EPA Listening Session — Denver, Colorado July 30, 2014 Good afternoon, my name is Tyler Hamman, I'm the director of government affairs for the Lignite Energy Council based in Bismarck, North Dakota.

I appreciate the opportunity to provide comments today about the EPA's proposed Clean Power Plan to regulate carbon dioxide emissions from existing fossil-fueled power plants.

The mission of the Lignite Energy Council is to preserve, protect, and enhance the lignite coal industry to allow for the continued use of our region's 800 year supply of lignite coal to generate electricity, as well as produce synthetic natural gas and other valuable byproducts.

The Lignite Energy Council is concerned about the EPA's proposed Clean Power Plan because of its impact on the use of lignite coal to produce affordable and reliable electricity.

North Dakota enjoys some of the lowest electricity rates in the nation' because of our abundant lignite resources. North Dakota produces and utilizes approximately 30 million tons of lignite coal annually, providing nearly 80 percent of the electricity in the state and exporting electricity to the region. At the same time, we are one of only seven "Clean Air" states that meet all of the federal ambient air quality standards. Clearly, clean air and coal-fired electricity are not mutually exclusive, and if the "Clean Power Plan" were simply about clean power, then we can safely say that our industry has already met that goal.

However, CO2 does not share the characteristics of pollutants or emissions — sulfur, ash, mercury, etc - that the EPA has traditionally regulated. These are pollutants that are trace elements in the coal for which controls can be implemented at power plants. Since CO2 is the majority byproduct of burning fossil fuels, the only ways to achieve reductions at the power plant are through increased efficiency, yet-to-be-proven carbon capture and sequestration

1 http://www.eia.govistate/rankings/?sid=NDUseries/31technology, or by simply reducing power output. With respect to efficiency, our industry has

not been sitting on its hands. Utilities in North Dakota have invested $2 billion and continue to spend $100 million annually to increase efficiency and reduce emissions from their electrical generating units.

Yet in the proposed rule, the EPA again gets ahead of the current state of technology by assuming that all coal-fired units can achieve a 6 percent reduction in CO2 emissions through efficiency improvements even as these units add energy-intensive and/or efficiency-reducing
environmental controls to comply with other EPA rules. Furthermore, the EPA has provided no basis for the 6 percent number chosen for the proposed rule or cites any examples of plants that have been able to achieve that reduction through existing technology. Most of the straightforward and cost effective measures to improve efficiency at power plants have already been implemented.

The Lignite Energy Council is also very concerned with the reliability impacts of the proposed rule. North Dakota currently gets 16 percent of its power from wind, and has the technical potential for much more. However, integrating intermittent resources into the grid remains achallenge. Coal plants were designed to be run at a constant pace. The start/stop/slowdown/speed-up electric output associated with intermittent renewable energy production can greatly impact the efficiency and durability of coal-fired units that are forced to "load-follow". In short, while wind certainly plays an important role in our region's generation portfolio, we are nearing a crossroads with respect to the amount of wind that can be plugged into the grid without sacrificing reliability and efficiency. The remaining building blocks in the proposed rule present similar challenges with respect to infrastructure and management of the grid.

Given all of these factors and the complexity of the rule, the timeline for implementation is simply not possible. In North Dakota, the Department of Health is mainly responsible for implementing EPA's regulations under the Clean Air Act. Due to the overarching nature of thisrule and the overlap that impacts many different governmental jurisdictions — including other

states if they choose to participate in a regional plan — one year, and even two years is simply not sufficient. The EPA has yet to answer some very basic, yet very important, questions such as how renewables in one state might be credited to another, or how the emissions from power generated by one state but exported to another are dealt with. Not knowing the answers to these basic threshold questions until EPA issues its final rule, if then, makes it very difficult for states to even begin developing implementation plans.

There are far too many issues to cover with the proposed rule in the time allotted today. The Lignite Energy Council will be filing detailed comments with the EPA by the October deadline, and we look forward to working with the agency as this process moves forward. Reducing CO2 emissions is a worthy objective that we are glad to share. However, it is not hyperbole to say that the proposed rule is entirely different from any Clean Air Act regulation we have faced before. Affordable and reliable coal-fired electricity has been instrumental to achieving our standard of living and economic advantage in the world. The EPA needs to work with us on a practical regulation that will not sacrifice our ability to continue using this abundant resource. We would also ask that the EPA hold additional interactive sessions to take comment and answer questions about the proposed rule.

To close, I would just point out if there is any nation in the world that is utilizing its coal resources in the most efficient and effective manner, it's us. Carbon dioxide emissions from the U.S. coal fleet only represents 3 percent of global greenhouse gas emissions. Reducing U.S. emissions from coal plants by 30%, as EPA's proposed rule requires, comes with a high cost to our economy and our business and residential consumers -- with virtually no climate-related environmental benefits. We should keep this fact in mind as we consider the value and virtues of this proposed rule, and not punish the good actors.

Thank you for your attention.