today earlier this month we learned that the unemployment rate rose to hpercent americans are struggling because there just aren't enough jobs as i have said many times before in this subcommittee one reason explaining the stagnant jobs numbers is the administration's stubborn determination to issue multiple onerous regulations all at once the cumulative impacts of these regulations are preventing american job creators from putting people back to work as part of the committee's ongoing commitment to promote job creation today's hearing continues our examination into federal effect of a series of epa regulations that will impact the nation's power supply and will hit particularly hard the areas of the country that rely on coal for energy i am especially concerned about my home state of ohio which is the nation's fourth largest consumer of coal and depends on it to provide power for its manufacturing base these regulations have been collectively referred to as epa's train wreck they include changing the standards of cooling water intake structures altering the mercury and air toxic how all this is coming together in the next few years we will seek to get at the impact this is going to have on employers the jobkilling threat posed by these regulations comes from the timing and expense of the various mandates by epa's own analysis these are some of took into account the cumulative impact of its actions the north american electric reliability corporation an organization charged with ensuring the reliability of america's bulk power system warns that the epa's regulations will remove as much as hgigawatts of electrical  from two thousand and thirteen to two thousand and twenty due to the rising costs of energy in fact this same study estimates that nationwide electricity costs will increase by hpercent our state of ohio and other midwestern states will be hit even harder should have considered the cumulative impact of these rules before acting in order to minimize these negative impacts let's make one thing clear no one wants dirty air that is not what this hearing is about however we do need to be smart about the regulations that we as a country issue it appears from the lack of analysis on cumulative regulatory effects conducted by the epa that there is a high chance the left hand doesn't know what the right one is doing at the environmental protection agency the testimony we hear today will help us examine what can be done better to avoid these regulatory train wreck situations our economy has been in trouble for a long time now and the least we can do here in washington is make sure the government is not causing the problem americans want to get back to work and we need to be certain that we are not stopping them i thank the witnesses for  thank all the witnesses who will be testifying today about a critical issue facing america the protection of clean air and clean water on which we depend every single day today we will once again take a look at the role the epa plays in supporting these goals air toxics from coalfired power plants cause or contribute to devastating health problems ranging from asthma attacks to premature death from cardiovascular disease stroke and cancer one air toxic mercury damages the developing brains of fetuses infants and small children robbing them of the opportunity to fully develop intellectually and physically coalburning emissions of sulfur oxides and nitrogen oxides help fuel our nation's asthma problem and can increase heart attacks the burning of coal is also a major contributor to the environmental national security and economic crisis that is global climate change the combustion of coal produces a tremendous amount of carbon dioxide a greenhouse gas that contributes to increased trapping of heat in our atmosphere in fact coal accounts for approximately hpercent of all our greenhouse gas emissions it would be difficult to underestimate the urgency of shutting down coal power plants immediately for this reason alone these health and environmental consequences from toxic pollution are why the epa is developing tougher safeguards to protect americans one proposed on mercury and air toxics alone would be estimated to save as many as seventeen thousand lives every year by two thousand and fifteen to prevent up to one hundred and twenty thousand cases of childhood asthma one of the witnesses here to testify today represents the american electric power company which is headquartered in columbus ohio aep is also one of our nation's biggest polluters another one of ohio's polluters first energy corporation which owns the lakeshore plant in cleveland near my own district is identified as the nation sixth most harmful plant for lowincome communities and communities of color thanks in part to aep and first energy the state of ohio has more coalfired generating capacity than any other state in the nation ohio's electric sector also has the  s power plants ohio also ranked third among all states in mercury air pollution from power plants with about three thousand nine hundred and eighty pounds emitted in two thousand and nine which accounted for hpercent of the state's mercury air pollution and  hpercent of the u s electric sector pollution aep has also lobbied against the environmental protection agency's current efforts to regulate power plant pollution and is pushing legislation to weaken and delay these regulations i look forward to hearing from aep today about how they can justify the tragic and destructive side effects that coalfired power plants wreak upon us as well as what steps they are taking to curb emissions of toxic air pollution while it is consistent with the history of big business to kick and scream about having to minimize social and environmental harms they cause we should not underestimate the entrepreneurial ability of america's electric sector to invest retrofit and construct clean energy generation while maintaining system reliability in fact when they upgrade our nation's electric generation infrastructure to comply with new regulations their capital investments will help drive economic growth and create jobs according to a study by the political economy research institute at the university of massachusetts two of the proposed  regulations clean air transport rule and the new mercury and air toxic standards could stimulate the creation of hmillion jobs over the next hyears in the pollution controls engineering and construction fields congress passed the clean air act and the clean water act because the american public demanded it the american people demanded it because they didn't like their children to inhale and drink and die from toxic compounds from which even the most diligent parent can't protect his or her child nothing about this equation has changed we must allow the epa to continue to fulfill its mandate to protect our water and the air and i look forward to hearing from the epa today about how it continues to fulfill its promise we can't get into a position where it is either jobs or a clean environment we have to insist that we have to have both and the approach of the st cent ury that is going to be economically viable and economically successful and that will help grow our economy is to be able to catch the wave of new technologies that can help use the resources we have now and do it in such a way that we protect the me today and i appreciate the opportunity to appear before you when you ask whether epa regulations will cause the lights to go out i want to be able to assure you that the answer is no we do not have to choose between breathing clean air and running an air conditioner or turning on the lights at night the power plant rules that epa is developing are necessary to protect public health and the environment from pollution produced by these plants especially the oldest dirtiest and least efficient of them we are not the first administration to continuous policy of the united states government under two democratic and two republican presidents while past epa rules have made progress in reducing the harmful effects of pollution more remains to be done to ensure that all americans have the clean environment to which they are entitled epa's recent and upcoming actions to control pollution from power plants will achieve major public health benefits for americans that are significantly greater than the costs these pollutionreducing rules are affordable and they are technologically achievable there is tremendous public support for moving forward with these rules for instance since march we have received over eight hundred thousand comments from across the country in support of regulating mercury emission controls from power plants the crossstate air pollution rule finalized earlier this month illustrates significant health benefits from reducing power plant pollution in a single year two thousand and fourteen this rule is projected to produce benefits valued at over one hundred and twenty  to up to two hundred and eighty dollars billion and to avoid up to thirty four zero premature deaths our analysis and past experience indicate that warnings from some of dire economic consequences of moving forward with these important rules are exaggerated at best a publicly available analysis shows that these rules are affordable this is corroborated by other outside groups and by some in industry who recognize that issuing the rules in the same time frame helps provide power companies with the certainty they need to make smart and costeffective investments as we did more than two decades ago we are also hearing claims that our rules will lead to potential adverse effects on electric reliability epa's analysis  projects that the agency's rules will result in only a modest level of retirements and that these retirements are not expected to have adverse impact on electric generation and resource adequa y our rules will not cause the lights to go out these studies are often based on incorrect assumptions about the requirements of epa rules and are inconsistent with the actual proposals that come out in most cases the were performed before many of the regulations were even proposed simply put many of these studies are not based on the reality of what the agency is actually proposing to do in closing i would like to suggest that the subcommittee should be clear about what is at stake here as those who have stalled in cleaning up their pollution for further delays delay encourages companies to keep cash on the sidelines instead of spending it and putting people to work modernizing their facilities and most importantly delay means public health benefits of reducing harmful pollution are not realized thank you for allowing this opening comment i look forward to your questions mister jordan thank you mr hdeputy let me just start with one of the things that the ranking member referenced in his opening statement and i think you alluded to it as well was the jobs that can be created when you have to refit and retool and make changes but what do you sayh and did you look at this this idea that there can also be job  to be someone to come in and go to work putting that structure together in a different way retrofitting doing what needs to be done obviously that is pretty easy to calculate but did you look at the other side of the ledger yes when we look at the cost of rules we look at all the different aspects of it under the omb regulations that we are required to use and i might say that american industry and in particular the american power industry  becoming more and more efficient over the last hyears even without these rules the amount of megawatts that are produced continues to go up mister jordan every business has been doing that mister perciasepe every business is doing this oil refineries power plants the amount of output continues to go up but the number of employees continues to go down as they become more and more efficient over time with more efficient plants and some of the transition that takes place when we enact these rules is creating a more efficient fleet of powergenerating units  did you do what the executive order requires you to do which is a cumulative impact study onh i mean i am reading right here from the executive order each agency shall tailor its regulations to impose the least burden on society including businesses and individuals including businesses of differing sizes did you comply with the executive order mister perciasepe yes yes excuse me when we propose a rule like let's say toxics rule we start from the base that includes the rules that have already been done and then we want to be able to make sure we specify what the current rule that we are proposing is actually going to do for transparency has been out and we have put out some additional requests for information on that that is quite a ways away from being finalized mister jordan okay let me ask you this do you think though that a more general question do you think that there is ever a point where regulation can in fact be a strong impediment to job growth and actually beh actually cost jobs actually result in the reduction of jobs do you think that is something that foundation of what has already gone by but epa also goes beyond that particularly under the clean air act we look at the cumulative benefits and costs of the ruleh of all the rules all together since the clean expedited schedule we are limited in our ability to quantify the cost and benefits of obtaining separate secondary naaqs for ozone for this proposal so that would seem to indicate to me that you did not do a full cumulative impact study because you say right in your statement cost  is not selfimplementing what it does is it sets in motion a planning process that goes on for a number of years to identify where those areas are in the country that would not be meeting that standard and then what  are the implementation mechanisms that are used to implement or to achieve that standard each one of those requires that kind of detailed analysis once we get to that point but the standard itself is a sciencebased standard based on what number on one hand you are saying you are going to create jobs for retrofitting the facilities but we want to know overall if you did an estimate what was the estimate on what it was going to do to job creation or job loss mister perciasepe we did the overall cost of the rule member wouldn't you agree though that all this coming at onceh i mean you think about over the next several years we have cooling water intake structures utility mact the transport rule  all these different things some starting now but some more coming online soon don't you think that's a real cause for concern and that it is critical that you be able to provide an estimate and do the full cumulative i mean you can obviously see the concern that folks in this now they have been coming back and having to be reproposed things like the ozone standard you mentioned get implemented over a long period of time into the future and some of them like the water intakeh the water intake  thank you very much mister chairman i think it is fair to say that the utility industry is hysterical with claims that the new epa regulations are job killing  contrast as the slide i would like to put up on the screen shows a report from the university of massachusetts entitled new jobs cleaner air says the home states of each member of the subcommittee on the eastern power grid would fare very well with respect to jobs created by the new investment and capital improvements our own state of ohio will gain as many as seventy six thousand two hundred and forty jobs to build the capacity to implement the new regulations in the first five years so i would like to ask mr hperciasepe how does the epa's own risk assessment our analysis shows particularly on these utility rules that it will create jobs mister kucinich okay we are going to hear from industry representatives in the next panel that claim that compliance with the new mercury and air toxic standards and the transport rule is not achievable and not costeffective these industry advocates are making claims of dire economic consequences if we move forward with these rules some of our witnesses today will say that environmental protections will cost too much money kill too many jobs end their competitiveness this is familiar industry always claims t with the new proposed rules from your perspective is industry exaggerating the detrimental impacts of the regulations mister perciasepe well some of the studies that we have been able to review have a numberhof that they have done that demonstrate these  impacts have some significant flaws to them first of all and i mentioned this in my opening comments they make assumptions about rules that we haven't finalized yet for instance on the cooling water regulation that we have been talking about some of those studies have assumed that every power plant would have to install a closed loop cooling system or a cooling tower that is not what we proposed and we still haven't even finalized that rule so these end up  causing exaggerated estimates of what the costs of the rule would be they don't differentiate between plants that are getting old and need to close or for economic and business reasons need to be phased out as new generating geth when you actually implement these rules there are certain flexibilities that are included in the clean air act that are not considered in these studies so by definition then they come up with an exaggerated estimate of what the impact would  they are based on peerreviewed science they are not a statistical fabrication and you are not going to see on somebody's death certificate they died of air pollution they are going to die of the diseases that air pollution exacerbates and causes premature impacts even healthy people are impacted but people who are more vulnerable like retired folks are going to be even more vulnerable to these things so the impact of the damage on the lungs and cardiovascular system so i know you have other witnesses that will go into the science of this in more detail but these are not fabricated they are based on peerreviewed science both clinical and epidemiological studies is not just mercury it includes acid gases arsenic nickel cadmium all these other metals and acid gases that also have health effects are included which is why you have to look at the then if there is going to be increased energy costs do you think that can also translate into lost jobs or maybe not as many jobs being created as otherwise would have been  are the rules you are proposing going to mean energy costs more i thought the answer was yes is that what you are saying so furthermore if the answer is yes which it is then there could be some other results or ramifications down the road for job creators and businesses across the country at a time we have hpercent unemployment mister perciasepe we do not see the small increase in the price of electricity from this rule which is not different than the normal variation in the prices over the last decade to have any significant  my guess is small business owners my guess is manufacturers probably do when they are faced with the tough decision can i keep these families these individuals employed who their families are relying on this and i got to make decisions look at my bottom line look at my fixed costs look at everything else they probably but i guess i want to ask this is the old basic economics principle opportunity costs if you are not spending those dollars to retrofit and retool your facility you are probably using them some other way maybe to create jobs maybe to do other things so would  questions thank you for being here today and your willingness to testify in your analysis for utility mact you estimated that it could lead to pollution controlrelated capital investment of forty five dollars billion  like to be able to provide some information for you on that ms buerkle okay can you provide that information today or would you like to provide ith mister perciasepe i have toh i have to go look at the technical support document and see whereh but what i just gave you are the numbers in the final proposal ten dollars ninety cents million i am sorry billion a year thirty one thousand temporary jobs nine thousand permanent jobs benefits of  reconsider the ozone naaqs standards established in two thousand and seven can you explain or tell me why the epa decided to review and actually on an expedited  schedule they are not really ready the two thousand and twelve would be the appropriate time mister perciasepe the ozone standard was last proposed in two thousand and eight and  process we are going to do it as soon as possible but it is still going to take some time ms buerkle my concern with that is that the environmentalists rather than epa and the appropriate branches of government are establishing our environmental policy  oxides and particulate matter emissions from power plants sir if this legislation became law what impact would it have on epa's ability to fulfill its mandate under the clean air act and implement the air pollution rules covering pollution from power plants well if you make the assumption that those riders would not allow us to spend funds in the budget on finishing the work under those rules it will delay furtherh it has already been delayed almost a decadeh the health attacks nineteen thousand hospital emergency department visits nineteen thousand acute bronchitis events four hundred and twenty thousand upper and lower respiratory symptoms four hundred thousand aggravated asthma and and those conditions are not resolved and the industry keeps building their profit margins while having not to make any investments at all in cleaning up the environment so there wouldn't be these untoward health effects what you actually have is a direct transfer of wealth in terms of the cost of human health from the mass of people to the utilities this i think is one of the underlying problems that i have with the fact that utilities refuse to have spent my whole life in the healthh i am a nurse i was a health care attorney so i am very concerned about health public health and i don't think anyone on either side of the aisle is saying we don't need regulations but what we need is regulations regulations that encourage people to be entrepreneurial encourage people to take a risk not thinking that they will be beat down and when they do comply with regulations that you know around the next corner those regulations are changed so then they have to retrofit and they have to recomply the cost of compliance as i talk to small businesses throughout the district it is exorbitant and it really is a deterrent for people to take the risk and to go into business so i think all we are talking about here and we are asking the epa is to be reasonable to understand that every one of those new regulations every one of those regulations that get put into a book have an effect they filter down to some poor small business owner whose bottom line and his profit margin is very slim and one more change or one more law to comply with or one more regulation may be what puts him over and i think that is moreh and if we look at it that way we are talking about public health but we are also balancing it with a nine point two unemployment rate in this country we have got to look at this thing in its entirety you look like you wanted to comment mister perciasepe you know those are very  reasonable words and i think we share the desire to make sure these rules are implemented in an appropriate way we are trying to provide time in the rules flexibility with trading allowance secretary of energy james wood stated that number one electric rates are going to go up and i would like you to comment on that i mean do you agree with him that electric rates are going to go up and i will enter indicate that electric rates will go up from a base that is lower than it was in the last decade so the variability in the electric rates are going to be small compared to the variability of the electric rates we had before these rules were out there that said when we doh when we did work on some of these rules we definitely used the small business panels to help us look at the impact on small an average across the country and we have identified that in our regulatory impact we are not hiding that fact we are trying to put it in context ms buerkle i don't mean to interrupt but my time is clicking away here i will say your estimate came in the lowest of anyone's estimate as to what their electrical rates will do and again that goes back to jobs and job creation and small businesses i mean it may be a few pennies but it may not be a few pennies it may be more than that and that may be the one single factor that pushes either deters someone from going into business the cost of doing business or worse yet it forces them out of business because they can't meet their bottom line with that my time has expired estimate impacts of our rules and we are even conservative in our impacts on how we estimate our impacts on rules so it could have been any number of things that they have included in their assumptions that we would have to look at well why don't you obtain the information and get back to this subcommittee so that we can make an evaluation of their claim thank you i yield back ms buerkle thank you with that we will all our second panel to the witness table and thank you very good afternoon thank you for being here our second panel consists of ms hjanet henry who is the deputy general counsel for american electric power doctor joel schwartz professor of environmental epidemiology harvard school of public health and mr hmike carey president of the ohio coal association ms buerkle good afternoon and welcome to all of you pursuant to the rules of the oversight and government reform committee if i could ask you to stand and please raise your right hands do you if you could limit your opening statements to five minutes i know that the ranking member has an amendment to offer on the floor and i would like to give him the opportunity to lead off the first round of questions before he has to leave so ms henry if you would proceed i would appreciate it  capacity and serves more than five million retail customers in eleven states we employ diverse kinds of generating of energy sources including coal nuclear hydroelectric natural gas oil and wind power but coal is important in our states and approximately twothirds of our generating capacity utilizes coal to generate electricity we believe that the current regulatory track being pursued by the epa will have damaging impacts on our nation's electricity system as well as broader negative employment and economic implications together they will require very large capital utility investments on a very short timeframe invested over hbillion in emissions control equipment on our coal units to reduce so and nox about twothirds of our fleet is currently equipped with the most efficient so controls and about threequarters of the eastern system has the most advanced nox controls two projects were completed in the last hmonths at our amos power plant and we are preparing to submit applications for regulatory approvals to install additional controls in indiana we expect this transformation to continue and our emissions to continue to decline we are committed to working with epa in the development of future control requirements but we have concerns about epa's proposals they include the in feasibility of the compliance deadlines the crossstate air pollution rule will take effect in less than six months and the reductions in several states required by two thousand and twelve represent more than a hpercent reduction in emissions and ten emission levels multiple regulatory programs are going to be taking effect in a very compressed timeframe resulting in unprecedented capital expenditures mostly before tw there would be two to three times as much capital spent in the u s to comply with these new epa rules by two thousand and twenty as has been spent over the past hyears abrupt and significant power plant retirements are likely to occur due to high costs and infeasible compliance deadlines we expect that between fifty and hgigawatts of coalfired generating capacity will retire due to the proposed epa rules and recently experienced an alltime high peak and the serc region which is in the southeastern portion of the country but both ercot and spp have also expressed concerns about the localized effects on the electric grid there will be very high electricity rate increases as has been observed by the committee members and significant job losses associated with the implementation of these rules according to a recent study by ne a the crossstate rule and the utility mact rule will result in over hmillion net job losses in the u s there's a better way we would like to see more holistic analysis of epa's regulatory programs in an effort to coordinate the implementation of these requirements that can be phased in reasonably over a slightly more extended period of time and achieve the same environmental outcomes that time will reduce the impact on our customers and the economy thank you ms buerkle thank you ms henry m employers domestic workers will be devastating my name is mike carey i am president of the ohio coal association we are an association that provides a voice for the many thousands of citizens working in ohio's coal sector cheap affordable coal is what powers the manufacturing base and maintains our families across the midwest and other regions of america the companies we represent both large and small are proud to directly employ over three thousand individuals as well as the thirty zero additional secondary jobs that depend on our sector these jobs and hundreds of more or thousands more are at risk directly because of the decisions under way by the epa in particular it is my hope that this committee will undertake a serious review of the work being conducted by the epa as it relates to the following proposals the crossstate air pollution rule formerly known as the clean air transport rule the air toxic standards for utilities or utility mact the new source performance standard changes the new ozone particular matter standards regulation for coal combustion residuals and the power plant cooling water intake structure rule members of this have probably heard this grouping of proposals called the epa train wreck the regulatory wave embodied in these new mandates and rules above stands to cause great harm not only to ohio but to the rest of the american economy today c mined in over twenty seven states across the nation and is consumed in over forty eight as reliable and affordable power i will focus my time today on the two most harmful epa proposals the first the crossstate air pollution rule the underlying assumption of this proposal mister chairman is that our customers the electric utilities like american electric power like first energy and duke energy will simply move to a lower sulfur content coal that assumes that companies will even continue to use coal in the first place they could fuel switch to natural gas this ultimately could disrupt the natural gas markets this administration proposes to sacrifice these thirty three thousand primary and secondary jobs that we create and that is as simple as it gets epa's complex rule creates a system of allowances and trading that is much less flexible than the current regulatory framework winners and losers are thus clearly chosen and ohio is a loser the only option for those producing electricity in our state as we have already seen in many cases is to shut down or potentially shut down their plants the second most harmful proposal in our view is the utility mact rule when the proposals are both finalized the national and regional impacts will be devastating ohio alone will lose fifty three thousand jobs and electricity prices could certainly spur and hurt the middle and lower class americans which already pay almost sixteen to hpercent of their annual aftertax income on energy costs annually the future of midwestern jobs and access to affordable energy depends on demanding that the epa examine cumulative impacts of their regulatory proposals oversight for how these flawed proposals are costly unworkable and harmful to the u s economy should continue in the interim congress must seek to enact policies that address the flaws in epa's proposals that i have outlined epa's war on coal will also be harmful to the homeowners across the country as the studies have shown the train wreck will result in electricity prices that would increase  way to shuffle around the funds and such a cut will not stop their plans to move forward with the train wreck it is the belief of the ohio coal association that congress must be bolder delay these rules immediately it is critical and the house must then act to write legislation that makes these rules more reasonable without a clear direction from congress in this fashion epa will continue its toward pace of piling on new job crushing policies i want to thank you for the regulations that we have heard about like the transport rule will impose significant costs on industry but they will also produce significant health benefits and i would like to talk a bit about that particulate matter is one of the largest avoidable causes of death in the united states to put that in perspective particulate matter kills more people each year in the united states than aids breast cancer and prostate cancer put together that is a big number and the difference is we don't know how to cure aids breast cancer and prostate cancer but we do know how to put scrubbers on coalburning power plants and so it is important to think about it in that respect and this is not just my opinion this is a worldwide scientific consensus in two thousand and five the world health organization said that particulate matter killed eight hundred thousand people a year in the world's cities alone the american medical association has endorsed these conclusions as has the american thoracic society the american cancer society the american heart association the clean air advisory committee has extensively reviewed epa's science assessment for particles over the last several years and concluded that the association with mortality was causal that the risk assessment was sound except they said that what epa cited as their high estimate was actually a midrange estimate because there were lots of studies that showed bigger effects the national academy of sciences in the united states has endorsed this conclusion in two separate reports in two thousand and five the european union proposed the strategy to reduce particles because their scientific review concluded it killed a lot of people and their strategy was to impose an hpercent reduction in so emissions primarily coalburning power plants so this is really a consensus view of the worldwide scientific community and the reasons they believe that are simple we have lots of studies in the scientific literature to support this we have studies that compare death rates in more polluted towns and less polluted towns and they are higher in more polluted towns we have studies that have looked at changes in particle concentrations in cities and changes in their death rates and the more the particle concentrations drop the more the death rates drop in those locations we  studies that have then said well let's forget about those downward trends and let's look at just yeartoyear fluctuations around the downward trend in particles and yeartoyear fluctuations in death rates went with those changes in particles we have studies that looked at strikes and found that death rates fell when major industries that were important sources of air pollution were shut down and went back up when they were turned on again and then buttressing all of this we have studies from animals that show that if you expose animals over a period of months to particle multiple studies we have animal studies showing that if you produce ischemia in animals and expose them to particles the blood flow to the heart is reduced further compared to one's breathing filter have studies showing that you can produce arrhythmias in animals by exposing them to particles so in addition to all of the human studies we have a great deal of toxicology that backs this up and this is why review committee after review committee and scientific body and medical body after medical body have all come to the conclusion that this is really happening and the numbers that we are talking about quite large so the midrange number from epa's expert elicitation or from what case act said says that the transport rule will save thirty four thousand early deaths per year that is a really big deal and yes it costs money but actually the cost per life saved is about one hundred thousand dollars a life and that is actually pretty cheap among public health interventions that are available to us so i think that these are important issues but it is important to realize that there are very important public health benefits that  questions i am offering an amendment on the floor i am very grateful for your kindness at a juneh two thousand and eleven meeting with investors when discussing the risk of closures to plants as a result of epa rules the chairman of aep michael mo told investors the following as you know those are highcost plants throughout almost all of two thousand and nine those plants probably didn't run five percent of the time because of natural gas prices when we shut those down there will be some cost uncompetitive in the market how can you come here today and portray epa's rules as infeasible and blame the epa for forcing a large number of premature power plant requirements  ranking member kucinich the plants referred to in the chairman's remarks and the plants referred to in the studies that have been conducted as a result of epa's rules are not necessarily the same plan kucinich no you don't know the answer so i am going to ask my next question if the price of natural gas relative to coal stays where it was at the time your ceo is explaining his decision to close certain plants and that price stays the same through two thousand and fourteen henry the plants were running at lowcapacity factors they were not closed and those plants run during times of peak energy demand and are used to respond to needs for additional power on days like we experienced this past week having those plants available to respond to those peak demands is critical to the integrity of the electrical grid mister kucinich so what you are saying is that those plants are specifically part of meeting peak demands and they are otherwise totally efficient and not subject to market fluctuations that would come about as a result of natural gas competition ms henry certainly if the price of natural gas were to increase significantly their capacity factors might go up because their dispatch might be more economic than the gas plants that run also at peak periods of time but i think that the critical point is that the plants provide any kind of discussion draft that relates to a bill by that name ms henry i know that aep assisted in the preparation of some suggested language for legislation that might have had that i that is what i am talking about this bill proposes to wait another six years before we limit toxic mercury from some power plants as well as delaying limits on a host of other  okay i will yield myself five minutes for questions  first of all ms henry i want to give you the opportunity it seemed to me you had an answer to the ranking member's question that you weren't allowed to give if you wanted to early in his line of questioning he was speaking to you ms henry if i could continue my response i appreciate it thank you the legislation that aep was discussing with certain members of congress would have provided for a phasedin program to allow sufficient time in order for all of the controls that are required by the various epa proposals to be phased in over a slightly longer period of time than is proposed under the crossstate air pollution rule and the utility mact rule instead of having all of the requirements become final and effective in two thousand and fourteen there would have been an extension through two thousand and twenty and a phasedin program with specific levels of control required to be achieved throughout that time period thank you and this question is for ms henry as well as mister carey the epa time lines to comply with these regulations is it realistic or unrealistic ms henry based on our experience it is an unrealistic carey i would agree with i would agree with her analysis of how that would affect the powerproducing facilities and what that actually would do for the coal producers of the state would be a removal of us from the marketplace because they simply could not meet regards to these compliance timelines how many jobs can you estimate would be lost ms henry based on the comprehensive analysis that was done by nera we estimate that rule the impacts are probably more severe than that based on the final rule because nera did its analysis on the proposed rule and not the final rule ms buerkle and if you had more time to comply would that affect the number questions to you mister carey mister carey according madam chair according to the nera study it alone that loss of those jobs just because of those two proposals would be fifty three thousand direct jobs in the state of which many of those jobs would come from the appalachian coal fields because of the direct jobs in the mining industry and the up to eleven spinoff jobs that occur from one coal mining job so the numbers would be significant in that region ms buerkle and again if there is longer now can either or both of you actually comment on what this will do to electricity rates you heard in the previous panel of the testimony that it will raise slightly but i would like to hear your thoughts about what it will do  henry well the epa analysis has been done on an average basis nationwide and not on an individual company basis obviously those companies that are most dramatically impacted by the rules bear the highest cost of compliance and their rates increase the most for the aep companies the rate increases we have estimated range from ten percent at the lowest end of the range to almost hpercent in those areas most highly impacted thank you i want to ask one more question of the two of you and then doctor schwartz i don't want you to feel left out here this afternoon the epa is a singular regulatory body and yet we see so many regulations coming out of it from so many various agencies and departments i would like for you to commenth and mister carey i can start with you and then ms henryh have you seen any signs that there is a coordination of or a look at how all of these regulations affect businesses i mean one regulation by itself may not be bad but cumulatively they may devastate businesses and  illinois kentucky you are seeing a coordinated attack because the new restrictions on certain coal permits the fact that the u s epa is getting involved in a lot of the processes that normally would have taken place under the state or the state permitting program you are seeing that federal that federal go into the states start revoking permits as happened in the state of west virginia so what you have is systematically you have the u not allowing for coal to be permitted to get out of the ground and then ultimately trying to take away the market that the coal could go to so i guess you could say that the epa believes that they can control both the laws of supply and demand ultimately to the detriment of the entire country ms buerkle thank you ms henry ms henry the epa regulations are analyzed in a silo each individual requirement is analyzed only for its individual cost and benefits and there is no comprehensive analysis undertaken that results in a failure to consider the cumulative impacts at any individual facility let alone across an industrial sector and for an example the suite of regulations that are currently before us include not only the air pollution regulations but also the cooling tower requirements and the coal combustion residuals rulemaking each of those rules has its own costs and all of them would be considered by a utility before any investment would be made to determine whether the longterm viability of the facility is justified so it is essential that epa not only do cumulative analyses within an individual office or division like the air division but that it take a holistic view of all of the regulatory programs that are coming out of the various offices within epa ms buerkle thank you very much doctor schwartz in your testimony you talk a lot about the negative health effects of particulate matter and i want to clarify if primarily particulate matter is regulated by macts is that correct  particulate matter but then there are also new source performance standards and you know best available control technology and a bunch of other regulations as well the transport rule is primarily being put out to help states come into attainment with the macts because we know that particles don't actually stop at state borders and so the clean air interstate rule that was originally proposed was for the purpose of doing that the mact i think is an entirely different thing that has nothing to do with the ambient air quality standard i haven't read every document that epa has produced but certainly when epa did the regulatory impact analysis for the ongoing round of revision of the ambient air quality standards for particles they said what if we got particle levels down to some point and what might be the costs and the benefits of that in their risk assessment they didn't specifically propose rules that would accomplish that but they implicitly assumed that one of the rules that was going to be providing a lot of the help was the transport rule so if you looked at the benefits of those two things and added them up that would be incorrect it would also be incorrect if you looked at the cost of those two things and added it up th e transport rule is one of the strategies that epa is proposing to help come into attainment with the current macts and with any future macts and so it should be a sub category under there for chair i think that the primary objection that we have to epa's benefits analysis is that for the crossstate air pollution rule epa assumed that current requirements that apply to our facilities under the clean air interstate rule don't exist so they started from an artificial baseline and overstated the benefits that would be achieved through the crossstate rule with respect to the utility mact rule the benefits that are affiliated with reducing the hazardous and toxics air emissions under that rule benefits are around hmillion associated with reductions in mercury epa claimed it could not quantify any benefits associated with any other individual hazardous air pollutant but they did quantify benefits associated with reductions in particulate matter and those are the benefits that they claim are achieved through the reductions of the utility mact rule ms buerkle thank you mister carey would you like to comment on th well with that since there are no other members here for questioning i would like to thank all three of you for being here this afternoon for being willing to answer our questions and to testify i think the chairman called this committee our concern is always that regulations are putting such burdens on businesses in our country and given the unemployment rate we have a responsibility to act responsibly and as i mentioned to the previous panel that no one is saying we don't need regulations but we need reasonable regulations that don't put companies out of business that create barriers to their success that you know we see compliance and then we see new regulations that require retrofitting so i thank you all for being here today and with that this hearing is adjourned thank you