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S. HRG. 114–36 

LEGAL IMPLICATIONS OF 

THE CLEAN POWER PLAN 

HEARING 

BEFORE THE

SUBCOMMITTEE ON CLEAN AIR 

AND NUCLEAR SAFETY 

OF THE

COMMITTEE ON 

ENVIRONMENT AND PUBLIC WORKS 

UNITED STATES SENATE 

ONE HUNDRED FOURTEENTH CONGRESS 

FIRST SESSION 

MAY 5, 2015 

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

( 

Available via the World Wide Web: http://www.gpo.gov/fdsys 
(II) 

COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS 

ONE HUNDRED FOURTEENTH CONGRESS 

FIRST SESSION 

JAMES M. INHOFE, Oklahoma, Chairman 

DAVID VITTER, Louisiana 

JOHN BARRASSO, Wyoming 

SHELLEY MOORE CAPITO, West Virginia 

MIKE CRAPO, Idaho 

JOHN BOOZMAN, Arkansas 

JEFF SESSIONS, Alabama 

ROGER WICKER, Mississippi 

DEB FISCHER, Nebraska 

MIKE ROUNDS, South Dakota 

DAN SULLIVAN, Alaska 

BARBARA BOXER, California 

THOMAS R. CARPER, Delaware 

BENJAMIN L. CARDIN, Maryland 

BERNARD SANDERS, Vermont 

SHELDON WHITEHOUSE, Rhode Island 

JEFF MERKLEY, Oregon 

KIRSTEN GILLIBRAND, New York 

CORY A. BOOKER, New Jersey 

EDWARD J. MARKEY, Massachusetts 

RYAN JACKSON, Majority Staff Director 

BETTINA POIRIER, Democratic Staff Director 

SUBCOMMITTEE ON CLEAN AIR AND NUCLEAR SAFETY

SHELLEY MOORE CAPITO, West Virginia, Chairman 

DAVID VITTER, Louisiana 

JOHN BARRASSO, Wyoming 

MIKE CRAPO, Idaho 

JEFF SESSIONS, Alabama 

ROGER WICKER, Mississippi 

DEB FISCHER, Nebraska 

JAMES M. INHOFE, Oklahoma (ex officio) 

THOMAS R. CARPER, Delaware 

BENJAMIN L. CARDIN, Maryland 

BERNARD SANDERS, Vermont 

SHELDON WHITEHOUSE, Rhode Island 

JEFF MERKLEY, Oregon 

EDWARD J. MARKEY, Massachusetts 

BARBARA BOXER, California (ex officio) 
(III) 

C O N T E N T S 

Page 

MAY 5, 2015 

OPENING STATEMENTS 

Capito, Hon. Shelley Moore, U.S. Senator from the State of West Virginia ...... 1 

Carper, Hon. Thomas R., U.S. Senator from the State of Delaware ................... 3 

Inhofe, Hon. James M., U.S. Senator from the State of Oklahoma .................... 5 

Cardin, Hon. Benjamin L., U.S. Senator from the State of Maryland, prepared 

statement .............................................................................................................. 275 

WITNESSES 

Morrisey, Hon. Patrick, Attorney General, State of West Virginia ..................... 6 

Prepared statement .......................................................................................... 9 

Response to an additional question from Senator Whitehouse .................... 15 

Pruitt, Hon. Scott, Attorney General, State of Oklahoma ................................... 15 

Prepared statement .......................................................................................... 18 

Response to an additional question from Senator Whitehouse .................... 23 

Martella, Roger Jr., Partner, Sidley Austin, LLP ................................................. 23 

Prepared statement .......................................................................................... 26 

Speakes-Backman, Kelly, Maryland Public Service Commissioner, Chair, 

Board of Directors, RGGI .................................................................................... 41 

Prepared statement .......................................................................................... 43 

Heinzerling, Lisa, Professor, Georgetown University ........................................... 52 

Prepared statement .......................................................................................... 54 

(1) 

LEGAL IMPLICATIONS OF 

THE CLEAN POWER PLAN 

TUESDAY, MAY 5, 2015 

U.S. SENATE, 

COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS, 

SUBCOMMITTEE ON CLEAN AIR AND NUCLEAR SAFETY, 

Washington, DC. 

The committee met, pursuant to notice, at 2:59 p.m. in room 406, 

Dirksen Senate Office Building, Hon. Shelley Moore Capito (chairwoman of the committee) presiding. 

Present: Senators Capito, Carper, Barrasso, Crapo, Inhofe, 

Cardin, Whitehouse, and Markey. 

OPENING STATEMENT OF HON. SHELLEY MOORE CAPITO, 

U.S. SENATOR FROM THE STATE OF WEST VIRGINIA 

Senator CAPITO. I would like to thank everybody for being here 

today. This is our first Clean Air and Nuclear Safety Subcommittee 

hearing on the EPA’s Clean Power Plan. 

I would like to thank all the witnesses for appearing before us 

today and say a special thank you to my State’s attorney general, 

Patrick Morrisey, who has been leading the national legal fight 

against this rule, which would have, we believe, a devastating impact in our home State of West Virginia. So thank you and thank 

you, Attorney General Morrisey, for traveling across the mountain. 

Appreciate it. 

Back in February, in a full committee hearing in this room, I 

asked EPA Acting Assistant Administrator Janet McCabe to explain why the EPA did not hold a public hearing on its proposed 

Clean Power Plan in the State of West Virginia, one of those States 

very heavily impacted. Despite the large role that coal has in our 

economy, in our electricity generation, and despite the multiple invitations issued by me and many, many others, Federal and State 

legislators, to have them come to our State, she told me basically 

that public hearings were held where people were ‘‘comfortable.’’ 

That response was unacceptable to me then and to the people of 

my State. 

As Attorney General Morrisey will also point out in his testimony, this rule will have a devastating impact on our State, other 

coal-producing States, electricity ratepayers across the Country, 

and the reliability of our grid. 

We know from nearly five decades of experience that the Clean 

Air Act works best when implemented in the spirit of cooperative 

federalism. When the Federal Government works with the State as 
2 

partners, we can and have improved our air quality, protected our 

economy and the electricity grid at the same time. 

However, the Clean Power Plan does none of this, in my opinion. 

Instead, we have an EPA dictating to the States and effectively 

micro-managing interstate electricity policy decisions to a degree 

even the Agency admits is unprecedented. This raises a broad 

array of legal issues and is quite simply bad policy. 

As a result, many States, including West Virginia and Oklahoma, 

whose attorneys general will be here today, have raised grave concerns about the legality of the rule and the implications for their 

citizens and ratepayers. In addition to significant constitutional 

and other legal questions, States have expressed concerns about 

the feasibility of EPA’s proposed requirements and the likely impacts on electricity costs and reliability. 

At risk is the ability the States have always had to make the decision about their electricity generation. West Virginia has chosen 

to rely on coal to provide affordable and reliable electricity for our 

consumers and businesses. Other States have made different 

choices that best serve their citizens. But under the Clean Power 

Plan, each State’s electricity plan will have to make EPA’s criteria 

for reducing carbon dioxide emissions and be approved by the EPA. 

Other EPA regulations like Utility MACT rule is already contributing to rising electricity rates and growing concerns about reliability. We have had testimony in this committee in other hearings. 

With the economy still far from fully recovered, the last thing job 

creators need is another expensive regulation likely to drive up our 

energy prices. And the last things our families and senior citizens 

need is to see their electric bills continue to go up. 

Next week I will be introducing greenhouse gas legislation with 

my colleagues that will preserve the proper balance of State and 

Federal authority, help ensure reliable and affordable electricity, 

and protect jobs and our economy. I look forward to working with 

many colleagues on the committee to advance this bill. 

I would also like to say anecdotally that throughout the State of 

West Virginia we have such uncertainty and such disappointment, 

I think, that our voices haven’t been heard in our State with the 

EPA coming to the State to listen, and we don’t feel that the calculation of the economic impact in our communities has been fully 

explored, nor even taken into consideration as we move forward 

with these rules. 

With that, I would like to yield to the ranking member, Senator 

Carper, for an opening statement. 

[The prepared statement of Senator Capito follows:] 

STATEMENT OF HON. SHELLEY MOORE CAPITO, 

U.S. SENATOR FROM THE STATE OF WEST VIRGINIA

Thank you all for being here today for the first Clean Air and Nuclear Safety Subcommittee hearing on EPA’s Clean Power Plan. I would like to thank all of our witnesses for appearing before us today, and say a special thank you to my State’s Attorney General, Patrick Morrisey, who has been leading the national legal fight 

against this rule, which would have such devastating impacts on our home State 

of West Virginia. 

Back in February, in a full committee hearing in this room, I asked EPA Acting 

Assistant Administrator Janet McCabe to explain why the EPA did not hold a public hearing on its proposed Clean Power Plan in West Virginia, despite the large role 
3 

coal has in our economy and our electricity generation, and despite the multiple invitations by Federal and State legislators. 

She told me public hearings were held where people were ‘‘comfortable’’ going. 

That response is unacceptable to me and to the people of my State. As Attorney 

General Morrisey will also point out in his testimony, this rule will have a devastating impact on our State, other coal producing States, electricity rate payers 

across the country and the reliability of our grid. 

We know from nearly five decades of experience that the Clean Air Act works best 

when implemented in the spirit of cooperative federalism. When the Federal Government works with the States as partners, we can, and have, improved air quality 

and protected our economy and our electricity grid at the same time. 

However, the Clean Power Plan does none of this. Instead, we have EPA dictating 

to States and effectively micromanaging intrastate electricity policy decisions to a 

degree even the agency admits is unprecedented. This raises a broad array of legal 

issues and is, quite simply, bad policy. 

As a result, many States—including West Virginia and Oklahoma, whose Attorneys General we will be hearing from today—have raised grave concerns about the 

legality of the rule and the implications for their citizens and ratepayers. In addition to significant constitutional and other legal questions, States have expressed 

concerns about the feasibility of EPA’s proposed requirements and the likely impacts 

on electricity costs and reliability. 

At risk is the ability that States have always had to make decisions about their 

electricity generation. West Virginia has chosen to rely on coal to provide affordable 

and reliable electricity for our consumers and businesses. As a result, we have some 

of the lowest electricity rates in the Nation. Other States make different choices 

that best serve their citizens. But under the Clean Power Plan, each State’s electricity plan would have to meet EPA’s criteria for reducing carbon dioxide emissions 

and be approved by EPA. 

Other EPA regulations like the Utility MACT rule have already contributed to rising electric rates and growing concerns about reliability. With the economy still far 

from fully recovered, the last thing job creators need is another expensive regulation 

likely to drive up energy prices. And the last thing our families and senior citizens 

need is to see their electric bills continue to go up. 

Next week I will be introducing greenhouse gas legislation with my colleagues 

that will preserve the proper balance of State and Federal authority, help ensure 

reliable and affordable electricity, and protect jobs and our economy. 

OPENING STATEMENT OF HON. THOMAS R. CARPER, 

U.S. SENATOR FROM THE STATE OF DELAWARE 

Senator CARPER. Thank you, Madam Chairman. Thanks so very 

much for holding our hearing today. 

I want to welcome our witnesses. Nice to see you all today. And 

thanks for joining us for this important conversation. 

Today’s hearing will continue the discussion of the legal implications of EPA’s proposed carbon regulations known as the Clean 

Power Plan. I was born, as some of you know, in Beckley, West Virginia, Raleigh County, West Virginia. One of the 15 founders of 

West Virginia, Raleigh County, was my great-great-great-greatgreat-grandfather, Joseph Carper. And as a native of a county 

where coal mining was important, remains important, and now as 

a Senator, recovering Governor, representing the lowest lying State 

in the Nation, I have a unique perspective on the balance that we 

must strike to make environmental regulation work; not just for 

my State, not just for your States, but for all of our States. 

For those of us from States that are already being impacted by 

climate change, the EPA’s Clean Power Plan to regulate our Nation’s largest source of carbon pollution is not just important, but 

it is essential. Many States, such as Maryland, my home State of 

Delaware, have already taken action to reduce lower power plant 

emissions. However, we need all States to do their fair share to 

protect the air that we breathe and stem the tide of climate 
4 

change. In order for these standards to be effective, the EPA must 

ensure that all 50 States are capable of complying with these 

standards. 

Today, the EPA has conducted an unprecedented level of State 

and local government outreach, not just to State and local governments, but to utilities, to businesses, in order to craft a comprehensive plan that works for each State. Under the Clean Power Plan, 

States can create their own plan for meeting their targets in a 

number of ways, including by increasing renewable energy, such as 

wind and solar, and increasing the efficiency of their electrical grid. 

Unfortunately, since the day that EPA proposed the Clean Power 

Plan, it has been criticized as being outside the Agency’s authority 

under the Clean Air Act and the U.S. Constitution. I believe these 

claims are without basis in fact. 

In 2006, 10 States actually sued EPA to force it to regulate carbon pollution from power plants. Since then, the U.S. Supreme 

Court has ruled, not once, not twice, but three times in support of 

EPA’s legal authority to control carbon pollution under existing 

law. 

In 2007, the Supreme Court confirmed in Massachusetts v. EPA 

that, as passed by Congress, the Clean Air Act gave the EPA the 

authority to regulate carbon pollution. 

The legal precedent for the Clean Power Plan is, at least in my 

mind, clear; and attempts by Congress and other parties to challenge its legality are essentially an attempt to delay implementation of the Plan. 

As we have seen in the past, litigation over carbon pollution regulations has the potential to be stuck in the courts for several 

years. The longer we wait to reduce our carbon output, the more 

severe and perhaps irreversible the effects of climate change will 

become; and, frankly, the more severe the changes that will have 

to be adopted to deal with this coming problem. 

Meanwhile, public health and our economy will continue to be 

endangered by more frequent storms, intense droughts, and sea 

level rise. 

Personally, I am committed to making sure Congress does all it 

can do to support the implementation of the Clean Power Plan, and 

I look forward to hearing from our witnesses today about our 

progress in doing so. 

Let me just close with one thought. I was born in Beckley, West 

Virginia; family still in that area, all over the State, actually. I remember going as a little boy going to a little church, Grace Gospel 

Church just outside of Beckley in a town called Shady Springs, 

which you know, Madam Chairman. And at a very early age I was 

told the Golden Rule: treat other people the way we want to be 

treated. I think the Golden Rule is probably the most important 

rule of all, and I think it should be apply here as well. 

I want to make sure that we treat West Virginia fairly. I want 

to make sure that we treat Delaware fairly. I want to make sure 

that the States that are seeing sea level rise, which poses enormous threat to us—the highest point in Delaware is a bridge; it is 

not a mountain. It is not a mountain, it is a bridge. We already 

see the effects of sea level rise in my State and we are concerned 

about it, and, frankly, so are a lot of other States. I want to make 
5 

sure we are fair to us in the First State; I want to make sure that 

we are fair to the folks in the Mountain State. 

With that in mind, let’s have a good hearing. Thank you. 

Senator CAPITO. Thank you. 

I would like to tell the audience and the witnesses that we are 

scheduled to have a vote somewhere between 10:15 and 10:30, so 

my plan would be to try to get through opening statements and 

then adjourn quickly and let us go vote, make that one vote and 

come back to the question portion. I reserve the right to change my 

mind. I might say we will just rotate inside and out. That might 

be a better way to do it. But at that point I just wanted to put you 

on alert. 

At this time, I would like to recognize the chairman of the full 

committee, Mr. Inhofe, from Oklahoma, for purposes of making 

some comments. 

OPENING STATEMENT OF HON. JAMES M. INHOFE, 

U.S. SENATOR FROM THE STATE OF OKLAHOMA 

Senator INHOFE. I thought that was just my wife that made that 

statement, about changing her mind. 

[Laughter.] 

Senator INHOFE. I appreciate it very much, Senator Capito. 

We have some people here today from Oklahoma; they came up 

here, the Rural Electric Coop. They are concerned. You know, in 

Oklahoma we get this question all the time. They say, now wait a 

minute. If we are reliant upon fossil fuel for 50 percent of the 

power to run this machine called America and they take that away, 

how do you run the machine called America? And I said, come up 

and find out, because I don’t know either. 

Three things real quickly. Cap-and-trade started, this was way 

back in 2002, and at that time they first said the world is coming 

to an end, all the global warming and all that stuff. Now, they 

tried to pass it legislatively from 2002 up until the current time, 

and they are unable to do that. So what we are looking at now is 

the Federal Government coming in under the Obama administration, trying to do through regulation what they couldn’t do through 

legislation. 

Second, when Lisa Jackson was the Administrator of the EPA 

under Obama, I asked her the question, in this room, live on TV, 

I said, you know, if we were to pass, either through regulation or 

through legislation, would this have the effect of reducing CO2

emissions worldwide? And she said, no, it wouldn’t because this 

isn’t where the problem is. So even if you are a believer in those 

things, it wouldn’t work. 

The last thing, I am not a lawyer, but I was on several radio 

shows this morning with Scott Pruitt, our attorney general, and I 

learned a lot, Scott, from you. But when the President’s own law 

professor, Laurence Tribe, recently testified before the House, he 

said that the EPA was attempting an unconstitutional trifecta, 

usurping the prerogatives of the States, Congress, and the Federal 

Courts all at once. This was Barack Obama’s Harvard Law professor. 

With that, I look forward to the opening statements. 

[The prepared statement of Senator Inhofe follows:] 
6 

STATEMENT OF HON. JAMES M. INHOFE, 

U.S. SENATOR FROM THE STATE OF OKLAHOMA

We are here today to talk with legal experts and Attorneys General about the Environmental Protection Agency’s proposed CO2 regulations for existing power plants. 

This proposal is another attempt by the Obama administration to circumvent the 

role of Congress and achieve through regulatory fiat what the President could not 

achieve through legislation. 

Congress has already been very clear in its opposition to a federally mandated 

emission reductions scheme when cap-and-trade legislation failed under a Democrat 

controlled Senate, yet the President is choosing to ignore the will of Congress and 

the American people by mandating this country’s energy system be restructured in 

an unprecedented, likely illegal and economically damaging way. 

It’s not just Republicans that disagree with the legal premise of the Clean Power 

Plan. The President’s own constitutional law professor, Lawrence Tribe, recently 

testified before the House Energy and Commerce Committee hearing that his EPA 

was attempting an ‘‘unconstitutional trifecta usurping the prerogatives of the 

States, Congress and the Federal Courts—all at once.’’ 

It is very telling when even legal and environmental experts that agree with the 

Administration’s overall objective, do not agree with the means by which they are 

attempting to achieve that objective. 

The EPA, an agency of unelected bureaucrats, expects the States to cede authority 

over its intrastate energy systems, so that the EPA can then tell its citizens what 

type and how much energy they can use. This is counter to the purpose of the Clean 

Air Act and undermines the longstanding principle of cooperative federalism where 

the Federal Government is meant to work in partnership with the States to achieve 

environmental objectives. 

This proposal is legally unsound, and comes with a $479 billion compliance cost, 

will result in double digit electricity price increases in 43 States and has negligible 

environmental benefits—environmental benefits the EPA did not even bother to 

measure and will be rendered pointless by 1 month of carbon emissions in China. 

This is why 32 States oppose this rule and 12 have sued the EPA over this proposal. I am thankful that two of the States leading the charge against this rule— 

West Virginia and Oklahoma—are here to testify. 

This is an unprecedented regulatory action where the agency is attempting to rewrite the law in a manner that Congress explicitly prohibited. Congress writes the 

laws and the agencies interpret them—even under President Obama. 

I will not stand by and let the EPA force States to spend their resources in a manner that will harm local economies and force their citizens to pay for the President’s 

misguided legacy. Especially when it is not a matter of if the Clean Power Plan will 

be ruled illegal, but when. 

I thank all the witnesses for being here and I look forward to their testimony. 

Senator CAPITO. Thank you. 

I would like to recognize, we will go, from my view, left to right. 

Our first witness is Hon. Patrick Morrisey, who is the Attorney 

General of the State of West Virginia. Welcome. 

STATEMENT OF HON. PATRICK MORRISEY, ATTORNEY 

GENERAL, STATE OF WEST VIRGINIA 

Mr. MORRISEY. Well, thank you very much, Chairman Capito, 

Ranking Member Carper, and all of the distinguished members of 

this subcommittee. I very much appreciate the opportunity to be 

here today to testify against the President’s so-called Clean Power 

Plan. 

I do want to say at the outset I feel good about this hearing because West Virginia seems to have some support, both from the 

Chair and the ranking member side. So, Senator Carper, you are 

always welcome to come back to the great State of your birth. 

Thank you. 

Now, I am here today to talk about the legal problems in the 

Obama administration’s so-called Clean Power Plan, commonly 

known as the 111(d) Rule. This Rule seeks to require States to re-
7 

duce emissions from existing coal-fired power plants by, on average, a staggering 30 percent over a 15-year period. 

Now, make no mistake about it, finalizing this proposal would 

have a devastating impact on my State, other coal-producing 

States, and citizens from across the Country who feel the negative 

impact of high electricity prices, lost jobs, and a potential lack of 

reliability in the power grid. 

Now, West Virginia is one of the poorest States in the Country, 

and yet we are the second largest producer of coal. It is a very important resource for us. This proposal would result in even greater 

economic dislocation in Appalachia at a time when we can least afford it. 

Now, it is my duty as the chief legal officer of the State of West 

Virginia to fight against this unlawful power grab, which is hurting 

our citizens. West Virginia has already led a bipartisan coalition of 

15 States before the U.S. Court of Appeals in D.C., and if this Administration elects to finalize this rule, West Virginia will challenge it in court, and we expect that the coalition of 15 States that 

we are currently working with will grow. 

Today I would like to talk about just a few of the legal defects 

of this proposal. 

Now, as you all know, the EPA bases its claim for legal authority 

to adopt this Rule entirely on Section 11(d) of the Clean Air Act. 

However, a nearby provision, Section 112 of the Clean Air Act, 

EPA prohibits the Agency from invoking Section 111(d) for any pollutant ‘‘emitted from a source category which is regulated under 

Section 112.’’ We think that language is very clear. 

And as EPA has repeatedly explained time after time, this text 

literally means that if EPA has already regulated a source category 

under Section 112, EPA may not then come in and require States 

to regulate any pollutants emitted from the same source category 

under 111(d). 

Now, this is where the EPA runs into some trouble because, as 

we know, in 2012 they already finalized a major rule affecting coalfired power plants under Section 112. 

Now, the EPA’s legal argument for avoiding this Section 112 exclusion is not credible and defies all traditional rules of administrative law and statutory construction. Let me explain. 

When Congress enacted the present version of the Section 112 

exclusion in 1990, they actually made a mistake. It accidentally included two provisions in the statute at large, two amendments to 

the same exact text. One was a substantive amendment that replaced a cross-reference and exchanged the exclusion to its present 

form. The second was a conforming amendment, a technical 

amendment, if you will, that was made 107 pages later. 

But once you actually applied the substantive amendment to the 

text, it made the conforming change wholly unnecessary, and that 

is why the technical error was never included in the U.S. Code. 

Now, what happened there is actually consistent with the way 

Congress has always operated. To the extent that there are clerical 

errors in a text, when Congress goes back through the revisers to 

decide what goes in the Code, they analyze that and they apply traditional rules of statutory construction. And, in fact, we have never 

seen a situation before where a Federal agency has literally tried 
8 

to push such sweeping proposal on the basis of a typo. It is unprecedented. 

But perhaps the most radical feature of Section 111(d) Rule is its 

sheer breadth. Rather than follow the traditional pathway of opposing an emission rule on a particular source category to make that 

source category more environmentally friendly, the Section 111(d) 

Rule requires States to replace coal-fired energy with other sources 

of energy, and even reduce consumer demand for energy. That 

means that the Section 111(d) Rule seeks not only to regulate 

power plant emissions, it is a mandate for States to fundamentally 

reorder their electricity sectors and pick winners and losers between those sectors. This Rule would regulate from power to plug. 

Now, as Allison Wood, a well-respected attorney, recently indicated before the House Energy and Commerce Committee, the 

EPA’s claim here is analogous to the Agency asserting that its authority to regulate automobile emissions provides it with the power 

to order citizens to take a bus to work or buy electric cars on the 

theory that the measures would reduce car emissions. 

Section 111(d) simply does not grant the EPA such broad sweeping power. 

Thank you very much. 

[The prepared statement of Mr. Morrisey follows:] 
9 
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RESPONSE TO A QUESTION FOR THE RECORD—HON. PATRICK MORRISEY

Senator Whitehouse: 

Question. Please describe any communications you have had with any element of 

the fossil fuel industry regarding the substance of your testimony before the EPW 

Committee for this hearing. 

Response. I worked exclusively with my staff in preparing my testimony to the 

Committee, drawing upon my Office’s extensive familiarity with the so-called Clean 

Power Plan. Although we did not discuss the remarks with any outside group, we 

have worked on these issues with a broad, bipartisan coalition of stakeholders, including labor unions, coal operators, businesses, and consumer groups. Notably, 

stakeholders across the political spectrum in West Virginia—from coal miners to energy companies to elected officials from both parties—are united in opposition to 

EPA’s illegal Plan, which will have devastating impacts upon our State. Opposing 

this illegal Plan remains one of the top priorities for my Office, and that will continue to be the case. 

Senator CAPITO. Thank you. 

Now, I have just been informed that the vote has been called, so 

hold on here, let me see what we prefer to do. 

[Pause.] 

Senator CAPITO. OK, we are going to go vote, so we will stand 

and recess and return. We should be here shortly. Thank you for 

your patience. 

[Recess.] 

Senator CAPITO. That was pretty quick, I think, and we will resume the hearing. 

I would like to welcome Hon. Scott Pruitt, who is the Attorney 

General from the State of Oklahoma. Welcome. 

STATEMENT OF HON. SCOTT PRUITT, ATTORNEY GENERAL, 

STATE OF OKLAHOMA 

Mr. PRUITT. Good morning, Chairwoman Capito, Ranking Member Carper, Chairman Inhofe, and members of the subcommittee. 

It is a joy to be with you this morning. It is good to be with my 

dear colleague and friend from West Virginia. I appreciate the invitation to discuss the legal ramifications of the EPA’s proposed 

Clean Power Plan. 

This is an issue of major importance to States across the Country 

like Oklahoma. 

Quite simply, Madam Chairwoman, the EPA does not possess the 

authority under the Clean Air Act to do what it is seeking to accomplish in the so-called Clean Power Plan. 

The EPA, under this Administration, treats States like a vessel 

of Federal will. The EPA believes States exist to implement the 

policies the Administration sees fit, regardless of whether laws like 

the Clean Air Act permit such action. 

In their wisdom, Congress gave States a primary role in emissions regulation, noting in the statement of policy of the Clean Air 

Act that ‘‘air pollution control at its source is the primary responsibility of States and local governments.’’ 

That statement respects the constitutional limits on Federal regulation of air quality and the reality that States are best suited to 

develop and implement such policies. 

States are able to engage in a cost-benefit analysis to strike the 

necessary balance between protecting and preserving the environment, while still creating a regulatory framework that does not stifle job growth and economic activity. The States are partners with 
16 

the Federal Government, as the chairwoman noted in her comments, with the Federal Government regulating such matters. 

Therefore, the Clean Air Act hinges on cooperative federalism by 

giving States the primary responsibility and role for regulation 

while providing a Federal backstop if the States should fail to act. 

When the EPA respects the role of the States, the cooperative relationship works well. When the EPA exceeds the constraints 

placed upon the Agency by Congress, the relationship is thrown out 

of balance and the rule of law and State sovereignty is affected adversely. 

The Clean Power Plan proposal throws the cooperative relationship between the States and the Federal Government off balance. 

The EPA claims the proposal gives States flexibility to develop 

their own plans to meet the national goals of reducing carbon dioxide emissions. In reality, the Clean Power Plan is nothing more 

than an attempt by the EPA to expand Federal agency power at 

the expense of States energy power generation. 

The Plan requires each State to submit a plan to cut carbon dioxide emissions by a nationwide average, the attorney general indicated earlier, by 30 percent by the year 2030. 

In Oklahoma, 40.5 percent of our energy production comes from 

coal-fired generation and 38 percent comes from natural gas. Oklahoma, notably, ranks fourth in the Country in generating electricity through wind. 

This begs the question: How does the EPA expect States like 

Oklahoma, and the top four in the Country in generating electricity 

through renewables, to meet the goals of the Clean Power Plan? 

There are only so many ways Oklahoma can achieve a 30 percent 

reduction demanded by the EPA. The Plan, therefore, must be 

viewed as an attempt by the EPA to force States into shuttering 

coal generation and eventually other sources of fossil fuel generated electricity. 

Additionally, the proposed Rule, through its building block four, 

would require States to use demand-side energy efficiency measures that would reduce the amount of generation required. However, States are limited to emission standards that actually can be 

achieved by existing industrial sources through source-level, insidethe-fence measures. 

The proposal’s attempt to force States to regulate energy consumption and generation throughout their jurisdictions, in the 

guise of reducing emissions from fossil fuel-fired plants, violates 

Section 111(d)’s plain text requirement that the performance standards established for existing sources by the States must be limited 

to measures that apply at existing power plants themselves, inside 

the fence. 

EPA’s approach converts the obscure, little-used Section 111(d) 

into a general enabling act, giving EPA power over the entire grid 

from generation to light switch. By going beyond source-level, inside-the-fence-line measures, EPA’s proposal would expand 111(d), 

and specifically the underlying statutory term ‘‘best system of emission reduction’’ into a whole new regime of regulation, one that regulates not only pollutant emission by sources, but the State’s entire 

resource and energy grid. 
17 

To meet the objectives of the EPA’s proposed rule, States would 

be forced to rework their energy generation market. To account for 

the loss of coal-fired generation, States will be forced into changing 

their energy mix in favor of renewables. States will be also forced 

to alter existing regulatory framework which would threaten energy affordability and reliability for consumers, industry, and energy producers. 

Finally, there is a substantial concern that the EPA, before the 

Clean Power Plan is even finalized, will issue a uniform Federal 

implementation plan that will be forced upon those States that 

don’t acquiesce to the unlawful Clean Power Plan. 

Such a move by the EPA would be the proverbial gun to the head 

of the States, demanding the States to act as the EPA sees fit or 

face punitive financial situations for their States. 

Madam Chairwoman, I can say with great confidence that if the 

EPA does in fact move forward with the uniform FIP, the EPA will 

be challenged in court by Oklahoma and other like-minded States. 

I am not one who believes the EPA has no role. The Agency has 

played a very important role historically in addressing water and 

air quality issues that traverse State lines. However, with this 

rule, the Agency is now being used to pick winners and losers in 

the energy market by elevating renewable power at the expense of 

fossil fuel generation. 

No State should comply with the Clean Power Plan if it means 

surrendering decisionmaking authority to the EPA, a power that 

has not been granted to it by this Congress. States should be left 

to make decisions on the fuel diversity that best meets their generation needs. 

States like Oklahoma care about these issues because we breathe 

the air, drink the water, and want to preserve the land for future 

generations, and we have developed a robust regulatory regime 

that has successfully struck a balance between maintaining and 

preserving air and water quality, while still considering the economic impact of such regulations. 

Madam Chairwoman, States like Oklahoma are simply opposed 

to the Clean Power Plan because it is outside the authority granted 

to the EPA by the law. We only ask that the State authority under 

the Clean Air Act be respected and preserved, and the decisions on 

power generation and how to achieve emissions reductions be made 

at the local level rather than at the Federal level. 

I again appreciate the opportunity to speak with you today and 

discuss these important matters. Thank you. 

[The prepared statement of Mr. Pruitt follows:] 
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RESPONSE TO A QUESTION FOR THE RECORD—HON. E. SCOTT PRUITT

Senator Whitehouse: 

Question. Please describe any communications you have had with any element of 

the fossil fuel industry regarding the substance of your testimony before the EPW 

Committee for this hearing. 

Response. My office did not have any contact with any outside groups regarding 

the substance of my testimony to this Committee and its honorable members. 

Senator CAPITO. Thank you. 

Our next witness is Mr. Roger Martella. He is a Partner at 

Sidley Austin and he was formally the General Counsel at the 

USEPA. Welcome. 

STATEMENT OF ROGER MARTELLA, JR., PARTNER, SIDLEY 

AUSTIN, LLP 

Mr. MARTELLA. Thank you, Madam Chair, Ranking Member Carper, Chairman Inhofe. Thank you for the opportunity to appear before this committee once again. It is a great honor. 

EPA has yet to finalize the Existing Source Performance Standard, but that hasn’t stopped the lawyers from submitting thousands of pages of legal arguments to the Agency, both in passionate 

support of the rulemaking and in vehement opposition of it. I have 

added to that mix a little bit today with some written testimony 

that I shared with you, but what I thought I would do is digest 

those scores of arguments into what I think are going to be the two 

overarching issues that the court is going to consider when it ultimately reviews the final rule. 

The first is picking up on a point from Senator Carper in his introduction, that if we look at how the courts have responded to climate change issues since 2007, since Massachusetts v. EPA, we 

have had a lot of direction in the last few years from the Supreme 

Court, the D.C. Circuit, the Ninth Circuit; and what the courts 

have told us is that they take climate change extremely seriously. 

Regardless of what I might think about it, what anyone here might 

think about it, the courts have expressed that they view climate 

change as a paramount policy concern and they have been highly 

deferential not only to EPA, but to the States, when they have engaged in creative mechanisms to use old and outdated tools to address the modern challenge of climate change. So I agree with that 

proposition. The courts have been recognizing that and they won’t 

look at this in a political vacuum or a policy vacuum; the courts 

will consider that when they review the rule and the goal of what 

the EPA is trying to do here. 

Now, having said that, the other countervailing consideration 

from the other side will be the unprecedented nature of what EPA 

is trying to do with its existing authority under the Clean Air Act, 

and what I am talking about specifically, of the many legal issues, 

the one that I think is going to get the most attention from the 

court is something you have probably heard about several times by 

now, EPA’s approach to regulate sources beyond the fence line of 

those sources, and it basically works like this: if my pen here is my 

coal-fired power plant, for the 45 years in the history of the Clean 

Air Act, the EPA has always set a standard for this coal-fired 

power plant based on the technology that could be achieved at this 

source, on what this coal-fired power plant could do. 
24 

But now EPA is saying in order to address climate change, that 

is going to limit us. We can only get so many emissions from the 

coal-fired power plant, so we have to look beyond the fence line; we 

have to look at natural gas facilities, we have to look at renewable 

energy, nuclear energy, the energy efficiency of buildings like this. 

And that will enable us, for the first time, to achieve greater reductions in greenhouse gases than what we can get from this coal-fired 

power plant. 

Now, back to my first point. The court may think that is a noble 

goal, but at the same time it is going to be thinking also about the 

legal precedent of this beyond-the-fence-line approach for the first 

time in 45 years of the Clean Air Act; and it has really three precedential ramifications. The first is the practical ramification. As the 

two generals have spoken today, is the enormous expansion of authority to make EPA not only a regulator of the environment, but 

really the most significant regulator of energy at the national level. 

In order to get those greenhouse reductions, it has to include in its 

regulatory authority nuclear facilities, renewable energy facilities, 

energy efficiency in countless buildings. So it is expanding its authority to the entire energy market in a way that really Congress 

should be speaking to and Congress should be authorizing, as opposed to looking at inherent authority. 

The second ramification is a legal one, and the courts are going 

to be concerned about the legal precedent here, that this is a departure from the Clean Air Act’s historic approach focusing on sources, 

on the case law that has been consistent in EPA’s past application. 

Never before in 45 years has EPA gone beyond a source and gone 

beyond the fence line. In the case law and the couple times it has 

tried to do so has shut that down. 

And then the third concern for the courts is going to be the precedential nature of this on other sectors. If EPA is affirmed with 

this approach, this beyond-the-fence-line approach here, as it starts 

to regulate greenhouse gases from other sectors down the road, 

there is really going to be almost no limit to how it can look beyond 

an individual source to bring in other sources and, by the way, also 

hold other sources that are not currently subject to Clean Air Act 

regulation, like a nuclear facility, like this building and energy efficiency, bring them into EPA’s regulatory regime. 

While I have said the Supreme Court has endorsed EPA’s climate change rules, there is an asterisk there. Less than a year ago, 

the Supreme Court did say, in partially affirming EPA, but partially reversing EPA, that EPA cannot look to the Clean Air Act to 

engage in sector-wide economic regulation; and that came out just 

4 days after this Rule that the Supreme Court said we will not 

allow EPA to use the Clean Air Act to regulate lots of small sources 

and engage in sector-wide regulation of the economy. It is 

unfathomable how the justices that were concerned in that instance with EPA regulation wouldn’t be concerned with this regulation. 

The last thing I just wanted to mention briefly is the harm that 

we are going to see in the interim, during judicial review. It takes 

about 4 years for courts to review cases like this if it goes to the 

Supreme Court, and, again, the generals have spoken to some of 

the harms going to the State. I do want to point out, any single 
25 

rule, everybody is always going to allege harm. But this is fundamentally distinctive because of the ways I think Attorney General Pruitt and Morrisey have talked about, the ways States have 

to fundamentally restructure and reorganize their entire system of 

regulating energy, creating energy infrastructure, and also developing laws, enacting laws that promote renewable portfolio standards, energy efficiency programs, and so on. So this is fundamentally distinct in terms of the harm that is going to be realized in 

the short-term from other environmental rulemakings. 

Thank you again for this opportunity. 

[The prepared statement of Mr. Martella follows:] 
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Senator CAPITO. Thank you very much. 

Our next witness is Ms. Kelly Speakes-Backman. She is a member of the Maryland Public Service Commission and she is also the 

Co-Chair of the Regional Greenhouse Gas Initiative. Welcome. 

STATEMENT OF KELLY SPEAKES-BACKMAN, MARYLAND PUBLIC SERVICE COMMISSIONER, CHAIR, BOARD OF DIRECTORS, RGGI 

Ms. SPEAKES-BACKMAN. Thank you. Good morning. Thank you 

for inviting me to speak today. It is truly an honor. 

Since the issuance of the Clean Power Plan, proponents and opponents alike have been engaged in many discussions about what 

the next steps are. Reiterating a sentiment expressed by one of my 

dear fellow panelists, one of the most significant questions for 

States right now is how do I comply. 

I respectfully submit to you, from the perspective of a State that 

already has boots on the ground on this issue, not only can States 

comply with the Clean Power Plan, but we can do so in a way that 

generates economic benefits and supports grid reliability. 

Furthermore, I ask in return can we, as States, afford not to 

comply with the Plan? 

Rather than looking at this in the contexts of a Federal implementation plan and what that would mean look like, I encourage 

the legal experts and legislators to view this situation from a State 

regulator’s perspective. 

As noted in the recently released Quadrennial Energy Review, 

severe weather is the leading cause of power disruptions, costing 

the U.S. economy from $18 billion to $33 billion a year. And as a 

rate utility regulator, I have the statutory obligation to ensure reliable and affordable electricity. In a restructured market I need 

more tools at my disposal than what is available to me from within 

the fence line of a power plant in order to meet those requirements. 

Modernizing the electricity grid is critical and it requires multistate collaboration to implement cost-effective infrastructure improvements. The proposed Plan is an impetus for us States to access our grid and to face the reality of an already shifting fuel mix. 

Adding carbon pollution reductions is a metric for States to consider. 

The RGGI States have continued for 7 years now, and coming up 

on 28 auctions, to successfully implement the Nation’s first fully 

operational carbon market. The RGGI program, initiated by a bipartisan group of Governors and developed collaboratively by economic and environmental regulatory bodies, caps emissions by first 

determining a regional budget of carbon dioxide allowances and 

then distributing a majority of those allowances through the regional auctions at market prices, and finally capturing that value 

for reinvestment into strategic energy programs. 

Although we have collaborated for the better part of a decade, 

the region remains surprisingly diverse. We comprise three different separate electricity regions, different political and economic 

landscapes, and dissimilar generation profiles. Maryland, for example, is 44 percent coal. 

It is a little bit surprising for those who look into the RGGI region and think of us all as northeastern States. But we have 
42 

learned to balance that and we have learned to diversify our fuel 

mix. We have gone, from 2005 to 2013, from 56 to 44 percent coal, 

demonstrating that it is actually possible for a State with a significant coal generation profile to reduce our carbon dioxide emissions. 

The carbon intensity of the whole RGGI region’s power sector has 

decreased at twice the rate of the rest of the Country. 

So you will find more statistics in my written testimony that attest to the economic and environmental benefits for our region and 

for my State. The benefits informed our perspective of the RGGI 

States as we voiced support for the framework of the Clean Power 

Plan and recommended revisions to ensure that early action is recognized and that State targets are verifiable, transparent, equitable, and enforceable. 

Regional mass-based programs like RGGI are advantageous in 

part because they closely align with the nature of the grid already 

and they allow for transparent and verifiable tracking and compliance systems. Recent analysis even from our own regional transmission organization, PJM, calculated higher compliance costs for 

States that go it alone, underscoring the cost-effectiveness of regional plans. States that work together can implement a regional 

emission budget across a larger geographic boundary and they can 

find the least cost solutions across a larger selection of options. 

To add some perspective on the timing, just a really quick one 

on that. The power sector has already responded effectively in the 

RGGI region to environmental regulations in less time than the 

EPA provides the rest of the Country as part of the Clean Power 

Plan. In fact, measures supported by RGGI investments have advanced reliability goals in the region in just 7 years. In contrast, 

States have 15 years to meet the final compliance goals. We have 

reduced our carbon dioxide emissions from power plants by 40 percent, while our region’s economy grew by 8 percent over that same 

timeframe. 

Finally, we have accumulated some pretty good lessons as a participant in RGGI that we hope will be instructive to other States. 

No. 1, we formed intra- and interagency relationships through cooperative effort, which allows us to do a lot more for a lot less. The 

regional mechanism has stimulated quite some good stakeholder 

engagements as many of the compliance entities span multiple jurisdictions and appreciate the regional consistency. The third is 

that consistency doesn’t mean that we have to have identical programs. Each State has its own programs based on its own policy 

and needs. 

And, last, I think the most important lesson is that participation 

in a mass-based regional compliance effort will likely provide our 

States the most flexibility moving forward. Using this mass-based 

construct, the cap is the only enforceable mechanism, and that cap 

is enforced by our individual State regulators. So States retain jurisdiction over their individual energy efficiency and renewable energy programs; they are not subject to the Federal implementation. 

And we can continue to offer these initiatives to mitigate the cost 

of compliance for ratepayers. 

So thank you. We look forward to working with you and answering questions. 

[The prepared statement of Ms. Speakes-Backman follows:] 
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Senator CAPITO. Thank you. 

And our final witness is Ms. Lisa Heinzerling, who is a Professor 

at Georgetown University. Welcome. 

STATEMENT OF LISA HEINZERLING, PROFESSOR, 

GEORGETOWN UNIVERSITY 

Ms. HEINZERLING. Thank you and thank you for inviting me to 

appear before you today to discuss the legal implications of EPA’s 

carbon dioxide rule. 

Many dramatic legal arguments have been raised against EPA’s 

proposal. Opponents of EPA’s proposal have claimed that the proposal is unconstitutional under any one of a number of novel theories. They have also argued that the whole proposal, or significant 

aspects of it, are unlawful under the Clean Air Act. We have heard 

several such arguments already this morning. 

In my view, the constitutional and statutory arguments that 

have been raised against EPA’s proposed rule collapse upon close 

inspection. 

For example, constitutional principles of federalism are not violated by EPA’s proposal. Under EPA’s proposal, States have a 

choice. They may devise their own plans to meet the State-specific 

targets EPA will set or they may let EPA devise a plan for them. 

This is the very same choice States have had for 45 years under 

the Air Quality Standards Program of the Clean Air Act. It is not 

an unconstitutional choice. 

Nor does EPA’s proposal violate the doctrine forbidding delegations of legislative authority to the Executive. EPA is interpreting 

statutory provisions of less than ideal clarity, using its best judgment to offer an interpretation that gives some force to the provisions enacted by Congress. The opponents of EPA’s rule argue that 

if EPA interprets the statute the right way, the way they favor, it 

raises no non-delegation issue. But, they say, if EPA interprets the 

statute the wrong way, the way they don’t like, this violates the 

non-delegation doctrine. 

In 2001, in a case called Whitman v. American Trucking Association, Justice Scalia, writing for a unanimous Supreme Court, rejected this exact theory, the theory that an agency can cure or create a non-delegation problem by adopting a particular interpretation of a statute. 

If the Clean Air Act presents EPA with an unconstitutional 

choice between apparently conflicting provisions, which it does not, 

the remedy would be to strike those provisions down, not to require 

the adoption of the interpretation that opponents of this rule prefer. 

EPA’s proposal also does not violate the Clean Air Act. Much has 

been made of the two different 1990 amendments to Section 111(d), 

both passed by Congress and both signed into law by President 

George H.W. Bush. EPA has long offered an interpretation of Section 111(d) that aims to take something from each of these amendments. 

Under EPA’s construction of the amendments, EPA may not, 

under Section 111, regulate the same hazardous air pollutants 

from the same sources under both that section, Section 111, and 

Section 112. This interpretation makes perfect sense and respects 
53 

the larger structure of the Clean Air Act, which pervasively leaves 

room for regulation in the event new threats from air pollution 

come to the fore. 

EPA’s proposed consideration of a wide range of emissions reduction measures and setting State targets, including renewable portfolio standards and demand-side energy efficiency, is also consistent with the broad authority given to it by Section 111(d). In 

contrast to what we have heard this morning already, this kind of 

approach is not unprecedented. EPA has long, for conventional air 

pollutants, allowed compliance via renewable energy standards and 

energy efficiency programs. 

And here it is worth thinking about what the claim is. The claim 

is that, in essence, there is too much flexibility afforded by the 

Plan. It is worth noting here the Office of Management and Budget 

of the White House, in 2003, noted that the Clean Air Act had the 

largest quantified health benefits of any Federal regulatory program. The latest EPA study of costs and benefits of the Clean Air 

Act found in a central estimate that the Clean Air produces $30 

worth of benefits for every dollar-worth of costs. The ratio is 30 to 

1 under a central estimate. Under a high estimate of benefits, it 

is 90 to 1. 

This doesn’t happen by accident. This kind of program, this kind 

of statutory implementation happens as a result of firm, but sensible interpretation of broad statutory provisions. It is mystifying 

to me that opponents of the Clean Power Plan are criticizing EPA 

for exhibiting the same good sense and flexibility that has served 

the Clean Air Act and this Country so well for 45 years. 

[The prepared statement of Ms. Heinzerling follows:] 
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Senator CAPITO. Thank you. 

Appreciate everybody’s testimony, and I will begin with questions. 

Attorney General Morrisey, let me ask you a question. We obviously have a difference of opinion here. The Supreme Court recently said that it is skeptical ‘‘when an agency claims to discover 

in a long extant statute an unheralded power to regulate a significant portion of the American economy.’’ 

I guess my question is how long has 111(d) existed and has it 

ever been used outside the fence line to overhaul an entire sector? 

Mr. MORRISEY. Ms. Chairman, this actually is literally an unprecedented effort on the part of the EPA to regulate, and we have 

looked very closely and we have never seen a proposal quite like 

this both in terms of its scope and its willingness to regulate outside the fence, but also the legal theory that is being advanced here 

by the Administration. If you go back to 1970 and then you go up 

all the way to modern day, to today, you are looking at nothing 

that has ever occurred quite like this. Now, there have been some 

select efforts to rely on 111(d) in very limited circumstances, but 

nothing ever approaching this magnitude. 

And the other critical point is that from 1990 no Federal agency, 

no one has ever questioned that if you were to regulate under 112, 

that the literal text would ultimately preclude the State-by-State 

emission targets that are being set under 111(d). So we think that 

this is really an unprecedented approach. 

And we would also add that what the Administration is trying 

to do here is rely on a typo, a conforming error, if you will, in order 

to breathe life into one of the most sweeping regulations in our 

Country’s history. If you look to advance something that has this 

great an impact on the American economy, at a minimum, there 

should be clear authority and not a reliance on this typo. 

Senator CAPITO. Mr. Martella, you mentioned in your statement, 

I believe, that EPA had never gone that far in terms of this fence 

line issue. Could you respond to that question as well? 

Mr. MARTELLA. Thank you, Madam Chair. That is correct. There 

have been a number of occasions where EPA, in the past, has 

looked at something called a bubble concept, and that sounds like 

exactly what it is, that you can sometimes bring in the notion that 

something is more than just a stack, and you bring in other sources 

of that bubble. There are two cases that address that, and both rejected the bubble concept, and those weren’t even in the Section 

111(d) context. So the little bit we have seen of this in the courts 

has been negative and pessimistic on that. 

In terms of your question on Section 111(d), EPA has engaged in 

five Section 111(d) rulemakings since 1990. In each single case it 

has always stayed strictly within the fence line, the analogous 

fence line, it has never gone outside of it. So there is a lack of 

precedent from the Agency and a consistent source of case law that 

would suggest that everything has to be within the fence, and, 

frankly, that is the clear reading of the statute as well. 

Senator CAPITO. Thank you. 

Attorney General Pruitt, the proposed rule is clearly on shaky 

grounds, and I believe Mr. Martella said 4 years before we would 

actually maybe get a firm legal interpretation of it being finalized. 
74 

So what happens if States start implementing the final rule, only 

to have the courts strike the rule down? What do they do? Are people going to start signing contracts and breaking ground? What 

kind of scenario does that present in your mind? 

Mr. PRUITT. Madam Chairwoman, I think it is a great question, 

because what has not been discussed this morning is the short time 

line that the EPA is likely going to propose when they finalize the 

rule next month. It is our understanding that it is going to be a 

1-year compliance period for States to submit a State implementation plan, and by any estimation that is a very ambitious time line. 

As such, I think what is happening across the Country is respective 

Departments of Environmental Quality at the State level feel as 

though they are being pressured, intimidated to comply with a rule 

that perhaps is not consistent with the statutory construction, 

which is the purpose of our discussion here today. I am very concerned about the time line. 

And I would add, to Roger’s comment earlier, you know, we have 

to keep in mind, in fact, one of my fellow panelists is a public utility corporation; she regulates this at the State level. The regulation 

of energy generation is a police power of the States that has historically been recognized as such through court cases, and for there 

to be any intervention into that police power, there is a rule of statutory construction that Congress speak explicitly, clearly, unambiguously to the authority of the Agency to invade that police power 

that has been recognized under the law. And I think by virtue of 

the discussion here today even among the panelists there is disagreement about whether this statute clearly provides that type of 

authority. 

Senator CAPITO. Another quick question. And I think your Governor has said that she will not be doing a State implementation 

plan, is that correct? 

Mr. PRUITT. There was an executive order recently issued by the 

Governor indicating that the DEQ is not empowered to submit an 

invalid plan to the EPA. 

Senator CAPITO. And I believe in West Virginia, Mr. Attorney 

General, that the State legislature weighed in on this. Could you 

talk about that just for a minute? 

Mr. MORRISEY. Yes. Just recently, a couple months ago, the State 

legislature changed the law so that for the State of West Virginia 

to submit a State implementation plan the legislation would have 

to ratify it. That is different from the previous law, which would 

leave all that authority to the Governor. 

Senator CAPITO. All right. Thank you. 

Senator Carper. 

Senator CARPER. Thank you, Madam Chair. 

Senator Inhofe may recall me telling this story before, but it 

bears, I think, repeating. Ten or so years ago I was involved in an 

effort with Senator George Voinovich and others to try to find 

agreement on multi-pollutant legislations dealing with sulfur dioxide and mercury and CO2, and as part of that process I remember 

meeting with a bunch of utility CEOs from all the Country and we 

spent about an hour or so together talking about how we might 

proceed. And at the end of the conversation this one old fellow who 

was with a utility from someplace down South, I don’t remember 
75 

just where, but he said to me these words, he said, look, Senator, 

here is what you need to do. You need to tell us what the rules are 

going to be. You need to give us some flexibility and a reasonable 

amount of time and get out of the way. That is what he said. Tell 

us what the rules are going to be, give us some flexibility, a reasonable amount of time, and get out of the way. 

And I would just say, if I could, for Ms. Heinzerling, think about 

that conversation and what that fellow said to me that day. How 

does it relate to what we are looking at here that the EPA is trying 

to accomplish? 

Ms. HEINZERLING. I think it fits it exactly, Senator; that is, this 

Plan sets out what States are to do, gives them targets to meet, 

gives them the flexibility to choose the way they want to meet 

those targets. In this respect, it is strange and surprising to me 

that States are already saying that they would prefer to have the 

Federal Government set their plans. But it gives them that kind 

of flexibility to set their own plans to meet the targets, and then 

it gives them the times to do it. The time lines in this rule are notably long. We are looking out to 2030 for a final compliance with 

the structure of this Plan. So I think your story fits this rule perfectly. 

Senator CARPER. Good. 

Ms. Backman, I think you were saying that Maryland has had 

a fairly heavy reliance on coal in the generation of electricity, and 

I think what you said was that you reduced over, I don’t know, 

over the last 7 or 8 years, your two emissions by roughly 40 percent? 

Ms. SPEAKES-BACKMAN. Yes, sir. 

Senator CARPER. And you are part of this regional coalition with 

Delaware and a bunch of other States. In my last job that I had 

as Governor, I loved the idea of having flexibility. If the Feds wanted me to do something, I would say give me a menu of options that 

I would have. I understand there are, like, at least four options 

here that States can use, and this term of beyond-the-fence-line is 

an option that is sort of unprecedented. As I recall working on 

multi-pollutant legislation a number of years ago, we were anxious 

to see what kind of options that were outside the fence line. 

How could we help it with respect to CO2? How could we help 

by going to no-till? How could we help with respect to encouraging 

folks to plan switch class and other crops like that, so the idea of 

going out of the fence line, it just seems to me, as my dad would 

say, that just seems like common sense. 

Ms. Backman, talk to us about this flexibility, the idea of actually more flexibility not just by going out of the fence line, but actually by doing these regional solutions. How is having a regional solution helped Maryland? And we have Oklahoma, a producer of 

wind. God bless you. We are doing that. But if they were in a regional compact of some kind, could they actually get some help, as 

I am sure Maryland and Delaware have? 

Ms. SPEAKES-BACKMAN. Absolutely. And thank you for the question. I will step back just a second and say that EPA has made unprecedented outreach to the utility regulators of the Nation 

through the National Association of Regulatory Utility Commissioners, and three things that we asked for across the board and 
76 

three things we could all agree on, even if the NARU commissioners don’t agree on everything. My good friend, Chairman 

McKinney, at the time, these were the things that we agreed on: 

that we wanted flexibility, that we wanted affordability, and that 

we wanted reliability. And I think the EPA’s Clean Power Plan 

gives us all of those. 

Now, we have chosen to use all four of these building blocks in 

reducing carbon emissions from our RGGI region, but it is not necessarily necessary to do all four of those building blocks. And you 

are not limited to those four building blocks. The EPA has clearly 

set out a plan in setting up the goal, very separately from what the 

compliance plans will be, that you may use outside-the-fence-line 

solutions, and that includes energy efficiency and demand response 

that has actually helped us with reliability. It includes changing 

fuel sources from 56 percent coal to a much wider mix of fuel availability for our generation, which actually helps with reliability. So 

we have been able to meet multiple policy goals for our States that 

include reliability, affordability, and reducing carbon by reaching 

outside the fence. 

Now, that said, we still only regulate State-by-State we regulate 

in our RGGI construct at the power plant line. We are not going 

in and regulating through RGGI the energy efficiency programs of 

each State. Each State regulates their own. I, as a utility regulator, 

actually help to make those decisions. 

Senator CARPER. Thank you. 

Ms. SPEAKES-BACKMAN. Thank you. 

Senator CARPER. My time has expired. 

Madam Chair, we have a simultaneous meeting going on in Finance on tax reform. I need to slip over there for a while. I will 

be back, though. This is a great hearing. Thank you. 

Senator CAPITO. Thank you. 

Senator CARPER. Thank you all. 

Senator CAPITO. Senator Inhofe. 

Senator INHOFE. Thank you, Madam Chair. 

I listened to different people here and I get different ideas, and 

since I am a rare thing, I am not an attorney—most of the members of the Senate are—it seems to me that the practical application of EPA’s proposal would require the States to pass new laws 

to revise existing regulatory systems, and I think of this and I 

think what is wrong with this picture. Should it be the role of an 

administrative agency to be forcing States to take this kind of action? 

And then, second, General Pruitt, is this consistent with the 

Clean Air Act, or how does that factor into it? 

Mr. PRUITT. Well, thank you, Mr. Chairman. I think, as we have 

discussed today, there is a question that keeps coming up in my 

mind. If this is such a flexible arrangement that is offered the 

States, if this is really within the bounds of cooperative federalism, 

why is it that the EPA presently is in the process of developing a 

uniform Federal implementation plan that they are going to put on 

the shelf to then say to the States unless you act a particular way, 

unless you act a particular way, unless you act consistent with the 

Rule, this is what you are going to get. 
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That, to me, does not sound like cooperation. That does not 

sound like partnership. That sounds like the proverbial gun to the 

head of making States act a particular way, and it is consistent 

with the comments, Mr. Chairman, that I offered in my opening 

statement. 

This EPA looks at State implementation plans and says you can 

introduce and adopt a State plan so long as it embodies Federal 

will, so long as it embodies that which we want to happen on a 

State-by-State basis. And when States disagree, that is when these 

Federal implementation plans are forced upon the States. I don’t 

think there is much discretion to the State of Oklahoma. As I indicated in my comments, we are already in the top four States in the 

Country in generating electricity through renewables and wind. 

But yet this EPA is expecting the State of Oklahoma to reduce 

their CO2 footprint by over 30 percent. The question is how, but for 

shuttering coal generation in the State of Oklahoma. That is a concern practically and it is a concern legally. 

Senator INHOFE. Well, looking at it as a non-attorney, you look 

at the Tenth Amendment, which refers to reserving power to the 

States. Do you think this is consistent with the Tenth Amendment? 

Mr. PRUITT. Well, I think this case, and I would add this to the 

comments earlier from the fellow panelists. I don’t think it is terribly novel for us to have a dispute or a case about statutory construction. I indicated that it is a traditional police power to regulate power generation. And for the Federal Government to intervene or to invade that, the statute has to be explicit and clear and 

unambiguous; and I think by virtue of our discussion today it is demonstrative that that is not the case. 

So, Senator, I think it is less about the Tenth Amendment, less 

about States’ rights under the Tenth Amendment, and more about 

statutory construction and whether the EPA possesses the authority that you gave it to regulate in this area. 

Senator INHOFE. Mr. Martella, do you have any comments about 

that? 

Mr. MARTELLA. I would agree with that. If I could mention this 

theme of flexibility that has come up during our discussion, I don’t 

think there is anybody who would dispute flexibility is a good 

thing. We all want flexibility. But I think there is a little bit of an 

apples to oranges situation going on. I apologize, but I have to go 

back to my pen. 

So if this is my coal-fired power plant, and if you are staying inside the fence line, EPA may say for coal-fired power plant you are 

currently emitting 2100 tons of CO2 per megawatt hour. We are 

going to reduce you to 2,000 tons. That is inside the fence line. 

What EPA is saying, though, is we are going to look at nuclear and 

renewable and energy efficiency and these other things, and because we are looking outside the fence line, we are going to bring 

you down to 1200 pounds of CO2 per megawatt hour, to the point 

this coal-fired power plant has to shut down. 

What we are saying or what I am saying is EPA has to set the 

standard. Set the standard inside the fence line. If there is flexibility on how you meet that standard, that is fine, but you can’t 

look outside the fence in setting the standard. So we don’t dispute, 

I don’t dispute that flexibility is a good thing, but the distinction 
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is the flexibility doesn’t come in in setting the standard, it comes 

in on the compliance side. 

Senator INHOFE. OK, that is a good comment. 

General Morrisey, we will probably have another round of questions and I might get to that building block 3 question that I want 

to pose to you, but I know people in West Virginia and I know what 

is happening there right now. Even though this Rule has not gone 

into effect, what has happened to some of your coal plants, some 

of your utilities in your State already as a result of the threat? 

Mr. MORRISEY. Well, Mr. Chairman, it is clear in West Virginia 

that the harm is already occurring. In fact, as we were preparing 

for the lawsuit that we filed last year against the EPA, one of the 

principal arguments that we made is that, unlike many of the 

other traditional rules that are subject to notice and comment, this 

proposed rule is actually causing real tangible harm in the States 

and also it is affecting power plant operations currently. If you go 

and look at our litigation, we have at least eight declarations from 

very experienced environmental regulators who talk about the cost 

of trying to comply with this rule. 

The other point that I would raise is that the timeframes associated with this proposal are hyperaggressive. You had a proposed 

rule that was issued June 2014, a final rule scheduled to be issued 

sometime this summer, and then while the regulators are suggesting that they may need many years in order to try to even 

come up with a plan, they have been given 1 year. That is a very 

real problem. 

But there are real costs being expended by the States and also 

I believe that this Administration is not particularly interested in 

whether the rule is finalized so long as the marketplace actually 

moves away for them. If coal-fired power plants have to be retired 

much quicker than baseline, then they are going to accomplish 

their goal even if this regulation never is upheld in the courts. 

Senator INHOFE. Thank you, General Morrisey. I do want to follow up on this. I will wait until the second round. 

Senator CAPITO. Senator Markey. 

Senator MARKEY. Thank you, Madam Chair. Madam Chair, I 

would ask that two articles by Jody Friedman and Richard Lazarus 

be included in the record. They provide a very clear and thorough 

explanation of the constitutionality of the EPA’s Clean Power Rule. 

Senator CAPITO. Without objection. 

Senator MARKEY. Thank you so much. 

[The referenced documents follow:] 
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Senator MARKEY. We are in a big moment. Pope Francis is about 

to issue an encyclical on climate change. The College of Cardinals 

did a very dangerous thing, they named a Jesuit who taught chemistry as the Pope. So Pope Francis believes, actually, that science 

is the answer to our prayers and we have to look at the smartest 

ways that we can deal with this to reduce the danger that growing 

greenhouse gases is going to pose to God’s creation, the planet. And 

I think it is important for us, then, to find ways to accomplish that 

goal. 

So back in 1990 we worked on the Clean Air Act. I was on the 

committee to draft it and put that law on the books, and I added, 

actually, an energy efficiency section to the Clean Air Act to give 

more flexibility to the administrator at the EPA, George Bush’s 

EPA administrator. And there were ways that utilities could comply with their acid rain requirements by undertaking activities beyond what was occurring at their power plants, and I can assure 

you that my intent and that of my congressional colleagues was to 

encourage utilities to look at the energy system in total to find 

ways of reducing sulfur pollution in the air. 

So Ms. Heinzerling, one objection that has been raised about the 

Clean Power Plan is that utilities might have to go beyond the 

fence of their power plants to achieve their emission targets. In addition to the acid rain program that I just mentioned, are there 

other examples of using energy efficiency renewables or other beyond-the-fence activities under the Clean Air Act? 

Ms. HEINZERLING. Yes. Very early on, something like 35 years 

ago, EPA issued a rule that included washing of coal before it was 

burned as a compliance mechanism for dealing with the Clean Air 

Act. It was something that wasn’t within the source, it wasn’t a 

typical end-of-the-pipe kind of measure. In regulating interstate 

pollution or interstate conventional air pollutant under the Clean 

Air Act, EPA has for many years included renewables in energy efficiency as potential compliance mechanisms. 

If I may just extend this example just a bit further afield, but 

I think it illustrates that you are talking about, if you look at the 

program under the Clean Air Act, under Section 202 to regulate 

mobile sources, you might, if you looked at that quickly, you might 

think that is the classic end-of-the-pipe measure. And yet if you 

look at EPA’s most recent rules on greenhouse gas emissions for 

mobile sources, EPA has, in the terms used today, gone beyond the 

fence line. They included flexibilities in their rules that made the 

rule, I think, a marvel of modern regulation. They included consideration of the footprint of the vehicle and the air conditioning refrigerants used in the vehicle, and flex fuel vehicles. So if you look 

not just at the pollution regulation that we have been talking 

about, of stationary sources, but beyond that under the Clean Air 

Act, it has, I think, become standard to look for flexibilities. 

Senator MARKEY. I agree with you, and that was the intent of 

the 1990 Act, it was to give more flexibility, it was to use a different model; and I think that is what this proposed Rule is going 

to do as well, it is going to say to each State, move in a way that 

accomplishes the goal, but we are going to be very flexible. 

Let me ask you this question. The constitutionality of EPA’s approach to setting public health standards has been challenged be-
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fore. The Supreme Court upheld EPA’s approach in a 9-to-nothing 

opinion in Whitman v. American Trucking in 2001. In 2011, the 

Supreme Court ruled that EPA has the authority to set standards 

for carbon pollution under Section 111(d) in an 8-to-nothing opinion 

in American Electric Power v. Connecticut. And during the oral arguments in that case the counsel argued, on behalf of AEP, said 

to the Court we believe that the EPA can consider, as it is undertaking to do, regulating existing, non-modified sources under Section 111 of the Clean Air Act. 

Ms. Heinzerling, is there really any constitutional question about 

EPA’s approach or their legal authority to regulate carbon pollution 

under Section 111 of the Clean Air Act? 

Ms. HEINZERLING. No, I don’t think so. I think the constitutional 

issues have been a distraction. I think they have been used to 

make people worry that maybe there is lurking a real constitutional issue, so we better interpret this statute narrowly. But the 

constitutional arguments, I think, are flimsy. And the statutory authority under the Clean Air Act, as I have said, I think is clear. 

Senator MARKEY. Beautiful. Thank you. 

Thank you, Madam Chair. 

Senator CAPITO. Thank you. 

Senator Barrasso. 

Senator BARRASSO. Thank you very much, Madam Chairman. 

Attorney General Pruitt, good to see you again. Oklahoma is a 

fossil fuel producing energy State. Attorney General Morrisey, the 

State of West Virginia, like the State of Wyoming, is a coal State. 

All of our States are particularly hit by the slew of proposed EPA 

rules aimed squarely at the fossil fuel industry and the folks that 

work in that industry. 

I would like to highlight a letter from the Governor of my home 

State of Wyoming, Governor Matt Mead, to EPA Administrator 

Gina McCarthy on April 28th of this year, and I ask that the Governor’s letter be entered into the record, Madam Chairman. 

Senator CAPITO. Without objection. 

Senator BARRASSO. Thank you. 

[The referenced document follows:] 
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Senator BARRASSO. In this letter, the Governor highlights a recent study by the Center for Energy Economics and Public Policy 

at the University of Wyoming entitled, The Impact of the Coal 

Economy on Wyoming. It was published in February of this year. 

I would ask also that this study be entered into the record. 

Senator CAPITO. Without objection. 

Senator BARRASSO. Thank you. 

[The referenced document follows:] 
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Senator BARRASSO. The Governor states about the study that the 

study determined the single largest threat to Wyoming’s coal industry is EPA’s Clean Power Rule. In fact, the study says that 

111(d) climate regulation has the potential to drastically decrease 

Wyoming coal production. Production coal output under the most 

favorable production circumstances decreases by 32 percent of the 

2012 production by the year 2025. 

The study goes on to say even the best case impact modeling of 

the 111(d) scenario suggests a loss of over 7,000 jobs across the 

State by 2025 relative to the employment in 2012. It also says overall proposed carbon regulations result in a predicted decline in the 

State’s combined coal and natural gas revenues of between 36 percent and 46 percent by 2030. 

So our State is finding that this Rule will cost thousands of good 

paying jobs, will drastically slash State revenue that pays for college scholarships, schools, medical emergency services, road safety 

programs, environmental protection programs, water quality services, veteran services, other vital services. Wyoming children, seniors, veterans, fish and wildlife, they don’t deserve, I believe, this 

dramatic cut in revenue by the EPA. 

So I find this is recklessly irresponsible, where the costs are so 

clear and devastating, and the benefits are theoretical or unknown. 

So my question to the two of you is this: Are these statistics and 

findings similar to what you are seeing and you are concerned 

about in your States? And how will essential services, State services for children, seniors, as well as the environment, be impacted 

both in Oklahoma, as well as in West Virginia? 

Mr. MORRISEY. Sure. So I think you raise a number of very important issues. We have obviously received a great deal of feedback 

from coal operators, from power plants, from coal miners in the 

State of West Virginia about the devastating impact of these rules. 

But there are a couple other implications as well. 

For instance, West Virginia, as its tax base, relies very heavily 

on coal severance revenues. If you were to look at a chart and examine some of the revenues that come into each of the counties 

from 2011 to now, you will start to see a very rapid decline. Just 

recently we have seen news publications about a number of people 

that were laid off in the counties because the coal severance tax 

revenue had declined. 

The regulations here have far-reaching implications well beyond 

coal operators. The fact is for every job that you have related to 

coal directly in West Virginia, there are probably seven jobs that 

tie in indirectly. It has a fundamental impact on our economy, and 

that is just one of the many reasons why our office has been focused so much on this, because it would be an absolute travesty to 

finalize a rule that ultimately has a real likelihood of being struck 

down in the courts. 

Senator BARRASSO. So the regulations have a direct impact on 

the people and the quality of life of the people in your State. 

Mr. MORRISEY. Without a doubt. I mean, as you are looking at 

these issues, there are always a wide variety of reasons that give 

rise to a particular decision by a power plant operator or a mine 

operator to change employment status, but regulatory burdens is 

always very high on that list. 
261 

Mr. PRUITT. And, Senator, if I could add to General Morrisey’s 

comments. Though we do not have a robust coal economy, we do 

actually have coal in the State of Oklahoma, we are vertical in our 

energy diversity, I think what is lost in the debate at times is the 

impact on consumers, those that will be consuming electricity in 

the future. In the State of Oklahoma, between coal and natural 

gas, 78 percent of our electricity is generated. As I indicated in my 

opening comment, 15 percent of our electricity is generated through 

the wind. 

The choices available to the State of Oklahoma to comply with 

this mandate from the EPA of reducing CO2 by over 30 percent, it 

puts us in the position of having to make decisions about the shuttering of coal generation, which, as I indicated, makes up over 40 

percent of our electricity generation. That is going to increase costs 

substantially to consumers; this one rule. 

To give you an example, in the Clean Air Act there is something 

called the regional haze statute, as you know, section of the Clean 

Air Act. That one rule alone, between PSO, Public Service Company of Oklahoma, and OG&E in the State of Oklahoma have seen 

15 to 20 percent increases in their generation of electricity with 

just one rule. When we combine all these others, it is going to be, 

obviously, substantially more than that in the future for consumers 

in the State of Oklahoma. 

Senator BARRASSO. So these regulations would directly hurt, hurt 

the people of Oklahoma. 

Mr. MORRISEY. Some of the folks that can least afford it. 

Senator BARRASSO. Thank you. 

Thank you, Madam Chairman. 

Senator CAPITO. Thank you. 

Senator Whitehouse. 

Senator WHITEHOUSE. Thank you very much, Madam Chairman. 

This is an interesting hearing because the questioners on the Republican side and the attorneys general who are present are all 

from States that have the characteristic that Attorney General 

Pruitt just described, i.e., they have a robust coal economy. And 

clearly we have a practical problem in that the burning of coal for 

electric generation creates some very, very dangerous consequences; but they are not fairly distributed. So where there is a 

robust coal economy, this creates one kind of problem. 

In Rhode Island, where our oceans are up 10 inches against the 

shore where our fishermen are seeing fisheries disappear, where 

houses that have been there for generations are falling into the 

ocean, we have a very different set of problems. And I think it is 

important, if we are going to address this, that we, on the one 

hand, recognize that there may very well be economic effects within 

coal economies from trying to unburden ourselves of the environmental consequences of coal burning; and we are, I think, very willing to work with you to mitigate those consequences. 

But we can’t allow those consequences to take us to a point 

where we deny that the problem exists. That is just irresponsible 

and factually wrong, and ultimately, I think, potentially really 

quite disgraceful to the institutions that we all serve. 

So let me ask you first, Attorney General Pruitt, you said that 

one of the problems with the EPA regulation was that this issue 
262 

should be left to the local level. Please tell me what Oklahoma is 

doing at the local level to address carbon pollution and climate 

change. 

Mr. PRUITT. Senator, if I could, in response to your question, also 

say that I did not make a reference to the coal economy in the 

State of Oklahoma. We do not have a robust coal economy. In fact, 

our percentage of generation of electricity attributable to coal is 40 

percent, which is less, I think, than perhaps Maryland, as it was 

referenced earlier. 

Senator WHITEHOUSE. Well, I wrote it down as you said it, and 

it was robust coal economy. But if that wasn’t correct, then I apologize and I stand corrected. The record will be what the record is. 

Mr. PRUITT. But I think what Oklahoma has done is engage in 

a very much a balancing effort between diverse fuel sources, from 

renewables at 15 percent of generated electricity to 40 percent in 

coal. 

Senator WHITEHOUSE. Why? How does climate change roll into 

that calculation? 

Mr. PRUITT. Well, our focus through public utility corporation decisionmaking, as well as my focus as attorney general, is not to engage in policy debate about whether climate action is occurring or 

not. 

Senator WHITEHOUSE. Why not? 

Mr. PRUITT. It is to look at the statute to determine whether the 

EPA is engaging in a process that is consistent with the authority 

that you have given the EPA. 

Senator WHITEHOUSE. But why would you be willing to look at 

the consequences of the regulation on, for instance, the coal economy, but not be willing to look at the consequences of this regulation on environmental protection? Why is that the debate that you 

think you need to stay out of when you are willing actively to get 

into the debate on the other side? That doesn’t seem balanced. 

Mr. PRUITT. Again, Senator, I think my comments were referring 

to the decisionmaking, the discretion that the State is engaged in 

as far as balancing generation of electricity between coal and fossil 

fuels. 

I would also say to you it is Congress that should be jealous 

about protecting its role and what it has told agencies what they 

can and cannot do. It is Congress that has set up the framework 

that we are talking about this morning between 111 and Section 

112. 

Senator WHITEHOUSE. Well, we passed the statute that it is following, and I am comfortable that they are following it. So I am 

not actually jealous at all; I think they are doing exactly what Congress intended. So I am very comfortable with that. 

What I am concerned about, we heard from Senator Barrasso 

here, from Wyoming, a very important coal State, that the benefits 

of this rule are theoretical or unknown. They are not theoretical or 

unknown. They are very clear. They are very specific. And there 

are people who are very knowledgeable about it. 

If I could use the remainder of my time to quote one very well 

known scientist on this who says, ‘‘We know precisely how fast CO2

is going up in the atmosphere. We have made a daily measurement 

of it since 1957. We have ice core data before that. We know with-
263 

out any question that it has increased by almost 40 percent since 

the industrial revolution, and that that increase is due to human 

activity, primarily fossil fuel burning and, secondarily, bad use in 

agriculture. There is no debate about that.’’ 

He continues, ‘‘There are lots of scientific uncertainties, but the 

fact that the planet’s warming and the fact that CO2 is a greenhouse gas, and the fact that is increasing in the atmosphere and 

that it increased in the atmosphere due to humans, about those 

things there is no debate.’’ 

And that is a statement of Dr. Berrien Moore III, who is the 

Dean of the University of Oklahoma’s College of Atmospheric and 

Geographic Sciences. And I think we need to be a little bit fairer 

about these hearings if we are going to get to a suitable result. 

My time has expired and I yield back. 

Senator CAPITO. Thank you. 

I think I would like to ask another question, make another statement. I believe the chairman of the full committee and Senate, certainly, if you are here still, we will go through another round. 

I would just react a little bit to some of the comments that were 

made in terms of the constitutionality and the legal authority that 

we are looking at here. I think we all need to be mindful that this 

can swing both ways in different administrations. Just because this 

time I think the constitutional overreach is too much and is something that bears terrific scrutiny, it is not to say that in another 

10 years another administration, that Senator Whitehouse would 

be thinking the same thing because of the direction it is going. So 

I think this is extremely important to look at the legal implications. 

Also, the comment was made that there was tremendous outreach to the State regulators, and I would reinforce what I said in 

my opening statement, and that I have said before this committee 

before and actually testimony was in front of the committee, that 

the primary administrator in charge of this at the EPA wouldn’t 

even come in to the State, our State, to hear about the seniors 

whose prices of electricity are going up, the miners who have lost 

their jobs, the manufacturers who are going out of business who 

are concerned about the price. So I think maybe there has been 

outreach, but there hasn’t been enough outreach, in my opinion, to 

the regular folks that are really being heavily impacted in those 

States, where I live. 

I am going to ask really quickly a question to Mr. Martella. We 

have heard a lot about whether the—I am getting back into the 

legal authority on the four building blocks. What legal authority, 

if any, does the EPA have under the Clean Air Act to impose disposal requirements on natural gas-fired power plants? Because 

that is one of their building blocks. 

Mr. MARTELLA. So thank you for asking that question, and the 

question about the building blocks two, three, and four, the dispatching the renewable energy, the energy efficiency. 

Senator CAPITO. I am going to ask the same question about all 

of them, so just wrap it in there. 

Mr. MARTELLA. OK, maybe I can give you the same answer to 

all of them. They sync up with your question about constitutionality, cooperative federalism in this relationship we are hearing 
264 

from all the witnesses on the relationship between the Federal 

Government and the States. I would like to answer it in this one 

way, and it is something that Professor Heinzerling said in her 

written testimony. A lot of people make analogies to the ESPS and 

the NOx program, which is something this committee is very familiar with. People say, well, EPA has always been able to implement 

the NOx program; the Supreme Court has endorsed it. Professor 

Heinzerling said this is not materially different than that. 

But it is materially different, and I think this is the answer to 

your question. In the NOx program, Congress has specifically authorized EPA to regulate NOx pollutants, and it has authorized 

EPA to delegate that authority to the States. So there are two 

things that are different there. At the outset, there is no doubt that 

Congress has delegated this authority to EPA, and Congress has 

said you can give this authority to the States or you can take it 

back. 

The fundamental distinction with the Clean Power Plan, when 

we talk about blocks two, three, and four, is EPA saying we now 

want States to implement a renewable portfolio standard, or dispatching system, or an energy efficiency system; and the distinction 

here is there is no debate that Congress has never authorized EPA 

itself to run a renewable portfolio standard in West Virginia, or a 

dispatching system in Oklahoma, or an energy efficiency program 

in Rhode Island. So Congress itself has never given that authority 

to EPA. EPA cannot, therefore, delegate that authority further to 

the States. 

That is just kind of a summary way that I think brings together 

these themes of cooperative federalism, constitutional issues, and 

the flexibility questions that have come up so far today. 

Senator CAPITO. So just so I understand specifically, you are saying that in the area of NOx, that there is specific legislative authority for the EPA to go into the direction that they have gone. 

Mr. MARTELLA. That is correct. That has been well settled; the 

Supreme Court has addressed that several times and it is very 

clear what Congress set up this cooperative federalism system 

there. Again, if a State decides, if my colleague here from Oklahoma decides not to implement the EPA NOx, Congress has specifically said, well, EPA has the authority in the first instance. If 

Oklahoma decides not to implement a renewable portfolio standard, Congress has never authorized EPA to implement that renewable portfolio standard. 

Senator CAPITO. Thank you. 

Attorney General Morrisey, how many States did you say joined 

in the case that you just recently brought? 

Mr. MORRISEY. Well, right now we have 15 States, which includes both attorneys general and Governors; and obviously in the 

D.C. Circuit there were three cases that came together and were 

consolidated. We led the State effort and then there were other industry efforts as well. 

Senator CAPITO. Would you characterize the 18 States as ones 

similar to West Virginia, Wyoming, Oklahoma, energy producing 

States, or are they just heavily reliant on coal, or is it all over the 

board? 
265 

Mr. MORRISEY. My sense is that these are strong energy producing States, but I would note that this is a bipartisan coalition. 

The State of Kentucky is also on board with our lawsuit as well, 

so we have obviously been reaching out to more and more States 

because we believe that even non-coal producing States or energy 

producing States should care fundamentally about whether this 

111(d) Rule gets finalized because of some of the legal implications. 

Senator CAPITO. Thank you. 

Senator Whitehouse. 

Senator WHITEHOUSE. Thank you very much, Chairman. 

Attorney General Morrisey, is climate change a problem anywhere in the world? 

Mr. MORRISEY. Well, Senator, my role is to serve as the chief 

legal officer of the State of West Virginia. 

Senator WHITEHOUSE. That is a pretty simple question. 

Mr. MORRISEY. So I am not going to make an argument today 

about climate change and whether the temperature is evolving, because regardless of the policy merits of anyone’s proposal, policies 

have to be implemented in a lawful manner, and that is one of my 

main obligations as the attorney general of the State of West Virginia. 

Senator WHITEHOUSE. Well, let me just ask Attorney General 

Pruitt, is climate change a problem anywhere in the world? 

Mr. PRUITT. Senator, I think that the process matters that the 

EPA engages in to address these issues. 

Senator WHITEHOUSE. I get that. But I didn’t ask you a process 

question; I asked you a question about whether climate change is 

a real problem anywhere in the world. 

Mr. PRUITT. I think the question about climate action plan of the 

President, climate change, is something that is a policy consideration of this Congress. If you want EPA to address that in a direct 

way, you can amend the Clean Air Act to provide that authority 

and the statutory power to do so, so that the States can know how 

to conduct themselves in a way that is consistent with statutory 

construction. 

Senator WHITEHOUSE. So, to be clear, neither of the attorneys 

general present will concede that climate change is a real problem 

anywhere in the world. 

Mr. PRUITT. Senator, I think it is immaterial to discussions about 

the legal framework of the Clean Air Act. 

Senator WHITEHOUSE. Immaterial or not, I get to ask the questions, so it is material to my question. 

All right, let’s go on to something else. 

We have talked a lot about kilowatt hour cost, and I would like 

to make a point, which is that the price of electricity in Rhode Island, my home State, was 15.2 cents per kilowatt hour. That compares to 9.67 cents per kilowatt hour in Oklahoma and it compares 

to 9.52 cents per kilowatt hour in West Virginia. However, because 

of Rhode Island’s investment in efficiency and a whole variety of 

programs particularly through RGGI, which has been mentioned 

earlier, that have been able to bring our usage down, Rhode Islanders paid only $91.48 per month for electricity, compared to $110.47 

in Oklahoma and $106.44 in West Virginia. 
266 

Will both of the attorneys general from West Virginia and Oklahoma concede that the real impact to a consumer is the dollar 

amount that they have to write on the check that pays the bill? 

Mr. MORRISEY. Well, Senator, I think where you are going right 

now, some of the details in terms of how electricity prices may vary 

across the State is a policy question. In West Virginia we have 

heard deep concern from power plant operators, from coal operators 

about what the impact will be on electricity prices, so we have seen 

that in the context of other proposed regulations that have gone 

through. 

But I think it is important to reiterate right now to choose a policy objective and try to advance it through unlawful means is something that everyone in this body should reject. 

Senator WHITEHOUSE. Can I go back to the question that I actually asked? Isn’t the economic effect of a policy made real in a consumer’s life by the amount of the check that they actually write, 

rather than a per kilowatt hour cost? 

Mr. MORRISEY. I think Senator, most people look at the amount 

that they are paying when they get in the bill; they don’t analyze 

the economic effect. 

Senator WHITEHOUSE. That is right. 

Attorney General Pruitt, you agree? 

Mr. PRUITT. I think, Senator, that what is important for utility 

companies across the Country is to have choices, flexibility in the 

diversity of the portfolio to generate electricity. 

Senator WHITEHOUSE. I agree with all that, but my question was 

quite specific, and that is when you are a utility consumer, in 

terms of the economic effect on you, what really matters is the 

amount of the check you write, correct? 

Mr. PRUITT. And the long-term economic effect of shuttering coal 

generation or fossil fuel generation in this Country, long-term, will 

be substantial on consumers. 

Senator WHITEHOUSE. Well, you didn’t answer my question; you 

segued into your lobbying on behalf of coal. But the answer to the 

question is yes or is it no, that the real difference is made by what 

the bill is? 

Mr. PRUITT. Senator, I maintain that the State of Oklahoma is 

experiencing an increase in cost to consumers because of the EPA’s 

heavy hand of eliminating fossil fuels from the energy mix. 

Senator WHITEHOUSE. Well, I would suggest to you that you try 

what Rhode Island did, because our costs are higher than you, but 

our bills are lower than yours because we actually took the trouble 

to invest in a significant way in energy reduction and efficiency. 

With that, my time has expired. 

Senator CAPITO. Senator Inhofe. 

Senator INHOFE. Thank you, Madam Chairman. 

We have been talking about this since 2002, and I can remember 

down on the Senate floor they tried to pass a similar thing that 

this regulation would do, but pass it by legislation; and I saw what 

happened. In fact, that first bill was the McCain-Lieberman bill; 

and McCain was a Republican. We decisively defeated that bill and 

every bill since that time. Senator Markey is not here now. He actually had a bill up also. Now, that has happened. 
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This discussion about the science is settled, the science is settled, 

the science is settled, every time something comes up where the 

science isn’t settled, all they talk about is that science is settled because they don’t want to elaborate on that. I want to make a part 

of the record an article a couple weeks ago in The Wall Street Journal called The Myth of Climate Change 97 Percent. 

This whole thing, they keep saying 97 percent of the scientists. 

This totally diffuses that. It would take me too long to read it, so 

I will put it into the record without objection. 

Senator CAPITO. Without objection. 

[The referenced article follows:] 
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Senator INHOFE. Talk about some of the scientists. I know Richard Lindzen. I have talked to him. He was quite upset back when 

then-Vice President Al Gore was using this politically for his career. Richard Lindzen is an MIT professor who is recognized as 

being one of the top professors around in the climate and the very 

thing that we are talking now, and people ask him the question 

why is it that people are so concerned about regulating CO2. He 

said it is a power grab. He said, and these are his words, regulation of carbon is a bureaucrat’s dream. If you regulate carbon, you 

regulate life. 

So this whole idea that the science is settled, the science is settled is just flat not true. 

Now, I know that people have 12 years of their life wrapped up 

in this issue as the only issue of our time; they don’t like to recognize this fact, but, nonetheless, this is a problem. In fact, I will do 

this from memory because I have said it so many times. You go 

back and you see these cycles that take place in the world. In 1895 

we went into the first cold spell that has been really talked about, 

it was about a 30-year cold spell; and that’s when they first said 

another ice age is coming and all of that, trying to get people 

alarmed. Because the world is always coming to an end when this 

happens. 

Then in 1918 we went into a warm spell that lasted about 30 

years, and that was the first time you heard global warming. That 

was 1918. That was a long time ago. 

Then 1945 they changed and it started going into a cold spell. 

Now, this is the interesting thing about these 30-year cycles; and 

it goes right up until today: the year that we had the greatest 

surge in emissions of CO2 was right after the second World War, 

you guys know this, it was 1945; and that precipitated not a warming period, but a cooling period. 

These are realities. I can remember speeches I made on the floor 

in response to things that my good friend from Rhode Island has 

said when I talk about what is the reality of what is going on 

today. 

So we are going to hear more of this and I know that there is 

an effort now to have this bureaucratic thing that, in my opinion, 

it doesn’t have what it is supposed to have. The only thing I want 

to get back in and get the response from both attorneys general is 

a matter of what we have been talking about, flexibility. Senator 

Markey talked about it, Ms. Heinzerling talked about it. The EPA 

often talks about the flexibility and would say that the EPA simply 

is hiding behind the flexibility while, in reality, forcing States to 

figure out how to make the least economically devastated decisions. 

So I would just ask the two of you does the Clean Power Plan 

provide States with any real flexibility? Every witness has talked 

about flexibility. 

Mr. MORRISEY. I think if you look at this concept of flexibility, 

it is a false concept. The reality is that States are having an enormous amount of pressure applied to them to develop a State implementation plan within 1 year. Based upon the declarations that we 

receive from many of the States, people really don’t think that is 

possible; that the goals of this proposal are so severe that States 

are not going to be able to come into compliance. So when you look 
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at the proposal the way it is constituted, I don’t think it is fair to 

say that it is flexible. 

But our argument has always been regardless of whether people 

think that is desirable from a policy perspective, the law actually 

doesn’t even allow the EPA to go outside the fence to develop that 

kind of flexible approach. 

The final point I would also make is that if you look at the predicate rule that is required before finalizing the 111(d) Rule that is 

for new source performance standards, that obviously does not rely 

on outside-the-fence technology. When they develop their best system of emission reductions, it is much more narrow. 

Senator INHOFE. General Pruitt. 

Mr. PRUITT. I think that my colleague, my fellow panelist here, 

Roger, addressed it well earlier. Flexibility with respect to how 

plans are adopted is something the States endeavor to possess and 

have, but flexibility with respect to performance standards, insidethe-fence versus outside-the-fence, that is what we are really facing 

here. The EPA has taken an approach of forcing performance 

standards upon the State of Oklahoma that outside-the-fence, they 

are providing less options in the future as far as how to comply. 

Senator INHOFE. Thank you, Madam Chairman. 

Senator CAPITO. Thank you. 

Senator Carper. 

Senator CARPER. Thanks much. 

If I could, I am not a lawyer either. I studied economics, got an 

MBA, but I am not a lawyer, and I don’t understand some of this 

discussion when we get into these technicalities. But I do know 

this: I have seen us pass legislation when I was in the House with 

Senator Inhofe and in the Senate where we were putting the same 

bill, conflicting approaches to the same issue. In some cases we 

were just unable to resolve our differences, so we put both in and 

say somebody else will figure this out. I think, in a way, when I 

saw this discussion around Section 111(d) of the Clean Air Act, it 

reminded me of that kind of behavior. 

I am looking at your testimony, Lisa, where you say based on the 

text of Section 111(d) alone, EPA has persuasively defended its proposed view that the statute is ambiguous and that its interpretation is reasonable. These are the criterion for the Chevron deference and EPA has met them. 

Explain this so I can understand. I think I do, but we have these 

two amendments, one dropped out of the Code, but now I am told 

it still is in another life. Explain this to us, please. 

Ms. HEINZERLING. So, Congress, in 1990, passed two different 

amendments to Section 111(d). One seemed to look to pollutants; 

one seemed to look to sources. But as EPA has explained, as I note 

there, they are not entirely clear, either one of them standing 

alone, and the combination is not entirely clear coming together. So 

what EPA has tried to do is try to take from each amendment 

something, and what it said is you cannot regulate the same pollutants from the same sources under both programs, Section 111 and 

112. 

That is the kind of judgment, as you are suggesting, that agencies make all the time. There are many times when statutes aren’t 

entirely clear. They may contain provisions that are in contention 
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with each other, and agencies resolve them. And this usually is a 

straightforward application of what I call there as Chevron deference, which is a case in which the Supreme Court said that if a 

statute is not clear, if policy judgments are left to the agency to 

make, then the agency gets deference to a reasonable interpretation of the statute. 

And here I think the text allows EPA’s interpretation. I would 

also say, in light of the comments earlier about the problem of global warming, just imagine if the EPA said, no, we will take the interpretation that does not allow us to regulate the sources of greenhouse gases that emit the most greenhouse gases in this Country, 

and to attack the problem of climate change by doing that; we are 

going to pick the interpretation that does not permit us to do that. 

That would be quite strange. 

Senator CARPER. Yes, it would. 

Question if I could, Ms. Backman, please. I want to go back to 

the issue of whether the science of climate change is settled law. 

Just very briefly, do you think it is or do you think it is not? 

Ms. SPEAKES-BACKMAN. I am sorry, could you repeat that? 

Senator CARPER. The question on whether the science of climate 

change is indeed settled law. Do you believe it is? Do you believe 

it is not? 

Ms. SPEAKES-BACKMAN. Well, Senator, I am also not a lawyer, 

and I am not a climate scientist, but I do choose to believe the 

overwhelming majority of climate scientists who say it is real and 

say it is caused by humans. So now we need to act. And I can tell 

you also that there is a cost to action, but there is also a cost to 

inaction. And I can tell you, as one who is responsible for consumers, electricity consumers who depend on reliable, affordable 

energy, that certain ways to help the system include renewable energy, include energy efficiency, include demand reduction to help 

with those reliability issues and to help with the resiliency of our 

system. 

Senator CARPER. OK, that is fine. Just hold it right there. 

One last question, if I could, for Lisa. Are EPA’s proposed carbon 

standards supported by the three Supreme Court decisions in Massachusetts v. EPA and American Electric Power v. Connecticut and 

Utility Air Regulatory Group v. EPA? Thanks very much. 

Ms. HEINZERLING. Yes. 

Senator CARPER. Tell us more. 

Ms. HEINZERLING. Yes. Massachusetts v. EPA, of course, held 

that greenhouse gases are air pollutants within the meaning of the 

Clean Air Act. I think much of what we hear against EPA’s Clean 

Power Plan is an attempt to re-litigate that case, to tell us that 

carbon dioxide is not really an air pollutant, it is not dirty somehow, so, therefore, it is not regulable under the Clean Air Act. That 

case clearly holds that these pollutants are regulable under the 

Clean Air Act. 

American Electric Power is interesting because it relied on regulation under Section 111(d) in holding that there was no so-called 

Federal common law, court made law of global warming pollution. 

That is significant because if this regulation goes by the boards, 

then all the reasons for that common law come back to force. 
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And the last, the Utility Air Regulatory Group, it seems to me 

that case can be understood most generally first as a victory for 

most of EPA’s greenhouse gas program that was at issue there and, 

second, it asked EPA to look section-by-section and make sure that 

regulation under a particular provision of the Clean Air Act made 

sense for particular pollutants. That is exactly what EPA has done 

here. 

Senator CARPER. Madam Chair, I would just say this is a good 

panel, and I commend you and our staffs for pulling them together. 

Thank you all for coming. If I ever go to law school, I would like 

you to be my professor. 

Senator CAPITO. Thank you very much. I would like to thank the 

panel and thank the Senators. 

Senator WHITEHOUSE. Will there be questions for the record allowed? 

Senator CAPITO. Yes. We will leave the record open for 2 weeks 

and you can submit questions for the record. 

Senator WHITEHOUSE. Very well. We will do that. 

Senator CAPITO. Thank you all very much. Appreciate it. Appreciate your patience when we had to leave. 

This hearing is adjourned. 

[Whereupon, at 11:52 a.m. the committee was adjourned.] 

[An additional statement submitted for the record follows:] 

STATEMENT OF HON. BENJAMIN L. CARDIN, 

U.S. SENATOR FROM THE STATE OF MARYLAND

I want to welcome Maryland Public Service Commissioner, and Chair of the Regional Greenhouse Gas Initiative, Kelly Speakes-Backman to the Committee and 

thank her for her service and willingness to testify before the Committee. Commissioner Speakes-Backman has served on the Maryland PSC for 4 years and has spent 

more than 20 years working on energy, sustainability, and environmental business 

strategies. 

She is a tremendous asset to RGGI for which I am proud Maryland is an active 

participant. Through her work on the PSC, the Maryland Energy Administration 

and RGGI, she has helped Maryland take steps to reduce its carbon footprint while 

maintaining affordable and reliable energy and helped grow new and exciting business opportunities in the State. 

Thank you for being here. 

With bi-partisan support, Congress passed the Clean Air Act that President Richard Nixon signed into law on the last day of the year in 1970. The Clean Air Act 

came about in response to devastating air pollution that made it nearly impossible 

to see the sky during certain times of the year in cities like Los Angeles, New York 

and my home town of Baltimore. 

After almost 45 years, the Clean Air Act has effectively helped clean up the air 

in most major cities. The proof is in the decline of bad-air days we experience in 

the Mid-Atlantic and Northeast during the hot summer months. It used to be that 

in the DC-Baltimore metropolitan areas during the 1970s, 1980s and 1990s, anytime the temperature reached into the 90s we’d inevitable have ground level ozone 

levels so high that the National Weather Service would issue ‘‘red alerts’’ for air 

quality. 

The Clean Air Act is working. The number of ‘‘red alert’’ and ‘‘orange alert’’ days 

have been in decline, despite our region experiencing some of the hottest summers 

on record since the start of this century. Not to mention that our nation’s economy 

has expanded exponentially under the Clean Air Act. 

I’d like to address a legislative proposal that recently passed the House allowing 

States to opt out of the Clean Air Act. When EPA promulgates rules to reduce smog 

causing pollutants like NOx and SOx, Members of Congress may complain about the 

stringency of the requirements, but Congress has never entertained legislation allowing upwind polluters to opt out of the regulations designed to protect their neighbors’ air quality and public health. Yet the approach of excusing responsibility of 

States from contributing to addressing a national problem is precisely what is mov-
276 

ing through Congress and that the majority leader is writing letters to Governors 

urging them to do. 

EPA’s authority to regulate CO2 under the Clean Air Act has been affirmed by 

the Supreme Court in two landmark Clean Air Act cases. When the commonwealth 

of Massachusetts, among other States, took EPA to court over a petition of certiorari 

for abdicating its responsibility to regulate greenhouse gases under the Clean Air 

Act, the court, in Massachusetts v. EPA (2007), found in favor of Massachusetts. 

The Clean Air Act defines ‘‘air pollutant’’ as ‘‘any air pollution agent or combination of such agents, including any physical, chemical, biological, radioactive . . . substance or matter which is emitted into or otherwise enters the ambient air.’’ On remand from Massachusetts v. EPA, EPA found that six greenhouse gases, emitted 

from the combustion of carbon based fuels, ‘‘in the atmosphere may reasonably be 

anticipated both to endanger public health and to endanger public welfare.’’ 

The Court prescribed EPA conduct an endangerment finding process to determine 

how greenhouse gases ‘‘cause, or contribute to, air pollution which may reasonably 

be anticipated to endanger public health or welfare.’’ 

In 2009, EPA conducted its endangerment finding, it was subject to public comment, there were several public hearings, thousands of public comments were received and eventually the Endangerment Finding was finalized. Without surprise 

the Endangerment Finding was challenged. 

The U.S. Chamber of Commerce and The National Manufacturing Association, 

under a coalition named ‘‘The Coalition for Responsible Regulation,’’ brought the 

challenge in a consolidated court case. This group also challenged the Light Duty 

Truck Rule: a rule developed to harmonize regulations to reduce GHGs and improve 

fuel economy in small trucks; and the Tailoring Rule: which set GHG thresholds for 

regulating GHGs under New Source Review Prevention of Significant Deterioration. 

In Coalition for Responsible Regulation v. EPA, the petitioners sought judicial review of EPA’s determination in the U.S. Court of Appeals, D.C. Circuit. On June 

26, 2012, the court issued an opinion which dismissed the challenges to the EPA’s 

endangerment finding and the related GHG regulations. 

The three-judge panel unanimously upheld the EPA’s central finding that GHGs 

such as CO2 endanger public health and are likely responsible for the global warming experienced over the past half-century. 

Prior to the D.C. Circuit’s ruling in CRR v. EPA, the Supreme Court heard another case of importance and influence regarding carbon pollution. In American 

Electric Power Company v. Connecticut (2011) was a unanimous SCOTUS decision 

which held that corporations cannot be sued individually for GHGs emissions under 

Federal common law, because the Clean Air Act delegates the management of GHGs 

emissions to the EPA. This is important because it further lays the groundwork for 

nationwide regulation of carbon pollution. 

Most recently, on June 23, 2014, the Supreme Court once again upheld and affirmed EPA’s responsibility to regulate carbon pollution under the Clean Air Act. 

This specific challenge was to EPA’s authority to regulate stationary sources, precisely what the Clean Power Plan does. The Supreme Court, in a decision where 

Justice Scalia wrote the majority opinion and all justices concurring with at least 

some portions of decision, affirmed EPA’s legal authority to regulate GHGs under 

its existing Clean Air Act authorities. 

The bottom line is that this Committee is not the Supreme Court. The final arbiter on the legality of the Clean Power Plan is the Supreme Court, and based on 

the rulings in the case law that preceded, instructed and informed EPA’s proposed 

Clean Power Plan it would seem very likely that the Supreme Court will uphold 

this rule. 

The statutory authority granted under the 1970 Clean Air Act, and three Federal 

court decisions including two Supreme Court decisions, laid the legal groundwork 

for a commonsense approach to regulating carbon pollution under Section 111(d) of 

the Clean Air Act. 

Sec. 111 authorizes EPA to establish baseline performance standards for power 

plants, which in the case of this rule we are talking about achieving a 30 percent 

net reduction in carbon pollution from power plants, using 2005 as the baseline, by 

2030. 

Moreover, the rule is flexible in how these ‘‘performance standards’’ are met by 

applying these standards broadly across each State’s fleet of power plants, rather 

than demanding these reductions from each individual power plant. 

This approach to regulation puts States in control of how their fleet of power generation facilities will meet these reduction targets. The performance standard is applied across all power generation facilities, including carbon intensive facilities like 

coal power plants, and zero emission power like nuclear, hydro and wind. 
277 

Through this rule, solutions can be sought outside the fence, it may be possible 

for States to meet these standards through increased in-state development of renewable energy and improved energy efficiency standard, without having to shut down 

or drastically change the operations of its coal power plants. 

States will be in control of how they will meet these standards and there are a 

wide variety of tools in the toolbox for States to use to meet these standards. 

Using RGGI as its model and approach for compliance with the rule, RGGI generates more than $200 million annually in revenues for Maryland, meaning compliance with this rule will continue to bring needed revenues into the State. Moreover, 

electricity rates have stabilized in Maryland providing price certainty for ratepayers 

which would be unchanged so long as Maryland remains a RGGI State. Last, MD’s 

regulated community understands and appreciates the regulatory certainty the 

RGGI has provided. 

That’s why our State’s largest electricity generator has submitted comments that 

support the goals of the proposed rules, while at the same time suggest how the 

rule may be improved to better accommodate nuclear power generation. 

I applaud Exelon’s constructive participation and approach to the rulemaking 

process. I’m proud that Maryland’s energy companies, like Constellation/Exelon are 

making investments to reduce the carbon output of its power generation fleet in 

Maryland and in the other States they are operating in. 

These early adopters made the correct investments and assumptions about where 

regulation was headed all based on information that everyone in the power generation sector had available. 

The actions taken by Maryland’s power sector and State regulators show an understanding of how important addressing climate change is to Maryland. After all, 

it makes good business sense in Maryland for power providers to do their part to 

reduce the causes of climate change, because 70 percent of the State’s population 

live in the coastal regions of the State. 

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