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THE ADMINISTRATION’S EMPTY PROMISES 

FOR THE INTERNATIONAL CLIMATE TREATY 

HEARING 

BEFORE THE

COMMITTEE ON SCIENCE, SPACE, AND 

TECHNOLOGY 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED FOURTEENTH CONGRESS 

FIRST SESSION 

November 18, 2015 

Serial No. 114–50 

Printed for the use of the Committee on Science, Space, and Technology 

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Available via the World Wide Web: http://science.house.gov 
(II) 

COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY 

HON. LAMAR S. SMITH, Texas, Chair 

FRANK D. LUCAS, Oklahoma 

F. JAMES SENSENBRENNER, JR., 

Wisconsin 

DANA ROHRABACHER, California 

RANDY NEUGEBAUER, Texas 

MICHAEL T. MCCAUL, Texas 

MO BROOKS, Alabama 

RANDY HULTGREN, Illinois 

BILL POSEY, Florida 

THOMAS MASSIE, Kentucky 

JIM BRIDENSTINE, Oklahoma 

RANDY K. WEBER, Texas 

BILL JOHNSON, Ohio 

JOHN R. MOOLENAAR, Michigan 

STEVE KNIGHT, California 

BRIAN BABIN, Texas 

BRUCE WESTERMAN, Arkansas 

BARBARA COMSTOCK, Virginia 

GARY PALMER, Alabama 

BARRY LOUDERMILK, Georgia 

RALPH LEE ABRAHAM, Louisiana 

DARIN LAHOOD, Illinois 

EDDIE BERNICE JOHNSON, Texas 

ZOE LOFGREN, California 

DANIEL LIPINSKI, Illinois 

DONNA F. EDWARDS, Maryland 

SUZANNE BONAMICI, Oregon 

ERIC SWALWELL, California 

ALAN GRAYSON, Florida 

AMI BERA, California 

ELIZABETH H. ESTY, Connecticut 

MARC A. VEASEY, Texas 

KATHERINE M. CLARK, Massachusetts 

DON S. BEYER, JR., Virginia 

ED PERLMUTTER, Colorado 

PAUL TONKO, New York 

MARK TAKANO, California 

BILL FOSTER, Illinois 
(III) 

C O N T E N T S 

November 18, 2015 

Page 

Witness List ............................................................................................................. 2 

Hearing Charter ...................................................................................................... 3 

Opening Statements 

Statement by Representative Lamar S. Smith, Chairman, Committee on 

Science, Space, and Technology, U.S. House of Representatives ..................... 7 

Written Statement ............................................................................................ 9 

Statement by Representative Suzanne Bonamici, Ranking Minority Member, 

Subcommittee on Enviorment, Committee on Science, Space, and Technology, U.S. House of Representatives ............................................................... 11 

Written Statement ............................................................................................ 13 

Witnesses: 

Dr. Anne Smith, Senior Vice President, NERA Economic Consulting 

Oral Statement ................................................................................................. 16 

Written Statement ............................................................................................ 18 

Mr. Bill Magness, Senior Vice President, Governance, Risk and Compliance, 

Electric Reliability Council of Texas 

Oral Statement ................................................................................................. 65 

Written Statement ............................................................................................ 67 

Ms. Katie Dykes, Deputy Commissioner, Connecticut Department of Energy 

and Environmental Protection and Chair, Regional Greenhouse Gas Initiative, Inc. 

Oral Statement ................................................................................................. 72 

Written Statement ............................................................................................ 74 

Mr. Chip Knappenberger, Assistant Director, Center for the Study of Science, 

Cato Institute 

Oral Statement ................................................................................................. 80 

Written Statement ............................................................................................ 82 

Discussion ................................................................................................................. 93 

Appendix I: Answers to Post-Hearing Questions 

Dr. Anne Smith, Senior Vice President, NERA Economic Consulting ................ 116 

Mr. Bill Magness, Senior Vice President, Governance, Risk and Compliance, 

Electric Reliability Council of Texas .................................................................. 120 

Appendix II: Additional Material for the Record 

Documents submitted by Representative Lamar S. Smith, Chairman, Committee on Science, Space, and Technology, U.S. House of Representatives .... 122 

Documents submitted by Representative Gary Palmer, Committee on Science, 

Space, and Technology, U.S. House of Representatives .................................... 140 

Statement submitted by Representative Eddie Bernice Johnson, Ranking 

Member, Committee on Science, Space, and Technology, U.S. House of 

Representatives .................................................................................................... 152 

Statement submitted by Representative Elizabeth H. Esty, Committee on 

Science, Space, and Technology, U.S. House of Representatives ..................... 154 

(1) 

THE ADMINISTRATION’S EMPTY PROMISES 

FOR THE INTERNATIONAL CLIMATE TREATY 

WEDNESDAY, NOVEMBER 18, 2015 

HOUSE OF REPRESENTATIVES, 

COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY, 

Washington, D.C. 

The Committee met, pursuant to call, at 10:05 a.m., in Room 

2318, Rayburn House Office Building, Hon. Lamar Smith [Chairman of the Committee] presiding. 
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Chairman SMITH. The Committee on Science, Space, and Technology will come to order. 

Without objection, the Chair is recognized to declare recesses of 

the Committee at any time. 

Welcome to today’s hearing entitled ‘‘The Administration’s Empty 

Promises for the International Climate Treaty.’’ 

I recognize myself for five minutes for the purposes of an opening 

statement, and then I’ll recognize the Ranking Member. 

Over the last year, the Environmental Protection Agency has released some of the most expensive and burdensome regulations in 

its history. Today’s hearing will examine how the Environmental 

Protection Agency’s recent regulations will do little to meet the administration’s pledge at the upcoming Paris talks to reduce global 

carbon emissions. 

The so-called Clean Power Plan will cost billions of dollars, cause 

financial hardship for American families, and diminish the competitiveness of American industry around the world, all with no 

significant benefit to climate change. It is well documented that the 

Clean Power Plan will shut down power plants across the country, 

increase electricity prices and cost thousands of Americans their 

jobs. 

New analysis by NERA Economic Consulting shows that this 

final rule will impose a tremendous cost on the American people. 

This includes $29 billion to $39 billion in annual compliance costs 

and annual double-digit electricity price increases in most states. 

My home state of Texas would be one of the hardest hit. According to a recent report by the Energy Reliability Council of Texas, 

energy costs for customers in Texas may increase by up to 16 percent per year due to the Clean Power Plan alone. 

EPA asserts that the Clean Power Plan will help combat climate 

change. However, EPA’s own data demonstrates that claim is false. 

The EPA Administrator Gina McCarthy testified before this committee and agreed that this rule would have a minimum impact on 

climate. In fact, their data shows that this regulation would reduce 

sea level rise by only one one-hundreth of an inch, the thickness 

of three sheets of paper. 

Furthermore, statements by President Obama and others that 

attempt to link extreme weather events to climate change are unfounded. The lack of evidence is clear: no increased tornadoes, no 

increased hurricanes, no increased droughts or floods. 

The administration’s claims are contradicted by the underlying 

science from the United Nation’s Intergovernmental Panel on Climate Change. For instance, the IPCC found that there is ‘‘low confidence on a global scale,’’ that drought has increased in intensity 

or duration. The same lack of evidence can be found in the IPCC 

reports for almost every parameter of extreme weather events. 

Hurricanes have not increased in the United States in frequency, 

intensity, or normalized damage since at least 1900. And it has 

been a decade since a category 3 or stronger hurricane has hit the 

United States. Whether measured by the number of strong tornadoes, tornado-related fatalities or economic losses associated with 

tornadoes, the latter half of the 20th century shows no climate-related trend. 
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Scientific American recently stated that the link between climate 

change and extreme weather is merely an opinion. The administration’s alarmism and exaggeration is not good science and intentionally misleads the American people. The Clean Power Plan represents massive costs without significant benefits. In other words, 

it is all pain and no gain. 

Another example of how this Administration attempts to promote 

its climate agenda can be seen at the National Oceanographic and 

Atmospheric Administration. Its employees altered historical climate data to get politically correct results in an attempt to disprove the hiatus in global temperature increases. 

NOAA conveniently issued its news release promoting this report 

just as the Obama Administration was about to announce its extensive climate change regulations. When the Science Committee 

raised concerns about NOAA’s report, the agency refused to be 

transparent about its findings and provide documents to the Committee. 

The American people should be suspicious of the motives of this 

Administration as it continually impedes Congressional oversight 

of agency actions tied to its extreme climate agenda. 

In just a few weeks, world leaders will gather in Paris to discuss 

how to regulate carbon emissions. The Obama Administration touts 

the Clean Power Plan as the cornerstone of its promise to the international community to reduce greenhouse gas emissions. However, 

the U.S. pledge to the U.N. is estimated to prevent only a three 

onehundreths of one degree Celsius temperature rise. This is 

laughable even if the negative consequences are serious. 

There is a reason the President chose to bypass Congress in 

order to negotiate a climate deal on his own. The President’s plan 

gives control of U.S. energy policy oftentimes to unelected United 

Nations officials. This plan ignores good science and only seeks to 

advance a partisan political agenda. The President should come 

back to Congress with any agreement that is made in Paris on carbon emissions. He won’t because he knows the Senate will not ratify it. 

I look forward to hearing from today’s witnesses about the impact of these burdensome EPA regulations on their states. 

[The prepared statement of Chairman Smith follows:] 
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Chairman SMITH. That concludes my opening statement, and the 

Ranking Member, the gentlewoman from Oregon, Ms. Bonamici, is 

recognized for hers. 

Ms. BONAMICI. Thank you very much, Mr. Chairman. And thank 

you to all of our witnesses for being here today. 

I’m especially looking forward to the testimony of Ms. Katie 

Dykes, the Deputy Commissioner of the Connecticut Department of 

Energy and Environmental Protection. It will be beneficial for the 

Committee to learn about the success of the State of Connecticut 

and the Regional Greenhouse Gas Initiative, known as RGGI, 

which is reducing carbon emissions while simultaneously growing 

the region’s economy. 

And after my opening statement, Ms. Esty from Connecticut will 

be sitting here in the Ranking Member chair. 

The success of RGGI highlights how we can have strong environmental regulations and a strong economy. They are not mutually 

exclusive. This is not just true in the United States; it’s a growing 

reality now accepted by many other nations. 

And I’m looking forward to discussing the Clean Power Plan, 

which builds on the history and accomplishments of the Clean Air 

Act and the mission of the EPA to protect public health and the 

environment. Our commitment to a cleaner future is what allows 

the United States to lead by example and galvanize the international community to take meaningful steps to address the issue 

of carbon emissions and climate change. The Clean Power Plan in 

the upcoming negotiations in Paris are necessary if we stand any 

chance, not just as a country but as a world, of lessening the effects 

of climate change on our States, our country, and our planet. 

Some here today might question the climate scientists and their 

research, yet the overwhelming body of scientific research shows 

that we must take action to avoid the most serious effects of climate change. Thankfully, over the last few years there have been 

numerous studies that clearly show the costs and risks associated 

with not acting to address climate change. Those are very large. 

For example, a recent study by the World Bank found that, without the right policies, rising seas and severe weather events could 

force more than 100 million people into extreme poverty. This is 

just one of the stark statistics reflecting the potential impacts of 

climate change. 

I’d also like to point out that the scientific community is not 

alone in its call for action. The business community has called for 

action on climate change as well. In my home State of Oregon 

many companies have stepped up and demonstrated their support 

to address climate change. Nike, Intel, Iberdrola USA, International Paper, LAM Research, and Portland General Electric are 

just a few examples of many that have joined more than 80 companies nationwide in signing the American Business Act on Climate 

Pledge. These companies have made business-specific commitments 

to take significant actions to address climate change and expressed 

their support for a strong Paris agreement. 

The Clean Power Plan is a critical element of our domestic efforts, and it represents an opportunity for American ingenuity. Environmental regulations often act as a catalyst to create new jobs 

and new markets, as well as the savings that come with a 
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healthier, more productive workforce and population. In 2012, the 

Department of Commerce estimated that the American environmental technologies industry generated approximately $312 billion 

in revenues with a global market of more than $800 billion, employing nearly 1.7 million Americans, and supporting 60,000 small 

businesses. 

The United States should remain a global leader in clean energy 

technologies and benefit from the much-needed transition to a low 

carbon economy. When you have the scientific and business communities agreeing that action to address climate change is necessary and that the benefits outweigh the risks, it is clearly time 

for Congress to listen. I am hopeful that with the United States’ 

leadership and commitment, the U.N. climate negotiations will result in meaningful actions to address our biggest environmental 

challenge. 

Thank you, Mr. Chairman, and again, thank you to our witnesses for being here this morning. I look forward to all of your testimony, and I yield back the balance of my time. 

[The prepared statement of Ms. Bonamici follows:] 
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Chairman SMITH. Thank you, Ms. Bonamici. 

Let me introduce our witnesses. Our first witness today is Dr. 

Anne Smith, Senior Vice President and Environmental Practice coChair for NERA Economic Consulting. Dr. Smith is an expert in 

environmental policy assessment and corporate compliance strategy 

planning. She specializes in market impact analysis, risk management integrated policy assessment, and the design and performance of emissions trading programs. Dr. Smith previously served as 

an economist in the Office of Policy Planning and Evaluation at the 

EPA. Dr. Smith received her bachelor’s degree in economics from 

Duke University and her master’s and Ph.D. from Stanford. 

Our second witness is Mr. Bill Magness, General Counsel and 

Senior Vice President for Governance, Risk, and Compliance for the 

Electric Reliability Council of Texas, or ERCOT. Mr. Magness has 

worked on utility issues for more than 20 years and has served as 

lead counsel in utility commission proceedings in 16 States. In addition, he served as a federal prosecutor early in his career. Mr. 

Magness received his bachelor’s degree from the University of 

Texas and his law degree from the University of Pennsylvania. 

I now recognize the gentlewoman from Connecticut, Ms. Esty, to 

introduce our next witness, Ms. Katie Dykes, Deputy Commissioner 

for the Connecticut Department of Energy and Environmental Protection and Chair of the Regional Greenhouse Gas Initiative. I hope 

I didn’t use up too much of your introduction by mentioning that, 

but the gentlewoman from Connecticut is recognized. 

Ms. ESTY. Thank you, Chairman Smith and Ranking Member 

Bonamici. I’m especially pleased to welcome and introduce Connecticut’s Deputy Commissioner for Energy, Ms. Katie Dykes, as 

one of our esteemed witnesses on today’s panel. 

As a Deputy Commissioner of the Connecticut Department of Energy and Environmental Protection, which we refer to as DEEP, 

Ms. Dykes is an invaluable director of Connecticut’s efforts to bring 

cheaper, cleaner, more reliable energy to our state. In addition, Ms. 

Dykes currently serves as the Chair of the Board of the Regional 

Greenhouse Gas Initiative, known as RGGI. 

Connecticut is proving as one of the laboratories of the States in 

the Jacksonian/Jeffersonian model that we can protect the environment, reduce emissions, and sustain and support a strong economy. 

Through her leadership with RGGI and development of innovations 

like the Connecticut Energy Efficiency Fund, she’s the perfect 

spokesman for a cleaner, more prosperous energy future. Prior to 

her service in Connecticut, Ms. Dykes served as Deputy General 

Counsel for the Council on Environmental Quality at the White 

House and as Legal Advisor to the General Counsel of the U.S. Department of Energy. 

Finally, I would be remiss if I failed to mention that Yale Law 

School is proud to claim her as an alum. She’s a classmate of the 

Chairman’s daughter. 

Chairman SMITH. No fair mentioning that now. 

Ms. ESTY. And I also have to confess she was one of my husband’s star students, and he convinced her to return to Connecticut 

to take up her present duties. So thank you so much for joining us 

here today, and thank you for indulging me in that. 

Chairman SMITH. Thank you, Ms. Esty, for that introduction. 
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Our final witness today is Mr. Paul Knappenberger, Assistant 

Director for the Center for the Study of Science at the Cato Institute. Mr. Knappenberger has over 20 years of experience in climate 

research and public outreach, which includes ten years with the 

Virginia State Climatology Office and 15 years as a Research Coordinator for New Hope Environmental Services. Mr. Knappenberger 

received his bachelor’s and master’s degrees in environmental 

sciences from the University of Virginia. 

We clearly have star witnesses today. We welcome you all. And, 

Dr. Smith, if you’ll begin with your testimony. 

TESTIMONY OF DR. ANNE SMITH, 

SENIOR VICE PRESIDENT, 

NERA ECONOMIC CONSULTING 

Dr. SMITH. Mr. Chairman, Ranking Member Bonamici, and Members of the Committee, thank you for your invitation to participate 

in the hearing today. I’m Anne Smith of NERA Economic Consulting. My testimony today is my own and does not represent a 

position of my company or its clients. 

I have a Ph.D. in economics, and I’ve spent the past 25 years assessing costs and benefits of numerous types of climate policies for 

governments, businesses, research groups, and NGOs. 

My NERA colleagues and I have just completed a detailed analysis of the costs of EPA’s final Clean Power Plan or CPP. We used 

NERA’s integrated energy and macroeconomic model, which has 

been tested out multiple times in the modeling forums that Stanford University organizes. We use the most recent data on technology and energy markets from the U.S. Energy Information Administration, which is the government’s independent and impartial 

source of energy information for policy analysis. 

Our analysis estimated both distributional impacts and macroeconomic costs of the CPP. We found that the fossil energy sectors 

face extensive impacts. For example, under the CPP’s mass-based 

caps, over the period 2022 to 2033, energy sector expenditures increase by a present value of $220 billion to $292 billion. Those 

spending increases translate into electricity rate impacts. When 

averaged over those same years, we find rates higher by 11 percent 

to 14 percent than if there were no CPP. 

From the macroeconomic perspective, net costs to the economy 

are also substantial. For example, after accounting for economywide interactions and rebating all allowance values to consumers, 

the CPP reduces U.S. consumer spending by a present value of $64 

billion to $79 billion. 

I’ve heard comments that NERA’s estimates are not credible because they are supposedly much higher than EPA’s. But they are 

not higher. We examined the details of EPA’s cost analysis, and we 

found that EPA’s own comparable estimates are $76 billion, 

present value. In other words, an apples-to-apples comparison finds 

that EPA’s costs are essentially the same as NERA’s. And the reason it may seem our estimates are higher is because EPA has reported its annual cost estimates incorrectly. For example, for 2020 

EPA’s Regulatory Impact Analysis reports compliance spending 

that is only $1.4 billion, but we found that EPA actually estimated 
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spending in that year would be $17.4 billion. My written testimony 

explains how these facts can be found in EPA’s documents. 

But just yesterday, I was digging yet deeper into EPA’s cost outputs, and I discovered yet another problem. The CPP requires that 

States prevent leakage if they choose the mass cap compliance option. Leakage would occur if uncovered emitters increase their 

emissions to offset the reductions of the CPP-covered sources. And 

I discovered that EPA’s analysis of the mass cap for the CPP does 

not include such leakage prevention and that EPA actually analyzed a cap that’s about 11 percent less stringent in 2030 than the 

CPP requires. That means, of course, that EPA’s cost estimate is 

an underestimate. 

I’ve spoken mainly about costs, but there are concerns about 

EPA’s estimates and benefits as well. For example, EPA tells us 

that the CPP will prevent thousands of deaths and many more 

asthma attacks and sick days, and such health benefits account for 

about half of EPA’s estimates of the final CPP’s benefits. But none 

of these purported health benefits of the CPP are due to climate 

impacts. Those estimates are all due to reductions in non-greenhouse gas emissions. EPA already regulates those other emissions 

to levels that are protective of the public health, and that fact undercuts any rationale for viewing those estimates as credible estimates of the benefits of the CPP. 

I’ve also prepared a written statement and I request that it be 

submitted into the record. 

[The prepared statement of Dr. Smith follows:] 
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Chairman SMITH. Thank you—— 

Dr. SMITH. Thank you. 

Chairman SMITH. —Dr. Smith. 

Mr. Magness. 

TESTIMONY OF MR. BILL MAGNESS, 

SENIOR VICE PRESIDENT, GOVERNANCE, 

RISK AND COMPLIANCE, 

ELECTRIC RELIABILITY COUNCIL OF TEXAS 

Mr. MAGNESS. Thank you, Mr. Chairman, Ranking Member Esty, 

Members of the Committee. Thanks for the opportunity to appear 

before you today. 

I’m Bill Magness. I’m the Senior Vice President for Governance, 

Risk, and Compliance and General Counsel at the Electric Reliability Council of Texas, known as ERCOT. 

ERCOT’s a nonprofit corporation that ensures a reliable electric 

grid and operates wholesale electricity markets for consumers in 

Texas. The ERCOT interconnection is comprised of approximately 

75 percent of the landmass of Texas but includes about 90 percent 

of the customer demand in the State. 

ERCOT recently completed a study of the impact of the Clean 

Power Plan on electric service in Texas within the ERCOT region. 

ERCOT’s study looks at power supply impacts of the CPP, as well 

as the estimated cost to consumers. On the power supply side of 

the equation, we examine impacts in two broad areas: first, on 

power plants, where the power is made and transmitted through 

wires to the customers. ERCOT’s power plant portfolio is diverse. 

Of the energy used in ERCOT in 2014, 41 percent of it came from 

natural gas units, 36 percent from coal units, 11 percent from nuclear, and ten percent from wind and other renewable resources. 

The second area was the transmission system. This is a complex 

system of wires, towers, transformers, and associated infrastructure that carry electricity between power plants and to the local 

utilities for delivery to customers. 

ERCOT manages the flow of electricity on 43,000 miles of electric 

transmission lines, including 3,600 miles that were very recently 

built primarily to bring wind resources to urban areas at a cost of 

approximately $6.9 billion. 

On the consumer cost side, in ERCOT our customer base is also 

very diverse. On the hottest day in the summer ERCOT power demand comes from approximately 50 percent residential customers 

and then 25 percent small commercial customers and 25 percent 

large commercial and industrial customers. On a more mild day 

like today, ERCOT’s demand comes from 40 percent—rather, 40 

percent of the demand in ERCOT is for large commercial and industrial customers. This is because there is a large commercial and 

industrial base in our region, which continues to show growth, as 

well as population inflows continue to show growth in Texas. So we 

continue to have increased demand for electricity in the State. 

When we reviewed cost to customers based on the CPP, we examined wholesale and retail costs that customers can expect to experience in the future. To summarize the findings, first, on the supply side, ERCOT expects at least 4,000 megawatts of coal-fired generation capacity to stop operating due to the Clean Power Plan. 
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That’s roughly 25 percent of ERCOT’s coal fleet, approximately six 

percent of our total generation capacity. 

Compliance with the CPP would also require dramatic increase 

in reliance on renewable resources on the ERCOT grid. ERCOT 

and Texas are already number one in wind production in the 

United States and would rank sixth if Texas were measured 

against other nations. To put that growth in perspective, wind 

power generated 36 terawatt hours of electricity in ERCOT in 

2014. That’s with more wind production on our grid than exists in 

any other State. Our modeling shows the CPP requirements would 

demand that new renewables would be needed to produce 95 

terawatts—terawatt hours by 2030, which would be a remarkable 

increase. 

Now, ERCOT, because of the large amount of renewables on our 

system, has been a leader in the integration of renewable resources 

on electric grids, but the penetration rates contemplated by the 

CPP will pose challenges. In electric systems, supply and demand 

have to be perfectly balanced at all times within very small tolerances. Power supply that can be dispatched by operators, that can 

be controlled by operators, has traditionally provided a reliable way 

to keep frequency in balance. Power supply that cannot be dispatched must be operated in a different way and poses unique challenges that now exist on our grid and others. 

Our studies show that, at times, it may be very difficult to meet 

the CPP’s emissions targets while maintaining the amount of 

dispatchable power that we need to maintain reliability to keep 

things in balance. 

On the transmission issues, the transmission system moves powers from power suppliers to consumers, but it also relies on injections of power to keep it stable. Our model results show overloads 

on hundreds of miles of transmission lines within ERCOT, and if 

we need to do transmission projects to remedy that, those projects 

cost between $1 million and $3 million per mile, and in ERCOT, 

take approximately five years from the beginning of planning to 

the completion of construction. So for large infrastructure projects 

that would be needed to address the retirement of power plants, 

there is a very long lead time and a lot of expense involved. 

Finally, on the cost side, as noted, our study showed a 16 percent 

increase in compliance costs from Clean Power Plan, but that does 

not increase the additional infrastructure spending and transmission costs that I noted in the testimony. Thank you. 

[The prepared statement of Mr. Magness follows:] 
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Chairman SMITH. Thank you, Mr. Magness. 

And, Ms. Dykes. 

TESTIMONY OF MS. KATIE DYKES, 

DEPUTY COMMISSIONER, 

CONNECTICUT DEPARTMENT OF ENERGY AND 

ENVIRONMENTAL PROTECTION AND CHAIR, 

REGIONAL GREENHOUSE GAS INITIATIVE, INC. 

Ms. DYKES. Thank you, Chairman Smith and Ranking Member 

Esty and other Members of the Committee, for inviting me to testify today. 

Climate change threatens Connecticut’s energy system, its families, and its businesses, and I am proud to be here to tell you that 

our State has made a commitment to combat climate change and 

to share with you some of the successes that we’ve already 

achieved in our State in doing so. 

We know that a well-designed program can achieve cost-effective 

pollution reduction while supporting local economies. We know this 

because the Regional Greenhouse Gas Initiative, or RGGI, has 

proven it. The RGGI States have demonstrated the successful reduction of carbon pollution while maintaining grid reliability, creating jobs, and reinvesting in strategic energy and consumer benefit programs. 

As a RGGI State, Connecticut stands with nine other—or eight 

other States in New England and the mid-Atlantic region, representing 16 percent of the U.S. economy and $2.4 trillion in gross 

domestic product. Together, through our commitments to the RGGI 

program, we’ve achieved already the goals that the Clean Power 

Plan is setting out to put us on track to achieve thanks to the early 

adoption of climate change mitigation policies, investment in energy efficiency, and our leadership in the transition to a clean energy economy. We do not anticipate any difficulty in meeting the 

Clean Power Plan compliance timelines. 

Over the last decade, carbon pollution in the RGGI region has 

decreased by over 40 percent, while our regional economy has 

grown by eight percent. And during that time, we’ve maintained reliability, increased employment, and made a transition to a clean 

energy economy. 

Independent reports by the Analysis Group have concluded that 

RGGI has created billions of dollars of net economic value for families and businesses in our region and created tens of thousands of 

new job-years in our member States. Investments funded by RGGI 

proceeds are advancing grid reliability goals in the region through 

energy efficiency, peak demand reduction, and other strategic programs. 

Experts agree that multistate programs such as RGGI are the 

most cost-effective way to achieve Clean Power Plan targets. 

Multistate programs aligned with the regional nature of the grid, 

they allow for a simple, transparent, and verifiable tracking and 

compliance system, and they foster regional cooperation. 

The Clean Power Plan supports multistate cooperation as a compliance pathway, and I’m really proud to be here and excited to 

share with you some of the lessons that we’ve learned in imple-
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menting this program over the past several years, which we know 

has generated a lot of interest from other States and also from 

compliance entities as a model for States to pursue—to assist them 

in achieving very highly cost-effective compliance with the Clean 

Power Plan. I look forward to talking with you about that today. 

[The prepared statement of Ms. Dykes follows:] 
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Chairman SMITH. Thank you, Ms. Dykes. 

And, Mr. Knappenberger. 

TESTIMONY OF MR. CHIP KNAPPENBERGER, 

ASSISTANT DIRECTOR, 

CENTER FOR THE STUDY OF SCIENCE, 

CATO INSTITUTE 

Mr. KNAPPENBERGER. Well, good morning, Chairman Smith and 

Ranking Member Esty and the other distinguished Members of the 

Committee. I thank you for the opportunity to testify this morning. 

I’m Paul Knappenberger, Assistant Director of the Center for the 

Study of Science at the Cato Institute, a nonprofit, nonpartisan 

public policy research institute located here in Washington, and 

Cato is my sole source of employment income. 

Before I begin my testimony, I’d like to make clear that my comments are solely my own and do not represent any official position 

of the Cato Institute. 

For the past 25 years or so, I’ve conducted research on climate 

and climate change, including working to quantify potential human 

influences upon it. So let me begin by saying that climate change 

is real and that results from both human and natural factors. 

Human contributions include large-scale changes to the natural 

landscape, as well as emissions of greenhouse gases and aerosols. 

Natural influences include internal oscillations such as El Nino 

that’s going to make this year especially warm, and external influences such as the variations in solar activity. Together, such factors 

act to steer the Earth’s weather and climate both in time and 

place. 

These facts are undisputed. What is disputed is the degree to 

which we can separate and identify the influence of those factors 

on global—and even more importantly—on the local scales where 

human-climate interaction takes place. While there’s a broad agreement the Earth’s temperature has risen nearly a degree Celsius 

over the past 150 years, the level of uncertainty in our understanding of the individual factors behind this observed rise is quite 

substantial. Consequently, bankable and actionable projections of 

the evolution of the Earth’s future climate are largely lacking. 

But even with those caveats in mind, it is possible to glimpse the 

sort of climate impacts that U.S. actions aimed at mitigating climate change by reducing carbon dioxide emissions will have. To do 

so, I employ a widely used—in both national and international climate assessments—tool called the Model for the Assessment of 

Greenhouse Gas-Induced Climate Change, which is appropriately 

or not the acronym MAGICC. 

And MAGICC was in part funded by the EPA and is freely available online. It’s a climate model emulator that takes as input emissions scenarios and outputs projected temperature change, which 

are an actual metric of climate. 

So first, I’ll look at the EPA’s climate—Clean Power Plan and its 

goal to reduce carbon dioxide emissions from power plants by 32 

percent by the year 2030. MAGICC shows those reductions would 

result in a global warming—a global temperature savings by the 

end of this century of about 2/100 of a degree. This is neither 

meaningful, nor scientifically detectable. 
81 

The Clean Power Plan plays a major role in the Climate Action 

Plan that the United States is going to offer up at the United Nations upcoming climate conference in Paris beginning later this 

month. There, the United States will pledge to reduce greenhouse 

gas emissions by 26 to 28 percent below the 2005 level in 2025, and 

this is just a step along the way to an 80 percent reduction by the 

year 2050. 

Now, even if the United States were to achieve its 2025 pledge, 

which requires actions that go beyond the Clean Power Plan, the 

projected temperature rise averted by the year 2100 would be 

about 4/100 of a degree. And even if we were to reach an 80 percent reduction, the temperature savings only totals about 1/10 of a 

degree. That’s a very small part for the societal transformation 

that’s going to have to happen to make that 80 percent reduction 

come to pass. 

Now, the other nations of the world have offered up their own 

Climate Action Plans, and a critical analysis of those collective scenarios is that they depart very little from what seems like business-as-usual plans. Basically, the individual countries are emphasizing economic development over climate change concerns. 

The expected temperature rise from the current set of international offerings is about 3.5 degrees Celsius, which is far beneath 

the—which is far above the often talked about but rather arbitrary 

2 degrees Celsius target. 

Now, all of the temperature projections I’ve thus far described 

have assumed that the Earth’s climate sensitivity—that’s how 

much the temperature will rise for a doubling of the Earth’s carbon 

dioxide concentration—is about 3 degrees Celsius when in fact 

there’s a growing body of scientific literature and a growing consensus that the Earth’s climate sensitivity is actually closer to 2 

degrees Celsius. So if you rerun MAGICC with this lower value of 

the Earth’s climate sensitivity, the projected temperature changes 

decrease by about 25 percent. 

Now, this implication is twofold. First, the already minuscule impact U.S. actions will have on future climate change is further reduced; and second, the temperature rise associated with business 

as usual will result in a less-than-commonly-advertised warming 

not far from the U.N.’s 2 degree C target. These two considerations 

lower the urgency and bring into question the necessity of U.S. climate mitigation efforts like the EPA’s Clean Power Plan, the President’s Climate Action Plan, and pledges to the United Nations. 

Thank you. 

[The prepared statement of Mr. Knappenberger follows:] 
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Chairman SMITH. Thank you, Mr. Knappenberger. 

And, Dr. Smith, let me address my first question to you, and that 

is in what way is the EPA’s modeling system flawed or biased? 

Dr. SMITH. The issue is not—— 

Chairman SMITH. Turn on your mike there. 

Dr. SMITH. Sorry. The issue is not so much in the system itself 

as in the assumptions that go into the analysis, but more importantly, the reporting of the results that come out of it. 

Chairman SMITH. Right. 

Dr. SMITH. As I indicated in my testimony just now, there are 

estimates that are coming out of EPA’s modeling system that are 

not being reported to the public in the way that they come out of 

the analysis properly. 

Chairman SMITH. And what would be the impact if it was reported correctly? 

Dr. SMITH. Well, as I said, the—instead of reporting, for instance, $1 billion of costs in 2020, they would report $17 billion of costs 

in that year, and there’s an overall bias generally. A present value 

of $76 billion for the net cost across the whole time period also 

would be valuable to report. 

Chairman SMITH. So, in other words, if you skew the data, you 

can skew the results considerably? 

Dr. SMITH. That’s certainly true. 

Chairman SMITH. Okay. Thank you, Dr. Smith. 

And, Mr. Magness, you addressed this in your testimony as well, 

but if you can maybe give us a specific summary-what will states 

save, if anything, as a result of the Clean Power Plan? And more— 

I guess I’d say the reverse. What is the cost to the states and also 

what is the cost to consumers if you can be specific? 

Mr. MAGNESS. Sure. In the ERCOT region what we found as far 

as specific cost to consumers was our model indicated that we 

would see a 16 percent increase in retail electric rates, and that’s 

based on the amount that wholesale electric rates feed into the retail. So that was the basis of that in our modeling. 

In addition, the costs of things like transmission infrastructure 

are rather difficult to estimate with specificity because it depends 

on which projects we need to build. But if—with the rubric that between $1 and $3 million per mile for transmission projects, and if 

you have to build long lines to take the place of units that have 

been retired, you’re looking at multimillions of dollars pretty quickly. 

Chairman SMITH. Right. I have seen, and maybe you’re familiar 

with the analysis they came up with most States in the country 

would see double-digit increase in electric costs. Is that accurate? 

Mr. MAGNESS. We’ve seen data that suggests that, and it’s consistent with what we found in the ERCOT region. 

Chairman SMITH. Was it 40 states? I can’t recall how many, but 

it was over a majority. 

Mr. MAGNESS. I’ve seen reports indicating that’s—— 

Chairman SMITH. Roughly 40 States have ten percent or more increase in electricity costs as a result of this plan, which arguably 

has no significant impact on climate change. Is that right? 

Mr. MAGNESS. We’ve seen that data—— 

Chairman SMITH. Okay. 
94 

Mr. MAGNESS. —yes, sir. 

Chairman SMITH. Thank you, Mr. Magness. 

And then, Mr. Knappenberger, what impact will EPA’s Clean 

Power Plan have on Earth’s climate, if any? 

Mr. KNAPPENBERGER. Well, it’s very small. I testified it was 

about 2/100 of a degree. That is 0.02. So you can’t even detect such 

a change, and so—— 

Chairman SMITH. Right. 

Mr. KNAPPENBERGER. —you would—you could put that in, and 

even if you met it, you—there’s no quantifiable results that come 

out of it in terms of climate. 

Chairman SMITH. Now, I used three one-hundreths of a degree 

Celsius. You used two one-hundreths. No matter whether either of 

us is right, it’s insignificant one way or the other? 

Mr. KNAPPENBERGER. Right. 

Chairman SMITH. The other is how accurate is the science behind 

the claims connecting extreme weather with a change in climate? 

Mr. KNAPPENBERGER. Well, unfortunately, there’s an off—— 

Chairman SMITH. Or maybe I should make that specific. Increase 

in global warming, is there any connection between that and extreme weather? 

Mr. KNAPPENBERGER. Yes, sure. There’s a conflation—unfortunately, a conflation between climate and climate change. And so 

the Earth’s climate, the Nation’s climate, and Washington D.C.’s 

climate is characterized by extreme weather events. They happen 

all the time. And whether or not we put in—or we achieve any of 

these emissions reductions that we talked about, we’re still going 

to have extreme weather events in the future. And they’re weather 

events, and weather events are themselves influenced by tens or 

hundreds of individual factors. And so the science points to a climate change influence on some of those factors, but it’s hard to 

know which ones are controlling the character of those events. 

Chairman SMITH. So often individuals point to one extreme 

weather event and use that to deduce that there’s some kind of a 

connection. They know and we all know you can’t use one incident 

as an example of a larger trend, and in fact, hasn’t the trend been 

down as far as extreme weather goes over the last several decades? 

Mr. KNAPPENBERGER. That is true for many types of extreme 

weather across the United States. 

Chairman SMITH. Okay. Thank you, Mr. Knappenberger. 

The gentlewoman from Oregon, Ms. Bonamici, is recognized for 

her questions. 

Ms. BONAMICI. Thank you very much, Mr. Chairman. And thank 

you again to all the witnesses. 

Deputy Commissioner Dykes, the International Energy Agency 

recently released its World Energy Outlook Report for 2015. This 

report presents the Agency’s projections for the evolution of the 

global energy system out to the year 2040 based on the latest data 

and market developments. And in the current report, the Agency 

states that the balance is shifting towards low carbon technologies, 

policy preferences for lower carbon energy options are reinforced by 

trends and costs as oil and gas gradually become more expensive 

to extract while the costs of renewables and of more efficient enduse technologies continue to fall.’’ 
95 

So can you discuss how market dynamics have influenced the 

shift away from coal? And also, can you please discuss how the 

Clean Power Plan could influence current market trends toward a 

lower carbon—lower carbon technologies? 

Ms. DYKES. Of course. So as I mentioned in the RGGI States 

through the implementation of our program, a mass-based 

multistate trading program such as the kind that the Clean Power 

Plan embraces, we’ve seen a reduction of 40 percent in carbon over 

the last ten years while growing our GDP by eight percent. And 

we’ve achieved that through a whole complement of different drivers. Some of them include market-based mechanisms because our 

program is sending a price signal to compliance entities to power 

plants and to renewable developers and so on. They’re investing in, 

you know, building out new gas generation. We’ve seen a 36 percent increase in generation from gas in our region over that time 

period. 

We’ve also seen falling costs of renewables over that time period, 

which also has helped to spur this transition, and then a range of, 

complementary programs, many of which are common across the 

country, including utility-administered energy efficiency programs, 

renewable energy programs such as renewable portfolio standards 

have contributed to this shift over to cleaner generation, as well as 

infrastructure and transmission investments. 

And the RGGI program has created a virtuous cycle of reinvestment in catalyzing that transition. We auction the allowances to 

pollute—to emit carbon, and we reinvest those proceeds into renewable energy and energy efficiency programs. In my State in Connecticut 92.5 percent of those proceeds, $84 million during the time 

that we’ve participated in the program, we’ve been able to put back 

to work to help customers lower their bills through energy efficiency. That’s helped to bring down wholesale electric costs. 

At the same time, we’ve put those to work through innovative 

programs like the Connecticut Green Bank that are helping to deploy more renewable energy, which is making our grid more reliable, our fuel mix more diverse, and helping to again spur that 

transition that we’ve seen happen in our region in a very reliable 

and affordable way. 

Ms. BONAMICI. Terrific. And I have another question. Opponents 

of the Administration’s efforts to address climate change often say 

that even if the United States meets the goals of the Clean Power 

Plan, it would have a minimal effect on climate change in part because emissions from other countries like China and India might 

overtake any cuts we’re able to make, and regardless, any cuts by 

the United States would be a proverbial drop in the global carbon 

bucket anyway. But they’re missing some important pieces of the 

strategy of the United States and its partners. 

How do you perceive the Clean Power Plan improving the United 

States—the credibility, leverage, and influence of our country in 

negotiations to achieve an international agreement to reduce global 

greenhouse emissions at the climate change conference in Paris? 

And why is it important for the United States to take on a leadership role in these negotiations? 

And I want to add that, like your State of Connecticut, Oregon 

has been a leader in the renewable energy economy. I was proud 
96 

to be part of the State Legislature in 2007 when we passed our renewable fuel standards. What economic benefits will the United 

States have in leading the way in the development and administration of the next generation of energy technologies? 

Ms. DYKES. Well, I can tell you it’s so critical that the Obama 

Administration is putting our nation on track to reduce carbon pollution from its largest source sector in advance of the Paris negotiations, utilizing best practices that have been proven to be feasible across the various States. 

You know, when I hear your question, I’m reminded of when 

Connecticut first began discussions with other States about starting RGGI. We got a lot of questions because we are not the biggest 

State in the country, and, you know, some would question why 

should our State lead? Why should the RGGI States lead? But now 

we are seeing the benefits of that leadership. We are seeing those 

benefits in terms of the jobs we’ve created in our State through the 

development of our clean energy programs, and we are well placed 

to comply with the Clean Power Plan. 

But these benefits of leadership we are pleased to share with 

other States across the country who are looking to our model as a 

way to comply with the Clean Power Plan, and so those dividends 

of leadership I think will bring along other jurisdictions as well so 

we can address this global problem. 

Ms. BONAMICI. Thank you. I see my time is expired. I yield back. 

Thank you, Mr. Chairman. 

Chairman SMITH. Thank you, Ms. Bonamici. 

The gentleman from Oklahoma, Mr. Lucas, is recognized for his 

questions. 

Mr. LUCAS. Thank you, Mr. Chairman. 

Dr. Smith, the EPA says that the Clean Power Plan results in $20 billion in climate savings. Those of us who’ve worked with any 

of these kind of matters knows that a lot of this comes down to 

what kind of discount rate is calculated in your projections. Could 

you explain to us what happens if that discount rate is adjusted? 

Dr. SMITH. Yes. The climate benefits are based on a long future 

forecast of benefits that don’t start immediately. They start to accumulate later in time, several decades to 100 years or more out into 

the future. So the $20 billion, which I believe is a three percent 

benefit in 2030 in the Regulatory Impact Analysis is based on a 

three percent discount rate of those long-term future benefits that 

are occurring in the next century. If a discount rate of five percent 

is used, that cost comes down to about $6 billion, and that’s also 

observable in the Regulatory Impact Analysis. 

But the important thing, even more important than the discount 

rate, is the fact that those are benefits that are calculated not for 

the United States but benefits—90 percent of them or so are in 

other countries. So even out of the 20 billion, if you accept the 

three percent discount rate, perhaps only about 2 billion of that is 

United States. 

Mr. LUCAS. So then it’s fair to say a lot of this comes down to 

what kind of accounting you use and how big a picture you draw 

to achieve these savings. And you’re saying that it’s—the accounting number used obviously generates that $20 billion number, but 

even at that, we have to count the whole planet? 
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Dr. SMITH. It’s a choice but it’s not the typical choice in doing 

benefit-cost analysis to include benefits outside of the jurisdiction 

of the group that’s undertaking a cost. 

Mr. LUCAS. Do we know from the way the numbers are put to- gether how much of that $20 billion in savings actually is alleged 

to be derived here in the United States? 

Dr. SMITH. Yes, as I said, it’s about ten percent of the 20 billion. 

Mr. LUCAS. So amazing. Doctor, also in the EPA’s Clean Power 

Plan, would it be described fairly as an unauthorized regulatory 

cap-and-trade plan? 

Dr. SMITH. I’m sorry. Could you—— 

Mr. LUCAS. The Clean Power Plan put forth by the EPA, is it fair 

to describe it as an unauthorized regulatory cap-and-trade plan? 

Some of us went through the cap-and-trade wars not many years 

ago when Congress as a whole chose not to do that. 

Dr. SMITH. The way the rule is structured it allows states to put 

together cap-and-trade programs sort of voluntarily, and so in that 

sense it becomes a cap-and-trade program by way of regulation. 

Mr. LUCAS. So in effect, what Congress would not do by regulation, it would happen? 

Dr. SMITH. That’s correct. 

Mr. LUCAS. Fascinating. Fascinating, Mr. Chairman. Fascinating. 

I yield back my time, sir. 

Chairman SMITH. Thank you, Mr. Lucas. The gentlewoman from 

Connecticut, Ms. Esty, is recognized for her questions. 

Ms. ESTY. Thank you, Mr. Chairman, for holding today’s hearing 

on the Environmental Protection Agency’s final Clean Power Plan 

rule. 

Connecticut’s success with greenhouse gas reductions has been 

vast and extraordinary. We’ve already surpassed our 2020 goal of 

reducing emissions below 1990 levels and currently remain on a 

trajectory that will yield an 80 percent reduction of emissions 

below 2001 levels by 2050. 

Connecticut’s path forward is a very promising one, but we also 

know that no single country or State can possibly address climate 

change alone. Part of Connecticut’s success with carbon pollution 

reduction can be traced to its participation in the Regional Greenhouse Gas Initiative, a mass-based multistate approach to reducing 

carbon pollution in the electric sector. 

Empowering, empowering residents and citizens and businesses 

to use energy more efficiently as one of the key element of Connecticut’s approach in particular in RGGI. In fact, according to a 

report that tracks investments made by RGGI States from 2008 to 

2013, investment of RGGI proceeds, the cumulative investments in 

energy efficiency programs are vastly greater than investments in 

any other programs, including clean and renewable energy, directbill assistance, and greenhouse gas abatement. 

So, Deputy Commissioner Dykes, in your testimony you highlighted the success stemming from Connecticut’s participation in 

RGGI, as well as the ancillary programs Connecticut has developed 

like the Clean Energy Efficiency Fund. Can you drill down a little 

bit—because I think oftentimes the objections to plans like this in 

Washington are assumptions that it’s going to be a top-down mandate of how to achieve goals, but in fact, having been on the rel-
98 

evant committees in the State Legislature, I know that in fact it 

spurred a great deal of innovation, different approaches for towns 

like my town of Cheshire, which has exceeded its goals already, 

Waterbury, the largest city in my district, which are participating 

in state programs at their own option, developing their own ways 

of moving forward. 

Can you sort of explain to my colleagues a little bit more how 

Connecticut has achieved that innovation and that flexibility and 

that tailoring to meet those goals and in fact exceed them, save 

money, and improve the environment? 

Ms. DYKES. Absolutely. The programs that we’ve put in place and 

frankly the political commitment that’s been created in Connecticut 

through Governor Malloy’s administration and leadership of our 

General Assembly in adopting a statutory requirement to reduce 

carbon pollution has created an environment where all of these 

players are coming forward with different ways to reduce carbon 

pollution and make the transition to a clean energy economy, 

whether they are municipalities that are participating in our various commercial piece, financing programs, whether they are renewable developers who are taking advantage of our long-term contracting programs that are achieving renewable deployments at unheard-of low costs for renewable deployment, and down to individual customers who are making the choice to participate in energy efficiency programs that are not only putting money back into 

their pockets, helping businesses lower their operating cost, but 

they’re also creating benefits for all ratepayers to the extent that 

they’re helping us to avoid the cost of new generation and more 

transmission, and at the same time contributing to the resiliency 

of our grid. 

You know, I want to take a little—maybe clarify to the point that 

Dr. Smith was responding to is that we don’t believe that the EPA 

has created a mandatory cap-and-trade program through the Clean 

Power Plan. In fact, one of the things that the RGGI States asked 

for was for the EPA to provide flexibility for States, which has been 

so successful for us in how they comply. And of course States could 

pursue a traditional regulatory approach into adopting the Clean 

Power Plan requirements in normal permitting—permits for compliance entities, but EPA has been so many tools forward to allow 

States to opt into multistate mass-based programs to make trading 

with other States and other jurisdictions very feasible and flexible 

for States. And I think that that’s one of the key features of that 

program, that it does respect those needs of States and desires of 

States to comply in a way that matches their policy goals. 

Ms. ESTY. And if you can briefly talk a little bit about, for example, the Home Energy Solutions program, how that works in Connecticut again to put the power in the hands of consumers and 

businesses to make those choices. 

Ms. DYKES. Absolutely. I’m always pleased to pitch the program. 

By just making a simple call to their utilities, our residents in Connecticut can achieve—receive hundreds of dollars worth of energysaving upgrades for their homes, which help them feel more comfortable, reduce drafts, change out their lighting, and the—you 

know, we see tens of thousands of Connecticut residents taking ad-
99 

vantage of this, especially low-income families and businesses who 

spend a lot of their budgets on energy—or on electricity. 

Ms. ESTY. Thank you very much. 

Chairman SMITH. And thank you, Ms. Esty. 

The gentleman from Alabama, Mr. Brooks, is recognized. 

Mr. BROOKS. Thank you, Mr. Chairman. 

Will the Clean Power Plan have any discernible, i.e., statistical 

measurable and attributable impact on global temperature as a result of its implementation? If so, what will that impact be and how 

was that impact determined? And that’s for whomever would like 

to answer that question. 

Mr. KNAPPENBERGER. Well, I’ve attempted to quantify the impact 

of that, and it’s very small. The Clean Power Plan is—only goes 

after, you know, U.S. power plant emissions, which are only part 

of the U.S. economy, which are only part of the world emissions. 

So it is that drop in the bucket of global emissions, and as a result, 

the resulting climate impact of achieving the plan is extremely 

small. 

Mr. BROOKS. Would extremely small be synonymous with negligible? 

Mr. KNAPPENBERGER. Yes, I would say that’s correct. 

Mr. BROOKS. Ms. Dykes, do you have a similar or different opinion? 

Ms. DYKES. Well, again, I would say from the Connecticut experience, you know, the programs that we’ve put in place, our participation in RGGI, is—you could say is, you know, well, we’ve 

achieved significant reductions, 40 percent over the last ten years, 

and that’s only one step towards what the global need to do in 

order to have a meaningful impact on reducing carbon emissions, 

but it is so critical that everyone make these steps because it is a 

global pollutant. 

And so, you know, the leadership that we show by putting—by 

compliance with the Clean Power Plan I think sets a model and 

paves the way for other States—other countries to take action as 

well. 

Mr. BROOKS. Well, let’s worry about the United States for a moment. What kind of impact does this plan, the Clean Power Plan, 

have on the world situation? Well, the United States is a major 

emitter of greenhouse gas—greenhouse gases. The Clean Power 

Plan will achieve up to 32 percent emissions reductions from the 

electric sector, which is our largest source sector. So I think it’s 

going to have a very meaningful impact in U.S. leadership in carbon reductions. 

Mr. BROOKS. Do you have any way of quantifying what the Clean 

Power Plan’s impact would be on total global emissions, some kind 

of percentage? 

Ms. DYKES. I don’t. I know that that’s available from the EPA, 

and we see that—you know, we think that this leadership is really 

necessary and overdue. 

Mr. BROOKS. Mr. Magness, do you have an opinion? 

Mr. MAGNESS. Sir, as the grid operator in Texas, we haven’t examined or modeled the global impacts I think that you’re referencing. So I think certainly some of the concerns Mr. 
100 

Knappenberger raised have been raised by our state leadership, 

but we haven’t modeled those in our particular study. 

Mr. BROOKS. Dr. Smith, are there public health impacts when 

people lose their jobs and have lower incomes? And did the EPA 

take those into consideration in its rulemaking for the Clean Power 

Plan in your judgment? 

Dr. SMITH. There are impacts when people’s spending power is 

reduced, and this regulation is projected to reduce spending power. 

When that happens, people have to make substitutes in their 

choices, and there is evidence in the literature that there are 

health effects, and in fact mortality and—you know, greater mortality rates when spending power is reduced. Now, EPA did not account for this in their particular analysis of costs or benefits. 

Mr. BROOKS. Is there any way in your judgment, given the information that you have and your experience and intellect, that you 

can share with us what kind of increase in mortality that you anticipate from the Clean Power Plan on the economic side, as opposed to the alleged benefits on the pollution side? 

Dr. SMITH. I think the best way to think about that is to just 

simply compare the costs and the benefits, and when the actual 

benefits, the climate benefits are properly assessed and taken in a 

U.S. context and compared to the U.S. costs of this plan, the—it’s 

not a good purchase. 

Mr. BROOKS. Another question, Dr. Smith. How can EPA claim 

economic benefits from a rule that will increase consumers’ electricity prices, decrease electricity reliability, and shut down affordable energy sources like coal-fired power plants? 

Dr. SMITH. Again, the issue is these actions have costs, and costs 

have consequences. And when the costs are taken into consideration, they’re quite substantial and they could create harm that’s 

imminent and current in return for potential estimated benefits 

that are far in the future and appear on a U.S. basis to be less. 

Mr. BROOKS. Thank you, Dr. Smith. I see my time is about to expire. 

Mr. Chairman, I yield back the remainder. 

Chairman SMITH. Thank you, Mr. Brooks. 

And the gentlewoman from Maryland, Ms. Edwards, is recognized. 

Ms. EDWARDS. Thank you very much, Mr. Chairman, and thank 

you to the witnesses as well. 

You know, I just want to point out a couple of things. One, we’ve 

had about 40 years, 4 decades of experience that shows that the 

Clean Power Plan in fact will not cost jobs and it won’t take down 

the economy. Actually, to the contrary, on balance, the regulations 

have spurred innovation and created economic opportunity. I think 

we heard Ms. Dykes speak to that. 

The costs of inaction, in fact, on climate change far outweigh the 

costs of action. And I think that we can see that when you look at 

this last October, which will put us—sets us on pace for this year 

being the warmest record temperatures that we have seen on 

record since 2014, but prior to that, actually back into the 19—into 

the 1880s, preindustrial times. And so there’s great cost of us not 

doing anything. 
101 

EPA is also, as Ms. Dykes has pointed out, is in fact meeting its 

statutory obligation to protect our public health and our environment. And EPA is using the best available science and giving the 

States the flexibility that they need that uses peer-reviewed science 

to engage in constructive technologies and techniques to make sure 

that we can deal with this. Contrary to what the other side is saying, there is no secret science here in the work that the EPA is 

doing. 

There seems to be—one of the arguments that—and we’ve heard 

it on this panel today, that somehow it’s—the greenhouse gas emissions reductions are so minimal that we shouldn’t do anything 

about that. But I would point out that if we were to just go to the 

2025 levels with the reductions targets that have been set in place, 

that in fact we would reduce our carbon emissions by about 20 percent. If we were to go out to the 2050 time frame, we would reduce 

those emissions by about 60 percent. This would have a measurable impact on temperatures and on climate change and on the 

United States’ responsibility with respect to doing something about 

this because we are a global leader, and we are a significant contributor to greenhouse gas emissions. 

And so with my time remaining I want to leave to Deputy Commissioner Dykes to talk about the kind of innovation and economic 

growth that’s been spurred in Connecticut—Maryland is also a participating RGGI State; we are very proud of that—and how you can 

spur innovation and create jobs. And then I want you to speak to 

the importance of the United States’ leadership in the world going 

into Paris knowing the numbers that we have now and the warmth 

that we are experiencing today even compared to last year and 

compared to the 1880s because I think if we don’t do something 

now, we are in big trouble, and this committee bears a responsibility to do that. And I’ll leave you the balance of my time. 

Ms. DYKES. I appreciate that, Representative Edwards. 

You know, we are very pleased to co-implement the RGGI program, along with the State of Maryland. And the highlight of the 

RGGI program is that each State retains its own flexibility to make 

choices about how to invest the proceeds from the sale of carbon 

allowances into those programs that match that State’s particular 

policy preferences. And that includes, as I mentioned, investing in 

energy efficiency and renewable energy. 

In Connecticut, for example, we took some of our RGGI proceeds 

and used them to fund the country’s first Green Bank, which is 

leveraging that small amount of funds, along with some ratepayer 

contribution, to attract private capital, private investment into energy efficiency and clean energy. And so we’re vastly expanding the 

impact of those dollars, at the same time demonstrating to the private sector the real investment opportunity in these technologies. 

And it’s really taking—bringing capital off the sidelines that we see 

who’s ready and poised to invest when that market signal is there. 

Other States—I know Maryland also invests its proceeds in bill 

assistance, which is so critical for families and businesses as well, 

and we are just seeing all—innovations in terms of technologies, 

bringing down the costs and things like solar on rooftops, grid-scale 

wind, you know, the efficiency of wind turbines is getting better 
102 

every day. This is again because of the market signal that we are 

sending. 

You know, we have I think through the independent report that 

was done by the Analysis Group, they’ve reviewed our program 

twice now and confirmed that although there are very modest impacts to bills as a result of the cost of the generators purchasing 

allowances, those are more than overcome for by, you know, billions of dollars of net economic benefit that accrues because of 

these reinvestment and efficiency energy savings programs and renewable programs from RGGI. 

Ms. EDWARDS. Thank you so much for your testimony. And with 

that, I yield. 

Chairman SMITH. And thank you, Ms. Edwards. 

And the gentleman from Florida, Mr. Posey, is recognized for his 

questions, but would he yield to me briefly? 

Mr. POSEY. Yes, sir, I would. 

Chairman SMITH. I just want to make sure that the record reflects a couple of facts about the alleged claim that 2014 was the 

hottest year on record. If you read the footnote to that temperature, 

you find out that the NASA scientists say they were only 38 percent sure that that was accurate, less than 50/50. 

Furthermore, the alleged increase in temperature was so small 

that it was within the margin of error over previous years. So I just 

want to make sure that people understand and put that in perspective. 

And thank the gentleman for yielding and he continues to be recognized. 

Mr. POSEY. Thank you, Mr. Chairman. 

As I’ve learned well from the other side, some people have a tremendously good grasp of the small picture here. 

I’d like to submit a slide from the Institute for 21st-Century Energy for the record. 

[Slide.] 

[The information appears in Appendix II] 

Mr. POSEY. This slide shows a number of coal-fired power plants 

planned and under construction and their total capacity in 

megawatts. 

I think the conclusion is fairly simple. The world is hungry for 

energy, and whether you like it or not, coal is going to be the energy that will do what’s necessary to fill that gap. And nothing that 

happens in Paris is going to change that. 

It seems somebody in the administration or a group in the administration seem to be in la-la land. I mean it’s just not reality. 

And it’s hard to understand why they seem to have no problem 

making life more difficult not only for American families but especially harmful to those in America and around the world who can 

least afford it. I just don’t know why the other side would want to 

harm them. 

Mr. Knappenberger, the Paris conference appears to be more 

about climate financing, so not only is the United States supposed 

to hobble its own economy with the Clean Power Plan in the name 

of the President’s climate change agenda, it seems now we’re going 

to be asked to pay billions to developing countries. Am I reading 

this right? 
103 

Mr. KNAPPENBERGER. That’s definitely one aspect that’s going to 

be discussed in Paris. It’d be surprising if something binding comes 

out of that, but they are going to talk about that. 

Mr. POSEY. Do commitments in an international agreement that 

is not reviewed by Congress have any binding effect on domestic 

law? 

Mr. KNAPPENBERGER. That’s not my area of expertise. I’ve seen 

people who have suggested that there’s difficulties with that. 

Mr. POSEY. Professor Laurence Tribe compared the EPA’s power 

grab in the Clean Power Plan to ‘‘burning the Constitution.’’ Could 

the same be said of the Administration’s international agenda here, 

do you think? 

Mr. KNAPPENBERGER. Well, the Administration’s international 

agenda, you’ve got to be careful with it because going forward, the 

climate change that’s projected to occur is going to be coming 

from—90 percent from emissions from these developing countries. 

And so to—if you do something that sort of limits their ability to 

develop, that’s going to be potentially far worse than whatever climate change might bring to them. 

Mr. POSEY. In your testimony, you question the necessity for the 

Clean Power Plan in the President’s pledge to the United Nations. 

Are you inferring that the technological investments and trends 

will already reduce carbon emissions without regulation or further 

pledges? 

Mr. KNAPPENBERGER. I think that—I mean, business as usual is 

a pretty strong plan—is a pretty strong way forward. Energy— 

economies become more energy efficient over time and, and especially developing economies do that more rapid than developed 

economies. And our—in our case with the input of natural gas into 

the energy production system, we’ve become more carbon efficient 

with our economy, too. 

So business as usual is a strong plan, and you can lower your 

emissions through technological advancements that don’t need to 

be, you know, dictated from—— 

Mr. POSEY. Shoved down everybody’s throat. 

Already, 27 states, more than half the country, have filed legal 

challenges against the existing power plan regulation, a number 

that could grow even higher. Where are the President’s international climate commitments if the rules he’s relying on our 

thrown out by the courts? 

Mr. KNAPPENBERGER. Well, it’s very unlikely they’re going to be 

able to be met. 

Mr. POSEY. Okay. That’s the questions I have, Mr. Chairman. 

Thank you. I yield back. 

Chairman SMITH. Okay. Thank you, Mr. Posey. 

And the gentlewoman from Massachusetts, Ms. Clark, is recognized. 

Ms. CLARK. Thank you, Mr. Chairman. And thanks for having 

this hearing, to all our panelists for being with us today. 

I’m very proud to be from a State that is part of RGGI. And 

thank you, Deputy Commissioner Dykes, for joining us. I wondered 

if you could talk a little bit about when we set the market value 

for carbon, how has that affected job creation in Connecticut? 
104 

Ms. DYKES. Well, I can tell you throughout the RGGI region 

we’ve seen an increase in jobs related to the investments that the 

RGGI States are making fueled by the proceeds from the sale of 

carbon allowances. So the Analysis Group completed an independent review, as I had mentioned in my testimony, that just 

from the last three years of implementation of the RGGI program 

we have generated 14,000 new job-years. Those are jobs that are 

in our States, whether it’s installing insulation, putting renewable 

facilities into place, we’re keeping dollars in our States, growing 

our own economies instead of exporting those dollars out of our region to pay for fossil fuels. 

Ms. CLARK. Could you also go into a little more detail about the 

role of energy efficiency and the success of RGGI? 

Ms. DYKES. Yes, energy efficiency is one of the most cost-effective 

ways for us to reduce carbon pollution, and that’s recognized by 

States across the country who have programs to invest in efficiency. It creates so many benefits, whether, you know, to the customer who takes advantage of the measures by lowering their bills, 

but also by reducing the amount of electricity we need to flow 

across the region so we’re avoiding the need to develop more transmission and new power plants. 

This is why we call it the first fuel, and I know I’ve been very 

jealous of Massachusetts, which ranks number one very frequently 

in—across the country in their efficiency commitments. 

Ms. CLARK. And could you talk a little bit—you mentioned before 

about the grid and how this has helped, and this is a huge concern, 

sort of the infrastructure of our electric grid across the country. 

Could you talk a little bit more about the impact of RGGI on your 

grid stability? 

Ms. DYKES. Of course. You know, States have a long—and regional transmission organizations have a long history of factoring 

environmental compliance into the reliable operation of the grid, 

including capacity planning. You know, we are—we see the investments that we’re making in renewables and energy efficiency helping to improve the resiliency and the reliability of our grid. 

Right in Connecticut we invest in distributed generation, including microgrids, which help to provide resiliency, especially with the 

increased severity in storms that we are experiencing. We see— 

we’re especially—pleased to see some of the improvements that the 

EPA has made in the final Clean Power Plan in providing a reliability safety valve and other mechanisms for States to plan for revisions of their state implementation plans if necessary if there are 

unforeseen consequences or challenges that arise. 

But I would just stress that, you know, multistate mass-based 

programs like RGGI, because we span, you know, a diverse set of 

States with a diverse fuel mix, we cross three different regional 

transmission organizations, and this provides a lot of flexibility to 

address retirements where they occur, and it gives the compliance 

entities some mitigation of their risk because there’s so much diversity in the fleet. 

So that’s been one of the great benefits that we’ve proven 

through the RGGI program that I think provides a lot of assurance 

for other States as they look at their options for compliance. 
105 

Ms. CLARK. Thank you. I also had a question for Mr. 

Knappenberger. I don’t want to mischaracterize your testimony, 

but I’m trying to understand your position. You started your testimony by saying you believe we are experiencing climate change. It 

has natural and manmade causes behind it. But then we’re sort of 

talking about the Clean Power Plan, some of the environmental 

measures that we’re taking. I think you said they are so small; 

they’re a drop in the bucket. I think you agreed with the characterization that they would be negligible. 

So is your bottom line, is it fair to say that at the end of the day 

you’re saying stay the course where we are, that we don’t need any 

changes, or are you an advocate for more than we are currently 

doing or proposing to do to address climate change? 

Mr. KNAPPENBERGER. Thanks for the question. 

I’m a climate scientist and I’ve been studying the issue for 25 

years I think I said, and I’m—I think a lot of what you hear about 

is being overblown. I don’t—I think we’re influencing the climate. 

I just don’t think at the end of the day our—the net of our influence is going to be all that detrimental that we need to try to actively combat that. 

Ms. CLARK. So business as usual is good enough? 

Mr. KNAPPENBERGER. Yes. 

Ms. CLARK. Thank you. 

Chairman SMITH. Thank you, Ms. Clark. 

The gentleman from California, Mr. Knight, is recognized. 

Mr. KNIGHT. Thank you, Mr. Chair. I have a couple questions. 

Mr. Knappenberger, if you could give me an idea. You gave testimony and there was an awful lot of information in there, but, you 

know, as we go into Paris, and we’re about ten or eleven days away 

from doing that, is there disagreement that’s going to come out of 

there? Everything that I’ve read is not a binding agreement, there’s 

not an authority to enforce out of this agreement. But can you give 

me an idea, because I’ve read this, of what the cost is going to be? 

So if we look at countries, because as I understand the agreement, as we go into Paris, they talk about the ability for a country 

to act, the ability for a country to economically act. And some of 

these countries have no ability to act on this, even though they will 

be working into an agreement. 

So can you give me an idea, just an opinion of what America will 

be going through as opposed to other countries on kind of a cost 

basis economically as we move forward with this unbinding agreement? 

Mr. KNAPPENBERGER. Yes, thanks for the question. First off, I’m 

a client scientist, not an economist so I don’t know the economy, 

that much of it. But what I can tell you what’s going into Paris is 

that all the countries of the world had to turn in their—they had 

a homework assignment from last time to tell everyone—the rest 

of the world what they were going to do to address climate change. 

And at the end of the day when all the homework was turned it, 

it turns out that it’s not a whole lot. It’s not much different from 

business as usual. And so it doesn’t really impact the direction the 

climate was going in any way. 

The United States’ particular plan is a little bit more aggressive 

than business as usual, so we’ll have to put actions in place to 
106 

achieve our plan. In other major countries like India, I’ve seen assessments where this actually—their promises were actually less 

than business as usual their economy was going in any way. 

So at the end of the day, whatever comes out of Paris—I seriously doubt it will be binding—is not going to impact the climate— 

the direction the climate is going to go into in the future, but I 

imagine there will be some economic impact, although, like I said, 

many of these countries aren’t pledging much more than the direction their economy is going in any way. 

Mr. KNIGHT. Thank you. And, Dr. Smith, I’m going to come to 

you on the same question but just a little bit more in depth because 

all of the articles I’ve read, everything that I’ve read that we’re 

going into Paris, there are going to be several countries that are 

going to go into this and they’re going to be very engaged, I’m sure, 

in this and then walk out of there knowing that they can’t do anything, that they won’t do anything, and America will probably walk 

out of there thinking that everyone is looking that we can do everything. What say you? 

Dr. SMITH. Well, we have almost the same situation as we had 

with the Kyoto Protocol. Commitments were made and commitments then were found to be costly once the statesman went home 

and tried to say how will we implement this—these commitments. 

And then not all of the commitments were met. 

In the case of some countries, they may not have binding regulatory programs that will force them to implement programs that 

they may find to be costly. In the United States we may find ourselves implementing these programs because they’re part of our 

regulatory structure. 

Mr. KNIGHT. Thank you. And, Mr. Magness, as we see, you know, 

our states have a little similarities with Texas and California. 

Some of the similarities are we’re big states, we have a lot of wind, 

and we have a lot of sun, so there are an awful lot of possibilities 

for renewable energy in those states. And in California we have 

taken it into the nth degree with our RPS, our Renewable Portfolio 

Standard, that is putting a lot of our companies at a disadvantage 

with other states and are rising our prices of electricity quicker 

than most every other state. 

Can you give me an idea as we move forward with this type of 

activity? Where is the line in the sand that we can’t go any further, 

that the renewables have maybe taken their course and we can’t 

get any further on renewables? We are going to have to burn something at some time when the wind is not blowing and the sun is 

not shining and maybe we don’t have that new technology that can 

bridge us to that next capacity. Do you think we’re getting to that 

point, especially in states like ours? 

Mr. MAGNESS. Mr. Knight, that’s a very good question, and it’s 

an issue that ERCOT is actively investigating now. Because we’re 

seeing, as I noted, nation-leading wind implementation, we’ve set 

a new record of over 12,600 megawatts of wind on our grid just this 

week. 

And as I mentioned in my testimony, we welcome megawatts, 

whether solar, whether wind, coal, natural gas—— 

Mr. KNIGHT. Sure. 
107 

Mr. MAGNESS. —all of the above, but at times in order to maintain grid stability you need to be able to have something that the 

operators can control, something that can be dispatched like traditional thermal units. And I think often the point at which it gets 

trying for the operators is maybe not what you would expect, not 

so much the high, high peak day but the day when load is low and 

it needs to be balanced somehow, and only the renewables are on 

the grid. If those drop off quickly or go up quickly, we have to have 

mechanisms in place to be able to dispatch and control that. 

What we’ve seen in ERCOT is the market construct that our legislature created in 1999, which is a deregulatory approach, has 

driven more wind into our state than we’ve seen anywhere else. It 

is also beginning to drive more solar investment in our state, but 

we’ve maintained a large base of gas, of coal, of nuclear resources 

that allow us to keep the grid balanced. And it is that balance that 

we need at some level in order to continue to operate reliably into 

the future. 

Mr. KNIGHT. Thank you very much, and I appreciate the time, 

Mr. Chairman. I yield back. 

Chairman SMITH. Thank you, Mr. Knight. 

The gentleman from Texas, Mr. Babin, is recognized for his questions. 

Mr. BABIN. Thank you, Mr. Chairman. 

And I’d like to ask Mr. Magness a few questions. Being a Congressman from Texas, I represent the 36th District in southeast 

Texas, and 63 percent of our power is coming from coal-fired 

plants, so we have a great interest in the Clean Power Plan. But 

how will the Clean Power Plan affect average electricity consumers 

in our State, Mr. Magness? 

Mr. MAGNESS. Mr. Babin, I’d say in two ways based on our studies. One is our study found that the cost of energy we would expect 

to increase by up to 16 percent going out into the implementation 

period. So just on that basis alone you’d see that sort of increase. 

Mr. BABIN. Yes. 

Mr. MAGNESS. Then, in addition, for example, in Texas we re- cently spent $6.9 billion investing in new transmission primarily to 

bring renewable energy that’s in the rural west part of Texas into 

the cities and into east Texas. So those costs all have to be recovered from end-user customers as well. 

When we have to buy reliability services—and they’re not just 

the energy coming out of the plant but something in addition to 

keep the system stable—those costs will increase as we have to 

face that situation more. So all of those costs in our market ultimately roll down to the end-user consumer. 

Mr. BABIN. I got you. Okay. And then second, Texas leads the nation in wind power, but EPA projects in building block 3 of the 

final rule that over 100 terawatt hours of renewable generation will 

be added in ERCOT by 2030 in addition to what exists today. 

Given ERCOT’s experience with integrating renewables, is that a 

realistic estimate? 

Mr. MAGNESS. Well, it’s an enormous increase in what we’re seeing. We currently in 2014 saw 36 terawatt hours on our system, 

and this is setting wind penetration records for the nation frequently. 
108 

Mr. BABIN. Right. 

Mr. MAGNESS. So to—the idea of taking that up to 100 is an 

enormous reach to add to a system that’s already doing a whole lot 

with renewables. 

Mr. BABIN. Okay. And then the Clean Power Plan is just one 

part of the EPA’s regulatory onslaught against Texas and other 

states. The EPA looks at the rule in isolation, but does Texas face 

a cumulative impact from this and other recent EPA rules? 

Mr. MAGNESS. Yes, and the one I would cite to you most specifically is there’s a regional haze program that EPA manages. We’re 

facing a federal implementation plan on the regional haze rules 

that could drive out coal-fired units much more quickly than the 

Clean Power Plan. So we may be seeing—but part of the—as you 

mentioned, the cumulative impact is if you might make the investment as a unit owner to comply with regional haze, you might not 

make that investment as you look over the horizon—— 

Mr. BABIN. Certainly. 

Mr. MAGNESS. —there’s an increasing number of investments 

that would be required, and it may make it a harder decision to 

keep those units available while we are building the transmission 

and taking the other steps we need to meet the time when they’re 

gone. 

Mr. BABIN. Okay. EPA says compliance with the Clean Power 

Plan will not start until 2022 but could Texas start seeing the impacts much sooner than that, especially when taking into account 

other EPA regulations? 

Mr. MAGNESS. I think for the reason we were discussing just a 

moment ago that you see sort of the cumulative impact of these 

rules and people are going to have to make very large, important 

investment decisions—— 

Mr. BABIN. Right. 

Mr. MAGNESS. —in the near term, and all they can see over the 

horizon is difficulties in the long term. 

Mr. BABIN. Last question, ERCOT’s analysis of the impacts of the 

Clean Power Plan state that, though EPA made a number of modifications in the final rule, the most impactful for the stringency of 

the limits for Texas is EPA’s shift to a uniform national approach 

for setting the standards of the final rule rather than the state-bystate approach used in the proposal. Has EPA provided state regulators with a significant degree of flexibility in determining how to 

comply with the Clean Power Plan, and why is a uniform approach 

a particular concern to Texas? 

Mr. MAGNESS. Well, I think that part of the issue here is the— 

understanding the ERCOT interconnection, which is a—sort of a 

separate grid from the eastern and western interconnections. So 

our ability to participate in regional approaches is more complicated, I think, than a lot of other areas and produces a challenge 

for Texas that may not exist in other States and other regions. So 

that certainly ups the ante on the difficulty of taking that kind of 

approach. 

So while there were some differences in that national approach 

that affected, you know, what we’re seeing in the study, we think 

trying to manage it in that—in the way they’re contemplating is 
109 

difficult, particularly when we’ve seen—our market, as it works, is 

generating a lot of the outcomes they’re already looking for. 

Mr. BABIN. Right. 

Mr. MAGNESS. To change it doesn’t make a lot of sense as far as 

trying to get the same objectives. 

Mr. BABIN. Anyway, thank you, Mr. Magness. And I’d also like 

to thank all the other witnesses. We appreciate you coming today. 

And with that, I yield back the balance of my time, which is zero. 

Chairman SMITH. Thank you, Mr. Babin. 

And the gentleman from Louisiana, Mr. Abraham, is recognized. 

Mr. ABRAHAM. Thank you, Mr. Chairman. 

I have been watching the narrative that Ms. McCarthy has been 

giving as far as the CPP, and I noticed it changed somewhat in August and in late July from global warming as to the effects of the 

CPP or the effects of carbon to—she then went to say that it’s 

going to exacerbate childhood asthma. And so I’ve been looking at 

this from a physician’s point of view, and I really made no connection between CO2 and child exacerbations of asthma. I’ve treated 

thousands of cases of it, and I know for a fact that most of childhood asthma is either tobacco smoke or rhinovirus or seasonal due 

to pollen or dust. 

So I guess my question to you, Dr. Smith and Mr. Magness, what 

are the health disbenefits of the CPP? For instance, are many seniors in my district—and certainly I live in a very rural district 

where unfortunately we have a disproportionate number of—people 

on a low fixed income. So are the poor and the seniors going to 

have to choose between medicines and higher electricity cost to afford medicine? Because if they do, that affects their health directly. 

I can make that connection much more easily than I can with the 

other way with the CO2 and the asthma exacerbations. Yes, Dr. 

Smith. 

Dr. SMITH. Thank you. I’d just like to repeat, as I said in my oral 

statement, that those asthma attacks that you’re referring to have 

nothing to do—they really have nothing to do with climate 

change—— 

Mr. ABRAHAM. And I agree. I think it’s pixie dust. 

Dr. SMITH. —neither in the present or the future. EPA has based 

them entirely on changes of—coincidental changes of other types of 

pollutants that are already regulated, and those other pollutants 

are already regulated to levels that are protective of the public 

health. So there’s really not a credible case for arguing that there 

would even be those benefits to be had as these other pollutants 

fall coincidently in the implementation of the CPP to get the CO2

down. But they have nothing to do with climate change. 

Now, at the same time you raise the question are there some 

other kinds of disbenefits, health disbenefits even that may be incurred as a result of the CPP, and that would be—if—as I said before, there is—there are statistical associations found between 

disbenefits in health and increased spending or costs to consumers. 

And so those would be real as well. They would be just as real as 

the statistical types of calculations that are lying behind the asserted benefits of the CPP. EPA has not calculated them. And as 

I said, if you compare costs to benefits, you end up with the impression that the costs are actually greater than the benefits, which 
110 

would imply that there are these health disbenefits also to be had 

from those costs. 

Mr. ABRAHAM. Mr. Magness, you have something to add, sir? 

Mr. MAGNESS. Mr. Abraham, if we’re not able to provide reliable 

electric service—that service is fundamental to people’s way of life 

day-to-day—the way in which a grid operator protects the grid 

from blackouts, from a much, much worse situation occurring that 

could go on for a while, is to do rotating outages. We don’t like to 

do them, but it’s one of the tools we have. 

What we see in our analysis is that if we are not able to get the 

transmission lines built in time to replace the coal units are lost, 

we could see, particularly, you know, localized effects in places like 

Dallas, places like Houston, that we may have a higher and higher 

risk of having to do rotating outages. When we do those rotating 

outages, they’re not something that you can plan very much in advance because of the nature of the electric system. They affect hospitals. They affect schools. They affect where our elders are cared 

for. 

So I think as a—you know, from the highest level, one of the reasons that electric reliability is so essential is the day-to-day health 

and operation of people of our economy. 

Mr. ABRAHAM. Thank you. 

Thank you, Mr. Chairman. I yield back. 

Chairman SMITH. Thank you, Mr. Abraham. 

And the gentleman from Georgia, Mr. Loudermilk, is recognized. 

Mr. LOUDERMILK. Thank you—— 

Chairman SMITH. I’m—if the gentleman will excuse me, I 

skipped over someone by mistake, and it’s the gentleman from Alabama, Mr. Palmer, who’s up next. 

Mr. PALMER. Thank you, Mr. Chairman. 

And, Mr. Loudermilk, I hope you can wait five minutes. Is that 

okay? 

Mr. LOUDERMILK. Yeah. 

Mr. PALMER. Thank you. Dr. Smith, did you find any serious 

problems with EPA’s analysis of the Clean Power Plan? 

Dr. SMITH. I found that they are not reporting the costs they actually estimated, pushing those costs off into years beyond the time 

period when they have to report cost estimates in their Regulatory 

Impact Analysis. 

I also found just yesterday that in their analysis of the massbased cap they haven’t actually analyzed the very rule that EPA 

itself has implemented or promulgated, which is that they are allowing leakage, and that causes their cost estimates to be understated. 

Mr. PALMER. Does that come across to you as a bit disingenuous? 

Dr. SMITH. I think that the reporting problems are a bit disingenuous. That has that appearance to me. The issue of the leakage, I’m not sure. I’m not sure how—whether it’s even been noted 

or that they’re aware that they failed to do that. 

Mr. PALMER. Ms. Dykes, this is a yes or no question in regard 

to Mr. Abraham’s points about asthma and health benefits of the 

Clean Power Plan. Is it your opinion—is it the EPA’s opinion that 

it does reduce asthma rates and has a beneficial impact on health? 

Ms. DYKES. It is my opinion that, yes, it does. 
111 

Mr. PALMER. Thank you. That’s interesting because Administrator Gina McCarthy testified before Congress that the Clean 

Power Plan—and I’m quoting—‘‘will not have any meaningful direct impact on respiratory health, atmospheric temperatures, or sea 

level rise,’’ which begs the question why is EPA selling out to impose this? And her response was something that actually you testified to a little while ago, that it will encourage other nations to 

comply. 

Mr. Knappenberger, your expertise is climate. Are you familiar 

with the research that’s indicating that we’re actually entering into 

a cooling period? 

Mr. KNAPPENBERGER. A little bit as having to do with the solar 

variability and the decrease of that. That is ongoing research. I’m 

not sure what it will yield. But as I said, there are natural and 

there are human influences on the climate system, and the human 

influences add a pressure to warm it, but doesn’t mean that you— 

that it will warm, as other natural influences could offset some of 

that warming. 

Mr. PALMER. So your research is consistent with the natural 

variations. I think, in fact, one of the IPCC lead authors has 

reached that conclusion that any variation in the climate is the result of natural variations. 

I also want to address this issue of the cost, and it’s interesting 

that we’ve had a couple of members testify about the benefits in 

their states, and I would just like to point out, Mr. Chairman, that 

for Connecticut, they have the highest household energy costs in 

the country. 

And in terms of the impact on low-income families, it might be 

interesting to look at the federal program, the Low Income Household Energy Assistance Program. Connecticut is getting 72 million 

a year. That’s what your appropriations would be for 2016, and 

Massachusetts, 133 million. 

So it has—it’s obviously having an impact on low-income families. As a matter of fact, the National Black Chamber of Commerce 

indicated that if the Clean Power Plan, which they oppose, is implemented, it will cost African Americans seven million jobs, will 

cost Hispanics twelve million jobs, it will lower their household income by $455 per year for African Americans, 515 for Hispanic 

families. They estimate that the African American poverty rate will 

go up 23 percent, and the Hispanic poverty rate will go up 26 percent. 

Dr. Smith, is this in any way consistent with some of the things 

that you’re finding? 

Dr. SMITH. In our analysis we have the RGGI region meeting— 

in our base case meeting its RGGI caps and the costs—basically, 

those costs that you’re describing are embedded in our base case, 

and they don’t even get captured into our cost analysis because we 

take those as already incurred. But there’s no reason to believe 

that those costs aren’t happening. 

And I also want to point out that the Analysis Group study is 

only looking at the benefits within the states, but there are damages and costs of the RGGI program to providers of fuels that are 

outside of the state, and those aren’t being accounted for in the 

Analysis Group report. 
112 

Mr. PALMER. Mr. Chairman, in wrapping up my point here, you 

know, you have the Administrator of the EPA admitting that it has 

little to no health benefit, little to no benefit in climate change. It 

seems like it’s a massive public relations program, but really it 

seems like it’s a political program. I yield back. 

Chairman SMITH. Yes. Thank you, Mr. Palmer. 

And now the gentleman from Georgia, Mr. Loudermilk, is recognized. 

Mr. LOUDERMILK. Thank you, Mr. Chairman, and also to my 

friend from Alabama, I just—that isn’t the first time that Alabama 

has beat Georgia this year. I’ll just bring that up. 

Dr. Smith, just for a few minutes here, I want to set aside hyperbole, I want to set aside tales of apocalypse of global warming, and 

I want to look at facts. I want to look at truth. My concern is the 

health and the welfare of the people of this nation, more specifically, the 11th Congressional District in Georgia. 

I’ve looked a lot into this, and you may say I want to look at the 

real impact overregulation by the government is having on the 

health, the welfare of the people of this nation. I’ve testified here 

before of what I have seen as going throughout the state of Georgia. Let me lay it out to you. 

Because of over-taxation and overregulation, many textile mills 

and other manufacturers that once dotted the landscape throughout Georgia that provided employment for generations of families— 

you had sometimes three generations of families working either in 

the factory or in a supporting business in a small community, a 

thriving small community in Georgia—those plants are now sitting 

empty because of the regulations that government has imposed 

upon them because those manufacturers have moved their operations overseas, not because of the cost of labor but because the 

hidden costs of overregulation and taxation. 

As you go into those neighborhoods, you go into those communities, you experience low-income families struggling to get by and 

you find poverty-stricken families. Their health has deteriorated, 

disease is higher, their living conditions are deplorable. Since this 

administration has gone on a rampage to even further destroy economic advancement in this nation, we have seen that we’re trying 

to come back, but every time the economy tries to recover, we see 

more regulation coming down the pike. We’ve already closed coalfired plants in Georgia costing 700 jobs of hardworking individuals 

because of regulation. 

Now, I read what’s going to happen here. We already have some 

of the highest cost of electricity in Georgia. I have one of the largest coal-fired plants in the nation ten miles from my home. It is 

one of the cleanest. They have exceeded the standards that the 

EPA has already put out there, but now they’re told they have to, 

even with a greater percentage. They can’t get there because 

they’re already employing the best technology out there. It is a very 

clean-operated coal-fired plant. They can’t get there. It is going to 

shut down, costing another 2,000 jobs. We will see more of this poverty continue. When you look at the average American family is already paying $15,000 in hidden regulatory taxes, that causes them 

to have to take other means to get by. 
113 

As we’re going to see another 17 percent, as—according to your 

report, a 17 percent estimated increase in the cost of electricity, I 

guarantee you families will supplement that electricity in the cold 

months by burning alternate fuel in their homes in their fireplaces. 

It happens every year. Every time we have a price increase, there 

are more home fires, there are more people burning—and I can 

imagine, and I’ve had others testify, that burning wood in a fireplace creates more carbon into the atmosphere than the footprint 

of a coal-fired plant does for that home. 

But we know through studies that that increases asthma. The 

reason Gina McCarthy testified that pollution isn’t a contributor to 

asthma because it isn’t. The World Health Organization says 

there’s not even a clear link. But indoor air pollution is. 

So my question, what are we going to see on a national scale if 

CPP is implemented on the impact to the economy and the average 

working family in this nation? 

Dr. SMITH. The costs that I’ve been reporting and estimating are 

average costs across the whole average consumer. And they are 

substantial in their own right as—but regulations are regressive. 

The costs of regulations, especially regulations on energy, are regressive in their impact, and that’s what you’ve been describing. 

And there’s no question that people, if they have a hard time meeting their electricity bill, are going to resort to sources of energy in 

their home warming that creates indoor air pollution, and there’s 

no question that indoor air pollution is a bigger problem than outdoor air pollution at this time, especially open fires in homes. 

Mr. LOUDERMILK. Okay. Thank you. 

And, Mr. Chairman, I would love to continue on with this but I 

see them I am out of time so—— 

Chairman SMITH. If you have another question, feel free to—— 

Mr. LOUDERMILK. I would real quickly. 

Ms. Dykes, my question to you would be are we prepared to handle the increased cases of disease, the health risks that this type 

of situation—I’m telling you, I’m dealing with facts, not studies 

that the EPA does that won’t even give us the data on the studies. 

I’m not talking about scientific studies. You can study all day long. 

The facts are the reality of what’s on the ground in my district 

across the Nation. When there is economic downturn, when there 

are people without jobs, poverty goes up, living conditions go down, 

you see pollution, you see unhealthy living conditions in the home, 

and health risks and go up. Are we prepared as a nation to deal 

with the increase of the health that this downturn of this plan will 

give us for, what, .03 percent decrease in global temperature? 

Chairman SMITH. Yes, 2 or 3/100 of a—— 

Mr. LOUDERMILK. Oh, 3/100. Okay. Thank you for the correction. 

Ms. DYKES. Well, I agree with you. I think that to the extent 

that—you know, I’m excited to talk to you today not about 

hypotheticals and studies but about the real experience that—the 

verified successes that we’ve had in the RGGI region through implementing for several years a program that is a model for how 

States can comply with the Clean Power Plan. 

And, you know, you’ve heard from the panelists a variety of different concerns about impacts on customers, reliability impacts. 

We’re experiencing those today because of the lack of action that’s 
114 

caused increased storm volatility. We’ve had five major storms roll 

through our State in 2011, 2012 that knocked out power to 800,000 

customers. We have substations that have to be built up because 

of storm surges now, you know, that have not been affected for decades. 

And the ability to reinvest proceeds from the sale of carbon allowances is what gives us our greatest tool to help low-income customers through energy efficiency programs, to weatherize their 

homes and reduce their electricity bills. And so it’s a very—I think 

those are demonstrated successes from our program. 

Chairman SMITH. And I think Dr. Smith wanted to respond as 

well. 

Dr. SMITH. It’s certainly possible that when you start to tax energy, to take some of those tax revenues as Connecticut is doing 

and recycling them back to helping households, even low-income 

households to reduce the impact on their bills. 

But, you know, another problem with weatherization and the like 

is that in fact that can increase the problem of indoor air pollution, 

and if people continue to try to find yet cheaper ways to meet their 

needs for warmth, that will continue. 

Mr. LOUDERMILK. And I may conclude, Mr. Chairman, that these 

credits and help for low income is a good idea, but when they have 

no job and they can’t pay their bills, period, a little bit of help 

doesn’t go a long way. 

Chairman SMITH. Thank you, Mr. Loudermilk. 

That concludes our hearing today. And let me thank the witnesses again, collectively and individually, for their testimony. This 

was very informative, very helpful, and we appreciate the time you 

took to be here and the effort you put into your testimony. Thank 

you. 

[Whereupon, at 11:47 a.m., the Committee was adjourned.] 
(115) 

Appendix I 

ANSWERS TO POST-HEARING QUESTIONS
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ANSWERS TO POST-HEARING QUESTIONS

Responses by Dr. Anne Smith 
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Responses by Mr. Bill Magness 
(121) 

Appendix II 

ADDITIONAL MATERIAL FOR THE RECORD
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DOCUMENTS SUBMITTED BY COMMITTEE CHAIRMAN LAMAR S. SMITH
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DOCUMENTS SUBMITTED BY REPRESENTATIVE GARY PALMER
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STATEMENT SUBMITTED BY COMMITTEE RANKING MEMBER EDDIE BERNICE JOHNSON
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STATEMENT SUBMITTED BY REPRESENTATIVE ELIZABETH H. ESTY
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Æ