Chairman Carper, thank you for holding this hearing today to discuss EPA's proposed Transport and Utility MACT rules. I would also like to thank the witnesses for being here today.
Let me say at the outset that, when it comes to reducing real air pollution from power plants, the best way to accelerate environmental progress and institute certainty for businesses is through multi-pollutant legislation. And even though we have fallen short in recent years, it is increasingly clear that the Clean Air Act needs to be updated and the rules for electric utilities are the place to start.
This is not something new for me. I supported 3-P legislation when, as Chairman of EPW, I tried to advance the Clear Skies bill. Because that effort eventually failed, for reasons I won't get into now, we received regulations under the Clean Air Act that the DC Circuit ultimately rejected—something I predicted would happen. Here's what I said when the Bush Administration's Clean Air Interstate Rule was promulgated: "This Clean Air Interstate Rule is significantly more vulnerable to court challenges than legislation and will undoubtedly be held up. Trying to litigate the way to cleaner air only delays progress, often yields little or no result and wastes millions in taxpayer dollars."
So here we sit, debating EPA's replacement regulations that are onerous and complex and vulnerable to the same lawsuits that stymied previous attempts to reduce emissions of sulfur dioxide, nitrogen oxides and mercury.
Most alarming is the effect the rules will have on our economy. Messy court rulings and bureaucratic overreach have produced regulations that will harm the economy. As the National Economic Research Associates (NERA) recently pointed out, these rules will likely result in electricity costs increasing by as much as 23 percent and 1.4 million lost jobs by 2020. Not a recipe for economic recovery.
Of course, these aren’t the only hurdles the power sector faces. Known as the “train wreck,” utilities also face moving and uncertain emissions targets as EPA further tightens National Ambient Air Quality Standards (NAAQS) for ozone and Particulate Matter (PM) over the next few years. Combined with rules for regional haze, new source performance standards, Acid Rain, and new source review requirements, the Clean Air Act presents a labyrinth of overlapping and redundant requirements that drive up electricity costs and hamper our economy.
In my state of Oklahoma, EPA’s rules are causing substantial concern. And we’re starting to see the effects already. Earlier this month, American Electric Power (AEP) announced it would be forced to close power plants in six states and lay off 600 workers as a result of EPA’s rules. Two plants are being idled in Oklahoma.
All of this might be great for environmental lawyers who, incidentally, make money by exploiting the citizen suit provisions of the nation's environmental laws. That's right, your tax dollars being used to destroy jobs in your own community. So you can bet these rules will be challenged, and we'll be back here next year.
It might also be great for energy companies - who profit by rising electricity prices. Exelon CEO, John Rowe, has been quoted as saying that for every $5 dollar increase per megawatt of power generated, his company makes $700 to $800 million in additional annual revenue. The regulations we debate here today could raise electricity prices by as much as 20 percent in some markets.
But ultimately, it’s working families that pay the price.
Of course, there are ways to reduce emissions and help keep electricity rates low. Perhaps the biggest one would be to update the Clean Air Act to stop the EPA “train wreck.” Reducing emissions doesn’t have to be this costly – the Obama EPA just wants it to be. Recall President Obama’s pledge: “under my plan…electricity rates will necessarily skyrocket.”
Last year, Senators Carper and Alexander introduced “3P” legislation that began to look at many of the issues we address here today. I commend them for taking on that challenge. But that legislation failed to get widespread support because it did nothing to address the utility “train wreck.” It simply added new requirements on top of old, increasing uncertainty and costs.
Now, with plant closures on the horizon, workers being laid off, and electricity prices sure to rise, a coalition of Congressmen and Senators is coming together to fix the Clean Air Act. I look forward to working with them. We can and should continue to reduce emissions, but we should do so in a way that protects families from skyrocketing electricity prices and businesses from unachievable requirements.