposal to Reduce Carbon Pollution from Existing Power Plants, 
at 2 (June 2, 2014) (presentation to Congressional Staff) (online at 
www2.epa.gov/sites/production/files/2014-05/ghg-chart.png).
---------------------------------------------------------------------------
    In June 2013, President Obama announced a Climate Action 
Plan to cut carbon pollution and to prepare for the effects of 
climate change.\3\ As part of that Plan, the President directed 
EPA to use its existing authority under the Clean Air Act to 
control carbon pollution from new and existing fossil fuel-
fired power plants.\4\ President Obama simultaneously issued a 
Presidential Memorandum on Power Sector Carbon Pollution 
Standards providing more detailed direction to EPA.\5\ It set 
deadlines of September 20, 2013, for a new proposed rule for 
new plants; June 1, 2014, and June 1, 2015, for proposed and 
final rules, respectively, for existing plants; and June 30, 
2016, for state submission of plans regulating existing 
plants.\6\ EPA expects to issue its final standards for new, 
modified and existing sources under Clean Air Act section 111 
this summer.\7\
---------------------------------------------------------------------------
    \3\Executive Office of the President, The President's Climate 
Action Plan (June 2013) (online at www.whitehouse.gov/sites/default/
files/image/president27sclimateactionplan.pdf).
    \4\Id. at 6.
    \5\President Barack Obama, Presidential Memorandum--Power Sector 
Carbon Pollution Standards (June 25, 2013) (online at 
www.whitehouse.gov/the-press-office/2013/06/25/presidential-memorandum-
power-sector-carbon-pollution-standards).
    \6\Id.
    \7\Senate Committee on Environment and Public Works, Testimony of 
the Honorable Janet McCabe, Assistant Administrator for Air and 
Radiation, U.S. Environmental Protection Agency, Hearing on ``Examining 
EPA's Proposed Carbon Dioxide Emissions Rules from New, Modified, and 
Existing Power Plants,'' 114th Cong. (Feb. 11, 2015); U.S. 
Environmental Protection Agency, Key Dates: Cutting Carbon Pollution 
from Power Plants (Jan. 7, 2015) (online at www2.epa.gov/sites/
production/files/2015-01/documents/20150107fs-key-dates.pdf)
---------------------------------------------------------------------------
A. Clean Air Act authority
    Section 111 of the Clean Air Act directs EPA to set 
performance standards to control air pollution from new 
stationary sources. These ``new source performance standards'' 
under section 111(b) establish limits on air pollution for 
sources in a given category (e.g., fossil fuel-fired power 
plants, oil refineries, pulp and paper plants, etc.) based on 
what can be achieved through ``the best system of emission 
reduction . . . adequately demonstrated.''\8\ In determining 
the ``best system of emission reduction'' (BSER), EPA must take 
into account cost and ``any nonair quality health and 
environmental impact and energy requirements.''\9\ Under 
section 111(b), EPA proposed performance standards for new 
coal- and natural gas-fired power plants in September 2013.\10\
---------------------------------------------------------------------------
    \8\Clean Air Act Sec. Sec. 111(a)(1); 111(b).
    \9\Id. at Sec. 111(a)(1).
    \10\U.S. Environmental Protection Agency, Standards of Performance 
for Greenhouse Gas Emissions from New Stationary Sources: Electric 
Utility Generating Units; Proposed Rule, 79 Fed. Reg. 1430 (Jan. 8, 
2014) (online at www.gpo.gov/fdsys/pkg/FR-2014-01-08/pdf/2013-
28668.pdf).
---------------------------------------------------------------------------
    For existing sources in a category covered by a new 
stationery source performance standard, section 111 would defer 
to other Clean Air Act provisions for pollutants that are: (1) 
covered by a National Ambient Air Quality Standard (NAAQS); or 
(2) listed as a hazardous air pollutant under section 112.\11\ 
Pollutants from existing sources that are not otherwise 
regulated under those provisions are addressed under section 
111(d). With respect to such pollutants, section 111(d) 
requires EPA to issue rules directing the states to reduce 
pollution from existing sources that would have been covered by 
a section 111(b) standard if they were new sources. Under 
section 111(d)(1), EPA must establish procedures for states to 
submit state plans to regulate existing sources that are 
similar to the procedures and requirements for State 
Implementation Plans (SIPs) under section 110.
---------------------------------------------------------------------------
    \11\Clean Air Act Sec. 111(d)(1).
---------------------------------------------------------------------------
    Specifically, the state plans for existing sources must 
apply a ``standard of performance'' for emissions of air 
pollutants that reflects the degree of emission limitation 
achievable through BSER, as applied to existing sources. Under 
this provision, EPA determines the BSER and the emission 
limitation it can achieve. States have considerable 
flexibility, however, in deciding how to achieve the overall 
pollution reduction goals for these sources. The state may take 
into consideration, for example the remaining useful life of 
the existing source, as well as other factors.
B. Proposed rule for state plans for existing sources
            1. Outreach process
    In developing this proposal, EPA has engaged in an 
unprecedented level of outreach for the pre-proposal stage of a 
rulemaking, and the proposal reflects extensive stakeholder 
input.\12\ Between August 2013 and June 2014, EPA held an 
overview webinar and four national teleconferences with states 
and a wide variety of stakeholders; established a mechanism to 
accept input by e-mail and web (receiving more than 2,000 
emails); held 11 public listening sessions across the country 
that were attended by over 3,300 people; sent consultation 
letters to 584 tribal leaders; and organized and participated 
in hundreds of meetings.\13\
---------------------------------------------------------------------------
    \12\U.S. Environmental Protection Agency Clean Power Plan at 34845.
    \13\Id. at 34845-34847.
---------------------------------------------------------------------------
    Among others, EPA met with state leaders, including 
governors, environmental commissioners, energy officers, public 
utility commissioners and air directors; industry leaders and 
trade association representatives; private, investor-owned, 
public and cooperative utilities and their associations; 
Independent System Operators and Regional Transmission 
Organizations; environmental and environmental justice 
organizations; religious groups; public health groups, doctors 
and health care providers; consumer groups; and individual 
unions, including the United Mine Workers of America, the 
International Brotherhood of Boilermakers, the International 
Brotherhood of Electrical Workers, and the AFL-CIO.\14\
---------------------------------------------------------------------------
    \14\Id.
---------------------------------------------------------------------------
    EPA indicated that the public submitted over 3.5 million 
public comments were submitted on the proposed Clean Power Plan 
before the December 1, 2014 deadline. The Agency will review 
and address all of the filed comments before finalizing the 
rule.\15\
---------------------------------------------------------------------------
    \15\Senate Committee on Environment and Public Works, Testimony of 
the Honorable Janet McCabe, Assistant Administrator for Air and 
Radiation, U.S. Environmental Protection Agency, Hearing on ``Examining 
EPA's Proposed Carbon Dioxide Emissions Rules from New, Modified, and 
Existing Power Plants,'' 114th Cong. (Feb. 11, 2015).
---------------------------------------------------------------------------
            2. Proposed emission guidelines for state plans
    The proposed emissions guidelines establish an individual 
goal for each state, expressed as a carbon intensity target. 
The carbon intensity target is a rate-based limit, which is 
expressed as a limit on the total pounds of carbon dioxide 
emitted from fossil fuel-fired power plants in the state per 
megawatt hour (MWh) of electricity generated in the state, 
adjusted to account for the MWh reduced through energy 
efficiency savings.\16\ The individual state carbon intensity 
goals are produced by applying a consistent national formula to 
each state's fossil fuel-fired power plants on a statewide 
basis, inputting state and regional-specific information to 
produce state goals that are tailored to each state's 
circumstances.\17\ For each state, EPA proposed a final state 
goal, to be achieved by 2030, and a less stringent interim goal 
that would apply for the 2020-2029 phase-in period.\18\
---------------------------------------------------------------------------
    \16\U.S. Environmental Protection Agency Clean Power Plan at 34892.
    \17\Id. at 34890-34892.
    \18\Id. at 34895.
---------------------------------------------------------------------------
    EPA developed the standards through several steps. First, 
EPA identified the ``best system of emission reduction . . . 
adequately demonstrated'' for greenhouse gas emissions from 
fossil fuel-fired power plants.\19\ In identifying the BSER, 
EPA relied heavily on the fact that the power system is an 
interconnected and integrated system in which the demand for 
electricity is met through different sources of electricity 
supply (including energy savings through efficiency).\20\ These 
different sources are constantly substituted for each other, 
both in the short term, through the dispatch order of various 
power sources (including demand-side savings), and over time, 
through investments in various new sources of supply (including 
efficiency). EPA proposed that the BSER is comprised of four 
building blocks: (1) making fossil fuel power plants more 
efficient; (2) using low-emitting power sources more by 
generating more electricity from existing natural gas combined 
cycle units; (3) building more zero and low-emitting power 
sources including renewables and some nuclear units; and (4) 
using electricity more efficiently through demand-side 
measures.\21\
---------------------------------------------------------------------------
    \19\Id. at 34835-34837, 34854-34890.
    \20\Id.
    \21\Id.; U.S. Environmental Protection Agency, Fact Sheet: Clean 
Power Plan; National Framework for States (June 2, 2014) (online at 
www2.epa.gov/sites/production/files/2014-05/documents/20140602fs-
setting-goals.pdf).
---------------------------------------------------------------------------
    For each building block, EPA analyzed the level of 
application that would be reasonable for the purpose of 
establishing state goals, taking into account technical 
feasibility, the quantity of emissions reductions achieved, the 
costs per metric ton of carbon dioxide, reliability, and other 
factors.\22\ EPA emphasized that it was not identifying the 
maximum quantity of pollution reduction that could be achieved 
through each building block, but only identifying a level of 
application that would be reasonable.\23\ For building block 1, 
EPA estimates that on average, existing coal-fired units can 
improve their heat rate (efficiency of power production) by 
6%.\24\ For building block 2, EPA estimates that existing 
natural gas combined cycle units could be used at up to 70% of 
their capacity.\25\ For building block 3, EPA developed a 
methodology to estimate the technical and economic renewable 
energy potential for each state, based on existing levels of 
renewable generation in each state and region-specific growth 
factors, as well as estimating the amount of nuclear generating 
capacity that could be preserved from retirement.\26\ For 
building block 4, EPA estimates, based on the performance 
achieved by the top 12 states, that it would be reasonable for 
each state to increase the level of demand-side energy 
efficiency to achieve an efficiency improvement rate of 1.5% 
per year.\27\
---------------------------------------------------------------------------
    \22\U.S. Environmental Protection Agency Clean Power Plan at 34836, 
34858-34875.
    \23\Id. at 34858-34875, 34893 (emphasis added).
    \24\Id. at 34859-34862.
    \25\Id. at 34862-34866.
    \26\Id. at 34866-34871.
    \27\Id. at 34871-34875.
---------------------------------------------------------------------------
    Next, EPA proposed to determine that the BSER is the 
combination of all four building blocks, each applied at the 
identified reasonable level of effort.\28\ Applying this BSER 
to the specific circumstances of each state produces the state 
goals, expressed as a carbon intensity target for the fossil 
fuel-fired generation in each state. The state goals vary 
widely, from a low (most stringent) goal of 228 pounds of 
carbon dioxide per MWh in Washington, to a high (least 
stringent) goal of 1,783 pounds of carbon dioxide per MWh in 
North Dakota.\29\
---------------------------------------------------------------------------
    \28\Id. at 34878-34890.
    \29\Id. at 34895.
---------------------------------------------------------------------------
            3. State flexibilities
    Under EPA's proposal, the basic elements for a state plan 
to be approvable are: the plan includes enforceable carbon 
dioxide limits on fossil fuel-fired power plants; any 
additional measures that would reduce carbon from these sources 
are also enforceable; and the plan demonstrates that the state 
will achieve its state goal over the specified time frame.\30\ 
EPA proposed multiple ways to maximize state flexibility in 
controlling carbon pollution from power plants and achieving 
the state goals.\31\ States and other stakeholders requested 
these flexibilities in the pre-proposal process.
---------------------------------------------------------------------------
    \30\Id. at 34837-34838; see also id. at 34909-34914 (detailing 
criteria for approvable state plan).
    \31\Id. at 34897-34898.
---------------------------------------------------------------------------
    First, EPA proposed that a state could either use its rate-
based goal, or could convert that goal (using a proposed 
formula for the translation) into a mass-based goal, which 
would cap the total quantity of carbon dioxide emissions from 
fossil fuel-fired power plants in the state.\32\
---------------------------------------------------------------------------
    \32\Id. at 34893-34894.
---------------------------------------------------------------------------
    Second, EPA proposed that states should have extensive 
flexibility in their plans in deciding how to achieve their 
state-wide goals.\33\ While EPA used the building blocks to 
determine what would be a reasonable carbon intensity goal for 
each state, EPA emphasized that there is no obligation for the 
states to use the particular control measures, or apply them at 
the same levels, that EPA identified as the BSER.\34\ In the 
proposal, EPA identified the potential for greater emissions 
reductions for each of the building blocks compared to the 
levels at which EPA applied each building block to generate the 
state goals.\35\ EPA also identified other measures that states 
could employ in addition to measures under the building blocks, 
including co-firing with natural gas, building new natural gas 
power plants, and building new nuclear capacity beyond what is 
already planned.\36\ In addition, EPA's proposal permits a 
state to choose either to place the full compliance obligation 
on fossil fuel-fired power plants in the state or undertake a 
``portfolio approach.'' A portfolio approach would include 
additional measures, such as state or local demand-side 
efficiency programs, that would reduce emissions from fossil 
fuel-fired power plants but would be undertaken by the state or 
other entities.\37\ EPA also proposed that states could choose 
to achieve their state goals through participation in multi-
state approaches, which EPA expects could enhance efficiency 
and lower costs.\38\
---------------------------------------------------------------------------
    \33\Id. at 34837-34838.
    \34\Id. at 34897.
    \35\Id. at 34858-34876.
    \36\Id.
    \37\Id. at 34897, 34900-34902.
    \38\Id. at 34833, 34900, 34910.
---------------------------------------------------------------------------
    Third, EPA proposed to provide flexibility in the timing 
both of when states must submit their plans and of when 
emission reductions would have to be achieved. States must 
submit their plans by June 2016; however, EPA proposed to allow 
a one-year extension for states that submit an initial plan but 
need additional time to complete it and a two-year extension 
for states participating in multi-state programs.\39\ The ten-
year phase-in period for achieving the reductions allows for 
the use of measures, such as energy efficiency, that ramp up 
over time.\40\ States also would not be required to meet their 
interim goal each year, but rather would be able to meet their 
goals on average over the 2020-2029 period.\41\
---------------------------------------------------------------------------
    \39\Id. at 34915; U.S. Environmental Protection Agency, Key Dates: 
Cutting Carbon Pollution from Power Plants (Jan. 7, 2015) (online at 
www2.epa.gov/sites/production/files/2015-01/documents/20150107fs-key-
dates.pdf).
    \40\Id. at 34838-34839, 34899, 34904-34906.
    \41\Id. at 34906.
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            4. Benefits and costs of the proposal
    If the proposed rule is finalized, EPA estimates that in 
2030, carbon pollution from the power sector will be reduced by 
30% compared to 2005 levels.\42\ In addition, this rule will 
cut pollution that leads to soot and smog by more than 25% in 
2030.\43\ EPA estimates the climate and public health benefits 
of these pollution controls will range anywhere between $55 
billion and $93 billion in 2030, and will help avoid between 
2,700 and 6,600 premature deaths and 140,000 and 150,000 asthma 
attacks in children in 2030 alone.\44\ EPA estimates that the 
benefits of the proposal will outweigh the costs by at least 6 
to 1, and by possibly as much as 12 to 1.\45\ In addition, 
while electricity prices may increase somewhat, EPA estimates 
that, due to increased use of cost-effective energy efficiency 
measures, actual electricity bills will fall by roughly 8% in 
2030.\46\
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    \42\U.S. Environmental Protection Agency, Fact Sheet: Clean Power 
Plan, Overview of the Clean Power Plan (June 2, 2014) (online at 
www2.epa.gov/sites/production/files/2014-05/documents/20140602fs-
overview.pdf).
    \43\Id.
    \44\Id.
    \45\U.S. Environmental Protection Agency, Fact Sheet: Clean Power 
Plan, By the Numbers (June 2, 2014) (online at www2.epa.gov/sites/
production/files/2014-06/documents/20140602fs-important-numbers-clean-
power-plan.pdf).
    \46\U.S. Environmental Protection Agency, Fact Sheet: Clean Power 
Plan, Overview of the Clean Power Plan (June 2, 2014) (online at 
www2.epa.gov/sites/production/files/2014-05/documents/20140602fs-
overview.pdf) (emphasis added).
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     ANALYSIS OF H.R. 2042 THE ``RATEPAYER PROTECTION ACT OF 2015''

    The following is a brief summary and analysis of the 
legislation

A. Summary of H.R. 2042

    Section 2 of the bill delays implementation of the final 
Clean Power Plan by extending all compliance deadlines based on 
pending judicial review. Under subsection (b), the compliance 
or submission date extension applies to ``any final rule to 
address carbon dioxide emissions from existing sources that are 
fossil fuel fired electric utility generating units under 
section 111(d) of the Clean Air Act.'' Also, subsection (b) 
specifically references and applies to rules that grow out of 
both the Clean Power Plan and the November 4, 2014 supplemental 
proposal covering Indian Country and U.S. Territories.\47\
---------------------------------------------------------------------------
    \47\H.R. 2042, the ``Ratepayer Protection Act of 2015,'' at 
Sec. 2(b).
---------------------------------------------------------------------------
    Subsection (c) establishes a uniform time period for all 
Clean Power Plan compliance and submission deadline extensions. 
Under the legislation, the time period starts 60 days after the 
final rule appears in the Federal Register, and ends when 
``judgment becomes final, and no longer subject to further 
appeal or review.''\48\
---------------------------------------------------------------------------
    \48\Id. at Sec. 2(c).
---------------------------------------------------------------------------
    Section 3 of the bill restates current law, that no state 
is required to submit a 111(d) plan. Subsection (a) further 
allows any governor to decide that the state shall not be 
subject to a federal 111(d) plan, if the governor makes a 
determination that implementation of the state or federal plan 
would ``have a significant adverse effect on the State's 
residential, commercial, or industrial ratepayers'' or would 
``have a significant adverse effect on the reliability of the 
State's electricity system.''\49\
---------------------------------------------------------------------------
    \49\Id. at Sec. 3(a).
---------------------------------------------------------------------------
    In making a determination on the state or federal plan's 
impact on ratepayers and electric reliability, the governor 
shall take into account a number of specific factors. Regarding 
the potential impact on ratepayers, a governor must consider 
any rate increases that are either associated with, or 
necessary for, implementation of the state or federal plan, as 
well as ``other rate increases that have been or are 
anticipated to be necessary to implement, or are associated 
with, other Federal or State environmental requirements.''\50\ 
Further, the governor must consider the state's existing and 
planned electricity generation, retirements, transmission and 
distribution infrastructure, and projected demand when 
determining the state or federal plan's impact on electric 
reliability.\51\
---------------------------------------------------------------------------
    \50\Id. at Sec. 3(a)(1).
    \51\Id. at Sec. 3(a)(2).
---------------------------------------------------------------------------
    Subsection (b) requires the governor to consult with the 
public utility commission or public service commission of the 
state, state environmental protection, public health and 
economic departments, and any regional transmission 
organization or independent service operator with jurisdiction 
over the state.

B. Issues raised by the H.R. 2042

    This legislation raises several major issues. In summary, 
the bill would suspend implementation of the Clean Power Plan 
and effectively prevent EPA from ever controlling carbon 
pollution from existing power plants to any significant degree, 
if a state fails--or outright refuses--to comply with the 
requirements of section 111(d) of the Clean Air Act.
    The bill's proponents argue that legislation is needed to 
delay implementation of the Clean Power Plan until all legal 
challenges are resolved by the courts. However, legal 
challenges to final EPA rules are routine and courts have the 
power on their own to stay the effectiveness of regulations 
under court challenge. The bill throws out the existing 
judicial process by legislatively granting a blanket extension 
for any compliance deadline, regardless of the merits of the 
legal challenge or the final outcome. Under the legislation, 
the Clean Power Plan would automatically be delayed by however 
much time it takes to conclude litigation, providing 
encouragement both for frivolous challenges and additional 
appeals in order to extend the ultimate compliance time.
    The bill's proponents have also argued that the legislation 
is needed to provide a ``safe harbor'' for states who cannot--
or will not--comply with the requirements of the Clean Power 
Plan. Under current law, EPA sets the emissions reduction goals 
under section 111(d) and it is up to the states to decide how 
to best achieve these reductions. States are not required to 
develop or implement their own plans for reducing carbon 
emissions from existing power plants, but EPA is required to 
step in with a federal 111(d) plan when a state does not 
implement its own. The Clean Air Act's use of cooperative 
federalism ensures that environmental risks are addressed, 
either by state action or by federal action where a state fails 
to act.
    The bill's opt-out provision disregards decades of success 
under the Clean Air Act's use of cooperative federalism. 
Instead, the draft would allow governors to refuse to comply 
unconditionally with the federal requirements of the Clean 
Power Plan. A governor would be able to take the ``Just Say 
No'' approach to reducing carbon emissions by simply 
determining that compliance with a phantom plan would adversely 
impact ratepayers or electric reliability.
    A number of amendments were offered during the full 
committee markup to address these concerns. The first, offered 
by Rep. Tonko, would ensure that a governor's decision to opt-
out of the Clean Power Plan is subject to judicial review. The 
amendment highlighted that a governor's decision to not follow 
federal law is completely unreviewable under the bill. The 
second amendment, offered by Rep. Rush, would require a 
governor wishing to opt-out of the Clean Power Plan, to certify 
that the ratepayer costs attributed to implementation of the 
Clean Power Plan must exceed the state costs of responding to 
extreme weather events caused by climate change such as sea 
level rise, flooding, storms, wildfires and drought. Rep. Rush 
also offered an amendment that would require a governor wishing 
to opt-out of the Clean Power Plan, to certify that such a 
decision would not result in significant adverse public health 
effects, including childhood asthma attacks, heart attacks, 
hospital admissions, and missed school and work days. Finally, 
Rep. Pallone offered an amendment to add a sense of Congress 
that the federal government should promote national security, 
economic growth and public health by addressing human induced 
climate change through the increased use of clean energy, 
energy efficiency and reductions in carbon pollution. The 
amendment was identical to an amendment offered by Sen. Bennet, 
which passed the Senate on March 26, 2015, with the support of 
all Democratic Senators, as well as seven Republican 
Senators.\52\ All amendments were defeated in full committee on 
a party line vote. H.R. 2042 was approved by the full committee 
by a party line vote of 28-23.
---------------------------------------------------------------------------
    \52\Ayotte, Collins, Graham, Heller, Murkowski, Kirk and Portman
---------------------------------------------------------------------------

              LEGAL ISSUES RELATED TO THE CLEAN POWER PLAN

    Although numerous parties critical of the Clean Power plan 
have suggested that EPA lacks authority for the plan or that 
the details of the plan cannot be squared with the language of 
the Clean Air Act, there is ample reason to believe that legal 
challenges to the EPA rule will ultimately fail. EPA has set 
forth its interpretation of the Clean Air Act as applied to the 
Clean Power Plan in a detailed legal memorandum and its 
interpretation is reasonable, grounded in the statute and case 
law and supported by the facts.\53\ EPA's reasonable 
interpretation of the statute will be entitled to 
deference.\54\
---------------------------------------------------------------------------
    \53\U.S. Environmental Protection Agency, Legal Memorandum for 
Proposed Carbon Pollution Emission Guidelines for Existing Electric 
Utility Generating Units (June 2, 2014) (online at www2.epa.gov/sites/
production/files/2014-06/documents/20140602-legal-memorandum.pdf).
    \54\Chevron U.S.A., Inc. v. Natural Res. Def. Council, 467 U.S. 
837, 843-44 (1984).
---------------------------------------------------------------------------

Analysis of EPA legal authority

    As an initial matter, it is beyond dispute that the 
Statutes at Large, not the United States Code provide 
definitive evidence of the law. The majority report recognizes 
this fact at footnote 24, and specifically cites 1 U.S.C. 112 
for that proposition (``the Statutes at Large serve as legal 
evidence of the law.'') Nor can it be disputed that there are 
two provisions relating to section 111(d) in the Statutes at 
Large and both provisions were passed by both chambers of 
Congress in identical fashion and both provisions were signed 
by the President into law.
    Despite the majority report's consistent citation to the 
United States Code, on this point, the United States Code is 
not the law and it cannot be considered controlling. As the 
majority admits, only when the United States Code is ``enacted 
as positive law'' does it ``replace the statutes at large'' as 
``legal evidence of the laws.''\55\ Such codification has not 
happened and therefore the Statutes at Large, with both the 
House and Senate provisions are the law of the United 
States.\56\
---------------------------------------------------------------------------
    \55\Majority Report at footnote 24.
    \56\See United States v. Welden, 377 U.S. 95, 98 n.4 (1964) 
(``[T]he Code cannot prevail over the Statutes at Large when the two 
are inconsistent.'') (quoting Stephan v. United States, 319 U.S. 423, 
426 (1943)); see also Five Flags Pipe Line Co. v. DOT, 854 F.2d 1438, 
1440 (D.C. Cir. 1988) (``Thus, where the language of the Statutes at 
Large conflicts with the language in the United States Code that has 
not been enacted into positive law, the language of the Statutes at 
Large controls.'')
---------------------------------------------------------------------------
    Contrary to the views of the majority, there is no evidence 
that the Senate-originated language was enacted into law in 
error, whereas a wealth of evidence shows that it was 
intentionally adopted by Congress. Because there is no dispute 
that this language was included in the final bill passed by 
both houses of Congress and signed into law by the President of 
the United States, the Senate provision is just as much part of 
the Clean Air Act as the House-originated language. For EPA now 
to disregard that Senate provision would be a dereliction of 
the executive's duty to ``take care the laws be faithfully 
executed.''\57\
---------------------------------------------------------------------------
    \57\U.S. Const., art. II, Sec. 3.
---------------------------------------------------------------------------
    In addition, the majority report cites the Chafee-Baucus 
``Statement of Senate Managers'' as evidence that the Senate-
originated amendment is nothing more than a scrivener's error. 
In fact, this document is entitled to no legal weight and is 
scant evidence of the actual intent of Congress as a whole in 
adopting the 1990 Clean Air Act Amendments. This statement by 
two members of one chamber was not reviewed or approved by all 
of the Senate conferees, let alone by the House conferees.\58\ 
Nor was it reviewed by the members of Congress who voted to 
adopt the final statutory language or by the President who 
signed the final statute into law. For these reasons, the D.C. 
Circuit has explicitly held that the Chafee-Baucus Statement 
``cannot undermine the statute's language.''\59\
---------------------------------------------------------------------------
    \58\see U.S. Senate, Debate on Agreeing to H. Rept 101-952 (Oct. 
27, 1990)
    \59\Environmental Defense Fund v. EPA, 82 F.3d 451, 460 n. 10 (D.C. 
Cir. 1996).
---------------------------------------------------------------------------
    The majority's interpretation of section 111(d) merely 
repeats the arguments made by Murray Energy in their failed 
lawsuits in the D.C. Circuit challenging EPA's proposed Clean 
Power Plan. These arguments are not persuasive and are undercut 
by the text, structure, design, and history of the Clean Air 
Act, which demonstrate that the agency must regulate carbon 
dioxide pollution from existing power plants under section 
111(d), regardless of whether or not it has regulated power 
plants' hazardous air pollutant (``HAP'') emissions under 
section 112. EPA's actions are fully in accord with the purpose 
of section 111(d), and the Clean Power Plan is on solid legal 
footing.
    In 1990, Congress enacted two amendments to section 
111(d)(1)(A)(i) to replace an obsolete cross-reference to the 
list of HAPs. As the Congressional Research Service's (CRS) 
legislative history, compiled shortly thereafter, these 
amendments ``appear to be duplicative; both, in different 
language, change the reference to section 112.''\60\ Despite 
the arguments of the majority, both the Senate and House 
amendments authorize EPA's promulgation of the Clean Power 
Plan. There is no doubt that the Senate amendment permits EPA 
to regulate power plant CO2 emissions under section 
111(d), since it requires the agency to control ``any existing 
source for any air pollutant (i) for which air quality criteria 
have not been issued or which is not included on a list 
published under section 108(a) or 112(b) . . . .'' Since the 
agency has not issued air quality criteria for CO2 
or listed it under section 108(a) or 112(b), it must regulate 
carbon dioxide pollution from existing power plants.
---------------------------------------------------------------------------
    \60\See Congressional Research Service, A legislative History of 
the Clean Air Act Amendments of 1990, Prepared for the Committee on 
Environment and Public Works, 103rd Cong. (1993) (S. Prt. 103-38, Vol. 
I at 46 n.1). To the extent the two provisions conflict with one 
another, EPA is entitled to deference under Chevron U.S.A., Inc. v. 
Natural Res. Def. Council, 467 U.S. 837, 843-44 (1984) in resolving the 
conflict. See Scialabba v. Cuellar de Osorio, 134 S. Ct. 2191, 2203 
(2014) (where ``internal tension'' in provision ``makes possible 
alternative reasonable constructions, . . . Chevron dictates that a 
court defer to the agency's . . . expert judgment about which 
interpretation fits best with, and makes the most sense of, the 
statutory scheme.'') (Kagan, J., plurality); id. at 2228 (``before 
concluding that Congress has legislated in conflicting and 
unintelligible terms,'' ``traditional tools of statutory construction'' 
should be used to ``allow [the provision] to function as a coherent 
whole'') (Sotomayor, J. dissenting). As discussed below, EPA's 
interpretation of the statute is reasonable and consistent with the 
text, history, purpose, and structure of section 111(d), and thus 
merits Chevron deference.
---------------------------------------------------------------------------
    The best interpretation of the House-originated provision 
produces an identical result, consistent with the observation 
that the two amendments are ``duplicative.'' Therefore even if 
one were to rely solely on the House provision and exclude the 
Senate language (which again, would be to disregard the actual 
law), EPA would continue to have authority to promulgate the 
Clean Power Plan.
    The House language directs the agency to regulate ``any 
existing source for any air pollutant (i) for which air quality 
criteria have not been issued or which is not included on a 
list published under section 108(a) or emitted from a source 
category which is regulated under section 112 . . .'' Because 
EPA has not issued air quality criteria for carbon dioxide or 
listed it under section 108(a), this language requires the 
agency to regulate existing sources' emissions of carbon 
dioxide under section 111(d) unless carbon dioxide qualifies as 
an ``air pollutant . . . emitted from a source category which 
is regulated under section 112.''
    In construing this provision, it is necessary to consider 
``the language itself, the specific context in which that 
language is used, and the broader context of the statute as a 
whole.''\61\ Considered by itself, the House language is 
ambiguous. One key source of ambiguity is the meaning of the 
phrase ``regulated under section 112.'' To determine whether 
section 112 ``regulate[s]'' existing sources of carbon dioxide, 
it is necessary to parse the ``what'' of the term 
``regulate[s].''.\62\ It is not facially clear whether this 
language exempts an existing source of carbon dioxide from 
regulation under section 111(d) when the source is subject to 
any requirement under section 112, or specifically when it is 
subject to a requirement under section 112 with respect to its 
carbon dioxide emissions.\63\
---------------------------------------------------------------------------
    \61\Robinson v. Shell Oil Co., 519 U.S. 337, 341 (1997).
    \62\Cf. Rush Prudential HMO, Inc. v. Moran, 536 U.S. 355, 366 
(2002) (to determine whether a law ``regulates insurance,'' it is 
necessary to ``pars[e] . . . the `what''' of the term ``regulates'')
    \63\Cf. Rush Prudential, 536 U.S. at 366 (a law does not 
``regulate[s] insurance'' unless ``insurers are regulated with respect 
to their insurance practices'') (emphasis added).
---------------------------------------------------------------------------
    The textual ambiguity is resolved when the House-originated 
language is read in light of ``the specific context in which 
that language is used, and the broader context of the statute 
as a whole.''\64\ Reading the House-originated language to bar 
section 111(d) regulation of non-HAPs from any source category 
regulated under section 112 does not make sense in the 
immediate context in which the language appears. The House 
language modifies the phrase ``any air pollutant'' not the 
phrase ``any existing source''--and appears alongside two other 
subclauses that exclude certain air pollutants from regulation 
under section 111(d). The natural inference is that the House 
language excludes a set of air pollutants, not a set of 
sources.
---------------------------------------------------------------------------
    \64\Robinson, 519 U.S. at 341.
---------------------------------------------------------------------------
    The same conclusion follows from consideration of the 
broader statutory context. The Senate-originated amendment,\65\ 
unambiguously exempts only HAPs from regulation under section 
111(d). The natural inference is that the House-originated 
amendment performs a similar or identical function, since the 
simplest explanation for the conferees' failure to reconcile 
the two amendments is that, in the absence of any substantive 
difference between the position of the two chambers, the 
conferees failed even to notice the presence of two amendments 
to the same clause. Indeed, this view is supported by the 
conclusion that the two provisions are ``duplicative.''\66\
---------------------------------------------------------------------------
    \65\Clean Air Act Amendments of 1990, Pub. L. 101-549, Sec. 302(a).
    \66\Congressional Research Service, A legislative History of the 
Clean Air Act Amendments of 1990, Prepared for the Committee on 
Environment and Public Works, 103rd Cong. (1993) (S. Prt. 103-38, Vol. 
I at 46 n.1).
---------------------------------------------------------------------------
    Lending additional support to this position is section 
112(d)(7) of the statute, also enacted in 1990. Section 
112(d)(7) provides that ``[n]o emission standard or other 
requirement promulgated under [section 112] shall be 
interpreted . . . to diminish or replace the requirements of a 
more stringent emission limitation or other applicable 
requirement established pursuant to section [111]'' or ``other 
authority of [the Clean Air Act].''\67\ This provision is clear 
evidence that Congress did not intend regulation of a source's 
HAP emissions under section 112 to displace regulation of that 
source's other emissions under section 111(d). On the contrary, 
Congress fully expected identical sources to be regulated under 
sections 111 and 112 at the same time; otherwise, section 
112(d)(7) would make no sense.
---------------------------------------------------------------------------
    \67\42 U.S.C. Sec. 7412(d)(7).
---------------------------------------------------------------------------
    Furthermore, section 111(d) must be interpreted in a manner 
that is consistent with the Clean Air Act's ``structure and 
design.''\68\ Section 111(d) is one of three major regulatory 
programs that Congress enacted in 1970 to control air pollution 
from existing industrial sources.\69\ Each program--the NAAQS 
program under sections 108-110, the HAP program under section 
112, and section 111(d)--was designed to regulate a specific 
class of air pollutants. Together, the three programs were 
designed to provide a comprehensive regulatory scheme for 
existing sources with ``no gaps in control activities 
pertaining to stationary source emissions that pose any 
significant danger to public health or welfare.''\70\
---------------------------------------------------------------------------
    \68\Util. Air Regulatory Grp. v. EPA, 134 S. Ct. 2427, 2442 (2014).
    \69\See 40 Fed. Reg. 55,240 (Nov. 17, 1975).
    \70\Senate Committee on Public Works, National Air Quality 
Standards Act of 1970, 91st Cong. (1970) (S. Rept. 91-1196); see also 
40 Fed. Reg. 55,240 (Nov. 17, 1975).
---------------------------------------------------------------------------
    Section 111(d) would be largely eviscerated if section 
111(d)(1)(A)(i) were construed to exempt all emissions (HAP and 
non-HAP alike) from any source subject to regulation under 
section 112 with respect to its HAP emissions, since as 
Congress intended, every large industrial source category is 
subject to regulation under section 112 for its HAP 
emissions.\71\ The majority's view of section 111(d) would 
destroy the conscientious design of the Clean Air Act and 
would, perversely, change a gap-filling provision--section 
111(d)--into a gap-creating provision. This would turn the law 
on its head.
---------------------------------------------------------------------------
    \71\See 42 U.S.C. Sec. 7412(c)(1) (requiring the listing of ``all 
categories and subcategories of major sources and area sources'' of 
HAPs).
---------------------------------------------------------------------------
    There is simply no evidence that Congress intended to 
abandon the Clean Air Act's seamless, tripartite regulatory 
framework in 1990. To the contrary, the legislative history of 
the 1990 amendments ``reflects Congress' desire to require EPA 
to regulate more substances,'' not fewer.\72\ The regulatory 
history of section 111(d) is in accord with the legislative 
history. EPA has regularly used section 111(d) to regulate non-
HAP emissions from sources that were simultaneously regulated 
with respect to their HAP emissions under section 112.\73\ 
Moreover, in the four presidential administrations since the 
1990 Amendments, EPA has consistently interpreted section 
111(d) to authorize and require the regulation of any air 
pollutant not regulated under the NAAQS or HAP program.\74\
---------------------------------------------------------------------------
    \72\70 Fed. Reg. 15,994, 16,032 (Mar. 29, 2005).
    \73\See 70 Fed. Reg. at 16,032; see also Amicus Br. of Inst. For 
Policy Integrity (``IPI Brief'') at 10-11, West Virginia v. EPA, No. 
14-1146 (D.C. Cir. 2015) (discussing municipal solid waste landfills).
    \74\See IPI Brief at 8-22; see also U.S. Environmental Protection 
Agency, Memorandum of EPA General Counsel Jonathan Z. Cannon, to EPA 
Administrator Carol M. Browner, Re: EPA's Authority to Regulate 
Pollutants Emitted by Electric Power Generation Sources at 3 n.2 (Apr. 
10, 1998) (stating that EPA's duty to regulate under section 111(d) 
extends to any dangerous air pollutant ``except criteria pollutants or 
hazardous air pollutants'').
---------------------------------------------------------------------------
    The majority's interpretation of the House language would 
also produce absurd results. Under that reading of the statute, 
EPA would only be prohibited from issuing section 111(d) 
regulations for existing power plants if a section 112 rule for 
those sources were already finalized and in effect. It would 
not, however, prohibit EPA from issuing section 111(d) 
regulations first and subsequently regulating those sources 
under section 112. In other words, under the majority's view, 
if EPA waited until the day after it finalized power plant 
CO2 regulations to issue the Mercury Air Toxics 
Standards (MATS) rule, the agency would be within its legal 
rights; but if it issued the MATS rule the day before it 
finalized power plant CO2 regulations, it would 
relinquish its authority to promulgate the latter regulation. 
This is, of course, a nonsensical outcome, and illustrates in 
stark terms why the majority's reading of the Clean Air Act is 
untenable.
    Also debunking the majority's interpretation of the statute 
is the Supreme Court's opinion in American Electric Power Co. 
v. Connecticut (AEP).\75\ In AEP, Connecticut and other states 
urged the recognition of a federal common law cause of action 
that would allow states injured by climate change to sue the 
owners of existing coal-fired power plants, the nation's 
largest emitters of CO2. The companies insisted that 
the nuisance remedy was not available because Congress, by 
enacting the Clean Air Act, had conferred authority on EPA to 
regulate carbon dioxide emissions, including from petitioners' 
power plants. The companies emphasized that the Clean Air Act 
is a ``comprehensive regulatory scheme,'' and pointed to 
language from the sponsors of the 1990 amendments who 
``repeatedly characterized the Act as `comprehensive,' and 
commented on its expansive reach.''\76\
---------------------------------------------------------------------------
    \75\American Electric Power Co. v. Connecticut (``AEP''), 131 S. 
Ct. 2527 (2011).
    \76\Petitioner's Brief at 9, 42, Am. Elec. Power Co. v. 
Connecticut, 131 S. Ct. 2527 (D.C. Cir. No. 10-174) (2011) (internal 
citations omitted). See also Amicus Br. of Edison Elec. Inst., et al., 
in Support of Pets. At 9, Am. Elec. Power Co. v. Connecticut, 131 S. 
Ct. 2527 (D.C. Cir. No. 10-174) (2011) (brief of leading power industry 
associations, stating: ``In the case of air pollutants that are not 
regulated under certain other provisions of the Clean Air Act, such as 
[greenhouse gases], the Act then `requires the States to determine 
appropriate control limits for existing sources for which there is an 
NSPS.''') (internal citation omitted).
---------------------------------------------------------------------------
    The petitioners' briefs in AEP pointed specifically to 
EPA's authority to regulate existing power plants under section 
111(d),\77\ and highlighted the absence of any ```gap' in the 
statutory system with respect to the particular emissions 
restrictions plaintiffs seek.''\78\ The Supreme Court, by an 8-
0 vote, adopted industry's argument, holding that section 
111(d) ``speaks directly to emissions of carbon dioxide from 
the defendants' power plants,''\79\ thereby displacing federal 
common law.
---------------------------------------------------------------------------
    \77\Pet's Br. at 6-7, 47,
    \78\Reply Br. at 17, Am. Elec. Power Co. v. Connecticut, 131 S. Ct. 
2527 (D.C. Cir. No. 10-174) (2011).
    \79\131 S. Ct. at 2537.
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    In a footnote, the AEP Court wrote that ``EPA may not 
employ [section 111(d)] if existing stationary sources of the 
pollutant in question are regulated under the [NAAQS] program . 
. . or the [HAP] program.''\80\ The Court understood the 
relevant question to be whether existing sources are regulated 
with respect to the ``pollutant in question'' under the NAAQS 
or HAP programs. Crucially, the Court treated the NAAQS 
exclusion and the HAP exclusion as parallel limits on EPA's 
authority. The NAAQS exclusion clearly excludes a class of 
pollutants, not sources, from regulation under section 
111(d).\81\ The Court's syntax indicates that it understood the 
HAP exclusion to establish a parallel, pollutant-based 
exclusion. Thus, the Court's footnote is properly read to 
provide that ``EPA may not employ [section 111(d)] if existing 
stationary sources of the pollutant in question are regulated'' 
with respect to that pollutant under the NAAQS program or HAP 
program. Had the Court not intended the HAP exclusion to be 
pollutant-specific, a key premise of its unanimous merits 
holding--EPA's authority to regulate power plants' carbon 
dioxide pollution under section 111(d)--would have been 
negated, since power plants' emissions of criteria pollutants 
have been regulated since the 1970s.
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    \80\Id. at 2538 n.7 (emphasis added).
    \81\See 42 U.S.C. Sec. 7411(d)(1)(A)(i (providing that EPA may 
regulate ``any air pollutant . . . which is not included on a list 
published under section [108(a)]'').
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    Notably, the section 112(n)(1) rule regulating power 
plants' HAP emissions (known as the Mercury and Air Toxics 
Standards rule) was well advanced during the briefing in 
AEP,\82\ and the proposed rule was signed by the Administrator 
more than a month before the AEP oral argument and more than 
three months before the Court's decision came down. No party 
suggested in AEP that EPA's authority to regulate carbon 
dioxide would go away with the promulgation of a section 
112(n)(1) standard for power plants.\83\ It is highly 
implausible that the Court believed the statutory authority 
underlying its displacement analysis would disappear within 
months if EPA finalized the emission standards for power 
plants' HAPs emissions that it had already proposed.
---------------------------------------------------------------------------
    \82\Am. Elec. Power Co. v. Connecticut, 131 S. Ct. 2527 (D.C. Cir. 
No. 10-174) (2011).
    \83\Id.
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    Despite the text, structure, and history of section 111(d), 
the consistent practice of EPA with regard to that provision, 
and the Supreme Court's holding in AEP, the majority maintains 
that EPA may not regulate CO2 emissions from 
existing power plants under section 111(d). Not only is the 
majority's view of the House-originated language incorrect, its 
argument fails independently unless the Senate-originated 
language is simply excised from the statute as a ``drafting 
error'' or a non-substantive ``conforming amendment.'' The 
majority report cites no cases, precedents, or other legal 
authorities holding that a duly enacted provision in the 
Statutes at Large can be disregarded in this manner. On the 
contrary, the Supreme Court has instructed that courts must 
``give effect, if possible, to every word Congress used'' when 
construing a statute.\84\ The Court has also admonished against 
``plac[ing] more weight on the `Conforming Amendments' caption 
than it can bear.''\85\
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    \84\Reiter v. Sonotone Corp., 442 U.S. 330, 339 (1979).
    \85\Burgess v. United States, 553 U.S. 124, 135 (2008). See also 
United States v. R.L.C., 503 U.S. 291, 305 n.5 (1992) (refusing to 
disregard the effects of a ``technical amendment'' because ``a statute 
is a statute, whatever its label'').
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    Furthermore, there is no evidence that the Senate amendment 
was adopted in error. A scrivener's error is ``a mistake made 
by someone unfamiliar with the law's object and design,''\86\ 
which produces language with ``no plausible 
interpretation.''\87\ In contrast, the Senate's eighteen-word 
amendment makes it clear that substituting ``112(b)'' for 
``112(b)(1)(A)'' was precise and intentional, not a 
typographical error. The amendment maintains section 111(d)'s 
prior function in the Act's comprehensive regulatory scheme and 
produces a perfectly sensible result. Moreover, the drafting 
history of the 1990 amendments indicates that the conferees 
restored the Senate-originated language to the final bill after 
it emerged from the House.
---------------------------------------------------------------------------
    \86\U.S. Nat'l. Bank of Or. v. Indep. Ins. Agents of Am., Inc., 508 
U.S. 439, 462 (1993),
    \87\Williams Co. v. FERC, 345 F.3d 910, 913 n.1 (D.C. Cir. 2003).
---------------------------------------------------------------------------
    In any case, the Chafee-Baucus Statement provides no 
support for the majority's position. The statement says nothing 
to suggest that Congress intended to create a gap in the pre-
existing comprehensive coverage of all dangerous air 
pollutants. The most plausible explanation for this silence is 
that Chafee and Baucus saw no difference in meaning between the 
Senate and House provisions and believed them consistent with 
the ``no gaps'' policy in place since 1970.
    For these reasons, the majority is incorrect to assert that 
EPA may not regulate CO2 emissions from existing 
power plants due to the earlier promulgation of the MATS rule. 
On the contrary, the Clean Air Act directs the agency to 
control all of the dangerous air emissions from existing major 
sources such as power plants. The Clean Power Plan is well 
within EPA's authority under section 111(d), and arguments to 
the contrary miss the mark.

Other legal arguments

    The majority report also raises other legal arguments 
against the Clean Power Plan, including an argument that EPA 
may not take a system-wide approach to regulating greenhouse 
gases from electric generating units. EPA has addressed this 
issue at length in its Legal Memorandum.\88\
---------------------------------------------------------------------------
    \88\U.S. Environmental Protection Agency, Legal Memorandum for 
Proposed Carbon Pollution Emission Guidelines for Existing Electric 
Utility Generating Units (June 2, 2014) (online at www2.epa.gov/sites/
production/files/2014-06/documents/20140602-legal-memorandum.pdf).
---------------------------------------------------------------------------
    Clean Air Act section 111 defines the term ``standard of 
performance'' as ``a standard for emissions of air pollution 
which reflects the degree of emission limitation achievable 
through the best system of emission reduction . . . which the 
Administrator determines has been adequately 
demonstrated.''\89\ That definition is clearly broad enough to 
encompass the four building block approach contemplated by the 
proposed EPA Clean Power Plan. As EPA notes in its Legal 
Memorandum, when each component term of ``system of emission 
reduction'' is given its ordinary meaning, the overall term is 
reasonably defined as ``any set of things that reduces 
emissions.''\90\
---------------------------------------------------------------------------
    \89\Id.
    \90\Id. at 51.
---------------------------------------------------------------------------
    Moreover, section 111(d) makes clear that the procedure 
governing submission of state 111(d) plans shall be ``similar'' 
to the procedure governing submission of SIPs under Clean Air 
Act section 110.\91\ Section 110, in turn, makes clear that 
such plans may include ``economic incentives such as marketable 
permits or auctions of emission allowances.''\92\ Thus, it is 
not only clear that EPA would have authority to consider the 
use of such emission reduction methods, but also, there is a 
strong argument that EPA may be required to consider such 
methods in setting the appropriate emission limit under section 
111(d).
---------------------------------------------------------------------------
    \91\Clean Air Act Sec. 111(d)(1).
    \92\Clean Air Act Sec. 110(a)(2)(A).
---------------------------------------------------------------------------
    In the legislative history of the 1977 amendments, Congress 
indicated that EPA should consider beyond-the-fence measures in 
regulating under section 111. For example, the legislative 
history instructed that EPA should consider ``oil 
desulfurization/denitrification at the refinery'' in 
establishing emission standards for oil-fired power plants.\93\ 
The Conference Committee was in agreement: EPA should ``give 
credit for accepted minemouth and other precombustion fuel 
treatment processes, whether they occur at, or are achieved by, 
the source or by another party.''\94\ Thus, Congress 
specifically contemplated that section 111 standards would 
reflect the availability of credits for off-site activities 
implemented by third parties, even during the years (1977-1990) 
when the statute required standards for new sources to reflect 
the application of a ``technological system of continuous 
emission reduction.''
---------------------------------------------------------------------------
    \93\U.S. House of Representatives, Conference Report, Clean Air 
Amendments of 1977, at 130, 95th Cong. (Aug. 3, 1977) (H. Rept. 95-
564).
    \94\U.S. House of Representatives, Conference Report, Clean Air 
Amendments of 1977, at 130, 95th Cong. (Aug. 3, 1977) (H. Rept. 95-
564).
---------------------------------------------------------------------------
    In addition there is precedent in EPA rulemakings under the 
Clean Air Act for reductions that take place at off-site 
locations, such as coal pre-treatment requirements for coal 
fired electric generating units.\95\ Furthermore there is also 
precedent for crediting zero emission output sources in an 
averaging plan.\96\
---------------------------------------------------------------------------
    \95\U.S. Environmental Protection Agency, New Stationary Sources 
Performance Standards; Electric Utility Steam Generating Units, 44 Fed. 
Reg. 33580, 33581 (June 11, 1979).
    \96\See U.S. Environmental Protection Agency, 2017 and Later Model 
Year Light-Duty Vehicle Greenhouse Gas Emissions and Corporate Average 
Fuel Economy Standards, 77 Fed. Reg. 62624, 62627-28 (Oct. 15, 2012). 
See also U.S. Environmental Protection Agency, Joint Technical Support 
Document: Final Rulemaking for 2017-2025 Light-Duty Vehicle Greenhouse 
Gas Emission Standards and Corporate Average Fuel Economy Standards at 
3-7 (2012) (crediting of zero emission vehicles).
---------------------------------------------------------------------------
    In short, EPA's proposed rule relies on a system-based 
approach that is grounded in the language of the statute and 
for which there is ample authority and precedent under the 
Clean Air Act and in EPA rulemakings that have been upheld on 
judicial review. There is no reason to expect that EPA's 
approach will not be upheld.

Legislation addressing a proposed rule

    On June 9, 2015, the United States Court of Appeals for the 
District of Columbia Circuit denied the Petitions for Review of 
EPA's proposed Clean Power Plan filed by the Murray Energy 
Corporation and the State of West Virginia.\97\
---------------------------------------------------------------------------
    \97\See In Re Murray Energy Corporation v. EPA, No 14-1112, Slip 
op. (D.C. Cir. 2015)
---------------------------------------------------------------------------
    Although most of the legal arguments set forth in the 
majority report were briefed in that case, the rationale for 
the court's decision was very simple. The court declined to 
review a proposed rule. As Judge Kavanagh noted in his opinion:

        EPA has not yet issued a final rule. It has issued only 
        a proposed rule. Petitioners nonetheless ask us to jump 
        into the fray now. They want us to do something they 
        candidly acknowledge we have never done before: review 
        the legality of a proposed rule. But a proposed rule is 
        just a proposal. . . . We deny the petitions for review 
        and the petition for a writ of prohibition because the 
        complained of action is not final.\98\
---------------------------------------------------------------------------
    \98\In re Murray Energy, slip op. at 6

    H.R. 2042 has the same problem. The rule is not yet final. 
H.R. 2042 seeks to have Congress legislate to address a 
proposed rule, not a final rule. It would be extraordinary 
enough for Congress to pass legislation extending by law the 
implementation dates of a final EPA rule and explicitly giving 
the states the ability to disregard federal law. However, here, 
Congress would be acting in similar fashion with regard to a 
proposed rule. It is entirely possible that EPA will act in the 
final rule to address many of the issues that are raised in the 
majority report and that the projected dire impacts will either 
be greatly mitigated, eliminated or proven to be non-existent 
in the final rule. Therefore it would be irresponsible and a 
waste of time for the Congress to act to legislate against 
EPA's proposed Clean Power Plan.
    As Ranking Member Pallone has stated: ``this legislation is 
not only dangerous, but also premature, unnecessary and poorly 
conceived. It asks us to legislate to address phantom problems 
in a rule that has not yet been finalized and it gives 
individual governors the unfettered ability to thumb their nose 
at the Clean Air Act.\99\
---------------------------------------------------------------------------
    \99\Statement of Ranking Member Frank Pallone, Jr. Subcommittee on 
Energy and Power Markup of H.R. 2042, Ratepayer Protection Act April 
22, 2015
---------------------------------------------------------------------------
    For the reasons stated above, we dissent from the views 
contained in the Committee's report.
                                   Frank Pallone, Jr.,
                                           Ranking Member, Committee on 
                                               Energy and Commerce.
                                   Bobby L. Rush,
                                           Ranking Member, Subcommittee 
                                               on Energy and Power.