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S. HRG. 110–1259 

EPA’S CLEAN AIR INTERSTATE RULE (CAIR): 

RECENT COURT DECISION AND ITS IMPLICATIONS 

HEARING 

BEFORE THE

SUBCOMMITTEE ON CLEAN AIR 

AND NUCLEAR SAFETY 

OF THE

COMMITTEE ON ENVIRONMENT AND 

PUBLIC WORKS 

UNITED STATES SENATE 

ONE HUNDRED TENTH CONGRESS 

SECOND SESSION 

JULY 29, 2008 

Printed for the use of the Committee on Environment and Public Works 

( 

Available via the World Wide Web: http://www.access.gpo.gov/congress.senate 

(II) 

COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS 

ONE HUNDRED TENTH CONGRESS 

SECOND SESSION 

BARBARA BOXER, California, Chairman 

MAX BAUCUS, Montana 

JOSEPH I. LIEBERMAN, Connecticut 

THOMAS R. CARPER, Delaware 

HILLARY RODHAM CLINTON, New York 

FRANK R. LAUTENBERG, New Jersey 

BENJAMIN L. CARDIN, Maryland 

BERNARD SANDERS, Vermont 

AMY KLOBUCHAR, Minnesota 

SHELDON WHITEHOUSE, Rhode Island 

JAMES M. INHOFE, Oklahoma 

JOHN W. WARNER, Virginia 

GEORGE V. VOINOVICH, Ohio 

JOHNNY ISAKSON, Georgia 

DAVID VITTER, Louisiana 

JOHN BARRASSO, Wyoming 

LARRY E. CRAIG, Idaho 

LAMAR ALEXANDER, Tennessee 

CHRISTOPHER S. BOND, Missouri 

BETTINA POIRIER, Majority Staff Director and Chief Counsel 

ANDREW WHEELER, Minority Staff Director 

SUBCOMMITTEE ON CLEAN AIR AND NUCLEAR SAFETY

THOMAS R. CARPER, Delaware, Chairman 

JOSEPH I. LIEBERMAN, Connecticut 

HILLARY RODHAM CLINTON, New York 

BERNARD SANDERS, Vermont 

BARBARA BOXER, California (ex officio) 

GEORGE V. VOINOVICH, Ohio 

JOHNNY ISAKSON, Georgia 

LAMAR ALEXANDER, Tennessee 

JAMES M. INHOFE, Oklahoma (ex officio) 

(III) 

C O N T E N T S 

Page 

JULY 29, 2008 

OPENING STATEMENTS 

Carper, Hon. Thomas R., U.S. Senator from the State of Delaware ................... 1 

Voinovich, Hon. George, V., U.S. Senator from the State of Ohio ....................... 3 

Lieberman, Joseph I., U.S. Senator from the State of Connecticut ..................... 14 

Inhofe, Hon. James M., U.S. Senator from the State of Oklahoma .................... 16 

Clinton, Hon. Hillary Rodham, U.S. Senator from the State of New York ........ 18 

Bond, Hon. Christopher, U.S. Senator from the State of Missouri ..................... 194 

Sanders, Hon. Bernard, U.S. Senator from the State of Vermont ....................... 195 

WITNESSES 

Mclean, Brian, Director, Office of Atmospheric Programs, Office and Air and 

Radiation, United States Environmental Protection Agency ........................... 20 

Prepared statement .......................................................................................... 23 

Responses to additional questions from: 

Senator Boxer ............................................................................................ 38 

Senator Carper .......................................................................................... 42 

Senator Clinton ......................................................................................... 48 

Response to an additional question from Senator Inhofe ............................. 49 

Snyder, Jared, Assistant Commissioner for Air Resources, Climate Change 

and Energy, New York State Department of Environmental Conservation ... 76 

Prepared statement .......................................................................................... 79 

Responses to additional questions from Senator Boxer ................................ 105 

Response to an additional question from Senator Inhofe ............................. 110 

Svenson, Eric, Vice President, Environment, Health and Safety, Public Service Enterprise Group ............................................................................................ 111 

Prepared statement .......................................................................................... 113 

Spence, William H., Executive Vice President and Chief Operating Officer, 

Ppl Corporation .................................................................................................... 130 

Prepared statement .......................................................................................... 132 

Responses to additional questions from: 

Senator Boxer ............................................................................................ 140 

Senator Carper .......................................................................................... 141 

Korleski, Christopher, Director, Ohio Environmental Protecton Agency ........... 144 

Prepared statement .......................................................................................... 146 

Walke, John D., Clean Air Director, Natural Resources Defense Council .......... 149 

Prepared statement .......................................................................................... 152 

(1) 

EPA’S CLEAN AIR INTERSTATE RULE (CAIR): 

RECENT COURT DECISION AND ITS IMPLICATIONS 

Tuesday, July 29, 2008 

U.S. SENATE, 

COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS, 

SUBCOMMITTEE ON CLEAN AIR AND NUCLEAR SAFETY

Washington, DC. 

The subcommittee met, pursuant to notice, at 9:30 a.m. in room 

406, Dirksen Senate Office Building, Hon. Barbara Boxer (chairman of the full committee) presiding. 

Present: Senators Carper, Voinovich, Lieberman, Clinton, Inhofe. 

OPENING STATEMENT OF HON. THOMAS R. CARPER, 

U.S. SENATOR FROM THE STATE OF DELAWARE 

Senator CARPER. The hearing will come to order. 

Welcome, one and all. We appreciate the efforts of our witnesses 

to be with us today, both the first and second panel. 

Today’s hearing is focused on the D.C. Circuit Court’s recent decision on EPA’s Clean Air InterState Rule, known affectionately as 

CAIR. Senators will have 5 minutes for opening statements. Then 

I will recognize the Director of EPA’s Office of Atmospheric Programs to offer his statement to the Committee. Welcome, Mr. 

McLean. 

Following the Director’s statement, we will have two rounds of 

questions. Then our second panel of witnesses will come forward. 

Their testimony will be followed by two rounds of questions. 

We will then break for dinner, return for a prayer meeting. And 

after hot chocolate, sing Kumbyah and go home and see where the 

future takes us from there. 

[Laughter.] 

Senator CARPER. Albert Einstein, my colleagues are used to me 

quoting Thomas Edison, but I am going to change that to now 

quote Albert Einstein, who once said that in the midst of every difficulty lies an opportunity. Einstein was one smart fellow, and we 

in Congress need to listen to him, at least on this point. 

As members of our Committee charged with protecting our environment, we are confronted with some of the greatest challenges 

facing our planet: global warming, making sure that people can 

swim and fish in our Nation’s rivers and lakes, cleaning up the air 

so that fewer Americans will die or suffer from lung cancer from 

mercury poisoning. As Members of Congress, it is our responsibility 

to seize these opportunities and to solve them. 

2 

The clean air issue is one that I began to address when I first 

became a Senator, almost 8 years ago. During those last 8 years, 

we have seen the Bush administration propose its own legislation 

called Clear Skies, but refuse to budget when Congress wanted to 

strengthen that proposal. We then saw the Administration try to 

implement Clear Skies through regulation, only to see those regulations, first through the mercury rule and now the Clean Air 

InterState Rule, overturned by the Federal courts for being either 

too weak or flawed in some respect. 

In other words, 8 years have gone by without any meaningful, 

substantive action on the clean air debate. I hope this offends everyone here as much as it offends me. 

This inaction means that tens of thousands of Americans will die 

prematurely from lung-related diseases who didn’t have to die. It 

means that thousands more children will be borne with birth defects, thanks to mercury poisoning, who otherwise would have been 

healthy without incident. It means that Congress and the White 

House failed to do what is right. 

Let me be clear. I am not going to wait another 8 years to do 

what should have been done 8 years ago, and that is to pass a 

strong, comprehensive Clean Air bill that makes deep and meaningful reductions in mercury, nitrogen oxides and sulfur dioxide. 

We have the science and we have the technology to clean up our 

act in a way that makes sense and won’t put anyone out of business. We owe it to the American people to try harder, to come together and develop a bipartisan solution to the clean air mess that 

we find ourselves in today. 

My bet is that no one in this room really wanted the D.C. Circuit 

Court to overturn the CAIR rule. I certainly didn’t. While I thought 

CAIR should have been stronger in the proposed legislation along 

those lines, CAIR would have nevertheless provided real benefits to 

my State, and I know to a number of our neighboring States. 

As many of you know, Delaware struggles to meet its clean air 

goals, because we are located, along with our neighbors, Pennsylvania, New Jersey, Maryland and others, at the end of what we 

call America’s tailpipe. We simply can’t cleanup our air along the 

eastern seaboard unless the upwind States meet their obligations 

too. In Delaware alone, we have some 80,000 children and adults 

who suffer from asthma this year. CAIR would have reduced that 

number and saved lives. 

But the court said that the rule was fundamentally flawed, and 

that is why we have invited all of our witnesses here to testify 

today, to find out what this ruling means and to understand its impact on the States, on industry and on public health. 

I am also hopeful that we can use today’s hearing to begin to develop consensus on how Congress should proceed for the balance of 

this year and once the new Administration takes office in less than 

175 days. Let me offer just a couple of my initial thoughts on that 

front. 

One, we should not expect this Administration or the next one 

to get the job done through regulation alone. The only surefire way 

that we are going to get reductions that we need is through, I believe, congressional action. Only Congress can take back the power 

from the courts and ensure that we move forward on schedule. 

3 

Two, CAIR only covered the eastern United States. We need to 

write legislation that protects the whole Country. This approach 

doesn’t just save more lives, it also prevents polluters from moving 

to unregulated areas in order to escape environmental controls. 

Three, CAIR only addresses SOx and NOx. We can do better by 

simultaneously addressing toxic mercury emissions as well as carbon dioxide that causes global warming. I said for some time it 

makes no sense to address only one or two of these pollutants without trying to address the others. The four-pollutant approach better 

protects the public health and gives industry the flexibility and the 

regulatory certainty that they need to implement the most cost-effective control strategy. 

I believe a good starting point for discussions on how to proceed 

is a bipartisan bill that I introduced again last year, the Clean Air 

Planning Act, which many of this Committee’s members have cosponsored. That legislation just picked up its 13th co-sponsor yesterday, I am told, and I want to thank Senator Clinton for joining 

us as a co-sponsor of the legislation and welcome her as a co-sponsor as well as welcome her back to this Committee and lending her 

voice and her support to our efforts. 

We believe that the Clean Air Planning Act provides an aggressive yet achievable schedule for power plants to reduce emissions 

from nitrogen oxides, from sulfur dioxide, from mercury and from 

CO2. It goes further and goes faster than what the Bush administration put forward; in fact, even more compelling given the legislative stalemate of the last 8 years. 

I would also point out that EPA’s own analysis shows that that 

CAPA greatly improves the health benefits associated with CAIR. 

For instance, 10,000 more premature deaths would be avoided 

under our legislation than under the CAIR rule. I believe the Clean 

Air Planning Act is a great starting point, but I want to say that 

all options are on the table. What matters most to me is not what 

legislative vehicle we use to clean up our air, but rather that we 

get something done. 

But that something has to be comprehensive, it needs to be 

meaningful and it has to be stronger than what the Administration’s Clean Air InterState Rule and seriously flawed mercury rule 

would have provided. In addition to today’s hearing, I will be holding other hearings and roundtables on this issue, along with my 

friend, Senator Voinovich, throughout this fall to hear various perspectives on how we can move forward on clean air legislation early 

next week at the latest. 

Again, we don’t have the luxury of waiting another 8 years to get 

the job done. I don’t know that we have the option of waiting another 8 months. It is time for all of us to come to the table and 

pass a long-overdue update to the Clean Air Act. It is time to stop 

squandering opportunities and to begin to seize them. 

That having been said, Senator Voinovich, I am pleased that you 

are here, and you are recognized for as long as you wish. 

OPENING STATEMENT OF HON. GEORGE V. VOINOVICH, 

U.S. SENATOR FROM THE STATE OF OHIO 

Senator VOINOVICH. Thank you, Mr. Chairman. 

4 

The Chairman and I have been friends for a long time. And we 

are arm in arm on many things, although we don’t see eye to eye 

on some issues. And one of the great disappointments in my being 

here in the Senate is the fact that we weren’t able to come together 

when we had the Clear Skies legislation before us. We spent hours 

and hours and hours and had all kinds of work done by staff and 

so forth. And I think we both talked that, who knows what would 

happen. I predicted that the courts would overrule it and it would 

be back on our table, and that we are in a period of uncertainty. 

I accept the challenge of trying to find some way that we can 

work together to get this done. I am hopeful, but every time we 

have tried in the past, we have failed because of the fact that there 

hasn’t been a willingness to compromise. And we are back at it. 

The environmental policy of the United States has been determined 

by the courts. 

I am glad that Chris Korleski, our Director of the Ohio Environmental Protection Agency is here, because he can give us a perspective on what does this mean, really, to the States that have 

gone ahead and passed their implementation plans, and what do 

they do now? What are we going? 

We know about the North Carolina suit, and they vacated the 

Clean Air InterState Rule. I think the people that brought the 

cause of action today, if you ask them, would say, what a revolting 

situation this turned out to be, because I don’t think they expected 

the Court to strike down the whole thing. They wanted a little exemption to the thing and the court just came in and said, goodbye. 

So we know that CAIR implemented a cap and trade program to 

provide significant reductions from fossil power utilities across 28 

eastern States and the District of Columbia. Now that it is vacated, 

it also, we have the mercury rule to decide what are we are we 

going to do. 

According to the EPA, when fully funded or implemented, CAIR 

would have reduced SO2 emissions in the participating States and 

D.C. by over 70 percent, and NOx emissions over 60 percent from 

2003 levels. EPA predicted that by the year 2015 CAIR would have 

provided $85 billion to $100 billion in annual health care benefits 

at a cost of approximately $4 billion. EPA also estimated that CAIR 

would have annually prevented 17,000 premature deaths. Senator 

Carper has talked about deaths, but the prediction from the EPA 

was 17,000 premature deaths. Millions of lost work and school days 

and tens of thousands of non-fatal heart attacks and hospital admissions. 

So it did something pretty significant. Indeed, CAIR and CAMR, 

combined with the Clean Air Visibility Rule were viewed as one of 

the most cost-effective set of environmental regulations in our history. In 2005, EPA estimated that the cost-benefit ration of these 

three rules to be greater than 20 to 1, with most of the benefits 

coming from the CAIR rule. While there were differences of opinion 

on how CAIR should be implemented, who should be included and 

whether the reduction requirements went far enough. The rule was 

generally supported by much of the regulated community, affected 

States and environmental groups. Indeed, Duke Energy, a petitioner in the litigation, didn’t want to have the rule vacated, as I 

5 

mentioned. They just wanted to have it remanded to address how 

the SO2 allowances were distributed. 

The Natural Resources Defense Council, NRDC, intervened on 

EPA’s behalf in support of the rule. And Mr. Chairman, I would 

like to submit a statement from Duke Energy for the record with 

regard to what it was they tried to accomplish with that. 

Senator CARPER. Without objection, so ordered. 

[The referenced information follows:] 

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88904.113
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88904.114
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88904.115
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88904.116
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88904.117
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88904.119
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Senator VOINOVICH. Now that it has been vacated, there is no 

comprehensive and cost-effective policy to address NAAQs compliance, untangle the complicated web of overlapping and redundant 

regulations affecting power plants and to bring about the public 

health benefits we had hoped to achieve. 

This situation is precisely what I feared, and is why Senator 

Inhofe and I worked so hard to move the Clear Skies Act during 

the last Congress. I already mentioned that. 

As most of you recall, Clear Skies was more or less the legislative equivalent to CAIR and CAMR. While Clear Skies did not go 

far enough for some, passing that legislation would have at least 

locked into law the emission reduction requirements that have now 

been invalidated by the Court. Now that the rule has been overturned, we have an uncertain and chaotic situation that I believe 

is incumbent upon the Congress to fix. I pledge publicly to work 

with Senator Carper and the other members of this Committee to 

see if we cannot get some legislation done before the end of the 

year, so there is not chaos, so there is certainty and we can move 

forward as a Country in reducing NOx, SOx, mercury and do it in 

a way that looks at not only the health benefits but also the impact 

that it has overall on our society in terms of our economy. 

[The prepared statement of Senator Voinovich follows:] 

STATEMENT OF HON, GEORGE V. VOINOVICH, U.S. SENATOR

FROM THE STATE OF OHIO

Mr. Chairman, 

I thank you for holding today’s hearing on this important issue. I thank the witnesses for being here today and look forward to their testimony. Today’s panel includes Chris Korleski, Director of the Ohio Environmental Protection Agency. I’m 

glad you’re here, Chris. I am anxious to hear how the court’s decision will impact 

Ohio. As you know, issues now before us have great bearing on Ohio and I look forward to your testimony. 

Earlier this month, in North Carolina v EPA the U.S. Court of Appeals for the 

DC Circuit vacated the Clean Air InterState Rule (CAIR). The decision undermines 

years of work and unravels the Administration’s attempt to implement a comprehensive air quality strategy to meet the combined goals of: bringing much of the 

country into attainment with the ozone and fine particulate matter National Ambient Air Quality Standards (NAAQS); achieving reductions in mercury emissions 

from coal-fired power plants; addressing regional haze impacts from power plants; 

and, responding to State petitions to control upwind sources of ozone and fine particulates under Section 126 of the Clean Air Act. 

Generally, CAIR implemented a cap and trade program to provide significant reductions in sulfur dioxide (SO2 ) and nitrogen oxide (NOx) emissions from fossil fuel 

powered utilities across 28 eastern states and the District of Columbia. 

CAIR, along with the also now vacated Clean Air Mercury Rule (CAMR), was an 

attempt to avoid piecemeal implementation of multiple emissions control obligations 

and to attain air quality standards in a cost effective manner. Among other things, 

coordinating the compliance obligations for all three air pollutants (SO2 NO and 

mercury) promoted efficiency, enabling many companies to meet a substantial portion of mercury emission reduction obligations through the co-benefits achieved by 

installing pollution controls to reduce SO2 and NOx (scrubbers and SCRs). 

According to EPA, when fully implemented, CAIR would have reduced SO2 emissions in the participating states and D.C. by over 70 percent, and NOx emissions 

by over 60 percent, from 2003 levels. EPA predicted that by the year 2015, CAIR 

would have provided $85 to $100 billion in annual health benefits, at a cost of approximately $4 billion. EPA also estimated CAIR would have annually prevented 

17,000 premature deaths, millions of lost work and school days, and tens of thousands of non-fatal heart attacks and hospital admissions. 

Indeed, CAIR and CAMR, combined with the Clean Air Visibility Rule (CAVR) 

were viewed as one of the most cost effective set of environmental regulations in 

history. In 2005, EPA estimated that the cost benefit ratio of these three rules to 

be greater than 20 to 1, with most of the benefits coming from the CAIR rule. And 

14 

while there were differences of opinion on how CAIR should be implemented, who 

should be included, and whether the reduction requirements went far enough, the 

rule was generally supported by much of the regulated community, affected states 

and environmental groups. Indeed, Duke Energy, a petitioner in the litigation didn’t 

want to have the rule vacated, but wanted to have it remanded to address how the 

SO2 allowances were distributed; the Natural Resources Defense Counsel (NRDC) 

intervened on EPA’s behalf in support of the rule. (Mr. Chairman, I’d like to submit 

a statement from Duke Energy for the record.) 

Now that CAIR has been vacated, there is no comprehensive and cost effective 

policy to address NAAQS compliance, untangle the complicated web of overlapping 

and redundant regulations affecting power plants and to bring about the public 

health benefits we had hoped to achieve. This situation is precisely what I feared 

and is why Senator Inhofe and I worked so hard to move the Clear Skies Act during 

the last Congress. As most of you will recall, Clear Skies was—more or less—the 

legislative equivalent to CAIR and CAMR. And while Clear Skies did not go far 

enough for some, passing that legislation would have at least locked in to law the 

emission reduction requirements that have now been invalidated by the court. Now 

that the rule has been overturned, we have an uncertain and chaotic situation that 

I believe it is incumbent upon this Congress to fix. 

Thank you. 

Senator CARPER. I look forward to working with you and try, try 

again, we will make another run at this. I think the stakes are 

even higher now than they are when we took a run at this, a very 

serious run at this about 4 years ago. You have my pledge to work 

with you in the harness. 

Senator Lieberman, I believe you are next. 

OPENING STATEMENT OF HON. JOSEPH I. LIEBERMAN, 

U.S. SENATOR FROM THE STATE OF CONNECTICUT 

Senator LIEBERMAN. Thanks, Mr. Chairman. Thanks to you and 

Senator Voinovich for holding this important hearing this morning. 

The EPA’s Clean Air InterState Rule, CAIR, was one of those 

rare moments in recent times in Washington where you had, with 

regard to environmental matters, where you had, it seemed to me, 

the overwhelming majority of regulated entities in the overwhelming majority of environmental groups supporting the overwhelming majority of parts of the CAIR rule. As Senator Voinovich 

indicated, some of the plaintiffs in the action in the courts had concerns about pieces of it. This is always a danger when you go to 

a court, you are not quite sure what the court might do in the exercise of its own individual judgment. This district circuit panel 

acted, if I may misappropriate an expression in a way that both 

shocked a lot of us and I suppose created an awe about what we 

were going to do, a lot of hard work by a lot of people may well 

have been, as my mother used to say, thrown on the window on 

that day. 

And the hopes that we had of really making progress in the reduction of these air pollutants was also put in jeopardy, unless we 

figure out a way to act together now. The decision was July 11th. 

Until that date, we were looking forward, as a result of CAIR, to 

exactly the positive public health effects that my colleagues have 

referred to, thousands of fewer premature deaths, thousands of 

fewer heart attacks, for instance, per year, as a result of the CAIR 

rule. Those projects are from science-based EPA testimony. Up 

until that decision on July 11th, if I may be a bit parochial, seven 

of Connecticut’s eight counties were looking forward to coming in 

line with important Federal air quality standards by 2015. That is 

something we simply can’t do on our own because of all the moveVerDate Aug 31 2005 12:29 May 01, 2015 Jkt 000000 PO 00000 Frm 00018 Fmt 6633 Sfmt 6633 S:\_EPW\DOCS\88904.TXT VERN
15 

ment of air into and out of Connecticut. And the seven Connecticut 

counties are joined by more than 100 other counties who similarly 

would have been benefited and whose people would have been protected from air pollution throughout the Country. 

It is worth saying that in the 3-years before this court decision 

on July 11th, owners of fossil fuel fired power plants all across the 

eastern part of the United States spent billions of dollars buying 

and installing pollution control equipment designed to bring their 

facilities into compliance with CAIR, with the Clean Air InterState 

Rule. For at least two of those 3 years, power plant owners had 

also been buying and saving emission allowances under CAIR’s 

emission trading system. Private energy companies and public electric utilities woke up on July 12th, the day after the decision, to 

learn that billions of dollars that they had convinced shareholders, 

lenders and ratepayers to spend, were now effectively stranded, 

perhaps at worst, wasted. They woke up to find that emission allowances they had prudently bought and saved were now worth a 

lot less than what they had paid for them. 

In all these alarming respects, the D.C. Circuit Court’s sudden 

invalidation, and unexpected, I would say, invalidation of the CAIR 

program has really hurt in a lot of ways. It could, if there is not 

some further action, get a lot worse. I know there are a lot of people, government officials, business leaders, environmentalists, lawyers, now trying to figure out how to devise alternative ways for 

the litigants, the EPA or Congress to reinState most of the CAIR 

program that most people, as I said at the beginning, agree on. I 

think it is very important that that way continue. 

I thank you, Mr. Chairman, and Senator Voinovich, for what I 

take to be your bold statement that if there is not some other way 

that this can be fixed quickly, that Congress must and will at 

under the leadership of this Subcommittee, to try to achieve all 

that CAIR was going to achieve, based on the consensus among the 

parties involved that that rule expressed. 

Thank you. 

[The prepared statement of Senator Lieberman follows:] 

STATEMENT OF HON. JOSEPH I. LIEBERMAN, U.S. SENATOR

FROM THE STATE OF CONNECTICUT

Thank you, Mr. Chairman. And thank you very much for holding this important 

hearing. Up until July 11, we as a nation were looking forward to preventing—starting as early as 2 years from now—19,000 heart attacks and 13,000 premature 

deaths every year. 

Up until July 11, seven of Connecticut’s eight counties— and more than a hundred others in the country— were looking forward to coming into line with important Federal air-quality standards by 2015. 

In the 3 years leading up to July 11, owners of fossil fuel-fired power plants all 

across the eastern half of the United States spent billions of dollars buying and installing pollution control equipment designed to bring those facilities into compliance with the Clean Air InterState Rule. 

For at least two of those 3 years, power-plant owners had been buying and saving 

emission allowances under CAIR’s emission trading system. When, on July 11, the 

DC Circuit panel invalidated CAIR in its entirety, we lost the program that was 

going to prevent those 13,000 premature deaths each year. We lost the program that 

was going to dramatically improve air quality for tens of millions of Americans 

while lightening a regulatory burden carried by countless State and local governments. 

And both private energy companies and public electric utilities woke up on July 

12 to learn that billions of dollars that they had convinced shareholders, lenders, 

16 

and ratepayers to spend was now potentially stranded. They woke up to find that 

emission allowances that they had prudently bought and saved were now worth substantially less than what they had paid for them. 

In all these alarming respects, the court’s sudden invalidation of the CAIR program is potentially disastrous. 

I know that a lot of government officials, business-people, and lawyers are now 

trying to devise various alternative ways that the litigants, the EPA, or Congress 

might quickly reinState the CAIR program. I am glad they are. I am eager to start 

learning about the options. And I am very willing, Mr. Chairman and Senator 

Voinovich, to help in whatever way I can to reinState the pollution reductions, bureaucratic streamlining, and clarity for industry that the July 11 decision has jeopardized. 

Senator CARPER. Senator, thank you for your statement. 

I also just want to say personally how much I appreciate the 

great leadership you and Senator Warner and Senator Boxer and 

others have shown on climate change. We thank you for that. I 

want to thank you also for being a co-sponsor, not just of our Clean 

Air Planning Act, but also of Senator Alexander’s sister proposal, 

a very similar proposal. Thank you for all of that. 

Senator Inhofe, welcome. 

OPENING STATEMENT OF HON. JAMES M. INHOFE, 

U.S. SENATOR FROM THE STATE OF OKLAHOMA 

Senator INHOFE. Thank you, Mr. Chairman. Again, I will join everyone else in thanking both Senators Carper and Voinovich for 

this very timely hearing. You acted pretty quickly after this rule 

came. 

While I welcome the opportunity to discuss the impacts and 

where we might go from here to achieve the reductions that are 

needed in real criteria pollutants that have direct adverse health 

effects, it is very unfortunate that the set of circumstances that 

brought us to this point has taken place. Let me just repeat something I said sitting in this chair 3 years ago, ‘‘CAIR is significantly 

more vulnerable to court challenges than Clear Skies would have 

been and will undoubtedly be held up not unlike the 1997 air quality standards.’’ This latest round of litigation demonstrates the 

need for a strong national Clear Skies law more than ever. Today, 

here we are, and unfortunately, the statement has rung true, and 

as I stated back then, trying to litigate the way to cleaner air only 

delays progress, often yields little or no results and wastes millions 

of taxpayers’ dollars, as Senator Lieberman has mentioned. 

Now we are faced with the full vacating of the entire rule, which 

ironically enough is a litigation result that no party actually wanted. In addition, we face an uncertain regulatory future. Most importantly, we have thrown into jeopardy the health and environmental benefits that CAIR would have achieved, estimated to have 

benefits over 25 times greater than the cost by EPA. I also note 

that this decision certainly doesn’t bode well for those folks who 

say we can structure flexibility into regulating carbon under the 

Clean Air Act. 

As I said in the beginning, none of these chaotic results needed 

to happen. Passing the Clear Skies legislation would actually have 

done far more to help State and local governments comply with the 

new air quality standards by providing greater certainty than implementing the Clean Air InterState Rule. Now we are left with a 

laundry list of uncertainty, and very costly uncertainty, most imVerDate Aug 31 2005 12:29 May 01, 2015 Jkt 000000 PO 00000 Frm 00020 Fmt 6633 Sfmt 6633 S:\_EPW\DOCS\88904.TXT VERN
17 

portantly for States who are either in the final planning stages or 

recently submitted SIPs that did rely on CAIR to finally achieve attainment for the 1997 ozone and PM National Ambient Air Quality 

Standards. Add to this the potential direct impacts the rule had on 

mercury reductions, conformity, new source review, and its effects 

on reductions in the regional haze rule, which may impact my 

State of Oklahoma. And we have a colossal mess on our hands. 

Clear Skies would have proposed to put in place an integrated 

set of emissions controls, requirements with coordinated compliance deadlines. It would have avoided piecemeal implementation of 

multiple emissions control obligations, and was essential if electric 

power generators were to achieve compliance in the most economically efficient manner possible. Among other things, coordinating 

the compliance deadlines for all three air pollutants, SOx, NOx and 

mercury, promoted economic efficiency including enabling many 

companies to meet a substantial portion of mercury emissions reductions obligations through the eco-benefits achieved by installing 

pollution controls to reduce SO2 and SOx and NOx. Now once 

again we are left with the status quo, and I think both sides agree 

that the status quo is not acceptable. It means more litigation, 

more costs and less certainty. And less certainty means a lot of 

costs. I won’t go into what has already been identified by Senator 

Voinovich and Senator Lieberman in terms of the EPA’s estimate 

on the very large numbers of premature deaths that could have 

been avoided, non-fatal heart attacks, the hospital emissions and 

all the things that we know were so great. We suspected that 

would happen, we stated that back then. 

So here we are back before this Committee, because these benefits were held hostage, first legislatively here in the Senate due to 

the issue of CO2 caps and now because of the litigation by some 

disgruntled parties. While this rule was not perfect in any way, it 

was progress, and an agreement among various stakeholders, 

something that rarely happens in this area. We had a rule in place 

that started guaranteeing real reductions in health benefits starting on January 1st of 2009. Now we are here in search of another 

solution to the problem. 

So I don’t know, it was very frustrating to me, I have to join Senator Voinovich in expressing my frustration that back when we had 

Clear Skies legislation, a fix, the largest reduction proposed by any 

President in the history of this Country, and we had a chance to 

do it with SOx and NOx and mercury and it was held hostage because everybody wanted CO2 to be in on the deal and it could have 

been handled separately. So I regret that, Mr. Chairman, and here 

we are. Let’s try to go forward from here. 

Senator CARPER. That is the spirit, and we will. 

Senator Clinton, I don’t know if Senator Clinton recalls this, but 

a couple of years ago, when you and I came here to the Senate, I 

think one of our first hearings, full Committee hearing here on 

EPW was a confirmation hearing for Governor Christie Todd Whitman. She had been nominated by the President to head up EPA. 

And in part, to help spearhead and lead us to the option of a fourpollutant strategy. 

And there were lot of cameras here in the room where Mr. 

McLean is sitting today, a lot of clicking noises as she came in and 

18 

took her seat. And then at that moment, you entered the room and 

sat down right next to me, and immediately 400 cameras turned 

to you, and in the room all I could hear was the clicking of cameras. I turned to you and I said, I know that is a lot of cameras, 

but you will get used to it. 

[Laughter.] 

Senator CARPER. I know in the last 18 months, I am sure, I don’t 

know if you have gotten used to it, but you had one heck of a lot 

of cameras. 

I just want to say as a friend how proud I am of you and the 

way that you handled yourself on the campaign trail and worked 

your heart out. We all applaud you and I am thrilled that you are 

back and look forward to working with you and very much appreciate your support of our multi-pollutant legislation. Thank you so 

much, and you are recognized. 

OPENING STATEMENT OF HON. HILLARY RODHAM CLINTON, 

U.S. SENATOR FROM THE STATE OF NEW YORK 

Senator CLINTON. Thank you so much, Mr. Chairman, and 

thanks for your dedication. I remember very well that you have 

been a tireless advocate for reducing power plant pollution ever 

since you came to the Senate, and your leadership continues with 

this hearing. I join with all of my colleagues to hope that we are 

going to come to some resolution. Because we find ourselves in a 

very unexpected and difficult position with the consequences of the 

D.C. Circuit Court’s decision to vacate the Clean Air InterState 

Rule. 

I also want to welcome Mr. Jared Snyder, who is representing 

New York and other downwind States on the second panel. 

It is critically important here, and you have already heard from 

my friends and colleagues who have already spoken about this, we 

have a very difficult dilemma. And it is not partisan in terms of 

political parties, so much as it is, I would argue, geographic to 

some extent. And maybe a little philosophical. We know that the 

Clean Air rule wasn’t perfect. It was trending in the direction of 

trying to help us get some of these pollutants under control and 

save the lives and alleviate suffering that we think would have 

flowed from that. And it wouldn’t have just improved human 

health, because it would also have affected positively the health of 

the mountains, lakes, farms and wildlife in New York and many 

other States. 

Just last week we had a new report detailing the continuing toll 

of acid rain and other air pollution on eastern ecosystems. It was 

released by the Nature Conservancy and the Cary Institute of Ecosystem Studies located in Milbrook, New York. And it talked about 

how ground level ozone harms both natural ecosystems and agricultural crops. High levels of deposited mercury continue to have 

negative impacts on wildlife. Acid rain is making sensitive lakes 

and streams uninhabitable for fish. And excess nitrogen in part 

from air pollution is harming waterways from the Chesapeake to 

the Narragansett Bay. 

Now, some of these ecosystem impacts double back on human 

health. Mercury, as we know, is a potent neurotoxin. And in New 

York, high levels of mercury in fish due to air pollution have 

19 

caused the State Department of Health to recommend that infants, 

children under 15 and women of child-bearing age should not eat 

even a single serving of fish caught from 93 lakes and 265 miles 

of river in New York. And last, of course, we know that power 

plants are a major contributor to the urgent problem of global 

warming, accounting for about 40 percent of U.S. greenhouse gas 

emissions. 

Now, the CAIR rule would not have solved all of these problems. 

In fact, the NRDC testimony we will hear later today underscores 

the point that to some extent, CAIR was in fact designed to avoid 

solving some of these problems. It was designed to dovetail with 

the EPA’s plan to ignore the Clean Air Act and delay action on 

mercury pollution from power plants. It was designed to delay reductions in NOx and SOx in accordance with industry wishes. And 

it wasn’t designed to do anything about global warming. 

For all these reasons, I was at the time critical of both CAIR and 

the Clean Skies legislation that it was based on. Yet, since CAIR 

was finalized in 2005, utilities have been making and planning billions of dollars of investment in pollution control equipment, based 

on the expectation of having to comply with CAIR. In turn, New 

York and other States have been relying on these new pollution 

controls to help us attain ozone and particular matter standards. 

The Court’s decision to vacate CAIR leaves States and utilities 

with uncertainty and confusion about the path forward. It is already financially punishing utilities like PPL who acted quickly 

and have already installed pollution controls. I have always felt, 

certainly since I have sat on this Committee, that we have done 

this backward. We should have figured out what incentives and rewards we could provide to utilities to move them more quickly. We 

put into place CAIR, some utilities moved, and now they are left 

holding the bag. 

So here we are, 8 years down the road, and I believe that the 

way forward is comprehensive legislation to reduce all four pollutants. I am proud to sponsor the Chairman’s Clean Air Planning 

Act. I also am a co-sponsor of Senator Sanders’ Clean Power Act, 

the successor to Senator Jeffords’ bill that I voted for as a member 

of this Committee in 2002. 

Now, I appreciate the concerns of some members of this Committee about the cost of pollution controls. But I am convinced that 

there are economic ways of ameliorating those costs for utilities, 

and we just cannot wait any longer. And if you are downwind 

State, like we are, we are getting the worst of both worlds. 

So I hope, Mr. Chairman, that we will do whatever we can, working together, to try to take on this issue. It is my initial judgment 

that rather than pursuing an inadequate short-term fix we should 

get to work and hopefully with a new Administration, immediately 

move to comprehensive bipartisan legislation to sharply reduce 

NOx, SOx mercury and carbon dioxide emissions from our power 

plants. 

Senator CARPER. Senator Clinton, thank you very much for your 

statement. 

Our lead-off witness joins us today from EPA. Mr. McLean, just 

tell us a little bit about how long you have been at EPA and the 

nature of your responsibilities there. Just very briefly. 

20 

Mr. MCLEAN. I have been at EPA since 1972. At the time I didn’t 

think I was going to be there that long, but it is a very challenging 

and rewarding institution. I have been involved in many of the 

clean air issues since that time, including the 1989–1990 period, 

when I worked with staff of this Committee on the Title IV Acid 

Rain provisions, which have turned out to be one of the most successful air quality programs we have had in this Country. 

Senator CARPER. Good. I spoke with Administrator Johnson last 

week about this hearing and urged him, if he couldn’t come himself, to send somebody who is knowledgeable and would be a very 

good expert witness. My staff tells me that EPA has sent the right 

person. So welcome, we are delighted that you are here. Please proceed. You will have roughly 5 minutes for your statement. If it goes 

a little bit long, that is OK, if it goes really long, that is not OK, 

I will reign you in. 

[Laughter.] 

Senator CARPER. But please proceed. Your entire statement will 

be made part of the record. 

STATEMENT OF BRIAN MCLEAN, DIRECTOR, OFFICE OF ATMOSPHERIC PROGRAMS, OFFICE AND AIR AND RADIATION, 

UNITED STATES ENVIRONMENTAL PROTECTION AGENCY 

Mr. MCLEAN. Thank you. 

Mr. Chairman and members of the Subcommittee, thank you for 

the opportunity to testify today on EPA’s Clean Air InterState 

Rule, or CAIR and our preliminary assessment of how the recent 

D.C. Circuit Court decision vacating that rule may affect EPA’s air 

quality programs. 

CAIR contains three regulatory programs intended to support the 

efforts of 28 eastern States and the District of Columbia to meet 

their obligations to attain the fine particle and ozone standards. It 

is the linchpin of EPA’s program to improve air quality, reduce regional haze and further reduce acid rain, and our most significant 

action to protect public health and the environment since the passage of the 1990 Clean Air Act amendments. Over the last 20 

years, first with acid rain and then with ozone and fine particles 

and regional haze, the States, EPA and industry have come to appreciate the value of a coordinated, multi-State approach to these 

problems. 

CAIR, along with other pollution control efforts, was poised to 

help over 450 counties in the eastern United States meet the national air quality standards for ozone and fine particles. CAIR was 

neither designed nor intended to replace State obligations to attain 

the air quality standards. Rather, it was designed to assist States 

by establishing a common level of control in upwind States that 

downwind States could count on in preparing their (SIPs) plans. 

The U.S. power sector, the focus of CAIR, is unique in that 

through the electricity grid, production (and accompanying emissions) can be rapidly shifted from one source to another, and one 

State to another, in the course of meeting electricity demand. In response to CAIR, the power industry had committed billions of dollars in add-on pollution control technology to meet the stringent 

new caps for SO2 and NOx in the CAIR rule. By 2020, in fact, about 

21 

80 percent of coal-fired capacity in the CAIR region was projected 

to have such equipment. 

By the year 2015, as you have noted, CAIR would dramatically reduce emissions and deliver $85 billion to $100 billion in annual 

health benefits, preventing 17,000 premature deaths annually and 

millions of lost work and school days. It would provide nearly $2 

billion worth of annual visibility benefits in our national parks in 

the East, and significantly reduce the number of acidic lakes and 

streams in the Northeast. As early as 2010, just 2 years from now, 

we projected the avoidance of about 13,000 premature deaths from 

this program. 

As you know, on July 11th, the D.C. Circuit issued its ruling on 

the petitions for review of CAIR. The Court’s opinion was mixed. 

It ruled for EPA on some issues and against us on other issues. 

Overall, however, the Court decided to vacate the entire rule and 

the associated Federal implementation plan. 

EPA is continuing to evaluate its litigation options. However, assuming the decision stands, it will have a ripple effect that will 

delay, if not impede, significant clean air programs and activities 

throughout the eastern United States. Since in many cases, State 

plans to attain the ozone and fine particle standards relied heavily 

on CAIR, they will likely need to be revised. States will likely have 

to reexamine the reasonable progress goals of the regional haze 

plans, develop alternative emission reduction strategies, and make 

individual best available retrofit technology determinations for certain power plants. 

After States missed the July 2000 Clean Air Act deadline regarding interState transport, EPA issued a Federal implementation 

plan (FIP) for all States covered by CAIR. The Court decision vacated the CAIR FIP, but not the findings of failure to submit. 

Therefore, EPA remains obligated to issue FIPs based on those 

findings and the statutory timeframe for doing so has now expired, 

in that it was May 2007. 

In 1998, EPA issued a rule known as the NOx SIP Call, to mitigate significant transport of nitrogen oxides critical in forming 

ozone. All 20 States and the District of Columbia covered by that 

NOx SIP Call chose to participate in an optional NOx trading program. The CAIR rulemaking in many States discontinued that 

trading program after this year’s ozone season. We are now evaluating the impact on the 2009 ozone season, which is rapidly approaching. 

While it is too early to assess fully the impact of this decision, 

we have many concerns, from the precipitous declines in allowance 

values that could lead to units slowing installations or abandoning 

pollution controls that could in turn increase emissions, to possible 

financial losses to those who acted early to meet CAIR’s compliance 

deadlines. But we are most concerned with the possible air quality 

impacts on ecosystems and human health. 

Another concern is the implication of the Court decision on the 

future of cap and trade programs. Cap and trade has been an extremely effective mechanism, delivering broad emission reductions 

with certainty that specific emission levels will be maintained, regulatory certainty and compliance flexibility for affected sources, 

cost savings to industry and government, unprecedented levels of 

22 

compliance, and dramatic human health and environmental benefits. Losing such programs means losing assurances that reductions 

will be made in a timely manner. It may also make environmental 

protection more expensive and thus, more difficult to achieve. 

With CAIR, we believed we were properly implementing the 

Clean Air Act and faithfully following precedent. In the wake of the 

Court’s decision, EPA and the affected States will need to work together to develop strategies to protect public health and the environment. EPA will earnestly be considering all options over the 

next few weeks. 

This concludes my oral statement. I would be happy to answer 

questions. 

[The prepared statement of Mr. McLean follows:] 

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Senator CARPER. Thanks very much. 

Very, very briefly, Mr. McLean, tell us a little bit about your involvement in the development of the Clean Air InterState Rule. 

Just very briefly. 

Mr. MCLEAN. Following the Acid Rain law in 1990, I was put in 

charge of implementing that program. Then in the mid–1990’s we 

started looking at ozone and got involved with the Ozone Transport 

Commission in the Northeast and partnered with them, actually, 

in operating a multi-State trading program in the Northeast, which 

then expanded into the NOx SIP Call, covering 20 States. Then 

after 2000, the first step was to look at Clear Skies, or a legislative 

solution to further reducing SOx, NOx and mercury, which you 

have mentioned. 

Since we didn’t make progress for a variety of reasons, we decided that it was urgent to address these emission reductions and 

we proceeded with the Clean Air InterState Rule. That was part 

of my office, and I was involved in helping to put forward that program as an alternative or a backup to the legislative fix that we 

had originally looked for. We proposed that program in 2004, it was 

final in 2005. So it was 3 years ago that this rule went into effect. 

And we were pleased to see the reaction of industry to accept that 

this was going to happen, and they began the steps necessary to 

start implementing that program and installing in control equipment. 

What we have actually seen is emissions of SO2, for example, 

which had been controlled by Title IV, start coming down in advance of this program to the point today where they are actually 

below the cap for Title IV. 

Senator CARPER. Thank you. You mentioned that in the weeks 

ahead, EPA is going to be considering their options. Just very brief, 

what are some of those options? 

Mr. MCLEAN. Well, trying to get your head around this whole 

thing, because it is like dropping a bomb in the middle of a program that was the underpinning of a lot of different other parts of 

the air program. It had been accepted as sort of a foundation piece. 

We are looking at it in three directions at the same time. One 

is our legal options in response to the Court decision, which we are 

working on. A decision will be made there by August 25th, I believe, on a request for rehearing. So that has not yet been decided 

but will be decided in the next few weeks. 

We are also looking at regulatory issues, both short-term and 

long-term. In the short term, we have issues like the NOx SIP Call 

and some of the SIPs that have been submitted that may have to 

be changed. So we have to address those issues quickly. And then 

we are also considering the legislative options that you have mentioned as a longer term solution to dealing with this program. And 

even on the legislative side, there are quick responses and there 

are longer term responses. So I think all of those areas are open 

and are being pursued. 

Senator CARPER. Good, thank you. So by the time we return following the August recess, we will know whether or not you are 

going to appeal and in what manner? 

Mr. MCLEAN. Yes. 

Senator CARPER. OK, thank you. 

51 

The real purpose of today’s hearing, we have gotten out of the 

box quickly, within 2 weeks of the Court’s decision, to hear from 

a variety of folks, including EPA and certainly a number of groups 

that are interested in these issues, States and environmental 

groups and the industry, the utility industry itself. I think as much 

today, what I am going to do is listen and hear a variety of options 

that are out there for EPA, but also for us as we try to decide what 

to do in the next several months and also by the early part of next 

year. 

Let me just ask a couple of questions, then I will yield to Senator 

Voinovich. What does EPA anticipate will happen to States that 

have relied on CAIR for their State implementation plans? For example, is EPA planning on issuing guidance to States to assist in 

the necessary State implementation plan revisions? 

Mr. MCLEAN. That is clearly one of the things we are considering 

and we will need to do if we go down that path. So I would say 

in the next few weeks, we have to make decisions in those areas 

as to which rules, which actions need to be taken first. But that 

is an area that we are looking at. 

Senator CARPER. Do you believe that many downwind States will 

supplement their State implementation plans with a Section 126 

petition? Do you expect EPA will encourage downwind States to 

look to Section 126 as a means to address regional transport? 

Mr. MCLEAN. We are clearly aware of that and even the Court 

mentioned 126 as a possibility for action. We have dealt with that 

section before, and it certainly is a tool that States can use. At this 

point, we haven’t decided what is the best path, so we are not encouraging anybody to use or not use that provision. 

Senator CARPER. Do you expect to be in a position to encourage 

them to consider that option after August 25th? 

Mr. MCLEAN. Some time after August 25th, I don’t know exactly 

how that will play out. 

Senator CARPER. Last, would a cap and trade policy be a good 

policy option for reducing upwind reductions if EPA had to act on 

a Section 126 petition? 

Mr. MCLEAN. We have to look at the Court opinion. It seems to 

say in parts that interState cap and trade may not be an option. 

So we would have to be sure of how the opinion is actually directing us and whether that limits some of our regulatory options. 

Senator CARPER. Thank you for your responses. 

Senator Voinovich? 

Senator VOINOVICH. Thank you, Mr. Chairman. 

Several things, you talked about a quick legislative fix or a longterm legislative fix. I have been on this Committee 10 years and 

I can recall many pieces of legislation that Senator Clinton and I 

worked on, and there was a time when we had something on NOx, 

SOx and mercury and we couldn’t get it, and everybody held out 

for greenhouse gases. And now we have separate legislation on 

greenhouse gases that didn’t go anywhere, and there are several of 

us that are working to try and come back with another proposal 

on that. 

So in effect, if you leave that off the table, understanding that 

we have to deal with it, and by the way, if we don’t deal with it, 

we are back to the EPA dealing with it. And you restricted to say 

52 

NOx, SOx, and mercury. First of all, in terms of a quick fix on 

CAIR, which deals with NOx and SOx, what do you anticipate 

would be a quick fix? And would you involve the mercury rule in 

that or leave that separate and apart and deal with that differently? 

Mr. MCLEAN. Personally, I think involving mercury would not be 

as quick a fix. I think the more issues and the more details one 

provides, the less quick it becomes. So I define quick as one page, 

very short direction to put things back in place while we consider 

how to deal with the longer term implications. It gets complicated 

very fast, as you know, and it becomes not quick very fast. I don’t 

necessarily think a quick fix is a permanent fix. 

But the permanent fix may, and you know better than I the difficulty of bringing parties together as we try to deal with all of the 

issues involved. So I see quick as being very short and trying to 

put the pieces back together for some period of time in order to develop a longer term solution. 

Senator VOINOVICH. In other words, if you had a quick fix, the 

one piece of paper, it would put everybody back where they are at 

and continue to be going forward with it in terms of what is underway. And if we held back and said, well, we want to deal with a 

lot of this other, the same thing that Senator Carper and I dealt 

with for, how long did we do that? 

Senator CARPER. Forever. 

[Laughter.] 

Senator VOINOVICH. Could take forever again. I hope not, but it 

could. And at the same time, while that is going on, you would 

have the situation where people, there would be uncertainty out 

there throughout the Country. The other issue is this: even if you 

go back to court and win this situation, you are still dealing with 

a CAIR that is not legislation. So somebody else could come in and 

say, we don’t like this piece of it and come back into court and take 

that on. 

So the best thing that we could possibly do, is it your opinion 

that the best thing we could do would be to pass legislation to clarify this? 

Mr. MCLEAN. I am trying not to give you a definite answer, because the Administration, in fact, while we are meeting, is meeting 

to work on this. There is a sincere sense of urgency within the Administration about dealing with this issue, and people are focused 

on it. So I am trying not to preclude whatever options they are trying to consider. So I think the range is open as to how to proceed, 

and there is no definite view at this point as to what the right path 

is. I personally think it may be a combination of these things. 

Senator VOINOVICH. Well, here is the thing. If you go back and 

the Court ruling is overturned, it still means that other actions 

could be filed against the CAIR rule, correct? 

Mr. MCLEAN. I believe so. I would have to check with my lawyers. Because I find this rather complicated, the situation we are 

in. 

Senator VOINOVICH. Well, I would argue that you would be better 

off with legislation than you would be with a rule. 

53 

Mr. MCLEAN. I would tend to agree. In fact, I think the Administration would tend to agree, having tried to go down that path first 

earlier. I think the general preference is for legislation. 

Senator VOINOVICH. The one last question is this. One of the 

things that I have been really impressed with is that you estimated 

some reductions in emissions. In fact, you mentioned it in your testimony. Because we had the certainty out there, as Senator Clinton 

and others have mentioned, that there has been billions of dollars 

worth of investments that are being made, and that we are getting 

in phase one of this reductions that we thought we wouldn’t get 

until we got to phase two of this program, which I think is terrific. 

Could you comment on that? 

Mr. MCLEAN. We were in fact a little surprised but very pleased 

at how rapidly the industry responded and the equipment was 

going in. That has accentuated our concern, that so much was 

going in now as we speak, people are installing equipment, and 

they are probably also making decisions about wherever they are 

in their contracts, how much money to spend at this point. So we 

have a considerable concern about any effect on slowing that effort. 

Senator VOINOVICH. Thank you. 

Senator CARPER. Senator Lieberman? 

Senator LIEBERMAN. Thanks, Mr. Chairman. 

Mr. McLean, thanks for your public service and all you have 

done in this regard and so many others to help our environment. 

I want to ask you a few questions that I think may help us understand in somewhat more local terms the impact of the Court decision on CAIR. I am going to come back to my own State. Currently in Fairfield and New Haven Counties, the airborne concentration of fine particles from coal-fired power plants and other 

sources exceeds EPA’s public health standard. But by 2015, it was 

expected that the concentration would drop down within the range 

deemed acceptable by EPA. That was according to CAIR. The reduction in coal-fired plant pollution that CAIR was going to bring 

about in upwind States, in other words, outside of Connecticut, was 

going to account for a very large part of the air quality improvement that was going to bring Fairfield and New Haven Counties 

back into attainment. 

So I wanted to ask you if you could walk us through, by way of 

illustration, some of the specific Federal legal requirements. I noted 

in your opening statement you specifically referred to the Federal 

implementation plan still necessitated by pre-existing Federal law, 

and some of the practical difficulties that State and local government entities in Connecticut, and by extension of course, throughout the Country face with respect to these two counties, Fairfield 

and New Haven that I have mentioned, if the CAIR reductions and 

regulations are not by one means or another reinstated. 

Mr. MCLEAN. State and local governments face a daunting task 

under normal circumstances to deal with a lot of the provisions of 

the Clean Air Act. They have to devise plans that are going to attain the standards. And as I mentioned earlier, what we have 

learned over the last 20 years is that the contribution to the emissions and the air quality in many local areas is dominated by emissions that come from outside those areas, making it extremely difVerDate Aug 31 2005 12:29 May 01, 2015 Jkt 000000 PO 00000 Frm 00057 Fmt 6633 Sfmt 6633 S:\_EPW\DOCS\88904.TXT VERN
54 

ficult for State and local governments to figure out, even begin the 

process to figure out, how they are going to attain those standards. 

Connecticut in particular is downwind of New York and Pennsylvania and the whole Midwest. So a large portion of their air quality 

is determined by factors outside their control. CAIR was an attempt, as the NOx SIP Call was, to give those States some certainty as to what they could count on in developing their plan. If 

they could assume that reductions were going to be 50 or 60 percent coming into the area, then they had a point to start with. And 

then they could figure out what was left for them to do. 

There are two consequences of this. First of all, the reductions 

that we were getting on a regional basis were, as we called them, 

highly cost effective. They were very effective cost reductions. And 

often more cost effective than what a local government could do. So 

the first thing that happens when they lose this is that the alternatives they have are much more expensive. So the cost of pollution control in those communities is going to rise to compensate for 

the reduction, if in fact they can. 

The second part is it may not be possible for them to compensate. 

Sometimes what they have available is just not enough to get to 

the standard, in which case they find themselves missing deadlines 

and being behind the eight ball, so to speak, with their responsibilities. Then the Clean Air Act has automatic provisions that deal 

with sanctions that may affect these areas from transportation to 

new source review, et cetera. So there is a whole set of consequences here that States face. And removing this piece increases 

the cost and greatly complicates their lives and may lead to other 

consequences. 

We had this problem in the mid–1990’s with ozone, when the 

States in the Northeast and others started to realize that they 

couldn’t even do their planning until they had a better handle on 

this regional air pollutant problem. So it is very important to try 

to put back in place some certainty for them so that they can move 

forward, because they can’t. 

Senator LIEBERMAN. Very well stated. At one point a while back, 

we had some modeling done in Connecticut that showed that we 

could, if we shut down the whole State, effectively, we still couldn’t 

meet the EPA attainment standard. 

Mr. MCLEAN. That is probably true. 

Senator LIEBERMAN. Can you take a moment, I am running out 

of time, just to talk a little bit about the impact of the Court decision on some of the utilities that have coal-fired plants in States 

that affect us but are away from us, like Indiana or Kentucky or 

West Virginia? What impact does this have now on those companies and their bottom lines, really? 

Mr. MCLEAN. First of all, there are a couple hundred companies 

in the eastern United States, and many are under different regulatory regimes in every State as to how their costs are handled and 

the rates are handled. Each one of them was on their own independent path in terms of where they were in contracting and building. 

So it is hard to sort of go through a good example, because each 

one would be almost unique. In each State, the regulatory structure for utilities is different. So their costs would be different. 

55 

So they each were designing programs that were responding to 

the rest of the regulatory environment in which utilities operate. 

They would have to go back to their rate commissions and find out 

if they had been given authority to charge, can they still charge for 

those costs or do they have to write them off. You will have a couple of utilities in the next panel that can describe their unique situations and what they face. It is like a story of each company separately. 

One of the beauties of this program was, we didn’t have to figure 

out each company’s situation. We gave them the general direction 

and they were able then to go work through those problems at the 

State level. 

Senator LIEBERMAN. Thank you. My time is up. Thanks, Mr. 

Chairman. 

Senator CARPER. Thank you, Senator Lieberman. 

Senator INHOFE. Senator INHOFE. Thank you, Mr. Chairman. Most of my questions I had actually have already been asked. Let me just pursue 

a couple of things. In your opinion, if Congress had passed the 

Clear Skies back in 2005, would there have been the same problems that were noted with the CAIR in the D.C. Circuit? 

Mr. MCLEAN. I do not believe so. I mean, I would have to ask, 

but I think because some of them would have been statutorily directed that that would not have been the issue. Most of the Court’s 

issues were regarding our interpretation of the current act. 

Senator INHOFE. When the EPA talks about trading, we still hear 

concerns about the hot spots today. Since EPA has significant experience in the acid rain program, there has been extensively modeled other trading programs. Does the EPA believe that trading results in more hot spots? 

Mr. MCLEAN. The programs that we have used cap and trade for 

we have analyzed quite a bit and have not found the case of hot 

spots. Hot spots are predicated on the assumption that areas will 

either not reduce or in fact increase their emissions and that the 

surrounding emissions won’t come down and you have this confluence of sort of a bad situation where emissions and concentrations increase. 

What we have seen is that across large areas, like the eastern 

United States or the whole Country, there are variabilities in costs 

across companies, within States, across States, within companies, 

and that you don’t see like pockets of areas where emissions increase and areas where they go down. Instead, it tends to be 

spread over an area. So when we have thousands of sources, which 

we do in these programs, we just haven’t seen any concentration 

of pollution increases. In fact, we haven’t seen any air quality areas 

that have gone up in air pollution concentrations. All areas have 

come down. 

Senator INHOFE. We talked about, all of us talked about some of 

the very responsible parties out there anticipating what they would 

have to do to comply with the CAIR rule, and millions of dollars 

have been spent by different parties. Do you have any kind of a figure as to how much you think could have been spent up to this 

point, No. 1? And No. 2, I think it goes without saying that all of 

us up here agree, we may disagree on how we got into this situaVerDate Aug 31 2005 12:29 May 01, 2015 Jkt 000000 PO 00000 Frm 00059 Fmt 6633 Sfmt 6633 S:\_EPW\DOCS\88904.TXT VERN
56 

tion, but we all want to get out. And if any solution we have, 

whether it is legislative or whether it is a rule, do you think that 

some of the money that has been spent by responsible parties will 

not be totally lost? In other words, they would have to do it anyway 

when we come up with a solution to this? 

Mr. MCLEAN. I think that we are all talking about solutions that 

would lead to comparable emission reductions. In some cases, 

maybe more. So that the actions people are taking, if we put things 

back together quickly, there will not be significant long-term losses. 

The longer we have this gap, the more discontinuity there will be, 

the more costs you could say maybe shouldn’t have been expended 

or would have been spent too soon. 

So timing is important in resolving this and minimizing the 

losses. But I think if we act relatively quickly, there should not be 

long-term financial consequences. 

Senator INHOFE. Yes, because this is not the first time we have 

been faced with this. There are a lot of other times when they have 

either retrofitted something or expended a lot of money and then 

find out that the rules have changed. 

Well, when we do ultimately have the solution, is it going to be 

better to have a legislative fix or a regulatory fix? 

Mr. MCLEAN. Given the choice, what we are facing today, I 

would rather have a legislative fix. I think that is the Administration preference. But what we did between Clear Skies and CAIR 

was we decided that a regulatory fix was better than no fix. So 

there is a priority there. 

Senator INHOFE. Thank you, Mr. Chairman. 

Senator CARPER. Thank you, Senator Inhofe. 

Senator Clinton. 

Senator CLINTON. Thank you, and thanks, Mr. McLean, for your 

many years of service to our Country, and especially on these important environmental issues. 

I want to followup on what Senator Inhofe was asking, because 

clearly when you take stock of where you will be by August 25th 

and what kind of actions you think you will pursue going forward, 

I think you can sense a readiness on the part of all of us up here 

to try to assist you in whatever way makes sense. 

In the second panel, you will hear what New York thinks should 

happen. Obviously, we want to move as quickly as possible to regain the benefits of CAIR and not undermine the implementation 

that was going on. 

At the same time, we want to do it in a way that does not remove the incentive for us pursuing multi-pollutant legislation. So 

we see a bit of a dilemma here, but we ought to be able to work 

our way through this. 

I know that New York sent EPA a letter that will be part of the 

testimony of Mr. Snyder when he testifies, asking you to immediately take action to protect air quality by restoring the protections required by the 1997 NOx SIP, which was largely displaced 

by CAIR. Could that be done? 

Mr. MCLEAN. I would have to check. I understand the question 

and we certainly are looking at that as one of the areas that we 

might need to move more quickly on than others. 

57 

Senator CLINTON. And then of course at the same time, you 

would be taking steps to issue a new comprehensive transport rule 

that would give us the opportunity to regain the benefits from 

CAIR, I assume? 

Mr. MCLEAN. Correct. 

Senator CLINTON. We are also hoping that the States can use the 

authority they have under Section 126 of the Act to try to file petitions seeking the elimination of emissions that contribute significantly to the non-attainment in the downwind States. One of the 

reasons that some of us had a problem with Clear Skies was because it removed the Section 126 opportunity for States to be able 

to take action on their own when they felt that they were not being 

given national relief. I think that we should also ask you to perhaps get back to the Committee as soon as you can after you have 

assessed the situation. Because if it were possible to pass something or support a new rulemaking before the Congress went out, 

some of us would certainly be interested in trying to do that, for 

all of the reasons that we have already heard discussed. 

So I guess, Mr. McLean, I can ask you specific questions about 

what if, what if, but I take it from your testimony you are in the 

process of trying to figure out what if, what if. 

Mr. MCLEAN. Yes. 

Senator CLINTON. So if you could, with the Chairman’s direction, 

provide us as soon as possible what your options are that you are 

considering and what if any help you need from us legislatively. 

Obviously if we can get Congress to act to promptly restore the 

benefits of CAIR, that would be a very good first step. And then 

we can, under the leadership of Senators Carper and Voinovich, try 

to figure out what else we are going to do to strengthen air quality 

across the board. 

So I hope you will let us know as soon as you know what it is 

you are pursuing, if there is any option other than a rehearing with 

the Court, whether they might consider some kind of negotiated 

settlement, if the parties would agree. In looking at the six reasons 

that the Court gave for overturning CAIR, it seems some of those 

are solvable. They didn’t look to me like they were big deal breakers. 

So it might be some kind of settlement or negotiation could perhaps bring everybody back to the table. But let us know as soon 

as you know through our Chairman what we all need to be doing. 

Mr. MCLEAN. We would be glad to, and appreciate the request. 

Senator CARPER. Mr. McLean, let me just ask, do you think EPA 

will still go through with finalizing a new source review rule, even 

though the basis for that rule, and that is relaxation of the new 

source review provisions, was justified by CAIR benefits? 

Mr. MCLEAN. The NSR rule is one of the things that we are looking at to see what effect this decision has on that rule. Unfortunately, it is not my area of responsibility, so I am not exactly sure 

how that is going to turn out. But it is one that we are aware of 

and we are looking at that. 

Senator CARPER. Is there some correlation between tightening 

the emissions standards for SOx, NOx and mercury, for example, 

the tighter those standards are with the greater ability of EPA to 

58 

relax the new source review rule? Is there any correlation, or some 

kind of an inverse correlation? 

Mr. MCLEAN. I know that has been an area that has been discussed and I think it is a matter of specifics as to exactly what you 

do and how that can work. I know legislatively that has also been 

considered, whether there is a relationship there that we can figure 

out a better path forward. 

Senator CARPER. Just kind of think out loud for us, and if you 

are not comfortable with answering this, don’t. But just kind of 

think out loud for us on this point, please. 

Mr. MCLEAN. On what? 

Senator CARPER. On the question I am raising. 

Mr. MCLEAN. On the relationship between the two? I think over 

time, as I have watched the Clean Air Act evolve, we have added 

to it new mechanisms. The cap and trade mechanism in Title IV 

didn’t exist in 1970 or 1977. I think from time to time, it is good 

to assess where we are and whether we need every mechanism or 

exactly the way it was originally written or whether we can make 

adjustments that can reconcile and allow those programs to operate 

more effectively together. That would be my general response. So 

I think there is an opportunity there to look at those issues again. 

Senator CARPER. Thank you. 

Another question. It is my understanding that the folks at EPA 

thought that they were limited in their legal scope to keep CAIR 

as a regional program. Would EPA rather have had a national program? 

Mr. MCLEAN. The focus of CAIR was responding to the requirement to meet the fine particle standard and ozone standard 

through Section 110, through Title 1. And based on Title 1, we had 

to tie the actions to specific contributions to non-attainment of 

those two pollutants. And that is what defined the boundary conditions. 

If your scope, if your purpose is different, then the scope of the 

geography can be different. Certainly we have regional haze issues 

in the east and west and we even have acid rain issues in the east 

and west. So I think there is an opportunity to look at the overall 

purpose and then define the scope of the area. 

Senator CARPER. Let me just followup. Without a national approach, what keeps polluters moving from one region of the Country where they are regulated to another region where they are not? 

Mr. MCLEAN. The general answer is, there are a lot of provisions 

in the Clean Air Act now. It is not so easy to move and be freed 

of responsibility. Between new source review and SIPs in every 

part of the Country, there would be requirements on anybody moving anywhere. So there would be some limitations. 

But you do raise an issue that is a valid one in terms of looking 

at the implications. Certainly if the requirements in one State are 

extremely different, tighter than another State, you do run the risk 

of moving sources or emissions. 

Senator CARPER. And one last followup, I think you said in your 

testimony that the CAIR would have saved some 17,000 lives per 

year when it is fully in effect. Any idea how many more lives per 

year would have been saved if CAIR was nationwide as opposed to 

regional in scope? 

59 

Mr. MCLEAN. I don’t know the number, but I think that is doable. 

Senator CARPER. Would you provide that for the record, please? 

Mr. MCLEAN. OK. 

[The referenced information follows:] 

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Senator CARPER. Last, with CAIR intact, how many States would 

still have non-attainment areas for ozone or particulate matter, 

say, maybe in 2010 or 2015? Any idea? 

Mr. MCLEAN. I would have to give that number to you for the 

record, but I think we can get that. 

Senator CARPER. All right, thanks very much. 

Senator Voinovich. 

Senator VOINOVICH. I am not asking you to speculate, but give 

me your best shot on some of these things. If we were to pass legislation that would put CAIR into law, and we put a sunset on it, 

i.e., 2 years from now we would have to reauthorize it, which would 

put us in the position where we could look out around the Country 

to just see how things are working or not working, what impact 

would that have on some of the decisionmaking, in your opinion, 

of the utilities that are primarily the ones that are going to have 

to invest the money? 

Now, I would suspect, and just add this, that if I am a utility 

and I am going forward and I am spending billions of dollars right 

now based on the CAIR rule, that they have to know that maybe 

down the road something else more stringent might be legislated. 

So as a regulator, looking out, what is your reaction to the concept 

of say, putting CAIR into law and then say, we have to reauthorize 

it in 2 years to see just exactly where we are and what impact 

would that have on decisionmaking made by some of the utilities 

and others that are making these decisions? 

Mr. MCLEAN. It could vary quite a bit from company to company. 

You would find different situations, where for some people a short 

timeframe might be sufficient for them to make their decisions on 

what they have to do. Other companies, may need a longer timeframe in order to make those decisions. You certainly have capital 

investments and payback and the longer the timeframe you have 

the more certainty and therefore the more efficient a solution 

would be. But you have to weigh that and you would be weighing 

that against various other pressures and trying to design an appropriate long-term solution. 

So the idea is to give people a long timeframe. But how much 

time do you have to put a fix in place and say you have to balance 

those two, I couldn’t really tell you at this point without looking at 

the whole range of companies and situations. It is sort of like a discount rate curve over time. There are diminishing returns the farther you go out. Certainly the near-term actions and stability are 

more valuable than the long-term ones. Again, you could ask the 

two companies here and they could probably tell you from their 

perspective how different timeframes would affect their decisionmaking. 

Senator VOINOVICH. Since they are here, hopefully they will respond to that. 

I know you are not supposed to do this, but has the EPA looked 

at the impact that the CAIR rule has had on ratepayers? 

Mr. MCLEAN. Yes, we did. I could give you that for the record. 

I don’t know what the numbers are. But we did look at the cost 

of the program and the likely impact on electricity rates. That is 

something that we usually do. 

74 

Senator VOINOVICH. Has it been around long enough to get an 

idea of the impact in the short term? 

Mr. MCLEAN. Of the decision, you mean? 

Senator VOINOVICH. Of the cost, yes. 

Mr. MCLEAN. We could probably do that. I mean, as you can 

imagine, there are many factors affecting the costs to ratepayers, 

this being one of them. So we often model this, assuming everything else doesn’t change, what is the incremental impact of this 

regulatory action. And I can check and see for what timeframes we 

have done that. 

Senator VOINOVICH. OK, a couple of questions. New source review. If I heard correctly, there are certain things that trigger new 

source review. And the reason I bring this up, it gets into the 

whole climate change area. One of the thoughts that many of us 

have to reduce greenhouse gases in this Country would be to allow 

utilities to move forward with making their plants more efficient, 

so they produce more energy. I think for every, it is like one for 

one, if you increased the efficiency by one, then you reduce your 

carbon emissions overall. 

Under CAIR, are there certain things that trigger new source review? And what would you think about having a different regimen, 

say, in terms of efficiency, taking into consideration the greenhouse 

emission aspect of it? 

Mr. MCLEAN. That is a good series of questions. I don’t really 

have the answer to that. But I understand what you are thinking 

about, and I think those are one of the areas that we will try to 

work on. 

Senator VOINOVICH. First of all, does CAIR trigger new source review, or does a company doing something trigger new source review? 

Mr. MCLEAN. I think it is more what a company does. Pollution 

control devices, generally, we have exempted from triggering new 

source review. So if you are responding to one part of the law, we 

are not trying to tie you into another part. 

Senator VOINOVICH. The way I understand it, some utilities are 

not going forward and doing the efficiencies that they could do because they are afraid they are going to trigger new source review, 

which then becomes a lot more expensive for them to do their—— 

Mr. MCLEAN. My perception, and I may be wrong, is that the efficiency itself is not the problem, it is how the plant is used afterward. So the efficiency allows you to increase production and emissions at the plant, that is the concern, not the efficiency per se. 

Senator VOINOVICH. Do you think it would be a good idea to 

have, when we take into consideration these decisions in terms of 

new source review, to look at the impact that they would have on 

climate change and greenhouse gases? 

Mr. MCLEAN. I think they should all be looked at, particularly 

given the relevance of the climate change issue that needs to be 

factored into the decisionmaking process. I also have found that 

with the cap and trade program, if you get the goal that you are 

looking for in terms of the emission reduction, then there is more 

flexibility on how you get there, and it may allow one to look at 

those issues with new eyes. 

75 

Senator VOINOVICH. To your knowledge, does the issue of greenhouse gases come into play when you are considering the new 

source review being triggered? 

Mr. MCLEAN. I don’t know the answer to that question. 

Senator VOINOVICH. Could you find out for me? 

Mr. MCLEAN. Yes. 

Senator VOINOVICH. Thank you. 

[The referenced information was not received at time of print.] 

Senator CARPER. Mr. McLean, I just have one last question, and 

if you can help us with this on the record that would be great, if 

you have to dig up the answer, that is understandable. I seem to 

recall that earlier it was forecast or predicted that the implementation of the CAIR rule would be saving roughly 17,000 lives per year 

by 2015. And the health benefits were anywhere from $85 billion 

to maybe $100 billion, which was roughly—what is the cost benefit 

ratio there, do you recall? Is it 20 to 1? 

Mr. MCLEAN. Twenty-five to one. 

Senator CARPER. The Clean Air Planning Act, which a number 

of us co-sponsored in support, would save, I believe, additional lives 

by 2015. Any idea how much that might be? 

Mr. MCLEAN. I would have to look at that. We analyzed your bill 

a few years ago, and we did have estimates of that. I don’t think 

we have done the more recent bill. It is the magnitude of the reductions which drives the benefits. So they should be similar. 

Senator CARPER. For some reason, I am thinking it was 26,000 

lives and the health benefits were in the range of $150 billion to 

$160 billion. 

Mr. MCLEAN. Yes, that could be correct. I can check that. 

Senator CARPER. Well, we are going to have, I suspect, some additional questions to submit in writing. I know a number of our colleagues would like to have been here. I personally have four hearings going this morning, and Senator Voinovich probably has at 

least as many. People have a lot on their plates. This is important 

for our Country, it is important, certainly, for my State and for 

other States that are at the end of the tailpipe. We will be interested in working with you and your colleagues at EPA in the weeks 

ahead as you decide your near-term course forward. Then as we get 

past August 25th, and you have made that decision to decide what 

we need to do this year, and then just as importantly, maybe more 

importantly, what we need to do next year. 

It sounds to me like what you are saying is that the EPA and 

the Administration believe that the real solution here is not for the 

long term additional regulation, but you need some legislation. 

Mr. MCLEAN. Yes. 

Senator CARPER. Thank you for your willingness on very short 

notice to be here for your testimony, for responding to our questions and for your willingness to followup. I leaned over to Senator 

Voinovich during one of your responses and said, well, I think we 

have ourselves, we are fortunate that you were able to make time 

to be here today. These are difficult issues for all of us to understand. I am certainly one of those. But you have helped make it 

a bit more understandable, and for that, I am grateful. 

Mr. MCLEAN. Thank you very much. 

76 

Senator VOINOVICH. Thank you very much. You have been a 

great, great witness. Thanks for your service. 

Senator CARPER. We will now excuse Mr. McLean and invite our 

second panel to come to the table. 

Thank you very much. So far, we have been fortunate enough not 

to have any votes. I am told that we may not have any votes until 

2:15, when I will be presiding, not over this Subcommittee, but 

over the Senate. And then we are going to be having a series of 

votes, so there is a good chance we will be able to finish this up 

at a reasonable time and break for a bit of lunch, then the Senate 

will convene and start its work. 

I want to just briefly introduce these five panel members. First 

of all, Jared Snyder, who is the Assistant Commissioner for Air Resources, Climate Change and Energy, New York Department of Environmental Conservation. Welcome, thank you for joining us 

today. 

Eric B. Svenson, Jr., Vice President, Environment, Health and 

Safety, Public Service Enterprise Group, our neighbors across the 

river in New Jersey. Welcome. We are happy you are here. 

Mr. William H. Spence, Executive Vice President and Chief Operating Officer, PPL Corporation. What does PPL stand for? 

Mr. SPENCE. Well, it used to be Pennsylvania Power and Light 

Corporation, but we changed it to PPL Corp. 

Senator CARPER. Fair enough. Thank you. 

Chris Korleski, Director of the Ohio Environmental Protection 

Agency. We are both Ohio State grads. 

John Walke, Director, Clean Air Program, Natural Resources Defense Council. Mr. Walke, thank you so much for coming today and 

we look forward to your testimony and the chance to ask you some 

questions. 

Mr. Snyder, you are our lead-off hitter, and Mr. Walke, you get 

to bat clean-up, even though you are No. 5 in the lineup. We are 

happy you are all here. Your entire testimoneys will be made part 

of the record. You can summarize if you wish. Try to wrap it up 

in about 5 minutes apiece, then we will get into some questions. 

STATEMENT OF JARED SNYDER, ASSISTANT COMMISSIONER 

FOR AIR RESOURCES, CLIMATE CHANGE AND ENERGY, NEW 

YORK STATE DEPARTMENT OF ENVIRONMENTAL CONSERVATION 

Mr. SNYDER. Good morning, Chairman Carper and Senator 

Voinovich. I am Jared Snyder, I am Assistant Commissioner in 

New York responsible for air pollution and climate change issues. 

I am also the current Chair of the Ozone Transport Commission. 

Thank you for providing me with the opportunity to testify on this 

important matter today. 

My message today is simple: unless prompt action is taken to 

rectify the Court’s decision vacating CAIR, we will all be breathing 

dirtier air, and many of us will suffer, especially the very old and 

very young and persons with asthma and other respiratory illnesses. 

I will make three major points this morning. First, the Court’s 

decision will harm air quality and make it more difficult for States 

to meet their obligations to comply with the national standards for 

77 

ozone and particulate matter. Second, and perhaps more importantly, the Court’s decision could have dire public health consequences. And third, achieving clean, healthy air means strengthening CAIR, requiring quicker and steeper reductions. 

CAIR was flawed. It did not provide sufficient and timely reductions from the power sector to fully protect public health. Nevertheless, we chose to view CAIR as a glass half full, rather than half 

empty. But the Court’s decision means that the glass is now empty. 

New York and other downwind States can no longer count on the 

substantial upwind pollution reductions needed for us to comply 

with the applicable standards. The demise of CAIR will also eliminate the help that was on its way for the lakes and streams still 

suffering from acid rain and will postpone the visibility improvements expected in our natural areas. 

New York and other States face a 2010 deadline for compliance 

with the ozone standards. Because the air entering the Northeast 

on hot summer days is already high in ozone, reducing upwind pollution is essential. Losing CAIR places a big hole in our efforts to 

comply. 

In what appears to be a classic case of unintended consequences, 

the Court’s decision has also placed the NOx SIP Call in jeopardy. 

Many States have replaced their SIP Call programs with CAIR 

starting next year. Thus, not only do we lose CAIR’s future air 

quality improvements but we may even lose at least some of the 

substantial benefits that the NOx SIP Call has provided over the 

last couple of years. 

Even more important from a public health perspective are the reductions in fine particulate matter that CAIR would help achieve. 

In cities across the eastern half of the United States, we will be 

unable to meet the 2010 deadline without the reductions required 

by CAIR. But this is not just about States meeting their compliance 

deadlines. Instead, the dirtier air that will result from the Court’s 

decision will harm the public, especially those who need relief the 

most, such as children, the elderly and persons with asthma. 

By 2015, when the second phase of CAIR is affected, the reductions will save over 17,000 lives annually. Each year, 1,500 of those 

lives saved will be in New York, the same as in Ohio. There will 

also be tens of thousands fewer hospitalizations and other breathing illnesses. 

Many of the OTC States are taking steps to ensure that in-State 

reductions comparable to CAIR are realized. New York’s acid deposition program is just one example. But because that program does 

not deal with transported pollution, which accounts for approximately 75 percent of our particulate matter in the New York City 

area, it will not provide the same public health benefits as CAIR. 

We must find a way to restore these lost public health benefits. 

We believe that extending compliance deadlines should not be part 

of the solution. It offers no relief to the breathing public. 

If Congress takes action, it should strengthen CAIR, accelerating 

the schedules and obtaining steeper reductions. CAIR’s schedule 

came from the Clear Skies bill. It wasn’t based on deadlines for 

compliance with air quality standards. We should also remember 

that CAIR seeks to facilitate compliance with the old ozone standards, which EPA has now replaced with more stringent standards. 

78 

And even those new standards do not provide the protection recommended by EPA’s science advisors. Inadequate as these new 

standards are, they still require the States and EPA to implement 

new control programs beyond CAIR to reduce regional pollution. 

This summer provides a stark reminder of the inadequacy of 

CAIR. Even with the reductions required by the NOx SIP Call, the 

eastern part of the Country is seeing an increase in high ozone 

alert days this summer. But CAIR would not provide substantial 

emission reductions in the ozone season beyond those provided by 

the NOx SIP Call until 2015. That is too late. 

A similar story can be told for particulate matter. The health 

benefits that I mentioned a moment ago and that we have been 

hearing about this morning, the 17,000 lives saved, those health 

benefits will not be realized until phase two of CAIR is implemented in 2015. We believe that the solution is obvious: the reductions required by CAIR should be accelerated and strengthened. 

A final point, which I will leave to my written testimony, is that 

Congress should take this opportunity to enact control programs 

for the other two pollutants emitted from power plants, mercury 

and carbon dioxide. 

Thank you very much. 

[The prepared statement of Mr. Snyder follows:] 

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Senator CARPER. Mr. Snyder, thank you again for your presence 

and for your testimony. 

Mr. Svenson, welcome. 

STATEMENT OF ERIC SVENSON, VICE PRESIDENT, ENVIRONMENT, HEALTH AND SAFETY, PUBLIC SERVICE ENTERPRISE 

GROUP 

Mr. SVENSON. Mr. Chairman and Senator Voinovich, I am very 

pleased and honored to appear before you today. 

My name is Eric Svenson and I am Vice President of Environment, Health and Safety for Public Service Enterprise Group, 

PSEG. PSEG is a large, New Jersey-based diversified energy company with 16,000 megawatts of electric generation in eight States. 

Mr. Chairman, you asked PSEG to provide an overview of the impacts of the vacatur of the Clean Air InterState Rule, otherwise 

known as CAIR. 

When CAIR was promulgated, PSEG believed it was the second 

best solution. But putting that aside, we believe the rule would 

have provided significant air quality and public health benefits. We 

are very concerned that it will take a long time for EPA to replace 

the rule. 

In the meantime, public health and the environment will suffer. 

As a result of this, a great cloud of additional uncertainty now 

hangs over the electric industry regarding future generation investment and air quality obligations. 

PSEG believes immediate legislation action is need for four-pollutant, or 4P legislation to address needed and timely NOx, sulfur 

dioxide, mercury and CO2 reductions from the electric power sector. Let me elaborate on some of the impacts of the Court decision. 

First and foremost, the significant public health and productivity 

benefits that would have been achieved by CAIR are lost. The EPA 

predicted the implementation of CAIR would lead to the reduction 

of 17,000 premature deaths a year and 22,000 non-fatal heart attacks. In addition, CAIR was expected to reduce lost work days by 

1.7 million a year and lost school days by 500,000 per year. 

CAIR would have also resulted in improvements in our lakes 

from reduced acid rain and improvements in visibility at some of 

our most cherished national parks. CAIR was expected to stimulate 

one of the most extensive pollution control retrofits in the history 

of the Clean Air Act, and now that has been lost. Those retrofits 

primarily would have consisted of the installation of scrubbers, 

which remove sulfur dioxide, and selective catalytic reduction technology, which removes NOx. 

The proven cap and trade method, whereby sulfur dioxide and 

NOx emissions are capped and allowances for emissions are traded 

was the heart of CAIR. Up until the D.C. Circuit’s decision, sulfur 

dioxide allowances were actively traded at approximately $500 per 

ton. After the decision, sulfur dioxide prices fell precipitously to a 

record low of $85 per ton. The glut of allowances discourages additional investment in scrubbers, and in some cases may even encourage existing scrubbers to shut down. 

In addition to NOx and sulfur dioxide, scrubbers and SCRs also 

help remove mercury from flue gases. Add that to the list of benefits now lost. The Court’s decision calls into question EPA’s ability 

112 

to use cap and trade programs to meet National Ambient Air Quality Standards. While the Court did not State definitively that cap 

and trade programs are impermissible under the Clean Air Act, the 

Court created at best an extremely high hurdle for the agency. We 

now have a huge regulatory hole. States must still attain the National Ambient Air Quality Standards for fine particulates and 

ozone. Without CAIR, States will have limited options other than 

to engage in protracted litigation like what led to the NOx SIP Call, 

ratchet down on existing sources within the State or both. Ultimately, the public will bear the additional costs of these systems. 

Finally, the uneven playing field of environmental regulation 

that cap and trade would have specifically addressed is back. CAIR 

would have provided a mechanism to meet the National Ambient 

Air Quality Standards and at the same time provide a level playing 

field for the competitive energy markets. 

So unless rectified, the Court decision leaves us stuck with an inefficient, more expensive system with significant public health loss 

and much less environmental benefit. 

Mr. Chairman, the vacatur of CAIR, the previous court ruling 

striking of the Clean Air Mercury Rule and the continued implementation of a patchwork of State and regional programs governing carbon dioxide have created a chaotic regulatory environment. PSEG believes that national multi-pollutant legislation is a 

national imperative for ensuring timely public health and environment benefits, business certainty and a level, competitive playing 

field for the electric generation sector. 

Mr. Chairman, for these reasons, PSEG was an early proponent 

of your Clean Air Planning Act, CAPA. The electric sector needs 4P 

regulatory certainty sooner rather than later, and more importantly, so does the public. 

Mr. Chairman, Senator Voinovich, thank you for the opportunity 

to be here. 

[The prepared statement of Mr. Svenson follows:] 

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Senator CARPER. Thank you for your testimony. Thank you especially for the last two sentences of your testimony and for your 

strong support right from the start. 

Mr. Spence, you are recognized. 

STATEMENT OF WILLIAM H. SPENCE, EXECUTIVE VICE PRESIDENT AND CHIEF OPERATING OFFICER, PPL CORPORATION 

Mr. SPENCE. Good morning, Chairman Carper and Senator 

Voinovich. It is my pleasure to be here. 

As the Chief Operating Officer of PPL, I have the responsibility 

to run the day to day operations of the corporation, which includes 

the operation of all of our power stations. Along with PSEG, you 

have before you two of the largest top ten power companies in the 

Nation. So I think we have a unique perspective on this. 

We own 12,000 megawatts of generation throughout the Country, 

from Montana to Maine, and 4 million customers in Pennsylvania 

and in the U.K. We have fossil plants in 4 of the 28 States covered 

by the CAIR rule, most notably of course, Pennsylvania, where we 

have 3,500 megawatts of generation. 

Under the EPA Clean Air Act and programs to reduce acid rain 

and ozone, we have already reduced emissions of SO2 by 30 percent and NOx by 60 percent since 1990. We are poised to do a lot 

more. In fact, we are in the midst right now of a billion and a half 

dollar program to put scrubbers on five of our power stations as we 

speak. In fact, two of those are already in operation. So this is a 

very important topic for us. 

The July 11th Appeals Court decision really shattered our expectations and left a lot of uncertainty, as already noted, for our sector 

and for our company. In fact, we have already had to advise our 

investors in the investment community that we expect the immediate impact of this rule to have resulted probably in about $100 

million of reduction in value from just the SO2 and NOx credit 

market declines alone. As you are probably aware, the SO2 market 

price prior to this rule was around $300 a ton and it dropped immediately to less than $100 a ton, a 70 percent reduction, very significant. And the annual NOx allowances actually went to no value, 

completely worthless at this point. 

In addition to the disruption in the allowance market, the D.C. 

Court of Appeals decision has also put at risk the ability of power 

generators in the eastern part of the U.S. to comply with the 2009 

ozone season. I think the gentleman from EPA mentioned that as 

well. The Appeals Court held that EPA’s NOx SIP Call program, 

initiated in 1998, remains in place even though the CAIR has been 

now invalidated. This means the industry and the States covered 

by the SIP Call provisions must have necessary NOx allowances to 

surrender for the 2009 ozone season. But there are no 2009 ozone 

season NOx available because of the vacation of CAIR. So again, 

very serious impact on the company. 

The decision also adversely affects States, and of course, the environment, importantly. States have now no assurance of the reductions needed to comply with National Ambient Air Quality 

Standards for ozone and fine particulates. We fully supported the 

CAIR, as did PSEG, and developed a compliance strategy based on 

CAIR requirements and construction of the billion and a half dolVerDate Aug 31 2005 12:29 May 01, 2015 Jkt 000000 PO 00000 Frm 00134 Fmt 6633 Sfmt 6633 S:\_EPW\DOCS\88904.TXT VERN
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lars in scrubbers was part of our strategy to comply with that rule. 

Scrubbers were placed in service already at our Montour Station in 

northeastern Pennsylvania, and we are in the midst of building 

three more scrubbers at our Brunner Island plant in south central 

Pennsylvania. 

So where do we go from here? What we propose is simply to codify the CAIR through an immediate legislative fix to rectify the situation in time in particular for 2009. Codifying CAIR, in our view, 

would not preclude further modifications or a multi-pollutant bill 

in the future. But with 2009 just around the corner, in our view, 

it is imperative that Congress act now to give us in the generation 

community certainty about the future requirements to reduce emissions. 

Thanks for the opportunity. 

[The prepared statement of Mr. Spence follows:] 

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Senator CARPER. Mr. Spence, thank you very much. Thanks for 

being here as well. 

Mr. Korleski, you are recognized. Thank you. 

STATEMENT OF CHRISTOPHER KORLESKI, DIRECTOR, OHIO 

ENVIRONMENTAL PROTECTION AGENCY 

Mr. KORLESKI. Mr. Chairman, Senator Voinovich, thank you. 

As you know, the Clean Air Act requires States to develop approval State implementation plans, SIPs, which set forth the emission reduction measures that States will implement in order to 

achieve attainment with what I am going to call the NAAQS, the 

National Ambient Air Quality Standards. Stated simply, CAIR 

served as an integral component of Ohio’s plan to achieve necessary reductions in both NOx and SOx emitted from power plants. 

Those NOx and SO2 emission reductions would have greatly assisted Ohio and other States in attaining the standards for both 

PM and ozone, and in addition, were an essential component of 

U.S. EPA’s plan for addressing regional haze. 

Now, of critical importance to the States is that despite the CAIR 

vacatur, the States’ obligation to achieve the NAAQS for ozone and 

PM in the strict timeframes promulgated by U.S. EPA remain firmly in place. Specifically, Ohio must still achieve compliance with 

the NAAQS for the old ozone standard in marginal non-attainment 

areas by June 2009, which I respectfully submit is tomorrow. And 

in our moderate non-attainment area, northeastern Ohio, by June 

2010, with similar deadlines coming quickly for PM as well. And 

new, more stringent standards for ozone and PM with their own 

compliance deadlines are now in place. 

Ohio was looking forward to the reductions achieved by CAIR to 

not only help us meet the old standards but also would have helped 

us toward achieving the new standards as well. Given the significant reductions we anticipated resulting from CAIR, we have 

quickly evaluated the direct impact of the decision on Ohio’s plans 

for both ozone and PM. Now, without the benefit of time to run a 

detailed modeling analysis, our preliminary estimate for ozone 

demonstrates that with Ohio’s NOx SIP Call still in place, we still 

do have the NOx SIP Call in Ohio, which requires reductions from 

utilities in the summer months, we are hopeful, cautiously hopeful 

that we will be able to meet our 2009 ozone attainment deadline 

in our marginal non-attainment areas. 

Unfortunately, the loss of the additional SO2 and NOx reductions 

CAIR would have provided will make it much more difficult to attain the PM standard and to achieve ozone attainment in our moderate non-attainment area under both the old and the new standards. 

Now, it is true that a number of power plants in Ohio have already installed and are operating NOx controls and SO2 scrubbers 

on their largest, newer units in anticipation of the first phase of 

CAIR, with a compliance deadline of January 2009. My intention 

is to work with the utilities on a one on one basis to determine if 

we can mutually agree to lock in those controls already planned or 

in place pursuant to CAIR. However, there is no guarantee that 

that will happen. And it is very unclear to me how the power companies will respond to any attempt to do so in light of the vacatur. 

145 

Now, as non-attainment with air quality standards threatens 

both public health and economic development, I am concerned by 

the wholesale vacatur of a rule which, without question, went a 

long way to help Ohio and many other States lower ozone and PM 

levels. So the question is, what now? Do we face years of litigation? 

Years of waiting while U.S. EPA goes back to the drawing board? 

Will we be faced with continued non-attainment in Ohio and other 

States, such that U.S. EPA is forced to impose sanctions, bump up 

our non-attainment status or impose costly but not necessarily 

cost-effective pollution controls on a host of pollution sources? 

I would suggest that these options are not in any State’s best interest. Therefore, let me respectfully suggest an alternative. In my 

view, the heart of the Court’s decision lies in its interpretation of 

a single section of the Clean Air Act, Section 110(a)(2)(D)(i)(I). 

Boiled down to its essence, the decision concluded that the cost-effective region-wide trading approach on which CAIR was based did 

not accord with the requirement in that section that SIPs must 

prohibit sources within a State, within a specific State, from contributing significantly to non-attainment in another State. 

Now, for today’s purposes, I will not argue the legal merits or demerits of the Court’s decision. Rather, I respectfully suggest that 

Congress address the loss of the significant emission reductions 

guaranteed by CAIR by a surgical, laser-like amendment to Section 

110. Such an amendment would essentially allow U.S. EPA to successfully repromulgate CAIR such that the certain and significant 

emission reductions would be re-established. Indeed, Ohio puts forward the following language as a starting point for legislative consideration and discussion. 

We propose a new Section 110(a)(2)(E), which would read: ‘‘Nothing in Section 110(a)(2)(D) shall be construed to prohibit the Administrator from requiring the development and implementation of 

a regional emission reduction approach (including but not limited 

to an emission reduction trading approach), which, in the Administrator’s judgment, will eliminate or minimize any significant contribution to non-attainment caused by the impacts of pollution from 

upwind States on downwind States. Inclusion in an implementation plan of the regional emission reduction approach may, in the 

judgment of the Administrator, satisfy a State’s obligations under 

110(a)(2)(D).’’ 

Again, I suggest this proposed language as a starting point for 

discussion. 

In conclusion, I assert that the loss of CAIR with its associated 

emission reductions is a startling and very dispiriting development. 

It is Ohio’s hope that Congress, U.S. EPA, other States and other 

stakeholders can put other air pollution control issues temporarily 

aside, very temporarily aside, and quickly work together to arrive 

at a solution that will allow for the reinstatement of CAIR or something very much akin to it. And I thank you for your time. 

[The prepared statement of Mr. Korleski follows:] 

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Senator CARPER. Thank you, Mr. Korleski. 

It is not every day that we have witnesses who come before us 

who actually propose legislation, actually come with it written 

down. Who wrote that? 

Mr. KORLESKI. I did. 

Senator CARPER. No pride of authorship. 

Mr. KORLESKI. I hope I wasn’t too bold in doing so, but I felt compelled to bring at least some starting language. 

Senator CARPER. Good. I appreciate that very much. You may be 

starting a trend here, you never know. 

Mr. Walke, we are delighted that you are here, thank you for 

your presence and for the work that you do. 

STATEMENT OF JOHN D. WALKE, CLEAN AIR DIRECTOR, 

NATURAL RESOURCES DEFENSE COUNCIL 

Mr. WALKE. Thank you, Chairman Carper, Ranking Member 

Voinovich. I appreciate the opportunity to appear before you here 

today. My name is John Walke, and I am the Clean Air Director 

for the Natural Resources Defense Council. 

Chairman Carper, I especially appreciate your willingness to 

hold this hearing about the important subject of power plant air 

pollution, public health and the Court’s overturning of the Clean 

Air InterState Rule. 

EPA’s Clean Air InterState Rule, or CAIR, represented an important first step forward to reduce dangerous levels of SO2 and NOx 

emissions from power plants, and to reduce the devastating public 

health and environmental toll caused by these emissions. NRDC 

and other public health and environmental groups accordingly had 

intervened on EPA’s behalf in litigation in the United States Court 

of Appeals for the D.C. Circuit, defending CAIR against industry 

challenges that sought to weaken CAIR, reduce its scope and effectiveness and disrupt its implementation. 

The July 11th decision by the D.C. Circuit vacating CAIR in its 

entirety was a significant setback to public health and environmental gains embodied in CAIR and the crucial need to reduce 

dangerous emissions from power plants in the eastern half of the 

United States. But the Court’s decision also represents an opportunity to get it right where CAIR did not, to take not just the first 

step, but the necessary steps, cost-effective and feasible steps, to 

eliminate dangerous levels of power plant emissions and deliver 

healthy air to all Americans. 

With the long-overdue strengthening of the public health standards for PM 2.5 in 2006 and ozone in 2008, we now know with 

greater urgency what we already knew in 2005 when CAIR was 

adopted. Allowing power plants to produce air pollution at excessive and unhealthy levels for as long as two decades before reaching a 70 percent reduction target that still would remain 

unprotective imposes tremendous harms upon the American people. 

Even with the setback to CAIR represented by the Court decision, 

we can and must achieve greater than 70 percent reductions in 

SO2 and NOx emissions from power plants well before the end of 

the next decade. 

I want to make one simple point about the Court’s decision and 

CAIR in order to highlight one mistake that we should not and 

150 

cannot afford to make again. In faulting the unlawfulness of CAIR, 

the Court realized that the Administration had worked backward 

from a political agenda to institute the emissions caps and design 

features of CAIR. In this case, that political agenda was represented by the Administration’s Clear Skies legislative proposal. 

The Court found that EPA had not worked forward from the Clean 

Air Act to achieve the emissions reductions necessary to address 

transported pollution at the levels and according to the schedules 

consistent with Clean Air Act obligations to downwind States, or 

consistent with the need to deliver healthy air to citizens in the affected States. 

The mistake was to let a political agenda dictate not just how 

EPA carried out the Clean Air Act, but how far EPA went to reduce transported air pollution from upwind States to victimized 

downwind communities. And finally, that political agenda dictated 

how far EPA went to protect public health. 

We can do better, we must do better. Let me be very direct why. 

EPA had projected that CAIR would avoid 13,000 American lives 

being cut short each year beginning in 2010 and avoid the loss of 

17,000 lives each year starting in 2015. These are very impressive 

health gains that we are in danger of losing if we do not mandate 

the important pollution controls that CAIR would have required 

and do so expeditiously. My testimony includes State by State 

breakdowns of the early adult deaths avoided under CAIR. For 

New York and Ohio, for example, 1,200 deaths would have been 

avoided in each State each year, beginning in 2010. And in 2015, 

1,500 fewer people in each of those States would have had their 

lives cut short by power plant air pollution. 

CAIR accomplished these significant health benefits by requiring power plant operators to spend, on average, $500 per ton of pollution reduced in 2010 and on average, $700 per ton of pollution reduced in 2015. Meanwhile, air quality regulators today, and for 

many years in recent memory, were requiring other types of businesses in other industrial sectors to spend $3,000 to $6,000, even 

$15,000 for the same ton of pollution reduced. Mr. McLean said 

that $500 cost per ton is highly cost-effective. 

But here is the crucial insight: $2,000 per ton is also highly costeffective relative to these other control costs borne by local businesses. The Administration refused to require power plants to 

achieve greater pollution reductions at modestly greater average 

cost per ton due to the Administration’s political agenda that the 

Court later found to be unlawful. 

If this sounds like an economically unsound approach to air quality, it is. But it is also an irresponsible approach to public health. 

Just contemplate the thousands of additional American lives that 

we could save each year by bringing the amount that utility companies spend to reduce a ton of pollution more in line with the costs 

that other local businesses spend to reduce that same ton of pollution. Power plant companies still would end up spending much less 

per ton of pollution than other businesses. But we could actually 

deliver healthy air in a timely fashion to the entire eastern half of 

the Country and most of the western U.S. outside of certain challenging areas in California. And we could save thousands of additional lives over the next decade. 

151 

One of the little-understood consequences of the Administration’s 

political agenda that created CAIR, as well as actively harmful 

rules that I detail in my written testimony, is that thousands of additional lives were to be sacrificed to power plant air pollution each 

year in order to save utility companies’ compliance costs that were 

and are one-half or one-fifth or even one-tenth the compliance cost 

being borne by local businesses in the Midwest and Southeast and 

New England. These local businesses individually do not even emit 

1 percent of the air pollution emitted by your typical power plant. 

So we are getting far fewer pollution reductions at far greater cost 

per ton from local businesses than from utility companies. 

The current Administration has managed to avoid answering for 

this, for the harmful, economically unsound and fundamentally unfair political choice that lies at the heart of the agenda for the electric sector. The next Administration and Congress will now have 

the opportunity to confront those facts and concerns honestly and 

fairly in order to solve the Country’s air quality problems in the 

most effective way possible. 

I look forward to working with members of this Committee, Congress, EPA, States and other interested parties to accomplish these 

solutions. Thank you for the chance to appear before you today. 

[The prepared statement of Mr. Walke follows:] 

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Senator CARPER. We are delighted that you came. Thank you for 

your preparation and for your testimony today, and your willingness to respond to our questions. 

Mr. Korleski, I leaned over and I asked, I will start with a softball for you, my friend, but I leaned over and I said to Governor 

Voinovich, was Mr. Korleski, do you recall if he was part of the 

team in Ohio, the Department of the Environment, what is the 

name of your department? 

Mr. KORLESKI. The Ohio Environmental Protection Agency. 

Senator CARPER. OK. I asked former Governor Voinovich, I said, 

do you recall if Mr. Korleski was part of the team that you led 

when you were Governor for 8 years, and he said, I don’t believe 

so. How long have you been there? 

Mr. KORLESKI. Just quick background, I have been the Director 

for a year and a half, almost exactly a year and a half. Prior to 

that, I was environmental counsel for Honda, based in Ohio. And 

prior to that, I was an assistant attorney general doing trial work 

in the environmental enforcement section of the Ohio Attorney 

General’s office. 

Senator CARPER. So you have been in Ohio for a while? 

Mr. KORLESKI. Yes. 

Senator CARPER. Did you grow up there? 

Mr. KORLESKI. Yes, I did. Alliance, Ohio. 

Senator CARPER. When you think back on the years that you 

have been in Ohio and looking back on the 20th century, you think 

back on the great Governors that Ohio has had, does any one particular former Governor rise to the top? 

[Laughter.] 

Mr. KORLESKI. There are several that come to mind. 

Senator CARPER. Are any of them in the room today? That’s OK. 

[Laughter.] 

Senator CARPER. I said this would be a softball. When Senator 

Voinovich was re-elected to his second term in the Senate a few 

years ago, I kept going up and asking him how many counties he 

carried in Ohio. There are a lot of counties in Ohio, is it 87? 

Senator VOINOVICH. Eighty-eight. 

Senator CARPER. Eighty-eight, but who is counting. 

I finally got him to admit that he carried all 88 counties. And 

I was under a lot of pressure when I ran 2 years ago to try to make 

sure I carried every single county of Delaware. And I am happy to 

report I got all three. 

[Laughter.] 

Senator CARPER. This man doesn’t have bragging rights over me, 

at least not too many. 

On a more serious note, I want to telegraph a pitch. And the 

pitch is in our second round, when we come to the close of our second round, a question I am going to ask of you. This is a diverse 

panel, you bring a lot of expertise and a lot of caring to the issues 

that are before us. But one of the things I am going to ask you is, 

help us find consensus. Give us some advice to help us, not continue to disagree amongst ourselves, but how to find common 

ground, which will meet the needs that the industry has for some 

certainty, the needs that the States have and the need the American people have. So just be thinking about that and help us to see, 

183 

despite the differences, where are some places that you agree and 

that you would suggest to us that we sort of build as a foundation. 

That will give you something to look forward to as we get to the 

end. 

The question I have for Mr. Svenson is, with the Court vacating 

CAIR, what do you see as the most significant impact for the electric sector? 

Mr. SVENSON. Mr. Chairman, from my perspective, it is really 

the chaotic State that it leaves us in. We had some certainty with 

the rules, even though, as you heard in my testimony we still 

thought the CAIR was a second best solution. But it provided certainty as to the obligations on nitrogen oxide emission reductions, 

sulfur dioxide emission reductions and furthermore, by using a 

trading program, when you think of the electric power markets, 

electric power markets extend, for my market, PJM, all the way 

out to Illinois. It placed everybody under the same set of rules, and 

that is important from a competitive standpoint to have the same 

rules, State to State, across the region. 

So what this has done has now thrown that out the window. We 

are now in a mode where we are left to potentially State by State 

rules again, which may be different. And it has placed a cloud of 

uncertainty as to the confidence level in the industry relative to 

making investments. It has really penalized first movers. I think 

we would be reluctant to take early action in the future. 

Senator CARPER. Maybe one more for you, then I have a question 

for Mr. Snyder, a question or two. PSEG has been a long-time supporter of a four-pollutant approach. We are grateful for that. What 

do you believe, and you spoke to this a little bit, but I want you 

to expand on it. Why does PSEG believe that a multi-pollutant approach is most appropriate? 

Mr. SVENSON. Mr. Chairman, the reasoning for that is that the 

electric power industry is facing significant investments going forward to meet customer demand. And it is not just simply around 

NOx and SO2 that we are making investment decisions. We are 

looking at issues associated with where do you think CO2 pricing 

is going to be in the future, what do you think mercury is going 

to be. 

So when absent having regulation, specifically State what that 

is, or legislation, each company is left to make certain bets as to 

what you think that will be, and factor that into your investment 

decisions going forward. I think it would be a lot better having national legislation giving certainty rather than having 100 or so 

major companies in this Country that are electric power generators 

making separate guesses as to what some of those parameters are 

going to be. 

Senator CARPER. Mr. Spence, do you want to add any thoughts 

on that question? 

Mr. SPENCE. I would just echo the uncertainty that was mentioned, as well as being thrown into a State by State type of an approach. And I would also agree that we need a venue for dealing 

with all four pollutants in the long term. And in the short term, 

my concern is if we try to incorporate some of the longer-term 

issues with a quick legislative fix on this particular issue, I think 

because of the complexity of those other issues, mercury and CO2 

184 

in particular, I would suspect that it wouldn’t be a quick fix after 

all. 

Senator CARPER. All right, thank you. 

My time has expired. I will have a couple more questions but let 

me yield to Senator Voinovich. 

Senator VOINOVICH. The last thing we talked about is how do you 

solve a problem. I have been a member of this Committee for 10 

years. I went through bills introduced by Senator Jeffords and others over the years. And I will never forget, maybe it was five or 

6 years ago that we had the Jeffords Bill and we thought we had 

a compromise, but many of the environmental groups, Mr. Walke 

held out and said, we have to do something about greenhouse 

gases, and if you didn’t get 4 Ps, we wouldn’t go for 3 Ps. So we 

didn’t get 3 Ps, and as a result of that, I believe that we have delayed the time when we could do something about NOx and SOx 

and also deal with the Adirondacks in New York and the Smokey 

Mountains in Tennessee and some of the other areas that could 

have benefited from that. 

Most recently, we spent a great deal of time on the issue of 

greenhouse gases and climate change. Again, we are going to be revisiting that. So from a practical point of view, looking at the picture as it really is, in your opinion, what would be the best thing 

for us to do at this time, understanding that Senator Carper has 

legislation in? And frankly, our biggest problem in coming to agreement on Clear Skies was he wanted lower reductions, I think it 

was, in SOx and NOx and moving the time table up and so forth. 

A lot of this is going to take a great deal of time to work out. 

I wish I could say that you could snap your fingers and it is going 

to happen. So here we are, in the real world, what do you think 

is the best thing for us to do at this time to deal with this problem, 

understanding that anything that we do ultimately will be again 

looked at by all of us in terms of whether or not it satisfies Mr. 

Walke, who said we should be doing better, or Mr. Snyder, you said 

we should be doing better. I understand that. So that is the question I am asking all five of you. What would you do? You are now 

a Senator from New York. 

[Laughter.] 

Senator CARPER. I don’t know which one of us is going to break 

the news to Chuck and Hillary. 

[Laughter.] 

Mr. SNYDER. Going back to Senator Carper’s opening statement, 

the quote from Albert Einstein, maybe this creates the opportunity, 

this is the moment in time, where the solution that has evaded 

Congress in the past is available because of everybody that you see 

in front of you who has an interest in solving the problem. We see 

that this is opportunity to address all four pollutants. We have inadequate regulation of all four pollutants right now. What we have 

seen over the last several years is what happens when we try to 

address, when EPA tries to address at least some of these pollutants with its administrative authority. The mercury rule gets 

thrown out by the court, and for good reason, if you would ask me. 

CAIR gets thrown out by the Court. EPA doesn’t know what to do 

about CO2. So we have inadequate regulation of all these pollutants. We have an opportunity in time. And I think dealing with 

185 

them all at once would facilitate industry planning, that industry 

would welcome the opportunity to know what the future holds for 

all these pollutants. Maybe they don’t put scrubbers and SCRs on 

a medium-size coal-fired power plant if, because of carbon regulation, it makes more sense to shut that plan down and develop new, 

cleaner capacity instead. 

So I think it is worth a try to try and solve all these problems. 

That would be my opinion. 

Senator VOINOVICH. Mr. Svenson. 

Mr. SVENSON. Yes, very much like Jared, my company would feel 

that there is an opportunity here to do better. And as you heard 

me in my testimony, CAIR was the second best solution. I do think 

that there is a, I will call it the pressure cooker effect here, that 

every one of us around the table wants to solve the problem. There 

has been a lot of uncertainty sitting out here even beyond CAIR, 

relative to the CO2, mercury, so it just added to the uncertainty. 

I think it is time for a 4P bill. 

Senator VOINOVICH. Mr. Spence. 

Mr. SPENCE. Yes, I would prefer a legislative solution, not a regulatory solution. I think that is the important point that I would 

try to make. I think also, we have also suggested through an appendix to my written testimony, I believe, some language on how 

to amend the Clean Air Act to basically codify the CAIR, but with 

the caveat that it would allow one difference between what was 

promulgated and what we would propose, is to allow for the States 

to petition the EPA to try to enforce those upwind States that 

aren’t meeting the requirements to take action. That was one of the 

obviously contentious issues in the CAIR. 

So not only are we proposing an approach, but also try to accommodate some of the concerns from some of the parties to try to get 

back to a common place. No one, most folks I would say, are not 

happy with this. So I think you have the vast majority of us saying, 

this is not what was expected, it is not good for anyone, companies, 

the environment, individuals. But we do have to now deal with it 

and fix it. I prefer a legislative fix. 

Senator VOINOVICH. Mr. Korleski. 

Mr. KORLESKI. I also very strongly believe that a legislative fix 

is appropriate. I think as I listened to my fellow—— 

Senator VOINOVICH. Do you agree that the legislative fix, though, 

and that is the other thing, has to include mercury and greenhouse 

gases? 

Mr. KORLESKI. That was going to be my concern. If I thought 

that a legislative fix addressing all those issues could be arrived at 

expeditiously, I would say have at it, let’s get it done. But again, 

less than a year from now, I am looking at trying to comply with 

ozone standards and shortly after that, I am going to have particulate kicking in. My instincts, just based on 20 years of doing environmental law and watching the process, is that it would be very 

unlikely that the parties could address mercury, carbon, SOx and 

NOx expeditiously. So if that could happen, I would be all for it. 

In lieu of that, because again, I will be somewhat skeptical here, 

in lieu of that, what we are proposing here is again a laser-like fix 

to reinState CAIR. I think we all agree here at the panel that 

CAIR was productive. It wasn’t perfect, it didn’t go as far as many 

186 

people would have liked. I am not familiar with the Clear Skies 

Initiative, I was a manufacturing lawyer at the time, was not involved in that. 

But at this point, we can argue or not whether CAIR should have 

been, would have been. But it was something. And it was significant, and we have lost it. And my primary recommendation is that 

we do something quickly to get it back quickly. If we can expeditiously address other issues, Ohio would be happy to support that 

concept. But after 20 years, I confess I am somewhat dubious 

whether that can be achieved in the very short timeframe that I 

think we are faced with to try to get this done. 

Senator VOINOVICH. Mr. Walke. 

Mr. WALKE. I think it is imperative that we pursue parallel regulatory and legislative paths, so that all the actors can try to get the 

right solutions. On the regulatory path, I think it is imperative 

that EPA stop going backward by pursuing some of these harmful 

rules. I also think it is imperative that EPA and the States work 

together, as Mr. Korleski said, to make sure that these controls, 

that we already have them installed and already have it planned 

or actually operated so that they protect the public. I am confident 

that we can do that in a faster timeframe. 

On the legislative front, I think we also have two options available to us, or two sequences. One would be a shorter term and one 

would be a longer term. On the longer term front, we think it is 

imperative to reduce all the pollutants from the power sector, including global warming pollutants. We look forward to working 

with members of the Committee to do that. 

On the shorter timeframe, we are facing some urgent public 

health needs in 2009 and 2010, and we would be happy to participate in constructive conversations that we think could well lead to 

consensus about ensuring that those protections are in place, at 

least in the next few years, to give us all time to kind of step back 

and think about what the longer term answers are, to allow the 

regulatory system to unfold, to achieve the necessary reductions, 

still before 2015, but according to the levels that we need, so that 

we could have those short-term protections for the public at the 

same time that we figure out what the right answer is. 

Senator VOINOVICH. Thank you. 

Senator CARPER. Let me just ask, I am going to ask my last 

question first, or I am going to ask it next. It is really sort of a 

variation of what Senator Voinovich has just asked. The question 

is this: what do you think, at least on this panel, where do you 

think the major points of agreement are? Mr. Snyder, do you want 

to lead it off? 

Mr. SNYDER. I think the major points of agreement, from hearing 

everybody today, are that we need to deal with the public health 

concerns relating to fine particulate matter and ozone, and the 

need for the States to comply with the standards that are applicable. I was involved in the NOx SIP Call 10 years ago, and the dynamic now is very different than it was then. This is sort of going 

to that question that you had about the places of consensus. Then 

it was really upwind versus downwind. And that division doesn’t 

really apply any more. The State of Ohio is an upwind and a downwind States. New York is an upwind and a downwind State. The 

187 

reductions that we will see here will serve the public health all 

across the eastern United States. 

One of the exhibits to my testimony is a map of the United 

States showing in 2015, even after the second phase of CAIR is implemented, the non-attainment areas for particulate matter. And it 

is most of the major metropolitan areas in the Midwest and the 

South, will still be non-attainment for PM and suffering the loss 

of life and illness as a result. So I think we are all converging on 

the need to deal with that issue. It is really a national issue now, 

rather than an us against them issue. 

And I think we all have concerns about mercury and carbon dioxide. It is just a question of, are we able to resolve those at the same 

time or not. I guess my point was, it is worth giving it a try. But 

the public health needs are really paramount in the short term. 

Senator CARPER. Thank you. 

Mr. Svenson, where do you think this panel agrees, major points? 

Mr. SVENSON. First of all, just an observation is that nobody is 

here saying hallelujah, that the rule went away. Everybody is saying, there is a public health issue here and there is an environmental issue, that needs to be addressed. So certainly the consensus is that we have a problem that needs to be fixed. 

The second piece here is that everybody, I think, is saying, geez, 

if there were sufficient time, let’s try to do something better. There 

were some shortcomings in the CAIR rule, but they are very concerned, I think every one of us is concerned about time, time from 

a public health standpoint and an environment standpoint. 

I like what Jared said about, give it a try, see where we can get 

it in terms of doing more. But time is of the essence. 

Senator CARPER. Thank you. 

Mr. Spence, where do you think this panel agrees? 

Mr. SPENCE. I would echo both comments. I think the urgency, 

there is a great sense of urgency that we need to do something here 

rather quickly. The environmental benefits, but I would also add 

the detriment to the companies involved here with the emissions 

market being now thrown into a State of chaos, something we need 

to think about. Because that is a fundamental premise upon which 

we have achieved, in my view, some fairly significant NOx and SOx 

reductions over the prior years under the Clean Air Act. I don’t 

want to miss that opportunity as we go forward to continue to have 

those foundations, be productive and get us to where we need to 

be. 

Senator CARPER. Mr. Korleski, where do you think there is consensus here on this panel? 

Mr. KORLESKI. The bottom line consensus that I think everyone 

agrees on is that the loss of CAIR is a very negative development 

for public health, for air pollution protection. There are nuances on 

what we should do, where we should go. But I think that is the 

bottom line from every member of this panel. 

Senator CARPER. Mr. Walke. 

Mr. WALKE. The benefit of batting cleanup is I am able to endorse so much of what my fellow panelists said. But I do think 

there is that core consensus around the public health imperative, 

the need to address these deadly problems of smog and soot pollution. I sense a constructive willingness to have those conversations 

188 

with this Committee and with the relative stakeholders. I don’t 

perceive much difference in our positions on an astonishing number 

of issues. 

I even detect consensus around the need to address global warming, pollution and the need to do so. We probably differ about the 

best way to go about doing it after that. But I think that there is 

real consensus here that we should try to seize. 

Senator CARPER. All right. 

My next question is going to be sort of the opposite of the first 

one. We have indicated some areas where we agree. Where do you 

see the major sticking points? Not just for where you think the 

major sticking points are, but how would you suggest that we deal 

with those in trying to find a middle ground? Mr. Snyder, do you 

want to start with that? 

Mr. SNYDER. Setting aside the mercury and carbon dioxide issues 

for a moment, just focusing on the NOx and SO2, I think that the 

sticking points are on accelerating the CAIR deadlines and making 

the reductions steeper. I think that those are sticking points that 

we could probably work toward resolution on. We have a dialog between the OTC States and the States, including Ohio in the Midwest, a group called LADCO. We are engaged in a dialog and developing—— 

Senator CARPER. That is all we need, another acronym. 

[Laughter.] 

Mr. SNYDER. And don’t ask me what it stands for. 

But we are engaged in a dialog of trying to identify control strategies that both groups can implement. We are identifying strategies that, as Mr. Walke has pointed out, are much more expensive 

than the control strategies of CAIR. So going beyond CAIR provides 

an opportunity to get cheaper, more efficient reductions than many 

of the other things that we are exploring. I think Ohio would probably agree with that. More analysis in that area I think would help 

and would result in some consensus. That is not analysis that we 

need to assign to EPA. We can just have that dialog with each 

other. 

I think we should also all recognize that we are facing these new 

compliance obligations and the new standards in time lines that 

are shorter than CAIR: 2013, 2014. I think we have to be able to 

reach consensus that we need to do better than CAIR to achieve 

compliance with those standards. 

So that is just identifying the possible points of difference and a 

way to come to resolution on those. 

Senator CARPER. Thank you. 

Mr. Svenson, particular points of difference and a way to address 

those? 

Mr. SVENSON. Yes, Mr. Chairman. I think that what I would 

think the key point of difference might be is about the extent the 

different parties would be willing to take the time to actually explore more. I think there are different points of view as to how fast, 

whether shall we quickly jump to an immediate fix of legislation 

right now, specific wording that would codify CAIR, maybe phase 

one or something like that. 

I think that my point of view is that we need to truly explore 

more. I think the way to do that is by doing what you are doing 

189 

here today, get more people around the table, in addition to PPL, 

PSEG, more other points of view from the industry to speak on the 

issue. And also get different members of the environmental community as well. That is one of the things I have found out over the 

years, is that there are many views within the environmental community as well, and amongst the States. So I think more dialog is 

going to be needed here on this. 

But I would certainly encourage, I think we should be taking 

some up-front time to explore more, not less. 

Senator CARPER. Thank you. 

Mr. Spence, same question. 

Mr. SPENCE. I think one of the key differences might be what to 

include in any kind of legislative fix. And clearly, in my view, including mercury and CO2 makes it more problematic to get a quick 

fix in the short term. So how do we address that? Maybe an approach is to put something in place on an interim basis that specifically addresses the CAIR issues with some type of process for 

working on all four pollutants on a longer term structure or process 

legislation that could work for all of us. 

Senator CARPER. Thank you. 

Mr. Korleski. 

Mr. KORLESKI. Mr. Chairman, I very much would agree with Mr. 

Spence. To me, this is really an issue of a bird in the hand versus 

two in the bush. Well, it is not a bird in the hand now, but it would 

be relatively easy, I think, to make CAIR a bird in the hand, 

versus holding out for something more, something greater, the time 

that will take, the parties that would have to be involved, the negotiations that would have to happen. It is an election year. All those 

factors, to me, mitigate toward it is going to take a while to get 

that done. 

So Mr. Spence’s suggestion of, in the interim, let’s restore CAIR, 

and then let’s begin working on the other issues. 

Senator CARPER. At least one of us up on this panel is an attorney. But I am not. And I am not sure if EPA appeals the D.C. Circuit Court of Appeals decision if that stays the vacating, if you will, 

of CAIR. Can someone advise us on that? 

Simply by appealing the decision, what effect does that have on 

the vacating of CAIR? 

Mr. WALKE. Senator Carper, ordinarily the D.C. Circuit does not 

issue its mandates in a ruling that make that effective as a matter 

of law until they have decided how to deal with any requests for 

appeal that have been filed. As EPA said, they have until the end 

of August. You should not expect to see the mandate from the 

Court before then,and depending upon the resolution of that appeal 

by the Court, you would see the mandate when they decide to either grant, if they deny the appeal, they would grant the mandate 

soon after. If they grant the appeal, then the mandate would be 

withheld and the decision would not take effect. 

Senator CARPER. All right, thank you. 

Back to my earlier question, if you will. Thank you for your response on that one, but back to my earlier question. Again, points 

of difference, major points of difference and how to get through 

those to develop consensus. We have plenty of consensus on a number of things here. I am encouraged by that. But there are obviVerDate Aug 31 2005 12:29 May 01, 2015 Jkt 000000 PO 00000 Frm 00193 Fmt 6633 Sfmt 6633 S:\_EPW\DOCS\88904.TXT VERN
190 

ously some areas we disagree. How would you suggest we go about 

dealing with those? 

Mr. WALKE. I echo the assessment of Mr. Snyder and Mr. 

Svenson that I believe there are disagreements over whether locking in the reduction levels and schedules in the second phase of 

CAIR is the right medium-term or long-term solution. So any effort 

to do that through legislative codification I think would run into a 

variety of different opinions. I detect more consensus around the 

benefits of CAIR in the earlier term, and I think that there might 

be consensus there. 

Obviously there are different views about carbon regulation in 

the short term. But in the long term, I think that we could have 

some consensus. 

Senator CARPER. All right, thanks. I have gone on too long. Senator Voinovich. 

Senator VOINOVICH. If you really look at the situation that we 

have today, this may be the last week we are in until we take our 

August break. Then we get back after the Republican convention, 

we will be back here until September 26th, according to Harry Reid 

and Speaker Pelosi, and we are gone. And I suspect there are some 

folks out there that have the opinion that we will have a new 

President, it may not be a Republican, it may be a Democrat. There 

are some people who are speculating that we may have more 

Democrats in the House and maybe more Democrats in the Senate 

and that probably to achieve some of the things that Mr. Snyder 

wants and Mr. Walke wants and some of the others, it is probably 

going to be more likely that they can get that with a new political 

environment here in the Congress, and maybe at the White House. 

Who knows. 

But I have to say to you that I don’t think anything is going to 

get done between now and March, April, May of next year. I don’t 

think that Senator Carper and I can get together after the hours 

we spent trying to—and we are good friends—working things out, 

that we are going to be able to get that done just like that. 

Now, I can understand, Mr. Walke, you are looking down the 

road in terms of where is this taking us and it is not deep enough, 

it is not quick enough. But I would like to suggest to all of you that 

we are living in the real world, the political world that we find ourselves, and I would like to suggest to a lot of you who are sitting 

in this room that care about this one way or the other, may represent environmental groups, you may represent industrial groups, 

and we all have to reflect the people that are out there right now 

who are really hurting in this Country. I would like you to think 

about it. What is the best thing that we could do right now to handle this situation? Is it a Draconian situation if we let this thing 

sit for 6 months or so? What impact is that going to have on the 

environment, public health, businesses’ decisions about what they 

are going to do going forward or whatever? 

That is it, that is where we are at right now. Mr. Walke, you are 

a pretty outspoken leader in the environmental groups. I would 

really like to sit down with some of your friends, try and look at 

this thing from a practical point of view and say, what are we 

going to do about this thing. I would sure be interested in your consensus and I know Senator Carper would. I see some representaVerDate Aug 31 2005 12:29 May 01, 2015 Jkt 000000 PO 00000 Frm 00194 Fmt 6633 Sfmt 6633 S:\_EPW\DOCS\88904.TXT VERN
191 

tives of Edison Electric industry that are here, other groups. We 

would sure like to hear from you about what do you think we ought 

to do now. Or should we just do nothing and wait until we come 

back after January and start to work on some of these other 

issues? 

Senator CARPER. I think we are getting close to the end. I have 

one more question I would like to pose for Mr. Korleski, and I don’t 

know if anybody else will want to chime in. I think somewhere 

within your statement, you said that it is your intention to work 

with utilities on a one on one basis to lock in controls already 

planned or in place pursuant to CAIR. How do you intend to lock 

in controls? 

Mr. KORLESKI. Mr. Chairman, what we are contemplating is having discussions where we would better understand the economic 

ramifications from their side about where they are with their controls, is it cost-effective to run them. But in order to get the benefits, we would have to have legally enforceable mechanisms in 

place, making sure that those controls were installed and operated 

and did provide the benefits. On a statewide basis, you could do 

that. 

The easiest way to do that, assuming the parties agreed that 

that was the appropriate step, would be to do that through findings 

and orders. You would make enforceable findings and orders where 

everyone would agree, OK, these controls are going in by these 

dates, or these controls that have already been installed will begin 

operating on such and such. And we would try to see how much 

of CAIR we could recoup through a State enforceable mechanism. 

But as I also said, we have not had those discussions yet. I don’t 

think those will be easy discussions. Certainly based on the comments from the power industry representatives here today, I certainly can’t guarantee that the utility companies are going to come 

in and say, no problem, we will be happy to go forward with that. 

But we think it is important to try to do that, to at least have those 

discussions. 

Senator CARPER. Does anyone else have a comment you would 

like to make on this point? Mr. Walke, please. 

Mr. WALKE. As I indicated in my testimony, there are tools available to States to deem the controls that are already in place and 

planned reasonably available control technology. I think it will be 

intuitive to most members of the public that the fact that a scrubber is already at the site, ready to have the switch flipped is reasonably available. 

A second point is, it is worth commending the companies that 

have already announced that they are going to continue with these 

scrubbers. Dayton Power and Light in Senator Voinovich’s State, 3 

days after the Court’s decision on Monday announced that they 

were going to go ahead with a very protective scrubber project. 

They are going to take a $20 million hit from allowances, but they 

are helping to offset the cost of the scrubbers by switching to higher sulfur coal that is actually taken from the region. So they are 

providing jobs, they are providing scrubbers to protect the public, 

and they are doing it in order to protect their customers and the 

residents that live around them. 

192 

So I am hopeful that Mr. Korleski and the industry will come to 

that decision through mutual agreement, as he suggested in his 

testimony. But if not, I think it is imperative that we draw upon 

the legal tools that are available under the statute to make those 

comments and decisions. 

Senator CARPER. Anyone else? Mr. Snyder. 

Mr. SNYDER. [off microphone] Senator Carper, as I mentioned in my testimony, in New York we have a State law program in place that will 

achieve most of the same reductions that CAIR would achieve in 

the first part. We can evaluate that, see if any of it needs to be 

strengthened. We will be working with the other OTC States to 

identify ways to ensure that the emission reductions remain in 

place in the OTC States, and we plan to have that, to initiate that 

dialog with our partners in the LADCO States to see if there can 

be some multi-State understanding worked out that keeps in place 

at least the kind of air quality protections that we would see in the 

first part of CAIR, as this process plays out in Congress. 

Senator CARPER. Mr. Spence. 

Mr. SPENCE. I would just maybe make a point that among the 

electric utilities, you have those that are merchant plants, those 

that don’t have the backstop of regulation versus those that are 

still in ‘‘regulated’’ States. And on the merchant generators, of 

which we are one, we rely on many things in the marketplace to 

help us guide our decisionmaking. When the regulatory, in this 

case the rulemaking set the foundation upon which we were making what I think were the right business decisions on behalf of our 

public and the company’s shareholders, now I just want to point 

out that whatever we do, I would like to see us restore some type 

of confidence in the underlying emission markets or whatever the 

new construct is, so that people that don’t have the ability to pass 

these costs on to customers and have to get them through market 

price mechanisms have that ability or at least the presumption 

that we are going to have that ability going forward. 

Senator CARPER. All right. This has been a timely and important 

and informative hearing for me, and I suspect for my colleagues. 

Senator Voinovich, do you want to make any closing comments before we wrap it up? 

Senator VOINOVICH. I think it has been a good hearing. I am anxious to hear from a lot of folks about what they think we ought to 

do. I am interested in the rates that individuals are paying in 

States where they are able to pass them through. Mr. Korleski, I 

don’t know what impact it is having on utility rates in the State 

of Ohio. All I know is that when I go home, people are really up 

in arms. They are telling me that their standard of living has 

changed, with gasoline, with the cost of heating, air conditioning. 

I go to Perkins on Sunday after Mass on Sunday for breakfast, and 

the guy said, I don’t know if I am going to make payroll this week, 

because people aren’t coming in any more. 

So there is a lot of hurt going on in the Country today. I think 

that anything that we should do should be, that that situation 

should be taken into consideration. And if we don’t do that, I don’t 

think we are going to have the political will to get the job done that 

we would like to do for the environment. So Mr. Walke, you have 

193 

been hearing me talk for a long time. Can we harmonize our environment, our energy, our economy and now even our national security? How can we come together and figure out how to get this 

done? 

I am going to be around, I know hopefully for another 2 years, 

God willing. I am willing to do that, I know Senator Carper is. But 

somehow we really have to come together here and figure this out. 

The climate change, I worked to make sure that didn’t pass, I 

worked very hard to do that. But I can tell you that there are several of us on a bipartisan basis that are working our tail off to try 

and see if we can’t come up with a compromise between now and 

when the next President comes in. The next President is going to 

have one great challenge. You just think about all the domestic 

challenges, and the international. 

And I think some of us that have been working on a lot of these 

problems for a long time could really do the Country a great favor. 

I have talked to some of my colleagues in the Senate about coming 

up with some compromises on some things and present them to the 

President and say, you know, we worked on this, it is not perfect. 

It doesn’t go as far as we want it to go. But here is something that 

will move us down the field to deal with some of these issues that 

have been around for a long period of time. That is my hope and 

vision. 

Thank you, Mr. Chairman. 

Senator CARPER. You bet. Thank you. 

Senator Voinovich and I agree on a whole lot. One of the things 

we agree on is that technology will help us, if we are smart enough, 

develop it and apply it, implement it, can help us address a lot of 

the problems we face, not all, but a lot of the problems that we face 

as a society. It wasn’t that long ago when we were harvesting corn, 

we got about 50 bushels of corn to the acre. Today we are up to 

about 150. Probably within the next decade or so, we will be up as 

high as 300. And that doesn’t mean we ought to take little kernels 

of corn and turn them into ethanol. But there is plenty of plant 

waste out there, and the ability to be smart about it, to be able to 

feed ourselves and to provide the fuels that we need. 

Another thing that he and I agree on is the importance of trying 

to maximize benefit with respect to costs. There are ways that we 

heard, very encouraging numbers here in terms of the amount of 

the cost of implementing these improvements, these ways to reduce 

our SOx, NOx, mercury, if you will, and the public health benefit 

that flows from that is really rather extraordinary. We need to 

keep that in mind. 

We started off today’s hearing, as you may recall, and I quoted 

Albert Einstein. I want to close today by quoting three other people. One of those is Winston Churchill. He used to say, and I am 

going to paraphrase him here, but he used to say, democracy is the 

worst form of government devised by wit of man except for all the 

rest. And dealing with these issues, we involve the President, actually a former Governor with whom George and I served, in October 

2000, a month before the election, announced in Saginaw, Michigan, that if elected President, he would lead an Administration 

that would address sulfur dioxide emissions, nitrogen oxide emisVerDate Aug 31 2005 12:29 May 01, 2015 Jkt 000000 PO 00000 Frm 00197 Fmt 6633 Sfmt 6633 S:\_EPW\DOCS\88904.TXT VERN
194 

sions, mercury emissions and carbon dioxide emissions from power 

plants. 

So we had that strong initial thought from a fellow who was 

going to be elected President shortly after that. And the Congress 

got involved, we ended up after 7 years not making nearly enough 

progress on any of those fronts. The courts have now become involved, the Federal court has become involved. So here we have democracy at its best, maybe at its worst, I am not sure. But in any 

event, what we have done is we have squandered 8 years, I think, 

unfortunately. It is important we not squander the next 8 years. 

I want to close by quoting not Churchill, but two other notable 

British citizens, Jagger and Richards, who I heard just yesterday 

on the radio saying these words, can’t always get what you want, 

but if we try sometimes, we can get what need. Here in this Country, among our needs, the utilities need certainty. States need the 

Federal support to help them meet air quality standards. And the 

rest of us just need cleaner air to breathe. And if we work hard, 

and I am certainly fully intent on doing that with Senator 

Voinovich, to make sure that during our watch, we get this job 

done and we get started on it sooner rather than later. 

To our panel of witnesses, thank you for coming on such short 

notice. Thank you for helping us to better understand what lies 

ahead. 

Senator VOINOVICH. Would you mind? I know you want to get the 

last word in. 

Senator CARPER. I am always happy to yield to you. 

Senator VOINOVICH. I have two mottoes, one of them that I took 

on when I was mayor of Cleveland was, together we can do it. And 

Mr. Korleski, we have another motto in Ohio, which is, with God, 

all things are possible. I think that working together and with 

God’s help and inspiration, I think maybe we can take on some of 

these things for the benefit of our Country and frankly, the world. 

Senator CARPER. And to that, I would say amen and this hearing 

is adjourned. 

[Whereupon, at 12:40 p.m., the subcommittee was adjourned.] 

[Additional material submitted for the record follows.] 

STATEMENT OF HON. CHRISTOPHER BOND, U.S. SENATOR

FROM THE STATE OF MISSOURI

Mr. Chairman, thank you for holding this hearing today to see what we can do 

regarding the Clean Air Interstate or (CAIR) [pronounced CARE] regulations recently overturned by the courts. 

Those clean air regulations by the Bush administration would have cut smog, soot 

and acid rain pollution from electric power plants across the eastern half of U.S. 

by up to 70 percent. 

EPA predicted that by the year 2015, CAIR would have provided almost $100 billion in annual health benefits and annually prevented 17,000 premature deaths, 

millions of lost work and school days, and tens of thousands of non-fatal heart attacks and hospital admissions. 

Instead, the court’s decision to throw out these rules has thrown these environmental and health benefits into turmoil. Utilities are suspending pollution cleanup 

efforts, hundreds of communities across America will face dirtier air, and thousands 

of lives that would have been saved from cardiac and respiratory illness are now 

in danger. 

I hope as we hear testimony from the witnesses, we will remember certain lessons 

that are already clear. First, the environmental and health protections of these rules 

would not be at risk if members of this Committee had not blocked efforts to enact 

195 

them into law. In 2003, President Bush proposed putting these smog, soot and acid 

rain pollution cuts into law. 

Providing specific statutory authority would have prevented a court from overturning them for that reason, as they have now done. Instead, the Democrat members of this Committee blocked that clean air legislative proposal. Democrats 

blocked the ability to guarantee new environmental environmental protections on 

power plants. 

Democrats preferred to hold environmental protection hostage to their climate 

change demands. Others demanded even stricter controls. For some, 70 percent 

gains were not enough. They wanted 90 percent gains. Now, instead of 90 percent 

of the loaf of bread, we are left with no loaf of bread, and efforts to cut smog, soot, 

and acid rain are set back years. 

The second lesson of this situation is that ‘‘regulate’’ and ‘‘litigate’’ failed the environment and the people. A strategy to block amending the Clean Air Act, and instead force new regulations under the current Act, and then litigate the details of 

those regulationshas backfired terribly. Regulate and litigate has left the environment weakened, air quality will be worse then it would have been, and thousands 

of lives unnecessarily threatened. This failed regulate and litigate strategy is the 

same that advocates are pressing the EPA to use on carbon dioxide. The environment deserves better, the American people deserve better. 

Thank you. 

STATEMENT OF HON. BERNARD SANDERS, U.S. SENATOR

FROM THE STATE OF VERMONT

Senator Carper, Senator Voinovich, you have convened an important hearing 

today. As we all know, the recent Court decision, which vacated the Clean Air InterState Rule, has left many worried that the air across much of the country, particularly the northeast, will get worse—not better. 

Quite frankly, I think there is widespread agreement that Congress must step in 

and provide some order when it comes to the Country’s air pollution policies. The 

Bush administration has failed on so many levels when it comes to clean air policy—starting with the so-called, inappropriately, I might add, ‘‘Clear Skies’’ proposal 

that this Committee voted down in a 2005 bipartisan vote. And, while I would like 

to say for certain that we won’t see any other bad proposals, who knows what the 

Administration might try in its final days —but we will be watching. 

Mr. Chairman, we must seriously address the pollution that is being spewed from 

power plants. The public health is threatened every single day that we don’t. Let 

me just provide one example: As we know, nitrogen oxides contribute to the formation of ground-level ozone. As we also know, as of June of this year, 132 million 

people in 293 counties lived in places where ozone was at dangerous levels. In fact, 

as many as 2,300 premature deaths are caused each year from respiratory and cardiovascular conditions related to ozone. That is just one example. We could also talk 

about the deaths associated with carbon dioxide, which we all know is the primary 

contributor to global warming. Or, we could talk about the threat that mercury pollution from power plants poses to pregnant women and our ecosystems, especially 

aquatic ecosystems. The point is this: Congress must move forward to protect the 

public health and environment from the pollution that fossil fuel power plants put 

into the air everyday. The exciting part is that the answers are at our finger tips. 

We could be building concentrated solar power plants in the southeast. We could 

be building more wind power in the Midwest. We could put solar photovoltaic units 

on roofs all across the country. We could utilize geothermal —both utility scale in 

the southwest, as well as residential scale all over. We could use our biomass resources more. We should be doing all of it—and if we did, the emissions of harmful 

air pollutants—the very ones the Clean Air InterState Rule addressed—would be reduced tremendously, if not completely. 

Now, I know that the Chairman has spent a significant amount of time and energy on clean air policy and I am sure that he wants to move forward in an expedited fashion to fill the gap left by the Court’s recent decision. In fact, as he has 

mentioned, he has a bill that would reduce emissions of four harmful pollutants —nitrogen oxides, sulfur dioxide, carbon dioxide, and mercury. Sen. Alexander also has 

a 4P bill. And, I too have a 4P bill. While they differ in some of the details, I think 

it is pretty clear that there is a strong interest in attacking power plant pollution 

and I suggest that we get right to business working together to solve the problem. 

Let me talk a little bit about my legislation, the Clean Power Act (S. 1201), which 

is cosponsored by Senators Lieberman, Leahy, Feingold, and Clinton. It is modeled 

after legislation spearheaded by my predecessor and ardent protector of the environment and the public health, Senator Jim Jeffords. Similar to the Chair’s legislation, 

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the bill would limit the pollution of the four major pollutants emitted by power 

plants: sulfur dioxide, nitrogen oxides, carbon dioxide, and mercury. 

While we wait for a new Administration to put forward a comprehensive approach 

to addressing global warming, I strongly believe power plants should begin reducing 

their emissions of greenhouse gases and other pollutants now. While there are some 

power plants that are reducing emissions of SOx NOx, and mercury, the technology 

exists for them to make deeper reductions —reductions that would be more protective of the public health and environment. And, the legislation specifies the levels 

that these pollutants must drop to. 

Additionally, the Clean Power Act lays out a roadmap for how many of the required reductions in emissions of harmful pollutants can actually be made. For example, the bill would increase the use of renewables like wind and solar by establishing a Renewable Portfolio Standard of 20 percent by 2020. I find this to be a 

rather modest goal. It also would establish a carbon dioxide performance standard 

for new power plants that would prevent the construction of traditional carbon dioxide-intensive coal plants. In addition, it seeks to implement an energy efficiency performance standard that would reduce electricity use by 9 percent by 2020. I think 

that it is many of these policies that make my legislation preferable to other similar 

pieces of legislation. 

Before I finish my remarks, I want to mention that I am glad that a variety of 

national organizations support my legislation, including the Clean Air Task Force, 

National Wildlife Federation, Environmental Defense, National Environmental 

Trust, the American Lung Association, Natural Resources Defense Council, and Environment America (formerly US PIRG). 

Again, Mr. Chairman, I think that the Congress must step in to bring some order 

to clean air policy and after we hear from today’s witnesses, I hope that we get right 

down to business. 

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