State officials to lock horns on the Clean Power Plan

By Jean Chemnick | 03/09/2015 06:58 AM EDT

The Senate Environment and Public Works Committee will hear this week from states weighing how — and whether — to implement U.S. EPA’s Clean Power Plan.

The Senate Environment and Public Works Committee will hear this week from states weighing how — and whether — to implement U.S. EPA’s Clean Power Plan.

The five officials who will address the panel Wednesday are from state agencies and public utility commissions tasked with writing and advising on state implementation plans for the draft existing power plant rule for carbon dioxide.

They come from states across the political spectrum with widely different energy landscapes. And their views of EPA’s draft run the gamut from intense opposition to support for even tougher emissions curbs.


Three of the states represented at the hearing are among the proposal’s most vocal opponents: Wisconsin, Wyoming and Indiana.

The governors of all three states signed a letter to EPA Administrator Gina McCarthy in September calling the draft a federal agency’s bid to seize long-established state authority over the power sector.

The attorneys general of Indiana and Wyoming also joined in a pre-emptive lawsuit against EPA last summer aimed at forcing it to withdraw the rule before it becomes final. The suit claims EPA lacks the legal authority to regulate power plants under Section 111(d) of the Clean Air Act because it is regulating the same source category for a different set of pollutants under another section of the law. The argument stems from a decades-old discrepancy in the language of the statute and is likely to resurface when the rule becomes final.

Ellen Nowak, a commissioner at Wisconsin’s Public Service Commission, is likely to tell the Senate panel Wednesday what she told a joint hearing in the state Legislature in January — that the rule would drive up electricity rates and harm Wisconsin’s manufacturing sector.

It is a view shared by Wisconsin Gov. Scott Walker (R), who wrote in comments to EPA that the proposal does not respect the $4.5 billion in new fossil fuels investments the state has made in the last 15 years. It also gives little thought to effects on reliability, he said.

The likely Republican presidential contender also lamented in his comments that the Clean Power Plan fails to take into account strides Wisconsin has already made in low- and no-carbon energy, instead assigning his state tougher targets because of those past investments.

"States that have already obtained large CO2 emissions reductions, such as Wisconsin, are being required to reduce emissions more than those that have not taken significant steps to decrease emissions," he wrote, counseling EPA to correct this "perplexing approach" in the final version.

Todd Parfitt, director of the Wyoming Department of Environmental Quality, represents a state that is a major producer and exporter of both fossil fuels and renewable energy. It produces 40 percent of the nation’s coal, and its largely rural population relies heavily on coal-fired generation.

Wyoming Gov. Matthew Mead (R) wrote in his comments to EPA that the proposal would leave Wyoming ratepayers on the hook when still-new infrastructure is shuttered and would kill coal mining jobs. It is also on legally shaky ground, he said.

"The EPA does not have the legal authority to propose, finalize or enforce this proposal," he said. Indiana will be represented at the hearing by the state’s Department of Environmental Management Commissioner Thomas Easterly.

In his comments to EPA, Easterly said that Indiana is in the process of formulating its own energy policy aimed at making power more affordable and reliable. The Clean Power Plan is not compatible with those objectives, he wrote.

"Indiana is concerned that the proposed rule will lead to Hoosiers, particularly those in low income socioeconomic brackets, losing heat and power because they will not be able to pay rising utility costs," he wrote.

EPA officials, including McCarthy and acting air chief Janet McCabe, who is a former assistant commissioner for the Indiana Department of Environmental Management, argue that the rule will be a boon to low-income families because it will boost demand-side efficiency, thereby lowering electricity bills.

The Senate environment panel will also hear from two prominent state officials who are likely to sing the praises of the Clean Power Plan — and make a pitch for strengthening it.

California Air Resources Board Chairwoman Mary Nichols and Michael Myers, who heads the affirmative litigation division of New York State’s Environmental Protection Bureau, are likely to argue that EPA was well within its legal authority in putting forward a proposal that reaches beyond the fence line of a power plant to achieve systemwide emissions cuts. But the two are likely to add that California’s experience and that of the Northeast’s Regional Greenhouse Gas Initiative show that more reductions can be made in a cost-effective manner than EPA assumes in its rule.

Nichols has offered California’s cap-and-trade program as a compliance option other West Coast states should take advantage of in crafting their Clean Power Plan responses.

And Myers has argued before the D.C. Circuit Court in support of EPA’s greenhouse gas regulations.

New York Attorney General Eric Schneiderman (D) and California Attorney General Kamala Harris (D), who is running to replace retiring Sen. Barbara Boxer (D-Calif.), submitted comments to EPA with 10 other attorneys general defending the agency’s legal basis for the draft on many of the points raised by its opponents.

The hearing comes as EPA continues to sift through more than 3 million comments on the Clean Power Plan, which is due to be finalized this summer together with curbs for modified and new power plants. Also due this summer is a federal implementation plan proposal that EPA says is intended to both guide states in crafting their own plans and show states that opt not to draft plans what they would face in a federal model.

There is a growing drumbeat from some state and federal lawmakers and industry representatives urging states not to submit their plans. The Clean Air Act might allow EPA to move ahead with a federal plan in those cases, they say, but it is unlikely to be as strict as the plans EPA is encouraging states to adopt, and the whole rule might be defeated in court.

But the agency has said it expects most states to write a compliance plan that takes into account their own policies and power mix.

The proposal sets deadlines for state submissions starting in June 2016.

Schedule: The hearing is Wednesday, March 11, at 10 a.m. in Dirksen 406.

Witnesses: Ellen Nowak, chairwoman, Public Service Commission of Wisconsin; Todd Parfitt, director, Wyoming Department of Environmental Quality; Thomas Easterly, commissioner, Indiana Department of Environmental Management; Mary Nichols, chairwoman, California Air Resources Board; and Michael Myers, chief, Affirmative Litigation Section, Environmental Protection Bureau, New York State Attorney General.