[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]
STATE PERSPECTIVES:
HOW EPA'S POWER PLAN WILL
SHUT DOWN POWER PLANTS
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON ENVIRONMENT
COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY
HOUSE OF REPRESENTATIVES
ONE HUNDRED FOURTEENTH CONGRESS
FIRST SESSION
__________
September 11, 2015
__________
Serial No. 114-38
__________
Printed for the use of the Committee on Science, Space, and Technology
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Available via the World Wide Web: http://science.house.gov
______
U.S. GOVERNMENT PUBLISHING OFFICE
97-757 PDF WASHINGTON : 2017
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COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY
HON. LAMAR S. SMITH, Texas, Chair
FRANK D. LUCAS, Oklahoma EDDIE BERNICE JOHNSON, Texas
F. JAMES SENSENBRENNER, JR., ZOE LOFGREN, California
Wisconsin DANIEL LIPINSKI, Illinois
DANA ROHRABACHER, California DONNA F. EDWARDS, Maryland
RANDY NEUGEBAUER, Texas SUZANNE BONAMICI, Oregon
MICHAEL T. McCAUL, Texas ERIC SWALWELL, California
MO BROOKS, Alabama ALAN GRAYSON, Florida
RANDY HULTGREN, Illinois AMI BERA, California
BILL POSEY, Florida ELIZABETH H. ESTY, Connecticut
THOMAS MASSIE, Kentucky MARC A. VEASEY, Texas
JIM BRIDENSTINE, Oklahoma KATHERINE M. CLARK, Massachusetts
RANDY K. WEBER, Texas DON S. BEYER, JR., Virginia
BILL JOHNSON, Ohio ED PERLMUTTER, Colorado
JOHN R. MOOLENAAR, Michigan PAUL TONKO, New York
STEVE KNIGHT, California MARK TAKANO, California
BRIAN BABIN, Texas BILL FOSTER, Illinois
BRUCE WESTERMAN, Arkansas
BARBARA COMSTOCK, Virginia
DAN NEWHOUSE, Washington
GARY PALMER, Alabama
BARRY LOUDERMILK, Georgia
RALPH LEE ABRAHAM, Louisiana
------
Subcommittee on Environment
HON. JIM BRIDENSTINE, Oklahoma, Chair
F. JAMES SENSENBRENNER, JR. SUZANNE BONAMICI, Oregon
RANDY NEUGEBAUER, Texas DONNA F. EDWARDS, Maryland
RANDY WEBER, Texas ALAN GRAYSON, Florida
JOHN MOOLENAAR, Michigan AMI BERA, California
BRIAN BABIN, Texas MARK TAKANO, California
BRUCE WESTERMAN, Arkansas BILL FOSTER, Illinois
GARY PALMER, Alabama EDDIE BERNICE JOHNSON, Texas
RALPH LEE ABRAHAM, Louisiana
C O N T E N T S
September 11, 2015
Page
Witness List..................................................... 2
Hearing Charter.................................................. 3
Opening Statements
Statement by Representative Jim Bridenstine, Chairman,
Subcommittee on Environment, Committee on Science, Space, and
Technology, U.S. House of Representatives...................... 5
Written Statement............................................ 6
Statement by Representative Suzanne Bonamici, Ranking Minority
Member, Subcommittee on Enviorment, Committee on Science,
Space, and Technology, U.S. House of Representatives........... 6
Written Statement............................................ 8
Statement by Representative Lamar S. Smith, Chairman, Committee
on Science, Space, and Technology, U.S. House of
Representatives................................................ 9
Written Statement............................................ 10
Statement by Representative Eddie Bernice Johnson, Committee on
Science, Space, and Technology, U.S. House of Representatives.. 10
Written Statement............................................ 11
Witnesses:
Mr. Craig Butler, Director, Ohio Environmental Protection Agency
Oral Statement............................................... 14
Written Statement............................................ 17
Dr. Bryan Shaw, Chairman, Texas Commission on Environmental
Quality
Oral Statement............................................... 21
Written Statement............................................ 23
Mr. Jason Eisdorfer, Utility Program Director, Oregon Public
Utility Commission
Oral Statement............................................... 28
Written Statement............................................ 30
Appendix I: Additional Material for the Record
Documents submitted by Representative Suzanne Bonamici, Ranking
Minority Member, Subcommittee on Enviorment, Committee on
Science, Space, and Technology, U.S. House of Representatives.. 64
Documents submitted by Representative Jim Bridenstine, Chairman,
Subcommittee on Enviorment, Committee on Science, Space, and
Technology, U.S. House of Representatives...................... 71
Documents submitted by Representative Donna F. Edwards,
Subcommittee on Enviorment, Committee on Science, Space, and
Technology, U.S. House of Representatives...................... 76
Documents submitted by Representative Gary Palmer, Subcommittee
on Enviorment, Committee on Science, Space, and Technology,
U.S. House of Representatives.................................. 92
Appendix II: Slides
Slide submitted by Representative Jim Bridenstine, Chairman,
Subcommittee on Enviorment, Committee on Science, Space, and
Technology, U.S. House of Representatives...................... 126
Slide submitted by Representative Bill Foster, Committee on
Science, Space, and Technology, U.S. House of Representatives.. 127
STATE PERSPECTIVES:
HOW EPA'S POWER PLAN WILL
SHUT DOWN POWER PLANTS
----------
FRIDAY, SEPTEMBER 11, 2015
House of Representatives,
Subcommittee on Environment
Committee on Science, Space, and Technology,
Washington, D.C.
The Subcommittee met, pursuant to call, at 9:04 a.m., in
Room 2318 of the Rayburn House Office Building, Hon. Jim
Bridenstine [Chairman of the Subcommittee] presiding.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Chairman Bridenstine. The Subcommittee on the Environment
will come to order.
Without objection, the Chair is authorized to declare
recesses of the Subcommittee at any time.
Welcome to today's hearing entitled ``State Perspectives:
How the EPA's Power Plan Will Shut Down Power Plants.'' I
recognize myself for five minutes for an opening statement.
Today's hearing focuses on the EPA's final Clean Power Plan
rule and the tremendous impact that this rule will have on the
states upon final implementation. I am very concerned about how
this regulation will affect the American economy, more
specifically, access to cheap and abundant traditional energy
sources as well as affordable and reliable electricity. Today,
I look forward to hearing testimony from state regulators about
how this rule will specifically impact the citizens of their
states.
The negative impacts of EPA's supposed Clean Power Plan are
well documented. A few months ago, we heard from industry
groups about some of these impacts. The Committee learned that
the total compliance costs of the rule could be as high as $366
billion by the year 2030. Additionally, according to the
National Association of Manufacturers, the regulation is
projected to cause double-digit electricity price increases in
43 states.
Moreover, the Committee has heard testimony that the EPA is
using questionable legal authority to promulgate the Clean
Power Plan under section 111 of the Clean Air Act. In fact,
Laurence Tribe, leading environmental and constitutional law
professor and mentor to President Obama, referred to the method
by which this rule was enacted as ``burning the Constitution.''
This Committee has also heard testimony at previous
hearings that the climate benefits from any reductions in
carbon emissions realized by the rule will be negligible on a
global scale.
Unfortunately, we have a rule that will place tremendous
costs on the American people for very little benefit if you
believe the models that we've been given by the Administration.
The U.S. Energy Information Administration reaffirmed many
of these facts in a report analyzing the impacts of the Clean
Power Plan. The Committee heard testimony from Howard
Gruenspecht at EIA, who reported that EPA's rule will shut down
large numbers of coal-fired power plants, increase electricity
prices, and decrease the U.S. GDP.
Many states, including the ones that we have represented
before us today have pushed back on the massive overreach of
EPA's carbon emission rule. States are uniquely positioned to
protect the environment in their states and support their local
economies, a key fact the EPA disregarded in promulgating this
rule. My home State of Oklahoma, which has been leading the
charge against EPA's onerous rule, recognizes that this rule
will harm reliability and impose massive costs on its citizens.
I applaud Oklahoma's efforts to fight against the EPA and its
activist, overbearing regulatory agenda.
This Committee has called many hearings conducting
oversight of EPA's regulatory agenda and will continue to do so
in order for the American people to understand how this will
impact their lives.
I thank all of our witnesses for testifying today and I
look forward to hearing about how EPA's final Clean Power Plan
will impact your states.
[The prepared statement of Chairman Bridenstine follows:]
Prepared Statement of Subcommittee on Environment
Chairman Jim Bridenstine
Today's hearing focuses on the EPA's final Clean Power Plan rule
and the tremendous impact that this rule will have on the states upon
final implementation. I am very concerned about how this regulation
will affect the American economy; more specifically, access to cheap
and abundant traditional energy sources as well as affordable and
reliable electricity.
Today, I look forward to hearing testimony from state regulators
about how this rule will specifically impact the citizens of their
states. The negative impacts of EPA's supposed Clean Power Plan are
well documented. A few months ago, we heard from industry groups about
some of these impacts. The Committee learned that the total compliance
costs of the rule could be as high as $366 billion by 2030.
Additionally, according to the National Association of Manufacturers,
the regulation is projected to cause double digit electricity price
increases in 43 states.
Moreover, the Committee has heard testimony that the EPA is using
questionable legal authority to promulgate the Clean Power Plan under
section 111 of the Clean Air Act. In fact, Laurence Tribe, the leading
environmental and constitutional law professor and mentor to President
Obama referred to the method by which this rule was enacted as
``burning the Constitution.''
This Committee has also heard testimony at previous hearings that
the climate benefits from any reductions in carbon emissions realized
by the rule will be negligible on a global scale. Unfortunately, we
have a rule that will place tremendous costs on the American people for
very little benefit.
The U.S. Energy Information Administration reaffirmed many of these
facts in a report analyzing the impacts of the Clean Power Plan. The
Committee heard testimony from Howard Gruenspecht at EIA who reported
that EPA's rule will shut down large numbers of coal-fired power
plants, increase electricity prices, and decrease the U.S. Gross
Domestic Product.
Many states, including the ones that we have represented before us
today have pushed back on the massive overreach of EPA's carbon
emission rule. States are uniquely positioned to protect the
environment in their states and support their local economies--a key
fact the EPA disregarded in promulgating this rule.
My home state of Oklahoma, which has been leading the charge
against EPA's onerous rule, recognizes that this rule will harm
reliability and impose massive costs on its citizens. I applaud
Oklahoma's efforts to fight against the EPA and its activist,
overbearing regulatory agenda.
This Committee has called many hearings conducting oversight of
EPA's regulatory agenda and will continue to do so--in order for the
American people to understand how this will impact their lives. I thank
all of our witnesses for testifying today and I look forward to hearing
about how EPA's final Clean Power Plan will impact your states.
Chairman Bridenstine. I now recognize the Ranking Member,
the gentlewoman from Oregon, for an opening statement.
Ms. Bonamici. Thank you very much, Mr. Chairman, and thank
you to all of our witnesses for being here today to discuss the
Environmental Protection Agency's Clean Power Plan.
I am especially pleased to welcome Mr. Jason Eisdorfer, a
fellow Oregonian. I'm looking forward to learning more about
Oregon's work to implement the Clean Power Plan and I'm glad
you will discuss some of the successes our state has had in
reducing greenhouse gas emissions. I want to say, Mr. Chairman,
I'm glad the title is ``State Perspectives,'' plural, because
there are different perspectives here.
The mission of the EPA is important yet simple: to protect
human health and the environment. And the goal of the Clean
Power Plan is equally important and simple: to cut carbon
emissions from the largest source, largest source--sorry--the
power sector, so that we can lessen the effects of climate
change on our states, our country, and our planet.
The Clean Power Plan offers enormous flexibility to states
as they tackle their individual carbon emissions targets and
the collective goal of reducing carbon emissions by 32 percent
by the year 2030. Inaction is unacceptable.
The Pacific Northwest faces risks that Oregonians take very
seriously. For example, according to the National Climate
Assessment, the snowpack in the Cascade Mountains has decreased
by 20 percent compared to 1950, and what snow remains melts
about 30 days earlier than usual. These changes are putting
additional pressure on the region's water supply. Also the
coastline, the health of our commercial fisheries are
threatened by rising seas and ocean acidification. Thousands of
salmon from the Columbia River died this summer because the
water's too warm. These and other changes have the potential to
negatively affect not only the safety, but also the economic
security of my constituents.
Thankfully Oregon is a state that has been proactive in
efforts to mitigate and adapt to climate change. As a result,
Oregon can be a resource for states that are just beginning to
address this important challenge. As a former member of the
Oregon legislature, I helped establish some of the state's
carbon emissions reduction goals. For example, in 2007, Oregon
set a target of reducing statewide emissions by 75 percent by
the year 2050. We also set the goal of having up to 25 percent
of our energy generated through renewable sources by 2025.
These efforts and others have put Oregon in a position to not
only meet, but likely surpass, its Clean Power Plan carbon
reduction goal, and all of that while maintaining a healthy and
vibrant economy.
Oregon is a leader in renewable energy technology and many
businesses have developed new products that add jobs to our
economy and are energy efficient. One innovative example is
Lucid Energy, which has developed technology to generate
electricity through a hydropower system in existing city water
pipes.
Some today will likely contend that regulating carbon hurts
the economy. But a recent report by Citi GPS adds to the
growing body of evidence showing that this is simply not the
case. The report states: ``We are not climate scientists, nor
are we trying to take sides in the global warming debate;
rather we are trying to take an objective look at the economics
of the discussion, to assess the incremental costs and impacts
of mitigating the effects of emissions, to see if there is a
solution which offers global opportunities without penalizing
global growth.'' The authors conclude: ``The incremental costs
of following a low-carbon path are in context limited and seem
affordable. The return on that investment is acceptable and,
moreover, the likely avoided liabilities are enormous.'' When
you have climate scientists and economists agreeing that action
to address climate change is necessary and that the benefits
outweigh the risks, then it is time for our country to stop
dragging its feet and to move forward as a Nation and a global
leader.
The Clean Power Plan builds on the efforts of states like
Oregon by creating a unified, national approach to our biggest
environmental challenge. The Clean Power Plan represents an
opportunity for American ingenuity that will allow us to
benefit from the much-needed transition to a low-carbon
economy.
Thank you, Mr. Chairman, and again thank you to our
witnesses for being here this morning, and I do want to ask
that the Citi GPS report from which I quoted be entered into
the record.
Chairman Bridenstine. Without objection, so ordered.
[The information appears in Appendix II]
Ms. Bonamici. Thank you, Mr. Chairman, and I yield back the
balance of my time.
[The prepared statement of Ms. Bonamici follows:]
Prepared Statement of Subcommittee on Oversight
Minority Ranking Member Suzanne Bonamici
Thank you, Mr. Chairman, and thank you to our witnesses for being
here today to discuss the Environmental Protection Agency's Clean Power
Plan. I am especially pleased to welcome Mr. Jason Eisdorfer, a fellow
Oregonian. I'm looking forward to learning more about Oregon's work to
implement the Clean Power Plan and I'm glad you will discuss some of
the successes our state has had in reducing greenhouse gas emissions.
The mission of EPA is important yet simple--to protect human health
and the environment. The goal of the Clean Power Plan is equally
important and simple--to cut carbon emissions from the largest source,
the power sector, so that we can lessen the effects of climate change
on our states, our country, and our planet.
The Clean Power Plan offers enormous flexibility to states as they
tackle their individual carbon emission targets and the collective goal
of reducing carbon emissions by 32 percent by the year 2030.
Inaction is unacceptable. The Pacific Northwest faces risks that
Oregonians take very seriously. For example, according to the National
Climate Assessment, the snowpack in the Cascade Mountains has decreased
by 20 percent compared to 1950, and what snow remains melts about 30
days earlier than usual. These changes are putting additional pressure
on the region's water supply.
Also the coastline and the health of our commercial fisheries are
threatened by rising seas and ocean acidification. Thousands of salmon
from the Columbia River died this summer because the water was too
warm. These and other changes have the potential to negatively affect
not only the safety, but also the economic security of my constituents.
Thankfully Oregon is a state that has been proactive in efforts to
mitigate and adapt to climate change. As a result, Oregon can be a
resource for states that are just beginning to address this important
challenge.
As a former member of Oregon's state legislature, I helped
establish some of the state's carbon emissions reduction goals. For
example, in 2007, Oregon set a target of reducing statewide emissions
by 75 percent by 2050. We also set the goal of having up to 25 percent
of our energy generated through renewable sources by 2025. These
efforts and others have put Oregon in a position to not only meet, but
likely surpass, its Clean Power Plan carbon reduction goal. And all
while maintaining a healthy and vibrant economy.
Oregon is a leader in renewable energy technology and many
businesses have developed new products that add jobs to our economy and
are energy efficient. One innovative example is Lucid Energy, which has
developed technology to generate electricity through a hydropower
system in existing city water pipes.
Some today will likely contend that regulating carbon hurts the
economy. But a recent report by Citigroup adds to the growing body of
evidence showing that this is simply not the case. The report states:
``We are not climate scientists, nor are we trying to take sides in the
global warming debate, rather we are trying to take an objective look
at the economics of the discussion, to assess the incremental costs and
impacts of mitigating the effects of emissions, to see if there is a
'solution' which offers global opportunities without penalizing global
growth.''
The authors conclude: ``the incremental costs of following a low
carbon path are in context limited and seem affordable, the 'return' on
that investment is acceptable and moreover the likely avoided
liabilities are enormous.''
When you have climate scientists and economists agreeing that
action to address climate change is necessary and that the benefits
outweigh the risks, then it is time for our country to stop dragging
its feet and to move forward as a nation and a global leader.
The Clean Power Plan builds on the efforts of states like Oregon by
creating a unified, national approach to our biggest environmental
challenge. The Clean Power Plan represents an opportunity for American
ingenuity that will allow us to benefit from the much needed transition
to a low carbon economy.Thank you, Mr. Chairman, and again thank you to
our witnesses for being here this morning. I yield back the balance of
my time.
Chairman Bridenstine. Thank you, Ms. Bonamici.
I now recognize the chairman of the full Committee, Mr.
Smith.
Chairman Smith. Thank you, Mr. Chairman, and thank you also
for holding this hearing today.
Over the last year, the Environmental Protection Agency has
released some of the most expensive and burdensome regulations
in its history. These rules will cost billions of dollars,
place a heavy burden on American families, and diminish the
competitiveness of American workers around the world.
Today's hearing will examine the Clean Power Plan and the
manner in which EPA has used secret science, questionable legal
interpretations, and flawed analysis to place tremendous and
unlawful burdens on the states, and yet, despite these issues,
this Administration continues to force costly and unnecessary
regulations on hardworking American families. On August 3rd,
the Obama Administration ignored the outcry from stakeholders
and the American public when it issued the final rule on its
Power Plan. The Clean Air Act was never intended to regulate
carbon. This final rule is another example of the President and
his Environmental Protection Agency sidestepping Congress to
push an extreme agenda.
It is well documented that the final plan will shut down
power plants across the country, increase electricity prices,
and cost thousands of Americans their jobs. My home State of
Texas would be one of the hardest hit. The state would be
forced to close affordable coal-fired power plants, which also
provide reliable electricity during peak usage times in the
summer. Additionally, the rule will cause double-digit
electricity price increases across the United States.
Despite EPA's statements to the contrary, this rule goes
well beyond the regulation of power plants, even reaching down
into Americans' homes to control electricity use. Higher energy
prices means the price of everything will increase, and low-
income families already struggling to make ends meet will be
among those most burdened by this costly rule. The so-called
Clean Power Plan is simply a power grab that will force states
to try to reach arbitrary and often impossible targets for
carbon emissions.
EPA asserts that the Clean Power Plan will help combat
climate change. However, EPA's own data demonstrates that is
false. The data shows that this regulation would reduce sea-
level rise by only 1/100th of an inch, the thickness of three
sheets of paper. This rule represents massive costs without
significant benefits. In other words, it's all pain and no
gain. Under the Clean Power Plan, Americans will be subject to
the constant threat of government intervention so the onslaught
of EPA regulations continues.
I look forward, Mr. Chairman, to today's hearing and to
hearing from the witnesses about the impact of these burdensome
EPA regulations on their states, and I yield back.
[The prepared statement of Chairman Smith follows:]
Prepared Statement of Committee on Science, Space, and Technology
Chairman Lamar S. Smith
Over the last year, the Environmental Protection Agency (EPA) has
released some of the most expensive and burdensome regulations in its
history. These rules will cost billions of dollars, place a heavy
burden on American families and diminish the competitiveness of
American industry around the world.
Today's hearing will examine the Clean Power Plan and the manner in
which EPA has used secret science, questionable legal interpretations,
and flawed analysis to place tremendous and unlawful burdens on the
states. And yet, despite these issues, this Administration continues to
force costly and unnecessary regulations on hardworking American
families.
On August 3rd, the Obama administration ignored the outcry from
stakeholders and the American public when it issued the final rule on
its Power Plan. The Clean Air Act was never intended to regulate
carbon. This final rule is another example of the president and his
Environmental Protection Agency sidestepping Congress to push an
extreme environmental agenda.
It is well documented that the final plan will shut down power
plants across the country, increase electricity prices and cost
thousands of Americans their jobs. My home state of Texas would be one
of the hardest hit. The state would be forced to close affordable coal-
fired power plants, which also provide reliable electricity during peak
usage times in the summer. Additionally, the rule will cause double
digit electricity price increases across the United States. Despite
EPA's statements to the contrary, this rule goes well beyond the
regulation of power plants, even reaching down into Americans' homes to
control electricity use.
Higher energy prices means the price of everything will increase,
and low-income families already struggling to make ends meet will be
among those most burdened by this costly rule. The so-called Clean
Power Plan is simply a power grab that will force states to try to
reach arbitrary and often impossible targets for carbon emissions.
EPA asserts that the Clean Power Plan will help combat climate
change. However, EPA's own data demonstrates that is false. This data
shows that this regulation would reduce sea level rise by only 1/100th
of an inch, the thickness of three sheets of paper.
This rule represents massive costs without significant benefits. In
other words, it's all pain and no gain. Under the Clean Power Plan,
Americans will be subject to the constant threat of government
intervention. The onslaught of EPA regulations continues.
I look forward to hearing from today's witnesses about the impact
of these burdensome EPA regulations on their states.
Chairman Bridenstine. Thank you, Chairman Smith.
I will now recognize the Ranking Member of the full
Committee for her statement.
Ms. Johnson of Texas. Good morning, Mr. Chairman, and thank
you to all of our witnesses who are here.
EPA's Clean Power Plan is a step in the right direction.
The scientific evidence shows we cannot afford to wait, but
must act now if we are to stand a chance of lessening the
impacts of climate change. Record temperatures, an increase in
heavy rain events, and rising seas are a few examples of what
Americans are confronting now and can expect to see more
frequently in the coming years.
As the largest source of carbon pollution, cutting
emissions from power plants is the key to any solution. This is
why I am supportive of the Clean Water Plan--Clean Power Plan
and its goal to reduce carbon emissions by 32 percent by 2030
from the power sector. The final rule we will be discussing
today is responsive to more than four million public comments
received by EPA. It sets reasonable limits that take into
account the characteristics of each state. It provides states
with an additional two years to formulate and implement their
compliance plans. It responds to concerns about grid
reliability by including a reliability safety valve and
requiring states to consider reliability concerns in their
state implementation plans. And finally, the central feature of
the rule is the enormous flexibility it provides to states.
EPA is not prescribing a specific set of measures, but
instead, states will choose what goes into their plans, and
they can work alone or as part of a multi-state effort to
achieve meaningful carbon reductions.
Today, I suspect that we will hear some of the same old
arguments about the Clean Power Plan that we hear about nearly
every regulation issued by the EPA: that it will cause nothing
but harm to our economy, that the federal government is
overstepping its authority, that the rule is unnecessary, and
that it won't make any difference in the long run.
However, we know that these assertions are just not true.
Rather, as history has shown us time and again, stricter
pollution limits have invariably led to innovation and the
creation of new technologies that end up creating jobs while
protecting our environment. I am confident American industry
will continue this record of innovation and job creation as the
Clean Power Plan is implemented.
Additionally, and perhaps, most importantly, the Clean
Power Plan sends a strong and much needed signal to the rest of
the world about the seriousness of the United States in
addressing climate change. Such a position is critical to
meaningful international engagement on this issue.
I recognize that implementing the Clean Power Plan will not
be easy, and that there are real costs associated with
transitioning to a low-carbon economy. But the bottom line is
that the costs of inaction are even greater.
I look forward to today's discussion and to hearing more
about how we can achieve the emissions targets in the Clean
Power Plan.
I thank you, and yield back the balance of my time.
[The prepared statement of Ms. Johnson of Texas follows:]
Prepared Statement of Committee on Science, Space, and Technology
Ranking Member Eddie Bernice Johnson
Thank you, Mr. Chairman, and thank you to our witnesses for being
here this morning.
EPA's Clean Power Plan is a step in the right direction at the
right time. The scientific evidence shows we cannot afford to wait, but
must act now if we are to stand a chance of lessening the impacts of
climate change. Record temperatures, an increase in heavy rain events,
and rising seas are a few examples of what Americans are confronting
now and can expect to see more frequently in the coming years.
As the largest source of carbon pollution, cutting emissions from
power plants is the key to any solution. This is why I am supportive of
the Clean Power Plan and its goal to reduce carbon emissions by 32
percent by 2030 from the power sector.
The final rule we will be discussing today is responsive to the
more than 4 million public comments received by EPA. It sets reasonable
limits that take into account the characteristics of each state. It
provides states with an additional two years to formulate and implement
their compliance plans. It responds to concerns about grid reliability
by including a ``reliability safety valve'' and requiring states to
consider reliability concerns in their state implementation plans.
And finally, the central feature of the rule is the enormous
flexibility it provides to states. EPA is not prescribing a specific
set of measures, but instead, states will choose what goes into their
plans, and they can work alone or as part of a multi-state effort to
achieve meaningful carbon reductions.
Today, I suspect that we will hear some of the same old arguments
about the Clean Power Plan that we hear about nearly every regulation
issued by the EPA. That it will cause nothing but harm to our economy.
That the federal government is overstepping its authority, that the
rule is unnecessary, and that it won't make any difference in the long-
run.
However, we know that these assertions are just not true. Rather,
as history has shown us time and again, stricter pollution limits have
invariably led to innovation and the creation of new technologies that
end up creating jobs while protecting our environment. I am confident
American industry will continue this record of innovation and job
creation as the Clean Power Plan is implemented.
Additionally, and perhaps, most importantly, the Clean Power Plan
sends a strong and much needed signal to the rest of the world about
the seriousness of the United States in addressing climate change. Such
a position is critical to meaningful international engagement on the
issue.
I recognize that implementing the Clean Power Plan will not be
easy, and that there are real costs associated with transitioning to a
low carbon economy. But the bottom line is that the costs of inaction
are even greater. I look forward to today's discussion and to hearing
more about how we can achieve the emissions targets in the Clean Power
Plan.
Thank you and I yield back the balance of my time.
Chairman Bridenstine. Thank you, Ranking Member Johnson.
And now to introduce our first witness, the Chairman of the
Texas Commission on Environmental Quality, Dr. Bryan Shaw, I
yield to the Chairman of the full Committee, Mr. Smith.
Chairman Smith. Thank you, Mr. Chair, and let me say it's
nice to be able to welcome a Texas colleague.
Chairman Shaw was appointed to the Texas Commission on
Environmental Quality (TCEQ) in 2007. Since then, he has served
on the Texas Environmental Flows Advisory Group and is Chair of
the Texas Advisory Panel on Federal Environmental Regulations.
He was appointed Chairman in 2009. Prior to joining the TCEQ,
Chairman Shaw served as a member of the U.S. Environmental
Protection Agency's Science Advisory Board Committee on
Integrated Nitrogen. He also served on the Environmental
Protection Agency SAB Environmental Engineering Committee and
the Ad Hoc Panel for Review of EPA's Risk and Technology Review
Assessment Plan. Additionally, he is a member of the U.S.
Department of Agriculture's Agricultural Air Quality Task
Force. In addition to his chairmanship, Dr. Shaw serves as an
Associate Professor in the Biological and Agricultural
Engineering Department of Texas A&M University. His research
there focuses on air pollution, air pollution abatement,
dispersion model development, and emission factor development.
Chairman Shaw received his bachelor's and master's degrees in
agricultural engineering from Texas A&M and his Ph.D. in
agricultural engineering from the University of Illinois at
Urbana-Champaign.
Thank you, Mr. Chairman, and I'm pleased that Chairman Shaw
is here to testify.
Chairman Bridenstine. Thank you, Chairman Smith.
I will now yield to the gentleman from Ohio, Mr. Johnson,
to introduce our next witness, Mr. Craig Butler, Director of
the Ohio Environmental Protection Agency.
Mr. Johnson of Ohio. Thank you, Mr. Chairman, and it is
indeed my distinct pleasure to introduce Director Craig Butler,
the Director of Ohio's Environmental Protection Agency.
Director Butler received his bachelor's degree in geography and
environmental science from Mansfield University and his
master's degree in environmental science from Ohio University.
Craig and his team have done some tremendous work for Ohio. The
respect that they have earned from people across our state both
within the energy sector and in the state agencies is clear.
Their high standards of an exceptional work ethic is evident in
everything that they do. For instance, the comments that
Director Butler and his agency submitted to the U.S. EPA in
response to the Clean Power Plan proposal are viewed by many as
some of the most detailed, extensive and informative comments
that the U.S. EPA received regarding this regulation. They
clearly highlighted the many shortcomings of the Clean Power
Plan, such as its potential impact on grid reliability and
energy costs.
Director Butler, I want to personally thank you for being
here today. I wish I could stay and hear the entire testimony
but with it being the last day of the week, we have multiple
hearings in conflict, and so I've got to go to another hearing
that is getting underway as we speak. But I want to reiterate,
thank you so much. The work you're doing in Ohio and the
example that you're setting across the Nation, boy, I sure we
could get along and work out a working relationship with the
federal EPA the way that we've done it in Ohio. You're to be
commended, and I welcome you.
Chairman Bridenstine. Thank you, Mr. Johnson.
Our final witness today is Mr. Jason Eisdorfer, Utility
Program Director for the Oregon Public Utility Commission, and
I'd like to yield to the Ranking Member, Ms. Bonamici, for an
introduction.
Ms. Bonamici. Thank you very much, Mr. Chairman.
It's my honor to introduce a fellow Oregonian, Mr. Jason
Eisdorfer, who has served as the Utility Program Director of
the Oregon Public Utility Commission since 2012. He oversees a
staff of approximately 77 employees and provides direction to
formulate policies, recommendations and practices regarding the
regulation of investor-owned utility, natural gas, water and
telecommunications utilities. Previously, Mr. Eisdorfer was the
Interim Director of Strategy Integration at the Bonneville
Power Administration, a federal power marketing administration,
and before that, he served as BPA's Greenhouse Gas Policy
Advisor. In this role, he served as the Senior Advisor to the
Agency on Policies and Programs Related to Climate Change. He
served as Legal Counsel and Energy Program Director of the
Citizens Utility Board of Oregon for 13 years. He has
coauthored state legislation related to climate change and
electric utility restructuring and operations including the
Electricity Restructuring Law in 1999 and the Oregon Renewable
Energy Act and Climate Change Integration Act, both of 2007,
and more recently he has advised on additional state
legislation concerning storage technology pilots and natural
gas utility carbon reduction programs. Mr. Eisdorfer has served
as an Adjunct Professor of Law at both the University of Oregon
School of Law and the Northwestern School of Law at Lewis and
Clark College teaching classes on energy law and climate change
and policy. He is a graduate of the University of Chicago and
he received his law degree, as I did, from the University of
Oregon. Go Ducks.
Thank you for joining us today, Mr. Eisdorfer.
Chairman Bridenstine. Thank you, Ranking Member Bonamici.
In order to allow time for discussion--we're going to move
to witness testimonies--please limit your testimony to five
minutes. Your entire written statement will be made a part of
the official record.
I now recognize Chairman Shaw for five minutes to present
his testimony.
TESTIMONY OF DR. BRYAN SHAW, CHAIRMAN,
TEXAS COMMISSION ON ENVIRONMENTAL QUALITY
Dr. Shaw. Mr. Chairman, Ranking Member Bonamici and Members
of the Committee, thank you for the opportunity to be here, and
good morning. A special thank you to Chairman Smith for the
kind introduction.
My name is Dr. Bryan Shaw. I'm the Chairman of the Texas
Commission on Environmental Quality. As the leader of this
agency, my job is to ensure we carry out our mission, which is
to mitigate environmental risk while basing all of our
regulations on sound science and compliance with state and
federal statutes. In every case where Texas disagrees with EPA
actions, it is because EPA's actions are not consistent with
these principles.
As you know, the EPA's Clean Power Plan for existing power
plants was signed by the EPA Administrator on August 3, 2015,
and is currently awaiting publication in the Federal Register.
The final version of the Clean Power Plan is radically
different than EPA's proposed plan, and as such, the TCEQ is
continuing to study and evaluate the impacts of the final rule.
Currently, the following concerns associated with the rule
have been identified. First, EPA's methodology for determining
the Best System of Emission Reduction, or BSER, in this Rule
marks a radical departure from historical practice, and, I
would argue, the plain language of the Clean Air Act.
Specifically, the EPA has now asserted the power to determine
Best System of Emission Reduction by evaluating technologies
and methods outside the fence of the facilities it claims to be
regulating. This is the first time the EPA has not determined
this BSER based on technology or methods that could be applied
to the source itself or materials being used by the source. In
the past, Best System of Emissions Reduction evaluations have
included installing scrubbers, low-emission combustion
technology, pretreatment of fuels, and myriad other systems
that a facility operator actually can control. But in this
case, the EPA has evaluated states' electric grids and energy
policies as a whole, instead of the individual sources which it
has authority to regulate under Section 111(d) of the Clean Air
Act.
The final Clean Power Plan establishes national performance
rates for two subcategories, steam generating units and
stationary combustion turbines, applying three building blocks
as BSER. While the final rule allows states to use--to elect to
use alternate statewide goals, these goals are derived from the
same performance rates. However, only the first of these
blocks, Building Block 1, or the heat rate improvement, those
efficiency improvements on existing coal-fired power plants, is
within the historical approach of how EPA has determined BSER
in the past. Block 2, which is redispatching generation from
steam-generating units to natural gas combined cycle units, and
Block 3, increased renewable energy, rely on the assumption of
other generating units increasing their generation, generating
units in which most circumstances are not located in the same
area, and for most forms of renewable energy, are not even
subject to the Federal Clean Air Act. In effect, EPA is setting
standards for existing power plants based on the method of
electric generation they prefer, not on the control technology
or methods that can be feasibly applied to the existing
sources.
Another major concern is that the final Clean Power Plan
has an insignificant effect on global carbon dioxide
concentrations, global temperatures, and sea-level rise. The
final rule does not provide a single quantifiable climate
benefit. EPA's purported climate benefits are based solely on
the Office of Management and Budget's Social Cost of Carbon and
their claim that it will put the United States in a stronger
bargaining position at the President's upcoming climate summit
in December. Aside from the obvious substantive objections I
have to this line of reasoning, I submit to you that a
regulation this expensive that entails such an unprecedented
arrogation of power to the Executive Branch cannot be justified
as a bargaining chip or with fuzzy math.
Furthermore, the EPA is deceiving the American public by
claiming wildly inflated economic benefits only tangentially
related to the purpose of the rule. The rest of EPA's claimed
benefits from the rule are actually co-benefits from reductions
of non-GHG, non-greenhouse-gas, pollutants such as nitrogen
oxides and sulfur dioxide, and even these benefits are suspect.
Not only are criteria pollutants not the purpose of the final
Clean Power Plan, the majority of claimed co-benefits are due
to changes in ambient concentrations of ozone and PM2.5 in
areas that are already attaining the National Ambient Air
Quality Standards for these criteria pollutants, so it is
irrational for the EPA to claim a health benefit from reduction
in a pollutant in areas where the EPA has already determined
that the current concentration of the pollutant is adequate to
protect human health. In areas not attaining this standard,
there are other rules in the Clean Air Act requires those
states to develop plans to address those and bring them into
compliance.
So one final issue before I close would be a more technical
concern about leakage that the EPA has included in the final
rule. ``Leakage'' is the shift of generation from existing
units to new units that are not subject to the Clean Power
Plan. This results in a net increase in emissions, and the EPA
is requiring states that choose to use a mass-based approach
must address this leakage. Also, they propose to address that
in the federal plan if that federal plan includes a mass-based
approach. EPA's motivation for its leakage policy is to remedy
the nonsensical situation that emission standards for existing
fossil fuel units under 111(d) are much more stringent than the
standards for new fossil fuels under 111(b), that is, it would
have a more stringent standard for existing sources than for
new, and this makes that very detrimental and unworkable moving
forward.
So it's important for me to bring this forward, and I thank
you for the opportunity to testify today.
[The prepared statement of Mr. Shaw follows:]
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Chairman Bridenstine. Thank you, Chairman Shaw.
Director Butler, you are recognized for five minutes.
TESTIMONY OF MR. CRAIG BUTLER, DIRECTOR,
OHIO ENVIRONMENTAL PROTECTION AGENCY
Mr. Butler. Chairman Bridenstine, Ranking Member Bonamici,
Members of the Subcommittee, and in particular, Representative
Bill Johnson, thank you. My name is Craig Butler, and I'm
Director at Ohio EPA, the Environmental Protection Agency in
Ohio. Thanks for the opportunity to provide testimony on the
now-final Clean Power Plan issued by the U.S. Environmental
Protection Agency.
When I provided testimony back in March in the House
Subcommittee on Energy and Power, the CPP was only a proposal,
and U.S. EPA was in the process of collecting and evaluating
what turned out to be over 4.3 million comments, and while we
continue to review the final rule presented by U.S. EPA, our
fundamental and legal technical concerns persist or continue to
grow.
Ohio has striven to revive its manufacturing output over
the last few years. Driven by affordable and reliable power,
countless energy-intensive industries including auto
manufacturing, steel, glass production and iron reside in Ohio.
This manufacturing rebound has been due in no small part to the
shale gas production in the eastern part of the state, and like
our locally mined coal, provides a foundation for predictable
and relatively stable low-cost power to industries and citizens
in the State of Ohio.
While working to revive our manufacturing output, we have
achieved significant emission reductions from our coal-fired
power plants. Between 2005 and 2014, carbon dioxide emissions
from these units were reduced by approximately 30 percent.
Given these reductions, one might think that Ohio is well on a
path to comply with the final CPP.
Unfortunately, U.S. EPA suggests using a baseline for
emission reductions is 2005, but in reality they're using 2012,
meaning that any reductions prior to that are not being
considered for compliance with our mandated reduction target.
Ohio's coal fleet has and will continue to improve its
operational efficiency, however, requiring additional pollution
control measures will be extremely costly and will undermine
the long-term viability of these plants.
Ohio has experienced a dramatic loss in generating
capacity, losing some 6,100 megawatts between years 2010 and
2015, primarily due to U.S. EPA's Mercury and Air Toxics
Standard. A further reduction in usage of coal-fired generation
is the biggest means for complying with the final CPP and is a
serious concern with respect to end-user costs, infrastructure
and reliability.
As mentioned, on August 3rd, EPA released three rules that
will have an adverse effect on coal-based electricity
generation across the country. Finalizing emissions standards
for new electronic generation units was the first rule released
and created a reliance on cost-prohibitive technology that will
effectively prevent any new coal plants from being built across
the country. Carbon capture and sequestration, the only
technology described in that rule, is provided--is proving to
not be ready for wide-scale technical implementation. Costs are
escalating to the point where even with heavy subsidization,
projects are being abandoned.
The second and third rules work together. The second rule
is the final version of the CPP and the third rule is a
proposed back stop or federal plan for states that are unable
to or choose not to comply with the final CPP. These rules will
result in an unprecedented overhaul of the power generation,
transmission systems by dramatically reducing fossil-fuel-based
power generation and establishing aggressive new renewable
targets. These rules together circumvent Congressional
authority by creating a large-scale program to revamp the power
industry and replace the long-standing economic model for
generation of electricity based on an environmental model.
U.S. EPA made certain changes in response to comments on
the proposed CPP. U.S. EPA is evident, however, it raised the
rule's carbon emissions reduction from 30 percent to 32
percent. In Ohio, our mandated target is now roughly 11 percent
more aggressive than the proposed rule, meaning Ohio will need
to lower its carbon emission rate by 37 percent between 2012
and the final plan.
The final CPP dictates that natural gas generation be
deployed at 75 percent capacity factor. Updated cost
projections using the final rule haven't been completed but our
Public Utilities Commission conducted an analysis of the
proposed rule, estimating a 70 percent capacity factor and
predicted wholesale energy prices to be 39 percent higher in
calendar year 2025, costing Ohioans $2.5 billion more than
projected.
U.S. EPA has made profound changes to the rule. The number,
the nature, and the overall level of wholesale changes drive
Ohio to call for U.S. EPA to rerelease the final CPP as a
proposed action allowing interested parties an opportunity to
review and provide comment.
On numerous occasions, EPA and the DC. Circuit Court of
Appeals and the State of Ohio have pointed out serious legal
shortcomings. This is why Governor Kasich has written a letter
to the President asking to stay the implementation of the rule
and all legal appeals--until all legal appeals have been
resolved.
I strongly believe that the CPP is not the answer, and with
unresolved legal challenges, along with substantial changes
between the draft and final proposal, U.S. EPA should hold off
on implementing this plan until legal challenges are resolved
or reissue the final plan as a proposed action.
Thank you for the opportunity to testify, and I'm happy to
answer any questions.
[The prepared statement of Mr. Butler follows:]
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Chairman Bridenstine. Thank you, Director Butler.
Mr. Eisdorfer, you are recognized for five minutes.
TESTIMONY OF MR. JASON EISDORFER,
UTILITY PROGRAM DIRECTOR,
OREGON PUBLIC UTILITY COMMISSION
Mr. Eisdorfer. Chair Bridenstine, Chair Smith, Members of
the Committee, I am Jason Eisdorfer, Director of the Utility
Program at the Oregon Public Utility Commission.
For more than a year now, three Oregon state agencies, the
Department of Environmental Quality, the Department of Energy,
and the Public Utility Commission, along with nearly two dozen
major stakeholders have been working together to understand
EPA's draft and now final 111(d) rule, and we are now working
on implementing the Clean Power Plan.
In our initial comments to the rule back in October of last
year, the Director of Oregon's DEQ wrote on behalf of the state
that ``The Clean Power Plan proposal is a welcome federal
response to reversing climate change and is a good first step
in mitigating the effects of greenhouse gas pollution across
the country.'' Governor Kate Brown has stated that ``The EPA's
Clean Power Plan is in the best interests of Oregon on many
fronts. A healthy environment is essential to ensuring the
health of Oregonians and protects our quality of life for many
generations to come.
As we look at how Oregon fares under the final rule, we can
say that Oregon is in pretty good shape, and there is a reason
for this. Oregon has been planning for this eventually for more
than two decades. The risk of greenhouse gas regulation that we
have required the utilities to plan for is now a reality.
Oregon's utility ratepayers have been investing in clean energy
to reduce the costs and risks of carbon regulation and those
investments are paying off. Here are a few investment
highlights.
The investor-owned utilities in Oregon engage in integrated
resource planning, which is firmly rooted in robust analysis
that compels the utility to make decisions that result in a
least-cost, least-risk future for its customers. This has
included considering that risk of future costs of greenhouse
gas regulation and the utilities' decisions about what types of
energy resources to invest in.
Oregon's largest utility, Portland General Electric, is
retiring the State's only coal plant in 2020, about 20 years
ahead of schedule, based on a least-cost, least-risk
determination by the Public Utility Commission. Customers of
the two largest utilities have been paying into a dedicated
fund for cost-effective energy efficiency and we believe our
energy efficiency delivery system is second to none. Oregon has
a renewable portfolio standard that directs the state's largest
utilities to serve their customers with 25 percent renewable
energy by the year 2025.
This is but a partial list of policies and investments that
have put Oregon, its utilities and their customers in a strong
position to comply with the Clean Power Plan. These investments
will reduce the costs and risk of compliance with the plan and
keep our utility system strong and robust.
Despite these long-term investments, or perhaps because of
these long-term investments, our economy is strong. Since 2000,
per capital carbon emissions have been in steady decline in
Oregon and yet the state's GDP is as good as or better than the
national average. Oregon's real GDP growth exceeded the U.S.
rate in 13 of the 16 years between 1998 and 2013, and Oregon
ranks among the 15 fastest-growing state economies in 11 of
those 16 years.
The Clean Power Plan provides state regulators with a
significant degree of flexibility in determining how to comply
and has accommodated states that are differently situated. In
Oregon, we are currently exploring that degree of flexibility
to decide whether to use a rate-based system or a mass-based
system, for example. To their credit, EPA has revised the plan
to address the concerns of Oregon, other states, and
stakeholders. And EPA has improved its thinking about the
reliability effects of the Clean Power Plan in the final rule
and understands that reliability is of paramount importance to
utilities, regulators and the customers.
The plan is accommodating of a variety of state compliance
approaches, allowing Oregon to leverage existing state laws and
recognizing under particular approaches the historic investment
Oregon ratepayers have made in clean energy.
However, Oregon is not an island and it's not enough for
Oregon to comply with the Clean Power Plan within its own
borders. Ratepayers of several of our utilities are tied to
fossil fuel generation located in other states. We are more
than interested in how other western states comply with the
Clean Power Plan since our electricity rates depend on how
those states comply.
As Oregon looks to implement its own compliance plan, we
are very interested in exploring the potential for
collaboration with neighboring states using market mechanisms
to reduce the overall cost of compliance and enhance the
overall effectiveness of reducing greenhouse gas emissions.
Oregon is proud of our clean energy investment strategy, and we
are in a good position to comply with the Clean Power Plan. If
the various states collaborate and cooperate, the Clean Power
Plan offers the United States a path toward finally addressing
the real and pressing issue of climate change on an integrated
and least-cost basis.
I appreciate the opportunity to testify before the
Committee today. Thank you.
[The prepared statement of Mr. Eisdorfer follows:]
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Chairman Bridenstine. Thank you for your testimony.
Members are reminded that Committee rules limit questioning
to five minutes, so we'll go into a round of questioning here,
and I'll recognize myself for five minutes.
There's a chart that was given to us by the U.S. Chamber of
Commerce. It's a map of the United States, and you can see that
the green states--I'm having a hard time reading that little
but I've got it here. So it says the green states this is
winners and losers from the EPA carbon regulations, and it says
states that will be able to increase CO2 are in
green, or they'll be able to sell credits to others needing to
achieve compliance. States that are in red must reduce CO2
emissions or purchase credits from states in order to comply.
So this to me, this rule has been published--no, it
actually hasn't been published. It's been finalized but it's
not been published in the Federal Register as of this point.
But when it goes into effect, it's going to establish winners
and losers. I guess my question for the witnesses, and I'd like
to start with you, Chairman Shaw, is, do you perceive this as a
transfer of wealth from maybe your State of Texas to the green
states?
Dr. Shaw. Thank you, Chairman. Certainly, when you look at
the fact that Texas rate will have to be reduced by about 33
percent, that is coming to come at a cost, and certainly one of
the major costs that we've seen and part of the reason that
we've been able to have economic prosperity and growth in our
state has been due to low cost of energy. The likely pretty
extreme increase in rates is going to make it much more
difficult for our state to continue to provide those jobs and
resources that are necessary for that growth. So yes, it would
certainly make it easier or make an uneven playing field from
that perspective if you're not having to make those
investments, and we've made investments. You know, $7 billion
in building out transmission lines for our 13,000 megawatts of
wind energy are significant investments that we've already
made.
Chairman Bridenstine. Director Butler, how do you see this
for your state?
Mr. Butler. Thank you for the question. I look at it two
ways. There's two ways for a state to comply, particularly
Ohio. We're either going to need to shut down additional coal
assets and buy more expensive power, or buy credits from
somebody else. Both of those will have a significant cost for
the State of Ohio to reach what I indicated in my testimony,
which is a 37 percent reduction in CO2 emissions,
and that's an 11 percent increase over the draft plan.
Chairman Bridenstine. Mr. Eisdorfer, it looks like your
state is going to be able to sell power or sell credits. You
guys stand to gain a lot from a rule that by the way that did
not exist until this month.
Mr. Eisdorfer. Mr. Chair----
Chairman Bridenstine. Or I guess last month.
Mr. Eisdorfer. Mr. Chair, two quick points. One, under the
proposed rule, Oregon actually did not come out very well in
this sense, and yet the state really welcomed the Clean Power
Plan as a good first step toward addressing climate change. So
the final rule did turn the tables a little bit.
But the second point I would make is that there are a
number of customers of utilities in Oregon that are tied to
assets in Montana, Wyoming and Utah. So in that sense, Oregon
is tied throughout the West, and while that makes it look like
Oregon is sitting pretty, we have a lot of work to do and a lot
of cooperative discussions on a multistate basis in the West.
Chairman Bridenstine. Do you disagree that Oregon will be
advantaged compared to Texas or Ohio?
Mr. Eisdorfer. Again, there are two things that Oregon has
to think about. One is complying as a state, and in that sense,
Oregon is in very good shape. The second thing is, rate impacts
on customers in Oregon and we have to work with the states in
which thermal resources are outside of Oregon but serving
Oregon. So it's a little bit of half a loaf, perhaps.
Chairman Bridenstine. Dr. Shaw, the EPA has assumed in the
final Clean Power Plan that renewable energy sources will
increase dramatically as a result of this rule. My home State
of Oklahoma is already a nationwide leader in wind energy.
We're fourth in the country in electricity produced from wind,
accounting for over 15 percent of electricity generation in
Oklahoma. Do you believe the EPA's targets for renewable energy
increases the--increases are--renewable energy increases are
realistic given the existing increases in production in states
such as yours and mine, Oklahoma and Texas?
Dr. Shaw. Chairman, we've--my state as well as yours have
made pretty phenomenal increases in renewables, especially wind
energy, and the rate that EPA has projected in determining our
goal it appears that for years 23 through 30, we would have to
increase our renewables and wind being part of that at the
maximum rate that we've ever done it every year in that time
frame, and I think that's far from typical and would be very
challenging to meet.
Chairman Bridenstine. Last question. I'm running out of
time.
Under the final Clean Power Plan, will states like Oklahoma
and Texas get any credit for renewable energy sources that have
already been implemented in their states? The investments we've
already made, will we get credit for that?
Dr. Shaw. Unfortunately, because most of the--many of those
investments happened after the--excuse me--before the 2012,
which they use as a baseline, we don't get credit for those
investments, and so it is a pretty significant blow from that
perspective.
Chairman Bridenstine. Thank you for your testimony, and I'd
like to recognize Ranking Member Bonamici for five minutes for
her questions.
Ms. Bonamici. Thank you very much, Mr. Chairman.
Mr. Eisdorfer, I only have five minutes and I have a lot of
questions, so I'm going to ask three--one about flexibility,
one about the grid and one about costs--and I'll ask them all
at once to save time.
So you give EPA credit for revising the Clean Power Plan to
address some concerns of states and stakeholders. You said that
the Clean Power Plan provides state regulators with a
significant degree of flexibility in determining how to comply.
So I want you to talk a little bit about how that flexibility
will work and how that's responsive to concerns that have been
raised.
Secondly, with regard to the grid, you state in your
testimony that there are existing tools and frameworks across
the country to protect the reliability of the grid, and that's
a concern that we've heard raised, so can you please discuss
how the rule was changed to address reliability concerns and
whether those changes are sufficient to alleviate the grid
reliability?
And finally, one of the main criticisms, and we heard this
morning, is that the Clean Power Plan will cause electric bills
to increase, but according to the EPA, the average electricity
bills will be cut, and by 2030, the average American family
will save $7 on their electric bill per month. So how have
consumers and communities in Oregon benefited from programs
like the Energy Trust, for example, the state's energy
efficiency program, and specifically, what has been the effect
on electricity bills? So reliability, grid and cost. Thank you.
Mr. Eisdorfer. Thank you, Representative Bonamici. We could
talk for hours on this but I'll try to be brief.
The flexibility comes in a number of ways and I'll sort of
list a couple. States are allowed to choose whether to go with
a mass-based or a rate-based calculation that allows states to
really tailor their particular situation. Under the proposed
rule, Oregon was in a position where we really couldn't choose
between the two, and under the final rule, mass-based became an
option. So now as we talk to stakeholders, mass-based versus
rate-based is very much on the table. The EPA also makes it
very clear that the states are going to have wide discretion on
how to allocate allowances. States can choose to go it alone or
join in multistate bilateral or multilateral agreements or even
go into a trading ready kind of platform. And so there really
are a number of different choices that the state can make.
In terms of reliability, there were some significant
improvements in the plan. The EPA provided a mechanism for
states to seek a revision of their plan if there are
unanticipated reliability challenges. There's also a safety
valve that would allow emissions from a plant to not count
under the goal under certain reliability circumstances, and
something that we're actually also looking closely at is the
memorandum of understanding between the EPA, FERC and the U.S.
Department of Energy where there's going to be a coordinated
process to help the states address reliability concerns,
monitor how that state plan development is going to go, and
then provide support for this important transition period.
And then finally, on the electricity bills. What I think
Oregon has done extremely well in the last 20 years is
planning. Our integrated resource planning process really
causes the utilities to think very long and hard about the
least-cost, least-risk approach. Oregon, especially since 1999
but even dating back to 1980, has treated energy efficiency not
as a boutique thing to do every now and then but as a genuine
resource that a utility should rely on. It is a cost-effective
resource and should be at the top of the list of any utility
acquisition as being the lowest-cost resources. So between
planning, energy efficiency, we've been able to maintain our
low cost. We are below average and we've been below average for
quite some time. We don't expect the Clean Power Plan to
fundamentally change that because the tools that you would use
to meet the clean power obligations are the very tools that
we've been using to keep rates low.
Ms. Bonamici. Thank you very much.
Chairman Bridenstine. Thank you, Ms. Bonamici.
I now recognize the Vice Chairman, Mr. Westerman.
Mr. Westerman. Thank you, Mr. Chairman.
I have two coal-fired plants in my states that could be
closed. One is actually in my district in southwestern, and has
already been announced to be closed, and there are studies that
show that our rates will increase from 20 to 60 percent because
of this closure. The obvious negative effects are direct loss
of several hundred highways jobs and an economic loss of $500
to $600 million per year. The higher rates will put a
disproportional burden on low- and fixed-income residents in my
district, not only in their higher light bills but also in the
increased cost of goods.
Chairman Shaw, welcome to the Committee. It's nice to have
a fellow bio and agricultural engineer. There's not too many of
us out there.
Dr. Shaw. Right.
Mr. Westerman. If you look at Texas, what's the split on
residential versus industrial commercial use?
Dr. Shaw. I don't have that information, Congressman. I
don't know what--you're talking about how much of that--I mean,
it's largely driven by the commercial. We are a large energy
consumer because of the fact that we manufacture good and
process materials that supply much of the rest of the United
States. So we're heavy on the commercial side.
Mr. Westerman. Right. And in Ohio, is that similar there
too?
Mr. Butler. Yes, sir. Ohio's the sixth largest energy-
consuming state in the United States. Fifty percent of that is
for industrial.
Mr. Westerman. And Mr. Eisdorfer, in Oregon?
Mr. Eisdorfer. My recollection is that residential is about
40 percent and the remainder is split between commercial and
industrial.
Mr. Westerman. Okay. I think we fail to see sometimes how
much of the power actually goes into industry and jobs. So if
you look at current air quality standards in Texas and the rest
of the United States and compare those to the world, just kind
of quickly on a scale one to ten, one being low quality and ten
being high quality, where would you say China would be on that
scale, Chairman Shaw?
Dr. Shaw. On the south end of that, some of the worst air
quality that exists exists in some parts of China.
Mr. Westerman. And Indonesia, Vietnam. What about Western
Europe? Where would you----
Dr. Shaw. They're certainly better than you see in China
but they're still not at the levels that we are.
Mr. Westerman. And in the United States?
Dr. Shaw. I would say if we're not a ten, then the scale
needs to be accommodating to put us there.
Mr. Westerman. But we're leading in the world in air
quality standards?
Dr. Shaw. Yes, sir.
Mr. Westerman. Okay. So do you believe higher costs and
less reliable energy could drive industrial manufacturing jobs
to countries with lower standards?
Dr. Shaw. I think it could. I think even the threat of
higher costs can drive those overseas to lower-cost areas with
less restrictive regulations.
Mr. Westerman. And I know in my district, what we need very
much are jobs and to get people back to work, and I would hate
for investors to come in and see this huge increase in
electrical rates and decide to move their manufacturing
somewhere else and potentially somewhere where it would
actually do more damage to air quality than they would do in my
state.
Let's shift gears a little bit. When we look at this Clean
Power Plan, there seems to be still be a lot of confusion in
it, and Mr. Eisdorfer, I've spent quite a bit of time out in
your state, a very beautiful state, maybe except for the large
wind farms along the Columbia Gorge that dot the landscape, but
you do have a tremendous amount of biomass in Oregon. How do
you feel about the EPA's treatment of biomass as renewable
energy?
Mr. Eisdorfer. Representative Westerman, that is something
that we continue to look at. As you just said, there are some
things that remain unclear. That's not something that we loved
and yet at the same time we sort of recognized what the EPA was
trying to--the message they were trying to send is that not all
biomass is treated equal. So folks at DEQ and Department of
Energy are----
Mr. Westerman. Are they saying some biomass is not
renewable?
Mr. Eisdorfer. They're saying that the carbon sequestration
benefits need to be tracked very closely and so that may mean
that some biomass is treated a little bit different and
depending upon if it's very sustainably----
Mr. Westerman. It's bad enough when EPA's picking winners
and losers in power but then you even get into the renewables
and they start winners and losers there. I think we should take
an all-encompassing approach and utilize all the technology
that we have, and especially the lower cost more efficient
technologies and develop these other technologies with more
research and development in those areas.
But it looks like I'm about out of time, Mr. Chairman, so
I'll yield back.
Chairman Bridenstine. Thank you for your questions.
Ranking Member Johnson is recognized for five minutes.
Ms. Johnson of Texas. Thank you very much.
Mr. Shaw, I'm a native Texan. I'm a nurse by education.
Last year, Parkland Hospital had a billion dollars of
uncompensated care. Children's Hospital had about a third of
that. Many of the conditions are respiratory related, which are
also related to environmental contamination. Have you factored
in the cost that it would take the state to continue to afford
this kind of healthcare cost with most of our people being
poor, that are living in low-income areas that are damaged more
frequently by these heavy environmental violations?
Dr. Shaw. Congresswoman, the Clean Power Plan is directed
at reducing greenhouse gases, which do not impact the
respiratory issues. The co-benefits that are claimed in the
rule----
Ms. Johnson of Texas. Wait a minute. Repeat what you just
said.
Dr. Shaw. The co-benefits, in other words, the rule is
based on reducing the greenhouse gas----
Ms. Johnson of Texas. I know what the rule says, but you
said it does not impact respiratory?
Dr. Shaw. That's correct. Greenhouse gas emissions do not
have an adverse impact on respiratory health. High CO2
levels do not cause respiratory issues. I know it's easy to
make that conclusion because some of the rhetoric from EPA sort
of suggests that the Clean Power Plan is going to, by reducing
greenhouse gases, lead to improvement in respiratory
conditions. That's not due to reductions of CO2.
Ms. Johnson of Texas. What is it due to?
Dr. Shaw. It's due to their co-benefits. They're suggesting
that the process that they're mandating to reduce greenhouse
gases will also accidentally, if you will, or at the same time
likely cause reductions in other emissions that they do
perceive to cause respiratory impacts. The challenge with that,
though, is that they're actually assuming that it's going to
provide health benefits even though your area is already in
attainment for the PM2.5 standard yet they're assuming that
reducing PM2.5 even lower leads to health benefits even though
their standards say that Houston area is already meeting the
standard and therefore we're not having adverse health effects
associated with PM2.5. That's my concern, is that it's
misleading whenever they've told us that you're going to have
these health benefits associated with this rule. Most of those
are unsubstantiated. The areas where there could be a benefit
to those areas that are in non-attainment for ozone or
something along those lines, those are being addressed through
other rules and we're making strides to comply with those
regulations. So CO2 does not lead to respiratory
challenges.
Ms. Johnson of Texas. So you're challenging the goal of
EPA? Their goal is health and safety of the people that inhabit
this planet.
Dr. Shaw. The purpose of this--yes, ma'am. The purpose of
this rule is to reduce greenhouse gas emissions, and as part of
that, the stated goal there is--primarily the benefits they
claim are a slight increase--excuse me, decrease in sea-level
rise, unmeasurable, as well as a hundredth of a degree
Fahrenheit reduction in increase in global temperature. Those
are unmeasurable and those are not quantifiable from a benefit
standpoint. Therefore, they went to the accidental co-benefits
associated with it, not what the purpose of the rule was, to
claim benefits to the rule.
Ms. Johnson of Texas. So you're saying that it has
absolutely nothing to do with the health status, that the
science that has indicated that is not pure science?
Dr. Shaw. I'm suggesting that the goal and the objective of
the Clean Power Plan and what led to this rule is climate
change, climate variability, and that the contaminant that
they're specifically seeking in the greenhouse gases and, more
particular, carbon dioxide, which is the focus of the rule does
not have health impacts. Carbon dioxide at the levels that we
breathe it is actually good for plants. We breathe in oxygen
and exhale carbon dioxide. You have to get much higher levels
of carbon dioxide than we're ever going to see in the ambient
air to get health effects associated with CO2 to the
human health. So the goal of the plan is to address climate
change and yet that impact----
Ms. Johnson of Texas. So climate change has no impact on
health?
Dr. Shaw. The model suggestions of what this rule would
accomplish would be an unmeasurable decrease in sea level and
one-hundredth of a degree Fahrenheit in temperature change. So
even the best estimate of what the climate change impact and
benefit of this rule is so small as to be unquantifiable.
Ms. Johnson of Texas. So would we continue to see climate
change with a lot of flooding, a lot of air contamination, this
is not going to impact health?
Dr. Shaw. For one, the IPCC, the Intergovernmental Panel on
Climate Change, has indicated that the adverse weather that
we're seeing has not been correlated with climate change. So
there's certainly a science argument to be made and some
additional data to be there but it's not clear that any--that
the global climate change is going to have those impacts, and
it's certainly clear that this rule would not have a measurable
impact on any of those--a measurable change in climate change.
Ms. Johnson of Texas. Could you submit to me your research
findings and the origin of them?
Dr. Shaw. Sure, I will be happy to provide you some of the
background information on that.
Ms. Johnson of Texas. Thank you very much.
Dr. Shaw. Thank you, Congresswoman.
Ms. Johnson of Texas. Thank you.
Chairman Bridenstine. And the Chair now recognizes the
Chairman of the full Committee, Mr. Smith, for five minutes.
Chairman Smith. Thank you, Mr. Chairman.
To respond real quickly to what the Ranking Member said and
her concern about the unreimbursed costs of Parkland Hospital,
from what I read, the reason for those unreimbursed costs are
primarily due to the fact that up to two-third of the births at
Parkland are the children of illegal immigrants in the country
today. It is not due to healthcare issues caused by carbon
emissions.
Dr. Shaw, let me address my first question to you. The
Chairman a few minutes ago put a chart on the screen that was
produced by the Chamber of Commerce that showed that 42 states
are going to be harmed by this Clean Power Plan, and by harmed,
I mean they're going to see a dramatic increase in electricity
costs. These electricity costs--and there's the chart--are
going to disproportionately hurt low-income individuals because
it's going to raise the cost of everything, whether it be food,
whether it be electricity, whether it be anything else, and so
I very much regret the impact on low-income Americans that this
plan is going to have.
But I wanted to ask you, do you see any benefits whatsoever
as a result of this plan's mandating the reduction in carbon
emissions?
Dr. Shaw. Chairman, no. As you look at the exchange I had
with Congresswoman Johnson, the rule does not, especially from
the standpoint of its impact on carbon dioxide, does not have a
measurable impact on sea level and/or the global temperature,
and to your point, Texas having a competitive energy on the
market, that is, you only get to generate and sell electricity
if you can do it cheaply, has naturally driven our electricity
generation grid, especially in ERCOT, to be the cheapest
possible. Any reaching in from the federal government to force
us to then choose more expensive generation will naturally
increase electricity rates, and unfortunately, those who are
least able to afford it, the fixed income and low income, will
be least likely to be able to take advantage of energy
efficiency measures and therefore they're going to be saddled
with higher electricity rates and therefore electricity bills.
So I don't share the EPA's optimism that we're going to have
lower utility bills, especially for the low and fixed income.
Chairman Smith. Okay. Thank you, Chairman Shaw.
Mr. Eisdorfer, let me ask you a question, and that is, do
you think that this Clean Power Plan is going to have any
significant impact on climate change?
Mr. Eisdorfer. Chair Smith, absolutely. We can talk about
the incremental benefits of this particular plan----
Chairman Smith. Do you disagree with the EPA's data that
shows it would only at best impact the rise in ocean levels by
one one-hundredth of an inch?
Mr. Eisdorfer. I can't say whether I agree with that or
disagree with that. I just haven't done that analysis. But I do
think you have to start somewhere, and if we don't begin to
address it, then certainly the----
Chairman Smith. But this is going to cost, by the EPA's own
admission, which is probably low, the American consumers about
$9 billion. When the Administrator of the EPA herself was
before the full Committee a couple of months ago, I made the
point that I just made to you about no significant impact on
climate change, and she did not deny that. She said only that
it could be justified because we need to show action, which I
don't think is sufficient justification. She did not dispute
the data that showed it would only impact the rise in sea
levels by one one-hundredth of an inch, the thickness of three
pieces of paper, and we're subject the American people to
burdensome regulations. They're going to cost jobs. It is going
to increase electricity prices and disproportionately hurt low-
income Americans, all so we can show action, not because it's
going to have any significant impact on climate change. That's
what the Administrator herself said. So apparently you disagree
with her or you're just not sure?
Mr. Eisdorfer. Well, Chair Smith, I think that if there are
going to be costs borne by the public and the ratepayer, it is
because certain plants are going to be dispatched less or be
shut down entirely, and those are going to be coal plants, and
if those coal plants are generating less carbon emissions, that
is going to have a measurable effect on the environment and is
beginning to address climate change on a national and
international basis.
Chairman Smith. When you say measurable effect, do you have
any evidence whatsoever that it's going to impact the sea-level
rise by more than one one-hundredth of an inch?
Mr. Eisdorfer. I don't have that information.
Chairman Smith. Okay. Thank you.
Last question is, you mentioned a while ago that you were
disappointed that the Clean Power Plan was only going to sort
of a half a loaf impact on the State of Oregon. What were you
disappointed about, or what's the half loaf that did not meet
your expectations?
Mr. Eisdorfer. Chair Smith, I think I was probably arguing
against the visual that was produced that seems to indicate
that Oregon is in really, really great shape. We are in good
shape for complying as a state, but as ratepayers, since we are
tied to coal plants and gas facilities in other states, we do
care very much what happens in those other states.
Chairman Smith. And I saw one chart that indicated
electricity rates would actually go up in Oregon. Is that
possible?
Mr. Eisdorfer. I think that's a possibility.
Chairman Smith. Okay. Thank you, Mr. Eisdorfer.
I yield back, Mr. Chairman.
Chairman Bridenstine. The Chairman yields back.
I now recognize Ms. Edwards from Maryland for five minutes.
Ms. Edwards. Thank you very much, Mr. Chairman, and thank
you to the witnesses today.
I just wanted to highlight, Mr. Chairman, that we've been
hearing a lot about the steps that are necessary to address
climate change by reducing carbon emissions, and its equivalent
is setting our economy on fire. That's some of the accusations.
But it's actually not the case. The efforts of Maryland--and I
would note that Maryland on that Chamber of Commerce chart is a
little deceptive, so it makes me question those other red
states on there. But the efforts of Maryland and other states
that have been involved in the Regional Greenhouse Gas
initiative are proof that environmental protection and robust
economic development can and should go hand and hand.
I have a recent review of the Regional Greenhouse Gas
Initiative by the Analysis Group that I want to submit for the
record. The report finds that over the last three years, the
Regional Greenhouse Gas Initiative has produced a net economic
value of $1.3 billion and 14,200 jobs, and this is on top of
the $1.6 in net economic value and 16,000 jobs created over the
first three years that were analyzed under the program.
Additionally, energy bills in my state and the other
participating states in this regional initiative declined
between 2012 and 2014 with consumers saving $460 million.
Overall, the initiative has achieved a 40 percent reduction in
greenhouse gas emissions compared to 2005 levels while the
regional economy has grown eight percent, and in fact, Maryland
has been very supportive of the rule that we're discussing
today, and began under this regional initiative CO2
emissions reductions under RGGI that have reaped over $200
million from credits. They've used those. We've used those in
our state for grants for renewables, for solar panels, for
helping low-income people with utility bills, and for rebates
for energy-efficient appliances. And so I am gratified that the
EPA has introduced this rule and is preparing to finalize it
and is preparing to finalize it because I think it's going to
be a great economic benefit for our state, for this Nation, and
frankly, for our future.
Maryland relies heavily on the economic generation of
income from the Chesapeake Bay as do the other states in the
region, and so we can't even afford even a little bit of an
increase in sea level because it would impact our economy
tremendously, and so I'm gratified for the EPA's work.
Let me just say as well, and I'm going to read directly
from the U.S. National Climate Assessment and the U.S. Global
Change research program that was published in May of 2014.
Finding five of a number of findings, human health. ``Climate
change threatens human health and well-being in many ways,'' I
quote. ``Climate change is increasing the risk of respiratory
stress from poor air quality, heat stress and the spread of
foodborne, insectborne and waterborne diseases. Extreme weather
events often lead to fatalities and a variety of health impacts
on vulnerable populations including impacts on mental health
such as anxiety, post-traumatic stress disorder. Large-scale
changes in the environment due to climate change and extreme
weather events are increasing the risk of the emergence or
reemergence of health threats that are currently uncommon in
the United States such as dengue fever. Key weather and climate
drivers of health impacts including increasingly frequent,
intense and longer-lasting extreme heat, which worsen drought,
wildfire and air pollution risk, increasingly frequent extreme
precipitation, intense storms and changes in precipitation
patterns that could lead to flooding, drought, and ecosystem
changes, and rising sea levels that intensify coastal flooding
and storm surge causing injuries and deaths, stress due to
evacuations, and water quality impacts, among other effects on
public health.'' And so I would welcome any submission for the
record that would refute the findings of the climate change
impacts in the United States and those highlights as published
in May of 2014.
And then lastly, just as we close out, for our witness from
Oregon--thank you for the work that you are doing--I wonder if
you can talk about any regional efforts that you're involved in
and whether you think that you might change some of your work
in the region over these next several weeks, months and years.
Thank you.
Mr. Eisdorfer. Thank you, Congresswoman. Two quick things.
One, the Northwest has acted as a region for many, many years,
so Washington, Oregon, Montana and Idaho are usually in a
constant state of discussion, and so this is no exception.
We're having those kinds of discussions.
Another kind of regional discussion that we're having is
the PacifiCorp service territory is six states that includes
Washington, Oregon, Wyoming and Utah, and they--their resource
fleet is heavy on coal and so that utility is significantly
impacted by the rule, and so discussions between those states
are in the offing. They will be coming and we'll be discussing
what is the least-cost way to approach compliance.
Ms. Edwards. Thank you, Mr. Chairman.
Chairman Bridenstine. Thank you.
I now recognize Mr. Abraham from Louisiana.
Mr. Abraham. Thank you, Mr. Chairman.
This, once again, in my opinion, is the EPA doing a little
malpractice of manipulating data to fit their goal instead of
using this data objectively to actually formulate a coherent
plan.
I'll make a brief mention to Ranking Member Johnson and Ms.
Edwards as far as wanting some documentation as far as whether
this climate change, which I assume is global warming the way
they are playing it, I am a practicing physician that does
treat respiratory conditions and surely asthma and--
Administrator McCarthy has often tried to refer to children's
asthma as something that she uses to try to sell her points.
But if you look at the data, the objective data from an
unbiased source, which I have to, that's the CDC, and if you
look at states like California who have some of the cleanest
air in the nation, they still have the highest asthma rate and
they have increasing asthma rates. So if we want to compare
apples to apples, you are right, Chairman Shaw, in that
CO2 certainly has no role in respiratory asthma as
far as exacerbating it.
So saying that, you know, we do have actually objective
data that proves your point. I'll refer also to this report
that has been touted, and I will that if it has not already
been done, that it be inserted into the record.
Mr. Eisdorfer, from this report, it says that Oregon stands
to make or benefit from up to $125 million. Would you agree
with that?
Mr. Eisdorfer. I'm sorry. I just don't have the ability
to----
Mr. Abraham. Well, it's a good--you know, I'm assuming it's
a good report. It looks to be fairly unbiased, so I will again
to submit it to the record, and I'll stay with you, sir. The
way I understand it, Oregon has only one coal-fired plant?
Mr. Eisdorfer. Yes, that's----
Mr. Abraham. And it's supposed to go down or shut down in
2020?
Mr. Eisdorfer. Yes. There's the Boardman plant. Its useful
life was to go out to the year 2040, and there was a discussion
that began about 2006, 2007 by stakeholders, utilities and the
regulators, and a least-cost, least-risk analysis was done, and
the result of that was, it was in the customers' interests, it
was less costly to actually shut the plan down early rather
than retrofit it with non-Clean Power Plan environmental
technologies. So it was actually cheaper to shut it down and
less riskier to shut it down in 2020 than the full 2040.
Mr. Abraham. Under the power plan, will Oregon be allowed
to emit more carbon or less carbon? The way I read it, it's
more actually. What's your take on that?
Mr. Eisdorfer. From the baseline from 2012, Oregon's not
going to be able to emit more carbon than from that baseline.
Mr. Abraham. Okay, and I will probably respectfully
disagree reading the report, but I will defer to sources for
that.
Chairman Shaw, would you agree that with this BSER
methodology, that this is an overreach of the federal
government?
Dr. Shaw. Clearly, this is exceptional from what I think
the clear reading of the 111(d) statute prescribes.
Mr. Abraham. Okay. And that's all I have, Mr. Chairman. I
yield back.
Chairman Bridenstine. The gentleman yields back.
I now recognize Mr. Foster from Illinois.
Mr. Foster. Thank you, Mr. Chairman.
Director Butler, I understand one of your fundamental
objections is that what is proposed is to replace an economic
model for determining the energy with one that includes
environmental factors, and so first is just a simple question.
How many people die in Ohio each year as a result of power
plant emissions?
Mr. Butler. Representative Foster, thanks for the question.
I don't know the exact number to your question but my premise--
--
Mr. Foster. Roughly, factor of two.
Mr. Butler. I don't know. I'm not a physician.
Mr. Foster. Okay. Well, it's certainly surprising, because
that seems like a fundamental question here.
Let's see. I actually do have an estimate, if we could have
the thing--this is an estimate from--someone by the Clean Air
Task Force put this together based--I think it's primarily
driven by particulate emissions, and it looks like--you sort of
do an eyeball average--about 10 people in 10,000--10 in
100,000. About one in 10,000 die each year in Ohio, roughly in
a typical area of Ohio, if this data is correct, and Ohio, I
think, has something like 10 million people, so we're talking
thousandish, roughly a thousand people per year die because of
particulates from coal plants.
So I was wondering, from a purely economic point of view
that you advocate, what is the economically optimum number of
people to die in Ohio each year?
Mr. Butler. Representative Foster, so Ohio is about 11-1/2
million people, and ultimately I think the chart that you're
showing and the argument that you're making is around something
that Dr. Shaw talked about, this issue about these co-benefits
of the Clean Power Plan. I mean, you're talking about--this is
about issues around particulate emissions. It has nothing to do
with CO2 emissions under the Clean Power Plan.
Mr. Foster. Right, but this hearing is about closing
plants.
Mr. Butler. This hearing is about----
Mr. Foster. The title of the hearing is ``closing plants,''
right?
Mr. Butler. Right.
Mr. Foster. SO the co-benefits--I do not understand the
argument that when you complain about the cost of something,
you don't include the economic co-benefits, but that's a
separate issue.
But I was wondering just in general, you know, if you for
whatever philosophical approach to this you take, how would you
calculate the economically optimum number of people to die in
Ohio each year? What are the inputs into that?
Mr. Butler. Sure. Representative Foster, we care about all
11-1/2 million Ohioans, and this hearing today is about the
Clean Power Plan. It is about the CO2 emissions that
are supposed to be reduced from the Clean Power Plan. We take
seriously, and as you have seen in my remarks also that Ohio
has reduced its not only CO2 emissions but we've
reduced our sulfur dioxide----
Mr. Foster. I'm asking you the general question. How do you
do the optimum plan? In your point of view, you know, do you
believe that the optimum number of people to die from
particulates in Ohio is zero or some number bigger than zero?
And how, from your philosophical point of view, do you
calculate the optimum number of people to die each year?
Mr. Butler. Sure. Representative Foster, so we benefited
from an all-fuels approach in the State of Ohio. So not only do
we have coal plants, we've got hydroelectric plants, we've got
energy efficiency, we've got natural gas, we've got wind, we've
got solar. We think that it is in our best economic and
environmental interest to have all of those in Ohio and we'll
strive to continue to do that.
Mr. Foster. But ultimately, you have a philosophy that
tells you how to optimize that mix, well, maybe purely economic
or a combination of economic and environmental aspects, that
allows you to calculate the number of people who should die in
Ohio each year. How do you--how would you advocate determining
that number? For example, does it include the health effects in
the downwind states? If emissions from Ohio kill people in
downwind states, should that be included or not? If the
emissions from Ohio raise CO2, we lose the Greenland
ice sheet and, you know, 75 years from now people die in
coastal areas, should that be included or not? You know, how
large is your commons that you're looking at here?
Mr. Butler. Representative Foster, so the way that we look
at this in Ohio is that again, it's an all-fuels approach, and
whether or not you want to--what we don't account for is the
notion in the Clean Power Plan is that we'll see any impact to
human health because of emissions that are regulated under the
Clean Power Plan. We take into development of our plan not just
clean power but how we look at our energy mix based on an
economic model. It is also based on looking at environmental
protection is included my role as Director of being protective
of human health and the environment. So it's always a balance,
and how we try to balance with perspectives. We work closely
with the Public Utilities Commission, all of our utilities, to
try to set up what that appropriate----
Mr. Foster. All right. What I'm fishing for is, what is the
balance of, you know, human suffering and death versus economic
goals? Because it seems like there's a big disconnect and we're
talking past each other----
Mr. Butler. Sure.
Mr. Foster. --on this where, you know, one side of this
hearing room, people seem to be, you know, ignoring anything
regarding quality of life or ultimately death, and versus pure
economic concerns. I was wondering how you handle that and what
is the objective function you're optimizing for from a
mathematical point of view? Does it take into account the
number of deaths in Ohio, or not?
Mr. Butler. Well, Representative, I'll just tell you, I
think your line of questioning's really unfair from the
perspective of what this hearing is about. It's about the Clean
Power Plan. It's about looking at CO2 emissions
relative to the Clean Power Plan. You know, we have addressed--
--
Mr. Foster. The title of the hearing is that the Power Plan
will shut down power plants. We're talking about shutting down
certain kinds of plants.
Anyway----
Chairman Bridenstine. The gentleman's time is expired.
Real quick, could you answer the question? Is there already
a National Ambient Air Quality Standard for particulate matter?
That already exists. Am I incorrect?
Mr. Butler. Mr. Chairman, that's correct.
Chairman Bridenstine. Okay. Very well.
I now recognize Representative Moolenaar from Michigan.
Mr. Moolenaar. Thank you, Mr. Chairman.
I wanted to follow up on some of the questions regarding
the Clean Power Plan rule and the safety valve provision.
According to the EPA, this would give states a 90-day period to
exceed carbon limits during emergencies, and EPA has indicated
that although this safety valve exists, it would be rarely
used.
Mr. Shaw and Mr. Butler, I wonder if you could address the
safety valve provision and give us your thoughts on that?
Dr. Shaw. Thank you. While I certainly am appreciative that
there's a recognition that this rule could lead to reliability
issues, some of the challenges and concerns with the safety
valve approach is that in order to have allowing generating to
operate beyond what's permitted and allowed in those extreme
circumstances, there's two issues. One, the EPA has not made it
clear what those extreme circumstances are, and so it's going
to be rare, would you be able to rely on it, and two, one of
the outcomes of this rule as I see it with the extreme
advancement in renewables energy is going to make it much more
challenging for us to be able to account for baseload and
maximum peak load at times when the wind is not blowing, which
in Texas, by the way, they're about 180 degrees out of phase.
And so part of what that's going to mean is, we may not have
generation available in our market to turn on because it's
difficult to justify cost of building new generation capacity
when you may only be able to operate for a few hours a year and
only during those extreme circumstances, and those rates are
going to have to be extremely high to warrant those
multimillions if not billions of dollars in investments.
Mr. Butler. Representative, so I think my comments would be
very much and similar to Dr. Shaw in the sense that the way
that we look at this reliability safety valve on the one hand,
we are appreciative because I think it was one of the probably
most mentioned concerns that states had raised with EPA as well
as our Public Utilities Commission around the notion that they
were going to be setting up through the Clean Power Plan really
constrain zones and putting in a position where we would have
unreliable power supplies at certain times. So what I will tell
you is, I think we'll have to go on what I've heard is the
Public Utilities Commission, FERC and U.S. EPA have signed a
memorandum of understanding. I think they are still trying to
figure out the dynamics of that as all--as we are as well. So
we appreciate that there is this reliability safety valve. I
think it's unknown at this point whether we think that it will
actually be effective. I've heard the FERC talk about the
reliability safety valve from the perspective while they have a
memorandum of understanding, it really is in the details, which
are yet to be developed.
Mr. Moolenaar. Okay. Thank you.
I also want to get back to this question of getting credit
for--and maybe have all three of you address this issue. For
energy efficiency changes or reduction in greenhouse gases,
different plans that you've implemented in your state prior to
2012 that you don't get credit for, could you talk about that
aspect? Because that's a concern I've heard from constituents
as well.
Dr. Shaw. I'll quickly talk about the case for Texas. With
regard to, for example, renewable energy, we've had a very
significant increase where about ten percent of our electric
generation is from wind power that was accomplished through
about a $7 billion investment in transmission lines to make
that occur and a very dedicated effort, and that peaked right--
because in 2012 in the mix of things, credits were going to be
expiring and so you had this cliff where lots of wind power was
installed, a lot of expenditure was made, but then we don't get
credit because the baseline was drawn after that occurred.
Mr. Butler. Representative, I'll echo that. One of our very
chief concerns in comments we made in our draft comments on the
Power Plan which has yet--was unaddressed and yet to be
addressed still is this notion of first movers like the State
of Ohio, like the State of Texas where we have--we've had an
aggressive renewable portfolio standard in the State of Ohio
since 2008, had targets for renewables, set targets for solar
and energy efficiency, hitting targets by the year 2025. To be
told that, frankly, because we were first movers and we were
aggressive in implementing those across the state, to be told
that those efforts between 2005 and 2012 don't count is frankly
very, very disappointing to us and puts in a very deep hole.
Number two, I think even more so, recent--very recent
conversations with U.S. EPA and our modeling looking at the
finalized Clean Power Plan is that many of our renewable
portfolio standard activities going forward even after 2012
will not count because they don't quality under the measurement
and verification requirements that U.S. EPA has put into the
final rule.
Mr. Eisdorfer. Congressman, very quickly, one of the things
I said earlier is that Oregon was beginning to look at the
mass-based approach, and under that approach, any energy
efficiency with a measure life that extends past into--after
2022 and into the compliance period in a sense very much does
count to the extent that it causes the utilities to have to
invest or operate their thermal generation that much less. So
under mass-based approach, mass-based and rate-based treat
energy efficiency differently. Under a mass-based, all energy
efficiency you do, if the measure life extends into the
compliance period, that's a really good thing.
Mr. Moolenaar. Mr. Chairman, I yield back.
Chairman Bridenstine. The gentleman yields back.
The gentleman from Ohio, Mr. Johnson, is recognized for
five minutes.
Mr. Johnson of Ohio. Well, thank you, Mr. Chairman, and I'm
glad I was able to make it back.
Director Butler, earlier this year in testimony before the
Energy and Commerce Committee, as I recall, you stated that
EPA's Clean Power Plan had not been well designed and that the
rule was rushed out the door to meet a predetermined schedule.
So question for you. Now that EPA has released the final Clean
Power Plan rule, do you still feel that the final rule has some
of the same flaws that existed in the proposed rule?
Mr. Butler. Representative Johnson, thanks for the
question. I think that they obviously made some adjustments in
the final rule, and I think as I made it brief in my remarks
today, we still have many of those questions remain and there
are certain new ones too. The actual final Clean Power Plan is
dramatically different. A lot of the--many of the targets
haven't changed. It's like the titles of the book haven't
changed but all of the pages are different. We're going through
that analysis of this 1,500-page rule as it's in completion,
and that is one of the reasons why today I called for EPA ought
to at a very minimum re-release this rule as a draft so that we
ought to be able to--rather than having to implement the rule
immediately at the same time we're reviewing it, give us and
all the stakeholders an opportunity to review it.
I will also just mention the idea that U.S. EPA had made
some assurances that as soon as August 3 when they released
this rule that beginning in the first week of September they
anticipated this rule to be issued as final. They have deferred
and moved away from that position. I think they've given a date
sometime in late October, which really puts us in a position
where U.S. EPA will finalize that rule, they will take comments
on the also corresponding federal backstop plan for 90 days
after that time period, which would take us into February, all
the while still requiring states to be able to submit a plan by
September 2016. Those dates are just unrealistic for us to
meet.
Mr. Johnson of Ohio. Sure.
Mr. Butler. So I think ultimately there are still many more
questions that have been even--have been raised even in the
fail plan that we're still unclear about, and frankly, U.S. EPA
has not been able to answer those questions for us.
Mr. Johnson of Ohio. Okay. Well, you've answered several of
my additional questions.
Let me turn to another issue that we've talked about before
in some of the hearings and testimonies. For Chairman Shaw and
Director Butler, it appears that one of the changes between the
final and proposed Clean Power Plan rule is the amount of coal-
fired power plant retirements reflected in the base case, the
scenario that analyzes the current state of affairs without the
Clean Power Plan. It appears that the EPA believes that 27
percent or 78 gigawatts of coal-fired electricity in existence
three months ago will close by next year even without the
implementation of the Clean Power Plan. EPA claims that it made
this change based on stakeholder comments submitted on the
proposed rule.
So my question, Chairman Shaw and Director Butler, did your
agencies and the States of Texas and Ohio submit comments for
the record regarding EPA's proposed Clean Power Plan rule?
Dr. Shaw. Yes, we did.
Mr. Butler. Representative Johnson, we submitted over 600
pages of comments on the Clean Power Plan.
Mr. Johnson of Ohio. Great. For you both, Chairman Shaw and
Director Butler, in your comments on the proposed Clean Power
Plan, did you provide comments regarding the number of coal-
fired retirements that would occur as a result of other EPA
rules such as the Mercury Air Toxics Rule?
Dr. Shaw. My agency did not. Our Public Utilities
Commission perhaps may have.
Mr. Butler. Representative Johnson, we did, and we still,
as I testified today, just by the mercury, the mass rules that
were responsible for closing 25 percent of our megawatts in
Ohio, so just over 6,000 megawatts of power turned off this
year because of the mercury standard.
Mr. Johnson of Ohio. Okay. Final question for the two of
you. In your opinions, what stakeholder groups would have
submitted comments that would have led the EPA to make changes
to its base case scenario for the amount of coal-fired
retirements, and do you believe that these comments were only
submitted in an attempt to make it appear as though the Clean
Power Plan was less onerous to the states?
Dr. Shaw. I don't know what groups submitted comments that
they were able to base that on, and certainly it does seem
especially with the overly aggressive renewables energy goals
that they have that one could conclude that it appears that
they were more concerned with getting a 30 percent reduction
than in determining what BSER was for the different facilities.
Mr. Butler. Representative, I concur with that. I still
believe that there was a predetermined number or a conclusion
before the plans ultimately were developed.
Mr. Johnson of Ohio. Got it. Okay. Well, we've heard this
before, Mr. Chairman. You know, you got to pass it before you
know what's in it. You got to define it before you do the
analysis. I mean, that's just a pattern of this Administration
in so many areas, and this is another one of them. I yield
back.
Chairman Bridenstine. The gentleman yields back.
Without objection, I have a letter here from the Governor
of Ohio, John Kasich. It's a request to suspend implementation
of the Clean Power Plan. Without objection, I'd like to have
this letter entered into the record.
[The information appears in Appendix II]
Chairman Bridenstine. I now recognize the gentleman from
Alabama, Mr. Palmer, for five minutes.
Mr. Palmer. Thank you, Mr. Chairman.
It was with great interest that I followed your testimony a
few minutes ago, several minutes ago, Chairman Shaw, that this
is really not about air quality, it's about climate change,
which I think raises some questions as to whether or not this
should fall under the purview of the EPA since their primary
responsibility under the Clean Air Act was air quality. That
said, one of the things that concerns me about this along that
same line is your excellent analysis of the scientific evidence
to the contrary of what this will actually do for climate
change, the very limited impact.
The one thing that you didn't cover that I'd like for you
to comment on is that there's recently a report from a former
lead author of the International Panel on Climate Change, Dr.
Philip Lloyd from South Africa, who says that the majority of
climate change that we're seeing is due to natural variations.
Are you familiar with that?
Dr. Shaw. I may have. I didn't recognize it from the
author's name but I have read material similar to that.
Mr. Palmer. I think this guy obviously has an excellent
reputation in the scientific community, given that he was a
lead author of the IPCC, one of their lead authors of the IPCC
report. So I think it's sensible then to suggest that the EPA
is imposing an enormous economic burden on the families of
America for little or no impact.
Dr. Shaw. And Congressman, I think that as you even look
into the material, not the summaries but look into the material
of even previous IPCC reports, you go back a few years and the
message wasn't that climate change, manmade climate change is
causing all these issues, it's that we've seen a natural
climate change and the concern was that manmade emissions might
accelerate that to lead to events, and then there was a shift,
it seems to me, that seemed to suggest that all weather
variability and any unusual weather became accredited to
climate change, and I think it seems to support what the more
robust review of the scientific record reflects.
Mr. Palmer. That came after they realized that we haven't
had any temperature increase in 18 years and there was no
evidence to support that, so they just changed the dialog from
global warming to climate change.
Mr. Eisdorfer, in regard to this impact that this is going
to have and your assertion that there's some association with
health benefits and particularly asthma, there's a study out of
UCLA, there's several studies to indicate that the single
biggest predictor of asthma is income. It's not air quality,
it's income. How do you respond to that?
Mr. Eisdorfer. Representative Palmer, not really my area of
expertise. It may be that low-income folks tend to be downwind
from generating facilities.
Mr. Palmer. No, sir.
Mr. Eisdorfer. I'm not really sure what the answer is.
Mr. Palmer. No, sir, it's the proximity to traffic and
things like that may have some impact but the study indicates
that the majority of this is low-income families, and I want to
continue on that line and point out that the National Black
Chamber of Commerce is opposed to the Clean Power Plan, and
they've pointed out that if this goes into effect, that poverty
rates among black families will go up 23 percent, among
Hispanic families it'll go up 26 percent. And the states that
have already implemented a renewable power plan such as
Maryland, who began this initiative in 2005, their power rates
have gone up--their electricity power rates have gone up 61
percent. So you're imposing an enormous burden on families
through this rule that I don't think the EPA has taken into
full consideration.
There's one other thing about this too is how it impacts
senior households, basically low-income houses. They're below
34,000, I think, in median income, and there's a report that
came out that indicated that you've got households, 41 percent
of seniors went without medical or dental care because they had
to make a choice between that and paying their energy bill, 30
percent went without food for a day, 33 percent did not fill
out a prescription or took less than a full dose.
You know, this is the real impact of the regulations that
the EPA is imposing. This is just some pie-in-the-sky stuff.
This is how it impacts real people. It costs jobs. The Black
National Chamber of Commerce is estimating that they'll lose
literally hundreds of thousands of jobs among black workers and
hundreds of thousands of jobs among Hispanic workers. That's
the real impact. It's not some issue of we may stop this
unproven idea of climate change. That's the real impact.
Chairman Bridenstine. The gentleman's time is expired.
Mr. Palmer. Thank you, Mr. Chairman.
Chairman Bridenstine. The gentleman's time is expired.
I'd like to recognize Ranking Member Bonamici for--she'd
like to make a submission for the record.
Ms. Bonamici. Thank you, Mr. Chairman. I would like to
submit to the record a letter written to the Administrator of
the U.S. EPA by the Attorneys General of New York, California,
Connecticut, Maine, Massachusetts, New Mexico, Oregon, Vermont,
Washington, the District of Columbia, and the Corporation
Counsel of the City of New York dated August 3, 2015, in which
this group of Attorneys General and Corporation Counsel wrote
that the power plant rules issued today are the product of an
unprecedented effort by the EPA to solicit public input
including from states, cities, nonprofit organizations and
industry. They write in strong support of the final rules,
stating that the rules are firmly grounded in law, and I would
like to submit this for the record, Mr. Chairman.
Chairman Bridenstine. Without objection, so ordered.
[The information appears in Appendix II]
Chairman Bridenstine. And of course, the states that are
going to benefit from the Clean Power Plan financially would be
the ones that would sign that letter.
I'd like to recognize Dr. Babin from the great State of
Texas.
Mr. Babin. Yes, sir. Thank you, Mr. Chairman. I appreciate
that you said ``great.''
I have a lot of concerns with the EPA's final rule for the
Clean Power Plan. While it's an improvement over the proposed
rule, it goes too far with unrealistic expectations for
reducing carbon emissions and lacks clarity in other areas. For
example, I have a new biomass plant in my district that uses
forest waste for fuel. Under the Clean Power Plan, it's not
clear if this plant would be treated as a renewable facility
for purposes of emission counting. Has EPA provided you, Dr.
Shaw, Chairman Shaw with the TCEQ, with any more guidance on
how these facilities will be handled under the Clean Power
Plan?
Dr. Shaw. That is one of those areas that still remains
very elusive to get a good answer to, and our fundamental
understanding.
Mr. Babin. Okay. Thank you. There's a lot of folks that are
worried about that in my district.
And also, Dr. Shaw, I have several coal-fired plants in my
district. In fact, surprisingly to many Texans, 65 percent of
our energy is produced in coal-fired plants no matter how cheap
natural gas is. Do you believe that this new rule will kick-
start a transition away from coal toward renewable energy in
Texas causing a number of coal-fired power units to retire?
Dr. Shaw. It seems that there's no other outcome then in
order to meet the rule would almost dictate require closing and
at least throttling back to a point that they're no longer
economically feasible to maintain many coal-fired power plants.
Mr. Babin. So war in coal is kind of a good name.
If so, how will this affect the economy and jobs in my
district? Won't this raise prices and affect reliability of our
energy?
Dr. Shaw. Congressman, I think based on the fact that
especially ERCOT and I think your district is in the ERCOT
region is an energy only competitive market which has led to,
for example, last time our checked, our electricity utility
rates were about 30 to 35 percent lower than the RGGI states'
utility rates. That's been because we've incentivized the most
efficient generation capacity. Anything that makes us depart
from that is going to necessarily increase electricity rates,
and in fact, the jobs that are utilizing that energy.
Mr. Babin. Thank you.
And directed at you again, Dr. Shaw and Director Butler,
when Administrator McCarthy was here and testified before the
Science Committee back in July, she stated unequivocally that
the EPA's regulatory agenda relies on science that is
accessible and transparent. Do you agree that with regard to
the Clean Power Plan, the EPA has promulgated this rule in
transparently and that all aspects of the rule including the
calculation of benefits rely upon science and data that have
been publicly made available?
Dr. Shaw. I think that is a stretch, and certainly we're
still digging our way through the 1,500 pages so maybe we've
missed it in their somewhere, Congressman, but it is a
challenge to understand the basis, and I think part of that is
because it's very difficult to quantify some of the benefits
because it's difficult to quantify the benefit of a hundredth
of an inch of sea-level-rise change.
Mr. Babin. Mr. Butler?
Mr. Butler. Representative Babin, I would agree with Bryan,
my colleague. Relative to transparency, maybe I'll transition
and just mention one other issue relative to transparency. U.S.
EPA often--the Administrator often talks about the
unprecedented level of outreach that they've done and that they
held lots of public hearings. I know the States of Ohio, West
Virginia and Kentucky, we asked the Administrator to hold one
of those public hearings somewhere within one of our three
states so that they could see and get firsthand information
from those the most dramatically affected by the Clean Power
Plan, coal miners and coal-fired--folks that work at coal-fired
power plants. The closest they got was Pittsburgh for having
one of those public hearings, and frankly, the level of
transparent interaction, I think it was more of just a
traditional top-down regulatory approach. They developed this
Clean Power Plan under their own model, handed it to the
states. We got an opportunity to provide some comment but
ultimately I think they're still continuing down along the
strategy that they had all along.
Mr. Babin. Absolutely. Thank you. I think we can see a
little more transparency myself.
I want to thank all the witnesses, and Mr. Chairman, it
seems that if you give them an inch, the EPA will take a mile.
This plan is another overreach by this Administration and I
hope not just for the sake of my home State of Texas but for
the entire country, we as a Congress will be able to do
something about this final rule.
Thank you, and I yield back the balance of my time.
Chairman Bridenstine. I'd like to thank the doctor from
Texas.
I now recognize the gentleman from Texas, Mr. Weber, for
five minutes.
Mr. Weber. Thank you, and Chairman Shaw, I'm going to start
with you. Thank you for being here. I didn't get to hear your
testimony. I came in late. Apparently I was out too late last
night.
But you mention in your testimony that the EPA seems to be
choosing energy sources that they prefer, and Mr. Westerman
actually said in his comments earlier that it looks like
they're in the business of picking winners and losers, and I
appreciate your comments when I was here about this adversely
affecting low-income people, especially in Texas, since we have
our own grid at 85 percent, as you know, ERCOT. So what you're
saying is that this is actually going to adversely affect low-
income people more so than others.
Dr. Shaw. Yes, Congressman. I don't see a way that--when
you look at a methodology that changes from dispatching
determining what your generation source is going to be based on
the economics, which is what our system, especially in the
ERCOT region, is based on, that a system that changes that and
says create new generation sources that didn't meet that test,
that aren't as cost-effective, and then dispatch based on
greenhouse gas emissions alone, that's necessarily going to
raise the cost, the rate, if you will, of that electric
generation.
Mr. Weber. Well, that's fascinating. I followed your
exchange with, I think, my colleague from Maryland and also
from the north part of Texas. Our colleague from Maryland
seemed to list just a whole bunch of bad things that were going
to happen, all kinds of illnesses, fires and bad weather. She
got down and she even said heat. I think she said heat stress,
which low-income people would actually when their electricity
bill goes up be more prone to turn off their air conditioning
and probably accede to heat stress. She had quite a long list
of bad things the EPA's apparently trying to prevent. The only
thing she left out was mumps and measles. And so I was
appreciating your comments to the colleague from Texas that
actually this is about CO2 and that doesn't cause--I
mean, CO2 doesn't cause asthma.
You also said something I think 100--or Chairman Smith
might have said one-hundredth of a degree Fahrenheit, an
unmeasurable raise. Is that what he said?
Dr. Shaw. I said that as well. The Chairman may have
mentioned that as well. That's from EPA's----
Mr. Weber. And then one one-hundredth of an inch sea-level
rise.
Mr. Eisdorfer, let's go over to you. You seem to be in
favor of the plan. One one-hundredth of an inch, I was
fascinated by Chairman Smith's comment that that's three pieces
of paper. Three pieces of paper. So if we're going to
disadvantage some low-income people, and by the way, the EPA
cost estimate of this was $9 billion. If you divide that out by
50 states, it's $180 million per state, just FY I. A hundred
and eighty million dollars per state. If we're going to
disadvantage low-income people and cause their electricity
prices to rise, Mr. Eisdorfer, how many sheets of paper would
you add to that pile to disenfranchise what percentage of the
elderly and the low-income? Would you add one sheet to increase
the number of disadvantaged economically by this? I mean, is it
worth that I guess is what I'm saying?
Mr. Eisdorfer. Congressman Weber, it's absolutely worth it.
It is----
Mr. Weber. It is worth it to add one sheet of paper to sea-
level rise to actually economically disadvantage how many, one
percent of the elderly in Oregon?
Mr. Eisdorfer. So we're talking about climate change as if
it were an environmental issue and this is a one side versus
the other side kind of thing. I tend to see climate change
almost entirely as a social and societal issue. The Earth is
going to take care of itself. The issue is, how is humanity
going to fare in it, and the Clean Power Plan is not the cure-
all but it is the start, and it's sort of interesting to me, in
this discussion we're talking about the economics of the plan.
We haven't talked a lot about the economics of the built
environment in Miami or Manhattan.
Mr. Weber. Let me stop you there. I'm running short on
time. When you talk about states being socioeconomic and you
said it's not about environment, which is really interesting to
me, so if you're concerned about people and society--Mr. Foster
was saying that a thousand people, I think, would die in Ohio
from--in his exchange with Director Butler from coal-fired
plants. The truth of the matter is, and I did some Citicom--
this Citi data.com research real quick. People are leaving Ohio
because there's no jobs, and actually 2,800 of them left in
2008 alone and came to Texas. If you looked back and you did
some more research, Chicago Tribune will tell you that July
2013 to July 2014, 10,000 people left and headed to Texas,
Florida and California. So we have our great TCEQ Director or
Chairman here. We understand in Texas we want clean air, we're
doing a good job, so it is about society but it's doing it
reasonably, and I don't think this EPA rule is reasonable.
Mr. Chairman, thank you for your indulgence. I yield back.
Chairman Bridenstine. The gentleman yields back.
We have a request for another couple of minutes of
questions from one of our Members, and Ranking Member Bonamici
has been gracious enough to allow that, so I'm going to give
her two minutes to ask a few more questions. Then I'll give our
side another two minutes to ask a few more questions, then
we'll close.
Ms. Bonamici, you're recognized.
Ms. Bonamici. Thank you, Mr. Chairman.
Mr. Eisdorfer, I want to follow up on the discussion we
were having about the changes that the EPA made in the final
rule about the way it treats a number of renewable sources. We
talked about biomass but also nuclear. Hydropower is very
important. Oregon does not have any nuclear power plants. But
can you talk about whether those changes in the treatment of
renewables will affect the state's energy mix, and if so, how?
Mr. Eisdorfer. Two changes. One, hydropower was not
included in the baseline this time so the fact that Oregon is a
hydropower state doesn't actually play into whether we are
doing well or not. And secondly, under the mass-based approach,
any renewable investment that would allow a fossil fuel
resource to be dispatched differently, dispatched less, and
actually reduce emissions is a very good thing. So in that
sense, any non-carbon-emitting resource that allows the
existing thermal plants to operate differently is good for the
state.
Ms. Bonamici. Thank you.
And in my remaining minute, you said in your testimony that
Oregon is not an island, and we've talked about the regional
approach, but could you briefly mention the importance of the
United States taking a leadership role in international efforts
to reduce carbon emissions and lessening the risks and impacts
associated with climate change?
Mr. Eisdorfer. Well, two brief things. I've heard
discussion here about sort of a top-down very heavy-handed
approach, and unwittingly I think the EPA actually didn't do
that. The Clean Air Act is a work between--is working----
Ms. Bonamici. The Clean Power Plan?
Mr. Eisdorfer. Well, the Clean Air Act itself actually
requires the federal government and the states to work well
together, and the Clean Power Plan itself is really offering
opportunities for the states to work very well to come up and
share with each other and learn from each other, and assuming
we can do that, we can really show the world the kinds of
opportunities there are to reduce carbon emissions at a very
least-cost path, and so if we can do it, everyone else can do
it. We just need to show the world that we can do it.
Ms. Bonamici. Thank you.
Thank you, Mr. Chairman. I yield back.
Chairman Bridenstine. I thank the Ranking Member, and the
gentleman from Alabama, Mr. Palmer, is recognized for two
minutes.
Mr. Palmer. Thank you, Mr. Chairman.
Chairman Shaw, the Supreme Court recently ruled that the
EPA erred in issuing its proposal to limit mercury emissions
from fossil-fuel-fired power plants. Unfortunately, a number of
states had already implemented control technologies and shut
down plants in order to comply. What I'd like to ask you, and
Mr. Butler, you can respond as well, and we've only got a
couple of minutes, so if you can, make it brief, should this
give states pause when considering whether to comply with the
Clean Power Plan?
Dr. Shaw. Certainly, Congressman, that's one of the great
concerns. As I refer to it, it's the camel's nose getting under
the tent, and that is the impacts of this rule will be
irreversible in that decisions are already being made and the
uncertainty is leading to decisions, and if this rule is not
stayed, there are going to have to be decisions that are being
made and frankly, coal-fired power plants are going to be
making determinations, do I invest in some of the other
regulations, some of which Mr. Butler talked about, in hopes
that I'll still be allowed to operate under the Clean Power
Plan. And so it's a great concern.
Mr. Palmer. Because I've only got a minute, let me direct
this question to you, Chairman Butler. Would it be your opinion
that submitting a state implementation plan would potentially
put your state and other states in a position of implementing
costly regulations which might be struck down later by the
Court?
Mr. Butler. Representative Palmer, that's exactly the point
that we were making as well with a group of states asking U.S.
EPA to stay the execution of this until all these legal
challenges and uncertainty have been resolved. The MATS rule is
a clear example in Ohio. It caused 6,100 megawatts of power to
be turned off this year and it's irreversible. The Clean Power
Plan is far more sweeping than the MATS rule. We would expect
an even greater result if that were to go forward.
Mr. Palmer. I want to thank the Chairman and the Ranking
Member Bonamici for allowing the additional questions. I yield,
sir.
Chairman Bridenstine. I'd like to thank the gentleman from
Alabama, thank the witnesses for their valuable testimony. You
want an additional two minutes as well? All right. The
gentleman from Texas is recognized for two minutes.
Mr. Weber. Thank you, Mr. Chairman. I appreciate your
overriding generosity.
Chairman Shaw, as you know, in Texas in the 81st or 82nd
session we passed a law the Governor signed into effect that
says the TCEQ in promulgating rules and regulations has to take
into account the effect on industry and the economic impact. So
I think we get right in Texas. A lot of people are moving to
Texas as everybody recognizes, and we do create a lot of jobs.
What advice would you give us in this last minute or so about
the EPA, how they might could do things better, making the air
cleaner, the water cleaner but still helping our economy? What
advice would you offer?
Dr. Shaw. Well, thank you, Congressman. I think I'll start
with our mission. Our mission statement is effectively that
we're to provide for clean air, clean water and the safe
disposal of waste in keeping with sustainable economic
development, and that's a recognition that we're not choosing
the environment or the economics, one or the other; we're
choosing to have both because we recognize that we have to have
a strong economy to make further environmental investments and
we have to have a clean environment to be able to track the
kinds of jobs and businesses that people want to work in and
raise their families around. And so my advice would be that if
the EPA would focus and partner with states, recognizing that
we want to protect our environment. We're looking for largely
market-based approaches but certainly we want to be able to
maintain our state's ability to customize those regulatory
approaches to fit the specific dynamics of our state. We end
up--and I think Texas is a great example. We're able to get
greater results faster and more economically, and that helps to
share them not only across the United States but even across
the world as we do things more efficiently, others adopt those
same techniques.
Mr. Weber. Thank you, Chairman.
Mr. Chairman, I yield back. Thank you.
Chairman Bridenstine. You've got 15 more seconds if you'd
like it.
Mr. Weber. Director Butler, this is a question----
Chairman Bridenstine. Okay. Now I recognize myself to
close.
I thank the witnesses for their valuable testimony and the
Members for their questions. The record will remain open for
two weeks for additional comments and written questions from
the Members.
This hearing is adjourned.
[Whereupon, at 11:05 a.m., the Subcommittee was adjourned.]
Appendix I
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Additional Material for the Record
Documents submitted by Representative Bonamici
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Documents submitted by Representative Bridenstine
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Document submitted by Representative Edwards
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Documents submitted by Representative Palmer
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Appendix II
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Slides
Slide submitted by Represenative Birdenstine
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Slide submitted by Represenative Foster
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
[all]