As a result, many states including West Virginia and oklahoma whose attorneys general we will be hearing from today, have raised grave concerns about the legality of the rule and implications for their citizens and ratepayers. In addition to constitutional and legal questions states have expressed concerns about the feasibility of the proposed requirements and the likely impacts on electricity cost and reliability. At risk is the belief that states have always had to make the decisions about their electricity generation. West virginia chose to rely on coal to provide affordable and reliable electricity for our consumers and businesses. Other states have made different choices that best serve their citizens. But under the Clean Power Plan each states electricity plan will have to meet epas criteria producing Carbon Dioxide emissions. Other regulations like the utility mact rule is computing to rising electricity rates and growing concerns about reliability. Weve had testimony and other hearings. With economy still far from fully recovered the last thing job creators to is another expensive regulation likely to drive apart energy prices. The last thing our families and Senior Citizens need is to see their electric bills continue to go. Next week i will be introducing Greenhouse Gas legislation that would preserve the proper balance of state and federal authority, help ensure reliable and affordable electricity protect jobs in our economy. I look forward to working with many colleagues on the committee to advance this bill. I would like to say anecdotally throughout the state of West Virginia we have such uncertainty and such disappointment i think that our voices have not been heard in our state with epa come into the state to listen and we dont feel that the calculation of the Economic Impact in our energies has been fully for even taking into consideration as we move forward with these rules are quick that i would like to yield to the Ranking Member for Opening Statements. Thanks very much for holding a hearing today. I want to welcome our witnesses. Nice to see all today that and thanks for joining us for this important conversation. Todays hearing will continue the discussion of the legal implications of epas proposed carbon regulations known as the Clean Power Plan. I was born in West Virginia, raleigh county. As a native of the county were coal mines was important remains important and now as a senator, recounting governor represent the lowest lying state in the nation, unique perspective on the balance that we must strike to make environmental regular should work not just for my stake, not just for your states but for all of our state. For those of us from states that are being impacted by Climate Change the epas Clean Power Plan to regulate our nations largest source of Carbon Pollution is not just important but essential. Many states have taken action to reduce local power plant emissions. However when you do all states do their fair share to protect the air we breathe. In order for these standards to be effective, epa must ensure that all 50 states are capable of comply with these standards. Today the epa has conducted an unprecedented level of state and local governments outreach, not just data local governments but utilities, businesses and or to craft comprehensive plan that works for each state. Under the Clean Power Plan states can create their own plan for targeting, for meeting their targets in a number of ways including by increasing Renewable Energy such as wind and solar and increasing the efficiency of their electrical grid. Unfortunately since the date epa proposed the Clean Power Plan its been criticized as being outside the agencys authority under the Clean Air Act and the u. S. Constitution. I believe these claims are without basis in fact. In 2006, 10 states actually sued epa to force it to regulate Carbon Pollution on power plants. Sense of them for your Supreme Court has ruled not once not twice but three times in support of epas Legal Authority to control Carbon Pollution under existing law. In 2007 the Supreme Court confirmed in massachusetts versus epa that has passed by congress Clean Air Act gave the epa the authority to regulate Carbon Pollution. The legal precedent for the Clean Power Plan is at least in my mind clear and attempts by congress under the parties to challenge its legality are sent to an attempt to delay implementation of the plan. As weve seen in the past, litigation over Carbon Pollution regulations has the potential to be stuck in the courts for several years. The longer we wait to reduce our carbon output, divorced her and perhaps irreversible effects of Climate Change will become and, frankly, the more severe the changes will have to be adopted to deal with this coming problem. Meanwhile, Public Health will continue be endangered by more frequent storms, intensive droughts and Sea Level Rise. Personally im committed to making sure congress does all it can do to support the implementation of the Clean Power Plan. I look forward to hearing from witnesses to date about our progress in doing so. Let me close with one thought. I was born in West Virginia family still in that area, all over the state actually and i remember going to an old church, Grace Gospel Church in the town called shady springs, which you know, madam chairman, at a very early age i was taught the golden rule. Treat other people the way we want to be treated. And i think it should apply here as well. I want to make sure that we treat West Virginia fairly. I want to make sure we treat delaware fairly. I want to make sure the states that seem Sea Level Rise the highest point of land in delaware is a bridge. Its not a mountain your its not a mountain. Its a bridge. We all receive effects of Sea Level Rise in my state and we are concerned about it frankly so are a lot of other states. I want to make sure with their to us and folks in the mountain states. With that in mind lets have a good hearing. I would like to tell the audience and the witnesses that were scheduled to have a boat somewhere between 10 and 15 and 1030 time it. My plan would try to get to the Opening Statements editor and quickly and let us go vote, make that one boat and come back to the question portion. I reserve the right to change my mind. I might just to we will rotate in and out. That might be a better way but at that point i want to put you on alert at this time for but like to recognize that chairman of the full committee mr. Inhofe from oklahoma for the purposes of making some comments. I thought that was just my wife that made that statement changing her mind. I appreciate it very much, and let me come we have some people here today from oklahoma that came up here comes the real electric cooperative concern. We get this question all the time, wait a minute if we are reliant upon fossil fuel for 50 of power to run this machine called america and they take that away, how do you run the machine called america . Three things quickly. Capandtrade started way back in 2002 at the time they first said the world come to an income of all and all that stuff. They tried to pass it a legislative we from 2002 up until the current time and theyre unable to do that. What we are looking at now is the federal government coming in under the Obama Administration tried to do regulation which they couldnt do through legislation. And then secondly if lisa jackson was the administrative come administered of the epa under obama i asked her the question in this room live on tv, i said if we were to pass either through regulation or through legislation with this had the effect of reducing co2 emissions worldwide but she said no, it wouldnt because this is what the problem is. If you are believe in those things it would work. The last thing, im not a lawyer i was on several radio shows this morning with scott pruitt ever learned a lot, scott from you but when the president s own law professor Laurence Tribe testified before the house, he said the epa was attempting an unconstitutional trifecta usurping the prerogatives of the state, congress and the federal courts all at once. This was Barack Obamas harvard law professor. Without i look forward to Opening Statements. Thank you because like to recognize, we would go from left to right first witness is available Patrick Morrisey was a the attorney general for the state of West Virginia. Welcome. Thank you very much chairman capito, Ranking Member carper, and all of the distinguished members of this subcommittee. I very much appreciate the opportunity to be here today to testify against the president socalled Clean Power Plan. Plan. I do what want to say at the outset i can put about this hearing because West Virginia seems to have some support both from the chair and Ranking Member site. Senator carper, you are always welcome to come back to the great state of your birth, thank you. On your today to talk about the legal problems in the Obama Administrations socalled Clean Power Plan. Commonly known as the one he left and the rule. This will seeks to acquire states to reduce submissions from existing coal power plants by an average staggering 30 over a 15 year period. Make no mistake about it. Finalizing this proposal would have a devastating impact on my state, other coal producing states and citizens from across the country who feel the negative impact of high electricity prices, loss of jobs at the potential lack of reliability and the power grid. West virginia is one of the poorest states in the country and yet where the second largest producer of coal, the very important resource for us. This proposal will result in even greater economic dislocation in appalachia at a time when we can least afford it. Its my duty as the chief legal officer of the state of West Virginia to fight against this unlawful power grab which is hurting our citizens. West virginia has already led a Bipartisan Coalition of 15 state before the u. S. Court of appeals in d. C. And if this is misdirection lx define what this rule West Virginia will challenge it in court and expect the coalition of 15 states that were going to working with will grow. Today at like to talk about just a few of the legal effects of this proposal. As you all know the epa basis claim for Legal Authority to adopt this rule in taiwan section 111 d. Of the Clean Air Act are however a nearby provision, section 112 of the Clean Air Act epa prohibits the agency from invoking section 111 they for any pollutant quote embedded from a source category which is regulate under section 112. We think that language is very clear. As epa has repeatedly claimed time after time is takes literally means that the epa is overrated at source category under section 112, epa may not then come in and of our states to regulate any pollutant emitted from the same source category under 111d. This is where the epa runs into trouble because as we know it 2012 they already finalized a major role affecting coalfired our plants under section 112. The epas legal argument for avoiding the section 112 exclusion is not credible edifies altercation roles of Administrative Law and statutory construction of let me explain. When congress enacted the present version of section 112 exclusion in 1990 actually made a mistake. It accidentally included two provisions in the statute at large. Two amendments the same exact test. One was a substitute a minute to replace the cross reference and change the exclusion to its present form. The second was a conforming amendment, a technical amendment a few of those make 107 pages later. But once you actually up on the substantive amendment to the text it make a conforming change wholly unnecessary and that is why the technical error was not included in the u. S. Code. Now what happened there is actually consistent with the way congress has always operated. You expect there are clerical errors in the text. When Congress Goes back through the revisers to be somewhat is in the code they analyze that and they apply traditional rules of statutory construction. In fact, weve never seen a situation before where a federal agency has literally tried to push such a sweeping proposal on the basis of a typo. Its unprecedented. But perhaps the most radical future of section 111 d is its sheer breadth. Rather than follow the traditional pathway of opposing a nationwide particular source category, to make a source category more environmentally friendly, the section 111d role requires the states to replace coalfired energy with other sources of energy and even reduce consumer demand for energy. That means that the section 111d role six that went to regulate powerplant emissions, its for state superintendent of reporter electricity sectors and pick winners and losers between those sectors. This rule would regulate from power to plug. As allison would a wellrespected attorney result indicated before the house energy and commerce committee, epas claim is analogous to the agency asserting its authority to regulate automobile emissions provides it with the power to order citizens to take a bus to work or by electric cars on the theory that the measures would reduce car emissions. Section 111d simply does not grant epa such broad sweeping power. Thank you very much. Thank you. Ive just been informed that vote has been called to hold on. Let me see what you prefer to do. We are going to go vote so well stand in recess and we should be here shortly. Thank you for your patience. [inaudible conversations] [inaudible conversations] so that was pretty quick i think. And we will resume the hearing and i would like to welcome the honorable scott produces the attorney general from the state of oklahoma. Welcome. Good morning chairwoman capital, Ranking Member carper chairman inhofe and members of the subcommittee. Its a joy to be with you this morning, good to be with my dear colleagues and friends from West Virginia. Appreciate the invitation to discuss the ramifications of epas proposed Clean Power Plan. This is an issue of major importance. Quite simply, madam chairwoman, the epa does not possess the authority to do what it is seeking to accomplish in the socalled Clean Power Plan. The epa under this administration treats states like a vessel of federal will. The epa believes states existed on the policies the administration sees fit regardless of what laws like the Clean Air Act permits such action. In their Wisdom Congress give states the primary role in missions regulation. Air pollution control at its source as a primer irresponsibility of states and local governments. That statement respect the constitutional limit on federal regulation of air quality. States are best suited to develop and implement such policies. States are able to engage in a costbenefit analysis despite the Necessary Balance between protecting and preserving the environment while still grieving the regular framework that does not stifle job growth and economic activity. Shr partners. With the federal government regulating such matters that therefore the Clean Air Act changes on cooperative federalism by giving states the primary responsibility while providing the federal backstop extension failed to act. The cooperative relationship works well. When the epa exceeds the constraints placed upon agency by congress the relationship is thrown out the balance of the rule of law and state sovereignty is affected adversely. The Clean Power Plan proposal does the relationship between the state and federal government off balance. The epa claims the proposal gives states flexible to develop their own plans to meet National Goals of reducing Carbon Dioxide emissions. In reality it is nothing more expand federal agency power at the expense of state energy Power Generation. The plan requires each state to submit a plan to cut Carbon Dioxide by a nationwide average by 30 by the year 2030. In oklahoma 40. 5 of our Energy Production comes from coalfired generation. 30 comes from natural gas. Oklahoma notably ranks fourth in the country in generating electricity through wind. This makes makes the question of how does the ep expect states like oklahoma the top four in the country in generating electricity through renewable to meet the goals of the Clean Power Plan . Are oh so me with oakland can achieve that 30 reduction demanded by the epa. The plan must be viewed as an attempt on the epa to force states into shattering coal generation and eventually other sources of fossil fuel generated electricity. Additionally, these proposed rule would require states to use demandside Energy Efficiency measures that would reduce the amount of generation required. States are limited to emissions standards that can be achieved by existing sources through source level inside the fence measures. The proposals attempt to force states to regulate Energy Consumption and generation throughout their jurisdictions in a guise of reducing emissions from fossil fuel fired plants violate section 111 d nine tex requirement that the standards established by the states must do limited to measures that apply to existing power plants themselves inside the fence. Epas approach converse of the obscure little used section 111 d into a general enabling act getting epa power over the entire grid from generation to light switch. By the inside the fence line measures epa proposal would expand 111 d and specifically on drug statutory term quote best system of Emission Reduction into a holy whole new mission of regulation. One that regulates by sources that the states entire resource and energy created. States will be forced to rework their Energy Generation market to account for loss of coalfired generation states will be forced into changing their energy mix in favor of renewables. States will be forced to alter existing Regulatory Framework which would threaten Energy Affordability and reliability for consumers. Theres a substantial concern the epa before the Clean Power Plan is finalized will issue a uniform federal Implementation Plan that will be forced upon those states that dont acquiesce to the unlawful Clean Power Plan. Such a move by the epa would be the proverbial gun to the head of the states diminished its act or face financial situation for state. I can say with confidence that ebay does, in fact, move forward with the uniform that can the people be challenged by obama and other likeminded states. Im not what he believes the epa has no role. The agencies played an Important Role historically in addressing water and air quality issues that covers state lines. However, with this rule the agency is now being used to pick winners and losers in the Energy Market by elevating Renewable Power at the expense of fossil fuel generation. No state should comply with the Clean Power Plan if it means surrendering Decisionmaking Authority to the epa coming out that has not been granted to it by this congress. States should be left to make decisions that best meet their generation needs. States like tocaloma care about these issues because we breathe the air drink the water and want to preserve the land for future generations. We have developed a robust machine that is success with chuck about between maintain and preserving air and water quality. Madam chairwoman, states like oh, are opposed to the Clean Power Plan because its outside the authority granted to the epa by law. Well ask the state authority under the Clean Air Act be respected and preserved in the decisions of our generation and how to achieve Emission Reductions be made at the local level rather than the federal voter i appreciate the opportunity to speak with you today and discuss these important matters. Thank you. Our next witness is mr. Roger martella, a partner at Sidley Austin and he was formerly the general counsel at the u. S. Epa. Welcome. Thank you, madam chair, Ranking Member carper chairman inhofe, thank you for the opportunity to appear before this committee once again. Its a great honor. Epa has yet yet to finalize existing Source Performance Standards but that hasnt stopped the lowest am submitting thousands of pages of legal arguments both in passionate support of the rulemaking and in opposition of it. Ive added to it makes it a with written testimony i should with people but i thought i would is digested those scores of arguments into what i think will be the two overarching issues that the court will consider when it ultimately reduce the final roll. The first is picking up on a point from senator carper in his introduction that if we look at how the courts have responded to Climate Change issue since 2007 sense of massachusetts versus epa, we got a lot of direction from the Supreme Court, the d. C. Circuit, the ninth circuit and what the court opposed is they take Climate Change concerns the regardless of what i might think about or whatever else you might think about. The quartet expressed the view Climate Change as a paramount policy concern. They have been highly deferential not on the epa but to the states when engage in creative mechanism is old and outdated tools to address the modern challenge of Climate Change. I agreed. The courts have it recognized that and they will not look at usthis in a political vacuum Foreign Policy backing. The courts will consider that when they reduce the rule. Having said that, the other countervailing considerations on the other side will be the unprecedented nature of the epa is trying to give with this existing authority under the Clean Air Act. What im talking specifically of the legal many issues when i think it will get the most attention is something about heard about several times by now, epas approach to regular sources beyond the fence line of the sources. It basically works like this if my pen is my coalfired power plant or the 40 figures and issues Clean Air Act is always set a standard for this coalfired power plant based on the technology that could be achieved on what this coalfired power plant can do. Not epsa and to address Climate Change thatclimatechange that will Climate Change that will limit us. Recoded some initial some of coalfired power plants we have to look beyond the fence line can look at natural gas facilities, at Renewable Energy, nuclear, the Energy Efficiency of buildings like this. That will enable us for the first time to achieve greater reductions of Greenhouse Gas is than what we can get from this coalfired power plant. Back to my first point the court may think thats a noble goal but at the same time its going to be thinking about the legal precedent of its beyond the fence on approach for the first time in 45 years of the Clean Air Act. It has three ramifications. The first is the practical limitation. As the two generals have spoken today is the enormous expansion of authority to make epa not only a regular of the environment but really the most significant regulator of energy at the national level. In order to get those greenhouse reductions it has to include in its Regulatory Authority nuclear facilities, Renewable Energy facility, Energy Efficiency and countless buildings. Its expanding its authority to the entire Energy Market in a way that really congress should be speaking to an congress should be authorized as opposed to looking at inherent authority. The second ramification is illegal but at that the court will be concerned about the legal precedent. That this is a departure from the Clean Air Act historic approach focusing on sources on the case law that has been consistent and epas pass application. Never before has epa gone beyond its source and the fence line. And the third concern for the courts is going to be the president ial nature of this on other sectors the kdpa is a from with this approach competence find approach as it starts to regulate Greenhouse Gas the other sectors theres going to be almost no limit to how it can look beyond an individual source to bring another source and but also other sources that are currently subject to clean air reckless like a new professor become like this building and Energy Efficiency, bring them into epas Regulatory Regime that while i said the Supreme Court has endorsed epas Climate Change ruled there is an asterisk if it can thus the new gotha sprint corp. Its a that epa cannot look to the Clean Air Act to engage in sector wide economic regulation and that came out just four days after this rule the Supreme Court said will not epa to use the Clean Air Act to regulate lots of small sources and engage in sector wide regulation of the economy. Its unfathomable how the justices were concerned in that would not be concerned with this recognition. The last thing i want to mention briefly is the harm were going to see in the interim. It takes about four years for courts to review cases like this if it goes to the Supreme Court. The generals have spoken to some of harmed going to the sticker to point at any single roll everybodys going to allege harm but this is utterly distinctive because of the ways i think attorney general pruitt and morrissey have talked with we have to fundamentally restructure and reorganize their entire system of regulating energy creating Energy Infrastructure and also developing laws come enacting laws that promote renewable proposed edgecomb Energy Efficiency programs and so one. This is fundamentally distinct entrance of the harm that would be realized in the short term from other environmental rulemaking. Thank you again for this opportunity. Thank you very much. Our next witness is missed kelly speakesbackman, a member of the Maryland Public Service commission and shes also the cochair of the regional Greenhouse Gas initiative. Welcome. [inaudible] microphone. Is this okay . All right. Thank you me to speak today. Its truly an honor. Since the issuance of the Clean Power Plan proposed the Clean Power Plan proposed an opposed to like it engaged in a discussion about what the next steps are. Reiterating the sentiment expressed by one of my dear fellow panelists, one of the most significant questions for states right now is how do i comply . I respectfully submit to you from the perspective of a state that is on his boots on the ground on this issue not only can you count can states comply with the Clean Power Plan but we can use it with the generate economic benefits and support grid reliability. Furthermore, i ask in return and we can states afford not to comply with this plan . Rather than look at this in the context of a federal Implementation Plan and what it would look like, i encourage the legal experts and legislators to view this situation from a state regulators perspective. As noted recently released quadrennial Energy ReviewSevere Weather is the leading cause of powerour destruction costing u. S. Economy from 18 billion to 33 billion a year. As a great utility regulator i have the statutory obligation to ensure reliable and affordable electricity. In a restructured market i need more tools than whats available from within the fence line of a power plant in order to meet those requirements. Modernizing the electric grid is critical and requires multistate collaboration to ultimate Cost Effective infrastructure improvements. The proposed plan is an impetus for a state to assess our grid and to face the reality of an already shifting fuel mix adding Carbon Pollution reductions as a metric for states to consider. The rggi states have continued for seven years now and coming up on 28 auction to successfully implement the first full album the harbor and marketer the rggi program initiated by a Bipartisan Group of governors and develop collaboratively by economic and environmental regulatory bodies cast a mission by first becoming a visual budget of Carbon Dioxide allowances and industryleading imagery of those allowances through the regional options at market prices and finally capturing that value for reinvestment into Strategic Energy programs. Although we have collaborated for the better part of a decade in the region been a surprisingly diverse. We comprise three different separate electricity region can do for political and economic landscapes and disassemble generation profiles. Maryland, for example, is 44 colder its a little bit surprising for those who look into the rggi region think of us all as a Northeastern State but we have learned to balance that and weve learned to diversify our fuel mix. Is gone from 56 to 44 coal demonstrate its possible for a state with a significant coal profile to reduce our emissions. The Carbon Intensity of the whole rggi region are such as decreased as twice the rate as the rest of edge. You one more statistic in my written testimony to attest to the economic and environmental benefits for our region and for my state. The benefits in from our perspective of the rggi states as we voiced support for the framework of the Clean Power Plan and recommended revisions to ensure early action is recognized and the estate targets are verifiable transparent, equitable and enforceable. Regional programs like which are advantageous in part because a close alliance with nature of the grid already and allow for transparent and verifiable tracking and compliance systems. Recent analysis even from our own Regional Transmission Organization calculated higher Compliance Costs for states to go it alone underscoring the Cost Effectiveness of regional plants. States to Work Together in a moment they regional emission budget across a across the larger geographic boundary and they can find the least Cost Solutions across a larger selection of options. To add some perspective on the timing, just a quick one on that, the power sector has already responded effectively in the rggi region to environmental regulations in less time than epa provide to the rest of the country as part of the Clean Power Plan. In fact, a measure supported by rggi investment potential of illegals in the region in just seven years. In contrast states had 15 years to make the final compliance goals. We reduce our Carbon Dioxide emissions from power plants by 40 while our regions economy grew by 8 over that same time frame. Finally, we have accumulated some pretty good lessons as a participant in rggi that we hope will be instructed to other states. Number one can reform into an Inter Agency Relationships which allows us to do a lot more for a lot less. The regional mechanism testing the quite some good stakeholder engagement. Is mythic compliant entities span multiple jurisdiction and appreciate the regional consistency, the third is consistency doesnt mean we have to identical programs to each state has its own programs based on its own policy and needs. Lastly i think the most important lesson is that participation in an effort will likely provide our states the most flexibility moving forward. Using its mass base construct, that cat is enforced by our individual state regulators. So states retain jurisdiction over the individual Energy Efficiency and Renewable Energy programs, not subject to the federal implementation. We can continue to offer these initiatives could mitigate the cost of compliance. So thank you. We look forward to working with you, and answering questions. Thank you. Out of final witnesses ms. Lisa heinzerling who is a professor at georgetown university. Welcome. Thank you, thank you for inviting me to appear before you today to discuss the legal obligations of epas Carbon Dioxide rule. Many dramatic legal arguments have been raised against epas proposal. Opponents have claimed the proposal is unconstitutional under any one of a number of novel theories. They also argued that the whole proposal or significant aspects of it are unlawful under the Clean Air Act. Youve heard several such arguments already this morning. In my view, the constitutional and statutory arguments that have been raised against epas proposed rule collapse upon close inspection. For example, constitutional principles of federalism are not violated i epas proposal. And epas proposal states have a choice. They may devise their own plans to be a state specific targets epa will set forth in a that bp devise a plan for them. This is the very same choice states have had for 45 years under the air Quality Standards Program of the Clean Air Act. It is not an unconstitutional choice. Nor does epas proposal violates the doctrine for delegations of legislative authority to the executive. Epa is interpreting statutory provisions of less than ideal clarity using its best judgment to often pashtun offer and trepidation to give some force to the provision enacted by congress to the opponents of epas rule says that bp interpreted the statute of the right way, the way they favorite memories is no nondelegation issue. But they say if they. Interpreted the statute to the wrong way, the way they dont like this violates the nondelegation doctrine. In 2001 and a case called wittmann versus American TruckingAssociation Justice scalia writing for unanimous Supreme Court rejected his exact theory. The theory that an agency can cure or create a nondelegation problem by adopting a particular interpretation of a statute. If the Clean Air Act presents dp with an unconstitutional choice between apparently conflicting provisions, which it does not the remedy would be to strike those provisions down, not to require the adoption of the interpretation that the opponents of this rule prefer. Epas proposal also does not violate the Clean Air Act. Much has been made of the two different 1990 amendments to section 9 11 both passed by congress and both signed into law by president george h. W. Bush. Epa has long offered an interpretation of section 1011 that aims to take something from each of these amendments. And epas construction of the amendment, epa may not under section 111 regulate the same hazardous air pollutants from the same sources under both that section, section 111, and section 112. This interpretation makes perfect sense and respects the larger structure of the Clean Air Act. Which pervasively leaves room for regulation in the event new threats from air pollution come to the floor. Epas proposed consideration of the wide range of Emission Reduction measures and setting state targets including renewable portfolio standards and demandside Energy Efficiency is also consistent with the Broad Authority given to it by section 111 d . The contrast to what weve heard this morning already this approach is not unprecedented epa has long conventional air pollutants allowed compliance via Renewable Energy standards and Energy Efficiency program. And you its worth think about what the claim is that the claim is that in essence is too much flexibility afforded by the plan. Its worth noting the office of management and budget of the white house in 2003 noted that the Clean Air Act had the largest quantified health affect of any health benefits, of any federal regulatory program. Please epa study of costs and benefits of the Clean Air Act found in a central estimate that the clean air produces 30 worth of benefits for every 1 dollar worth of caustic the ratio is 30 to 100 central estimate. Under a high estimate of benefit it is 90 to one. This happens as a result of sensible interpretation of broad statutory provisions. It is mystifying to me that opponents of the Clean Power Plan are criticizing epa for exhibiting the same good sense and flexibility better serve the Clean Air Act and this country so well for 45 years. Thank you. Appreciate everybodys testimony come and i will begin with questions. Attorney general morrisey, let me ask you a question. We have a difference of opinion here, the Supreme Court recently said that it is a skeptical quote when it Agency Claims to discover and a among statute an unheralded power to regulate. A significant portion of the american economy. I guess my question is how long is 111 they existed and has ever been just outside the fence lined overall and entire section . Is actually is literally an unprecedented effort on the part of the epa to regulate. And weve looked very close and weve never seen a proposal quite like this both in terms of its scope and its willingness to regulate outside the fence, but also the legal theory that is being advanced by this administration. If you go back to 1970 and then you go up all the way to modern day, today, you are looking at nothing thats ever occurred quite like this. Now, there have been some select efforts to rely on 111 d in very limited circumstances, but nothing ever approaching this magnitude. And at the critical point is that from 1990 no federal agency, no one has ever questioned that if you were to regulate under 112, that is the literal text and would preclude a statebystate emission targets that are being sent under 111 d . So we think that this is an unprecedented approach and would also add that what the administration is trying to do here is rely on a typo a conforming air if you will, in order to breathe life into one of the most sweeping regulations in our countries history. If you look to advance something that hasnt as great an impact on the american economy, at a minimum that should be Clear Authority and not a reliance on this type of. Thank you. You mention in your statement i believe that epa had never gone that far in terms of the fence line issue. Could you respond to that question is will . Iq madam chair. That is correct there have been a number of occasions where you could do something that a bubble concept, you can sometimes bring in the notion that something is more than just a stack and to bring another source to that bubble. Theres two cases that address that and both rejected the bubble concept and those were not even in section 111 the context. Little bit weve seen this in the courts have been negative and pessimistic on that. In terms of your question on section 111 they epa has engaged in five section 111 they will making since 1990 and in each case is posted strict within the fence line that they fence understood outside of the. Theres a lack of precedent from the agency in consistent source of case law that would suggest everything has to be within the fence and, frankly, thats the clear reading of the statute as well. Thank you. Attorney general pruitt, the proposed rule is clearly on shaky ground and i believe mr. Martella said for years before it would actually maybe get a firm legal interpretation of the to being finalized. So what happens if they start implementing the final rule would have the court struck to roll down . What to do . People started signing contracts and breaking ground . What kind of scenario is that present to you . Its a great question because whats not been discussed is a short timeline that the epas likely going to propose when the finalize this rule next month. Its our understanding its going to be in one year compliance period for states to submit a state application plan. Lightning estimation that is a very ambitious timeline. As such i think what is happening across the country is respected departments of environment the quality of the state level feel as though theyre being pressured intimidated to comply with the rule that perhaps is not consistent with statutory construction which is the purpose of our discussion here today. Im concerned about the timeline. And i would add we have to keep in mind, one of my fellow panelists is a public utility corporations that she regulates this at the state level the regulation of Energy Generation is a police power of the state. Historic have been recognized as such do court cases. And for there to be any intervention into the police power theres a rule of statutory construction that Congress Speak explicitly, clearly, unambiguously to the authority of the agency to invade that police power thats been recognized under the law. And i think by virtue of the discussion here today even among the panelists there is disagreement about whether this statutory provides a type of authority. Another quick question and i think your governor has said that she will not be doing a state application plan from is that correct speak with theres an executive order recently issued indicating that it is not empowered to submit an invalid plan to the epa. I believe in West Virginia mr. Attorney general, at the state legislature weighed in on this. Could you talk about 40 minutes because yes. A couple months ago the state legislature changed the law so that for the state of West Virginia to submit a state limitation plan the legislature would have to ratify it. Thats different from the previous law which would leave all that authority to the governor. Thank you. Mr. Carper. Thank you, madam chair. Senator inhofe made brief comments on this story before but it bears repeating. Ive involved in an effort with others to try to find agreement on multipollutant legislation. And as part of that process i remember meeting with a bunch of utility ceos from all over the country. We spent about an hour or so together to put out it might proceed. At the end of the conversation this one old fellow who was the utilities from someplace down south can i deliver where but he said to me these words. He said look heres what you need to do. You need to tell us what the rules are going to be. You need to give us some flexibility and a reasonable amount of time and get out of the way. Thats what he said. Can you tell us what the world would become give us some flexibility, reasonable amount of time, and get out of the way. And i would just say if i could, is it doctor or ms. . Ms. Heinzerling, think about that conversation and what that tells it to me that they. How does it relate to what were looking at here that epa is trying to accomplish . Gets it exactly senator that this plan sets out what states are to do give them targets to me, gives them the flexibility to choose that they went the way they want to meet those targets. In this respect it is strange and surprising communispace already saying that they preferred of the federal government have their place but it gives him flexibility to meet targets and then gives them the time to do the timeline in this rule are notably long. We are looking out for 2030 for final compliance with the structure of this blanket so i think your story fits of his role perfectly. Well, good. Ms. Backman, i think you were saying that maryland has had eight fairly heavy reliance on coal for electricity at a think what you said was you reduced over the last seven or eight years, emissions by roughly 40 . Yes or spent you are part of this Regional Cold issue of the delaware at a bunch of other states. In my last job i had as governor, i love the idea of having flexibility. If it wanted to do something id say give me a menu of options that would have. I understand the reason for options other states can use. Industry move beyond the fence line, as i recall working on a multipollutant legislation a number of years ago we were anxious to see what kind of options that were outside the fence line. How could we help with respect to co2 how can we help by going to know to . How can we help with respect to like urging folks to plant switchgrass and other crops like that but said going out of the fence line seems to me like my dentist it seems like common sense. Ms. Bachmann, talk to us about this flexibility comes this idea, the idea of actually more flexibility not just by going out of the fence line but doing these regional solutions. How is having a real solution help the maryland . With oklahoma your, producing all the wind god bless you for doing that but it do in the region, discipline could take it some help us ensure maryland and delaware have . Absolutely. And thank you for the question. I will step back a second and say epa has made unprecedented outreach to the regulators of the nation to the National Association of regulatory utility commissioners and the three things that we asked for a cross the border three things we can all agree on it even if the commission dont agree on everything, my good friend chairman mckeon at the time, these were the things we agreed on that we wanted flexibility, that we wanted affordability and that we wanted reliability. Everything they epa Clean Power Plan gives us all of those. Now, we choose, we have chosen to use all four of these Building Blocks in reducing Carbon Emissions from our rggi region. That is not necessarily necessary to do all four of those Building Blocks, and youre not limited to those for Building Blocks. Epa has clearly set out a plan in setting up they go their separate from what the compliance plans will be that you may use outside the fence line solutions. And that includes Energy Efficiency and demand response that has helped us with our reliability. It includes changing fuel sources from 56 goal to a much wider mix of fuel availability for our generation which helps with reliability. So weve been able to meet multiple goals for our policy goals for our state that include reliability, affordability and reducing carbon by reaching outside the fence. Now that said can we still only regulate statebystate can we regulate and our rggi construct at the power plant life. We are not going in and regulating through rggi the Energy Efficiency programs of each state and each state regular to their own. I as a utility regulator actually helped make those decisions, so thank you. Madam chair, i have a simultaneous meeting going on. I will be back. Thank you. Thank you all. Senator inhofe. Thank you, madam chair. You know i listen to get the people who advocate different ideas. Im a rare thing im not an attorney. Most of the members of the senate are. It seems to me that the Practical Application of the peace proposal would require the states to pass new laws revise existing bridge with systems. I think of it and i think whats wrong with this picture . Should be the role of an Administrative Agency to be forcing states to take this kind of action . And then secondly, general pruitt, is this consistent with the Clean Air Act or how does that factor into it . Well, thank you, mr. Chairman. And i think as weve discussed today theres a question that keeps coming up in my mind if this is such a flexible arrangement that is offered to states, if this is really within the bounds of cooperative for our lives on and why is it that epa presently is in the process of developing a uniform federal Implementation Plan if theyre going to put on the shelf . Didnt say to the state militia act of particular act consistent with the rule, this is what youre going to get. Back to me does not sound like cooperation. That does not sound like partnership. That sounds like the proverbial gun to the head of making states at a particular way and its consistent with the comments mr. Chairman that i offered him an opening statement. This epa looks at state compensation plans and says you can introduce and adopt a state plan so long as it embodies federal will. So long as it embodies that which we want to have understate by state basis. And when states disagree thats when the federal government issue plants are forced upon the states. I dont think theres much discretion to the state of oklahoma. As i indicated in my comments we are already in the top four states in the country in generating electricity through renewables and wind. But yet this epa is expecting the state of oklahoma to reduce their co2 footprint by over 30 of the question is how but for shuttering coal generation in the state of oklahoma. That is a concern practically and it is a concern legally. Looking as a nonattorney, looking at the 10th amendment which refers to reserving power to the states can do you think this is consistent with the tenth amendment . Well, i think this case and i would add this to comment earlier from a fellow panelist i dont think its terrible novel for us to have a dispute over case of statutory construction. I indicated it is a Traditional Police power to regulate Power Generation and for the federal government to intervene or to convey that it has to be the statute has the explicit and clear and unambiguous. Editing by virtue of our discussion today it is demonstrative that is not the case. So i think it is less about the 10th and an accomplice to a states rights under the tenth amendment and more of statutory construction and whether they epa possesses the authority that you gave it to regulate in this area. Mr. Martella, any comments about the . I would agree with that. If i could mention the theme flexible that has come up during our discussions i dont think theres anybody would dispute flexible is a good thing. We all want flexible if i think theres a lot of apples to oranges situation. I apologize to my to go back to my 10. So this is my coalfired power plant in an, interesting incidents like epa may say your curly knitting 2100 times that suit to prevent the want our we will reduce you to 2000 tons. Thats inside the fence line. We will look at nuclear and renewable and Energy Efficiency and these other things because nobody outside the fence i will bring you down to 1200 pounds of co2 per megawatt hour to the point this plant has to shut down. What we are saying or what i think is epa has to set the standard inside the fence line the flexibility meet that standard is fine but you cant look outside the fence in setting the standard. We dont dispute that flexibility is a good thing. But the distinction is the flexible doesnt come in setting the standard it comes in on the compliant site. Thats a good comment. General morrissey, i was going to expose will have another round of questions and might get to that Building Block question i want to post to you but i know people in West Virginia and i know whats happening there right now to even the this rule has not gone into effect, what has happened to some of your coal plants, some of your utahs interstate already as a result of this . Well, its clear in West Virginia that the heart is already occurring. And, in fact, as we were preparing for the lawsuit that we filed last year against against the epa got one of the principal arguments that we made is that unlike many of the other traditional rules that are subject to notice and comment, this proposed rule is actually causing real tangible harm in the states, and also its affecting power Plant Operations currently. If you go and look at our litigation, we have at least eight declaration some very experienced environmental regulators who talk about the cost of trying to comply with this rule. The other point i would race is about the timeframe associated with this proposal are hyper aggressive. You have a proposal that was issued june 2014, our final rule scheduled to be issued sometime this summer, and i want to regulators are suggesting that they may need many years nor to try to even come up with a plan they had been given one year. Thats a very real problem. But there are real costs being expended by the states, and also i believe that this administration is not take the interested in whether the rule is finalized so long as a marketplace actually moves away from vindictive coalfired power plants have to be retired much quicker than baseline, then theyre going to accomplish their goals even if this regulation never is upheld in the courts. Thank you, general morrissey to edit the want to follow up on this. I will wait until the second round. Senator markey. Madam chair, i would ask two articles by Jody Friedman and richard lasch is being put into record they provide a clear and thorough explanation. Without objection. Thank you so much. We are in a big moment pope francis is about to issue a report on Climate Change. They named a jesuit who taught chemistry as the pull. So pope francis believes science is attached to a person we have to look at this modest way we can do with us to reduce the danger that growing Greenhouse Gases going to and i think its important for us to find ways to accomplish that goal. So back in 1990 we worked on the Clean Air Act. I was on the committee that drafted it and put that law on the books. And added action Energy Efficiency section to the Clean Air Act to give more flexibility to the administrator at the epa. And there were ways that utilities could comply with the requirements by undertake activities beyond what was occurring at their power plants come and i can assure you that my intent and that of my Congressional Colleagues was to encourage utilities to look at the Energy System in total to find ways of reducing sulfur pollution in the air. So ms. Heinzerling, one objection and raised about the Clean Power Plan is that utilities might have to go beyond the fence of the power plants to achieve their ambition targets. In addition to the programs i mentioned, other examples of using Energy Efficiency renewables or other beyond the fence activities under the Clean Air Act. Yes. Very early on, Something Like 35 years ago epa issued a rule that included washing of call before it was burned call were dealing with the Clean Air Act, something that wasnt within this park and was and typical end of the pipe kind of measure. In regulating interstate pollution or interstate conventional air pollutant under the Clean Air Act epa has for many years included renewables and Energy Efficiency as potential compliant mechanism. If i may just extend this example of it for the field i think associates what youre talking about. If you look at the program under the Clean Air Act under section 202 to regulate mobile sources you might if you look at that quickly come you might think that is the classic end of the pipe measure