Posts filed under Policy and Legislation

Courts must step in and stop EPA’s brazen overreach

This column originally appeared on FoxNews.com on May 5, 2015.

It’s been said that ‘timing is everything’ and time is just one of the issues at stake in the legal proceedings surrounding the Environmental Protection Agency’s proposed Clean Power Plan, which would regulate carbon emissions from existing power plants. Specifically, the Court must decide if a proposed federal regulation, like the CPP, can be struck down before it is finalized.

In this case, that would be the right decision.

Last month, attorneys on behalf of Murray Energy Corporation and a bipartisan coalition of 15 states argued before the U.S. Court of Appeals District of Columbia Circuit seeking to have the Court dismiss EPA’s plan. One of the arguments made by EPA is that the Court must not dismiss the rule because it is still tentative, could change, and the EPA could still “even withdraw the proposed rule”.

When it comes to the Clean Power Plan, however, the EPA is clearly talking out of both sides of its mouth. As EPA attorneys seek to convince the courts the proposed rule could be influenced or even withdrawn based on the feedback received in the public comment period, EPA officials are blatantly singing another tune.

Just one week prior to the oral arguments before the Court of Appeals, EPA Administrator Gina McCarthy told an energy symposium, “[The Clean Power Plan] is going to happen. We have the legal – not just right and authority but responsibility – to do it.”

In March, McCarthy said, “EPA is going to regulate… If folks are thinking any of these pieces aren’t going to happen – and (the Clean Power Plan) isn’t going to be implemented, I think they need to look at the history of the Clean Air Act more carefully.”

These are hardly the words of an agency that is still making up its mind.

Fortunately, Judge Thomas Griffith seemed to pick up on this during oral arguments, asking the EPA if McCarthy’s remarks suggest that the agency’s comment period is a “sham.” While the EPA argued it wasn’t, the evidence certainly suggests otherwise.

When the EPA held field hearings on the rule, they neglected to hold them in coal-rich areas that would be among those most hurt by its plan. EPA’s air quality chief Janet McCabe told Congress the agency held hearings in “locations where people were comfortable coming.”

A sincere comment period should not be about comfort. It should be about hearing the impacts – both good and bad – of a proposed rule. Unfortunately, the EPA seems uninterested in doing the right thing.

It is essential the courts act now to stop EPA’s Clean Power Plan because the impacts on states are already being felt. EPA’s proposal requires each state to submit a specific plan that will lead to a nationwide cut in carbon dioxide emissions by an average of 30 percent by 2030. These plans are to be submitted to EPA by June 2016.

These plans represent an extraordinarily complex undertaking. States will need to study their electricity infrastructure, change their policies and laws, adjust their regulatory structures, all while ensuring electric reliability isn’t put at risk. Many states suggest the development of such a plan will require three years or more, yet EPA is giving them just one. Adding insult to injury, all of this work must be done irrespective of legal challenges that will likely overturn the rule.

To accommodate this accelerated schedule, states already are dedicating taxpayer dollars to prepare for the rule. Alabama, Indiana, Kansas, Kentucky and South Dakota are just some of the states that report using significant amounts of staff time studying the proposed rule and the substantial changes they would need to make to implement it.

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EPA’s Clean Power Plan Faces Tough Criticism at House Energy & Commerce Hearing

Tuesday, April 14, brought with it a deluge of criticism of the Environmental Protection Agency’s Clean Power Plan during a House Energy and Commerce Energy and Power Subcommittee hearing. The hearing focused on Chairman Ed Whitfield’s draft bill, the Ratepayer Protection Act, which seeks to protect consumers from increased electricity rates and decreased grid reliability associated with the CPP.

The committee heard from Janet McCabe, Acting Assistant Administrator of EPA’s Office of Air and Radiation, and energy experts like Eugene Trisko, an economist and attorney. Several members of the committee expressed strong opposition to the proposal, as did numerous witnesses:

Congressman Ed Whitfield (KY-1): The Clean Power Plan “forces states to adopt policies that will raise energy costs.”

Congressman Fred Upton (MI-6): “America’s manufacturing industry could not survive without electricity rates that allow us to be globally competitive.”  

Congressman Joe Barton (TX-6): “There is no health benefit to this rule… It’s the administration deciding politically correct social policy.”

 Economist Eugene Trisko: “Lower income families are more vulnerable to energy costs because electricity represents a larger portion of their budget, which in turn reduces the amount of income that can be spent on food, housing, health care and other necessities.”

 Kevin Sunday, the Pennsylvania Chamber of Business and Industry: “EPA’s proposal threatens Pennsylvania’s biggest competitive advantage, as it will drastically change the way Pennsylvania produces and uses energy. This change is likely to come with a significant economic impact to the business community, as well as threaten reliability across the grid.”

 Lisa D. Johnson, Seminole Electric Cooperative, Inc.: “The truth is that Florida cannot comply with EPA’s proposal using its existing utility investments, and the overall utility cost impacts would likely total in the billions – and perhaps tens of billions – of dollars.”  

While Ms. McCabe tried to argue that EPA’s analysis showed household electricity bills would fall in some cases because people will buy less electricity under energy efficiency measures, it convinced few attendees. Congressman David McKinley (WV-1) was particularly unimpressed with her arguments, responding to Ms. McCabe with two simple words: “Unbelievable. Delusional.”

Congressman McKinley is on point. It’s delusional to think this plan, which has been cited as the most expensive environmental regulation ever imposed on the electric power sector, will be affordable for consumers, families and businesses. Mr. Trisko recently published papers that delve deeper into the troubling trend of declining incomes and rising energy prices in states across the country – a trend that will only be exacerbated by EPA’s costly and overreaching CPP.

 


Witnesses at House Hearing Declare the Clean Power Plan Unconstitutional

“EPA’s [Clean Power Plan] proposal raises grave constitutional questions, exceeds EPA’s statutory authority and violates the Clean Air Act.”

– Professor Laurence Tribe, Harvard Law School

This quote aptly sums up the discussion at a hearing this week hosted by the House Committee on Energy and Commerce’s Subcommittee on Energy and Power. Subcommittee Chairman Ed Whitfield (KY-01) invited several scholars and state regulators to respond to the legal and cost issues associated with the Environmental Protection Agency’s Clean Power Plan.

It comes as no surprise that witnesses and legislators alike shared serious concerns with the constitutionality of the CPP. The proposed regulation amounts to a federal power grab, infringing on states’ authority to manage and regulate electricity generation within their borders.

Allison D. Wood, an environmental attorney with Hunton & Williams LLP and one of the witnesses at Tuesday’s hearing, noted “EPA’s proposed section 111(d) rule…seeks to regulate an enormous part of the economy. The rule suffers from numerous legal deficiencies, including whether EPA even has authority to issue it.” She also said that when it comes to the perceived legality of its promulgation of the rule, “EPA is incorrect.”

Professor Tribe elaborated on Ms. Woods’ sentiment when he said, “The obscure section of the Clean Air Act that EPA invokes to support its breathtaking exercise of power in fact authorizes only regulating individual plants and, far from giving EPA the green light it claims, actually forbids what it seeks to do. EPA is attempting an unconstitutional trifecta: usurping the prerogatives of the States, Congress and the Federal Courts – all at once. Burning the Constitution should not become part of our national energy policy.

Of course, the problems with the CPP didn’t stop with its questionable legal foundation. It was clear during the hearing that the economic consequences of the proposal will be felt far and wide.

As Representative Fred Upton (MI-06) noted, “the last thing job creators need is an expensive regulation likely to drive up energy prices.” Witnesses and legislators also decried the high costs of a regulation that, even if carried out as EPA demands, will result in only negligible environmental benefits. Representative David McKinley (WV-01) told witnesses “there’s something illogical about putting our economy at risk” only to diminish sea level rise by the thickness of three sheets of paper.

The CPP will come at a high cost to our local economies and communities, but it’s not only businesses that will be affected by the proposed regulations. Donald van der Vaart, Secretary of the North Carolina Department of Environment and Natural Resources said, “This will be a very expensive rule… The people who are going to bear the cost of the Clean Power Plan are those who can least afford it.”

Legal scholars, industry experts, state and federal lawmakers and others agree: the CPP is costly, overreaching and illegal. It must be withdrawn.

 


A Drop in the Bucket: The Real Compliance Costs of EPA’s Clean Power Plan

EPA Administrator Gina McCarthy will yet again be before Congress this week vigorously defending her agency’s $8.6 billion fiscal year 2016 budget request. A significant portion of McCarthy’s budget request will be dedicated to pursuing a legally flawed climate plan that won’t result in any meaningful environmental benefit – a questionable path for an agency charged with protecting the environment to be pursuing. What will the plan result in if not environmental benefits? Costs. Staggering electricity costs that risk our energy and economic security.

We won’t hear Administrator McCarthy talk about the costs of her agency’s Clean Power Plan, however, as that territory is a bit too tricky to navigate with her well memorized rhetoric.

The funny thing is, numbers seem to speak for themselves. So we took a look at multiple economic impact models that scrutinized the true costs of EPA’s plan. I don’t think you’ll be surprised to learn that EPA’s estimated compliance cost of $7.2 billion is a drop in the bucket compared to what others found.

Drop in the Bucket Infographic_FB_FINAL_02.25.15

 

 


Model After Model Affirms: The Clean Power Plan Will Raise Electricity Rates

Environmental Protection Agency Administrator Gina McCarthy is on Capitol Hill today to testify about her agency’s fiscal 2016 budget. We expect to hear a lot of back-patting and puffery, for the year ahead is a self-appointed important one at EPA headquarters. The agency will be tasked with carrying out President Obama’s climate change legacy, including the most far-reaching (and costliest) regulation on America’s power sector to date: the Clean Power Plan.

As Administrator McCarthy extolls the virtues of EPA, its mission and its work, she will surely advocate for the agency to receive every dollar requested in the budget draft. What she’ll likely leave out is any reference to the budgets that matter most: those of American families.

Time and time again, EPA has failed to be transparent about the real impact its plan will have on household budgets across the country. EPA claims the CPP will result in a 4.1 to 4.4 percent increase in the cost of electricity. A number of economic impact models, however, of the proposal tell a very different story.

REVISED_ACCCE Infographic_Lamp_EPA_Numbers-v10

While each of the models employ a different approach, the conclusions are the same: EPA vastly underestimated just how much electricity rates will rise under its plan.


Will EPA Ignore FERC Again?

Independent grid operators, elected officials and public utility commissioners have all raised concerns about the potential for power outages if states are forced to comply with the Environmental Protection Agency’s costly and overreaching Clean Power Plan.

Thus far, and not surprisingly, EPA has turned a deaf ear. They do, after all, have a habit of listening only to those whose opinions with which they are comfortable.

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At the request of congressional leaders, the Federal Energy Regulatory Commission—the agency charged with protecting the reliability of our nation’s energy generation and supply system—will host a series of technical conferences weighing the impact of compliance with EPA’s proposal on the electric grid. The conferences kick off today in Washington, D.C.

You would think, as EPA’s Clean Power Plan is more akin to a national energy policy (the job of Congress) than it is to a plan to protect public health (EPA’s actual job), that FERC would be heavily involved with the planning and crafting of the proposal. Not so, according to FERC Commissioner Tony Clark. In a letter to the House Energy and Commerce Committee, Clark wrote, “With regard to FERC staff generally, I believe it unreasonable to conclude that FERC meaningfully or substantially participated in the [Clean Power] plan’s development.” 

EPA has shown little regard for reliability concerns in the past and likely fears that FERC’s direct involvement may interfere with the agency’s knack for employing fuzzy math to underestimate the impacts of its regulations.

While finalizing the Mercury Air and Toxic Standards, EPA claimed that MATS (along with the Cross-State Air Pollution Rule, which was later remanded back to EPA) would cause 9,500 megawatts of coal unit retirements. In contrast, utilities have announced the retirement of 389 coal units—more than 61,000 MW and almost 20 percent of the U.S. coal fleet—as a result of EPA policies. 50,000 MW can be directly attributed to MATS.  You read that right. EPA’s projection for coal retirements due to MATS/CSAPR was only 1/5th the number of actual retirements caused by MATS.

During last year’s “polar vortex,” major utility companies like American Electric Power had to run 89 percent of its soon-to-be-retired coal capacity just to meet demand and avoid cascading power outages. Shortly thereafter, FERC Commissioner Philip Moeller issued a wake-up call before the Senate Committee on Energy and Natural Resources, stating, “I was, and remain concerned that EPA’s analysis greatly underestimated the amount of power production that would be retired due to these rules.” Moeller continued, “The experience of this winter strongly suggests that parts of the nation’s bulk power system are in a more precarious situation than I had feared in the past.”

According to EPA’s own projections, the Clean Power Plan will cause significantly more coal retirements than what the agency projected for MATS. An analysis conducted by NERA Economic Consulting projected that at least 45,000 MW more would be forced to retire. That is greater than the entire electricity supply of New England.

It’s no wonder that in Kansas last week, FERC Commissioner Clark, a former legislator and utility regulator in North Dakota, said complying with EPA’s mandate is a “huge decision to make,” and “a little bit like the Affordable Care Act…play ball, and potentially get caught up in it in a way that you may regret later on.”

We’ve already seen the impact of EPA’s regulations on our supply of reliable electricity. Will EPA listen to the experts this time around?

 


New Data Confirms Consumers and Businesses Will Bear the Burden of EPA’s Costly Proposed Carbon Regulations

A new study by NERA Economic Consulting exposes the truth about EPA’s proposed carbon regulations for America’s power plants: the price tag of the plan is unlike anything we’ve seen before and American consumers and businesses will be stuck with the tab.

NERA’s analysis confirms the economic costs of EPA’s plan are staggering, and include:

  • Compliance costs totaling $366 billion or more
  • Annual costs for consumers of $41 billion or more
  • Double-digit electricity price increases in 43 states
  • Peak year electricity price increases exceeding 20 percent in 14 states

These costs are especially concerning when compared to other rules imposed by EPA. As proposed, EPA’s carbon regulations will far outpace the costs of compliance for all EPA rules for power plants in 2010 ($7 billion) and the annual cost of the Mercury and Air Toxics Standards rule ($10 billion), which is already responsible for the planned shutdown of a significant portion of the U.S. coal fleet. EPA’s proposal will rapidly increase coal retirements, shuttering 45,000 megawatts or more of coal-based electricity—more than the entire electricity supply of New England. With most of these retirements projected to occur within the next five years, EPA is sending us down a dangerous path towards weakened electric reliability and power outages during critical times.

Despite these significant costs and threats to reliability, EPA’s proposal would have a meaningless effect on global climate change:  atmospheric CO2 concentrations would be reduced by less than one-half of a percent, equating to reductions in global average temperature of less than 2/100th of a degree, and sea level rise would be reduced by 1/100th of an inch—equal to the thickness of three sheets of paper.

Our fears of economic downturn, weakened electric reliability and rising electricity costs for American families and businesses will become an everyday reality if EPA imposes these dangerous and overreaching regulations. Join us and tell EPA that its “all pain, no gain” regulatory agenda must stop. Submit a comment at www.KeepAmericasPowerOn.org today.

 


Advocating for America’s Power: Week 3

I am back again, energy enthusiasts, and as promised have brought more information. I took a look last week at international reactions to EPA’s new carbon regulations, with a specific focus on Canada and Australia. This week my fellow intern, Joe Singh, and I analyze another area of the globe. Joe has a background in economic policy analysis and is helping ACCCE research the global coal market. As I mentioned last week, EPA’s costly new plan would have virtually no effect on climate change, with less than 1 percent in carbon reductions. The Obama Administration understands this, but believes that if they lead by example carbon-emitting nations like China and India will follow. In his research, Joe points out that assuming these nations will follow our lead is contrary to the growing coal consumption in both these nations.

China, the world’s largest coal consumer with one of the fastest growing economies, has said it will set emission limits. Make no mistake, however, China is not exactly following the administration’s approach. The EPA set state by state targets that would reduce carbon dioxide (CO2) emissions from the electric sector by 30 percent by 2030. China, on the other hand, has instead adopted an emissions intensity target. This emissions intensity target would limit the amount of COemitted for every dollar of economic activity in China, on average. The reason for using emissions intensity rather than absolute emissions is to allow economic growth, which China wishes to maintain. In Joe’s research, he cites an Australian National University report which found that if China maintains its economic growth, even with a significant emissions intensity target in place, COemissions will still grow. Put simply, even if China can meet the targets it sets, its continued economic growth will still result in increased COemissions – not less.

The results of future international negotiations on climate change are uncertain. One can look to the past, however, to provide clues for potential future actions.  In two recent international climate negotiations, agreements could not be reached because of defiance conflict between the developing and developed world. The United States did not ratify the Kyoto Protocol, because it exempted developing nations, like China, from reducing their emissions.  Chinese officials claimed that it was “unfair to expect impoverished people in…developing countries to cut back on energy consumption, which is not even sufficient to meet their basic living conditions.”  China’s resistance to a binding agreement arose again during the Copenhagen conference, which occurred during Obama’s first term in 2009.  In a study available on EPA’s website, Western officials blamed the failure of this conference on China’s opposition to binding global emissions reductions.  This opposition was traced once again to China’s view that emissions reductions are robbing developing nations of their right to industrialize. Considering this climate impasse happened only five years ago, it’s unclear if Chinese willingness to reach a binding agreement has changed.  All of this makes me wonder whether the administration’s plan to reduce COemissions will be enough to overcome a history of failed climate negotiations with China.