ALABAMA'S OPPOSITION TO U.S. EPA'S 

CLEAN POWER PLAN 

Testimony of Blaine Galliher 

Senior Advisor to Governor Robert Bentley 

Good morning, Madam Chairman and Members of this Panel: 

Thank you for inviting me to testify here today. My name is Blaine Galliher, and 

I am the Senior Advisor to Alabama's Governor, Robert Bentley. Governor Bentley is 

the Chief Executive Officer of the State of Alabama whose sworn duty is to uphold the 

rule of law for the nearly 5 million hard working men and women in Alabama. 

The Governor's sworn duty includes enforcing environmental laws, which help 

protect our natural resources and the health of Alabama citizens. My comments today on 

behalf of Governor Bentley reflect deep philosophical belief and concern with this 

Administration's proposed environmental regulations. These regulations will dictate how 

utilities generate power and how consumers use that power for decades to come. In 

doing so, the proposal effectively restructures the electric sector. 

Governor Bentley, in a letter to EPA Administrator Gina McCarthy, February 

2014, expressed these concerns: "....Regions of the country such as the South and 

Alabama will be more dramatically and adversely impacted by GHG emission 

requirements, where the economies of coal and natural gas in our state have helped 

deliver a critical manufacturing and industrial base leading to an improved quality of life 

not only for the residents of Alabama, but also for the nation." 

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The laudable goal of the proposed EPA regulations to reduce emissions of carbon 

dioxide for new effected fossil fuel-fired electric generating units is quite simply 

swallowed up by the adverse consequences of the proposed rule. 

THE COSTS ARE REAL -- THE BENEFITS ARE NOT. 

While it is abundantly clear that Alabama will incur these costs, the benefits are 

vague. Any claim that the proposed rule will make any material difference in global 

temperatures is dubious at best. Theoretically, the rule might reduce global concentration 

of carbon dioxide by less than one percent, and it might reduce global temperatures by 

less than a hundredth of a degree.' 

The link between affordable energy and economic growth cannot be ignored. 

Affordable energy, as we all know, is a vital necessity for every Alabama household and 

business alike; it is the cornerstone of a vibrant U.S. economy. 

Throughout Governor Bentley's term in office, Alabama has aggressively pursued 

new industry and jobs. Alabama's manufacturing industry has proven to be extremely 

valuable in that it contributes significantly to the Alabama economy. In 2011, Alabama's 

manufacturing sector provided approximately 237,300 direct jobs in Alabama, and 

created many more indirect jobs and small businesses.2Alabama's manufacturing 

industry produced more than 13 billion in exports to the world economy -- nearly 85% of 

all exports in Alabama. 3These economic contributions depend on low cost energy. But 

compliance with the proposal for reductions in CO2 emissions by almost 30% will 

1 American Coalition for Clean Coal Electricity (ACCCE), "Six Major Myths About EPA's Proposed 

Carbon Regulations." 

2National Association of Manufacturers, "Alabama Manufacturing Facts". 

3 Semmon Chang, Ph.D., "The Importance of the Manufacturing Industry to the Alabama Economy and the 

Role of Electricity", Consulting Report, November 2011. 

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directly cost the state by cost of compliance, increased energy rates, loss of jobs and 

industry, including coal-industry and related jobs, and the negative impact of lessened 

energy reliability. 

The U.S. Chamber of Commerce predicts that the compliance cost for these 

regulations will total nearly $480 billion by 2030, or $28 billion each year to 2030.4The 

Chamber's estimate is three times larger than the EPA estimate. As we all know, 

electricity is a force multiplier in Alabama and in every other state of this nation. Rising 

electric costs will damage our Gross Domestic Product (GDP). 

The U.S. Chamber of Commerce estimates the loss in GDP will be $50 billion per 

year, peaking at $100 billion in 2025.5 To bring these numbers into perspective, it would 

mean a typical family in Alabama would lose approximately $3,400 in disposable income 

during the time contemplated by the regulation (2013-2030) resulting from higher utility 

rates.6 The impact on Alabama's poorer families is disproportionate and devastating in 

light of that prospect. 

As Governor, Robert Bentley is unwilling to transfer to the U.S. Environmental 

Agency the indirect power to reshape Alabama's energy portfolio and choices at the 

expense of the people of Alabama. 

4Institute for 21st Century Energy, U.S. Chamber of Commerce, "Assessing the Impact of Potential New 

Carbon Regulations in the United States," pg. 4. 

5 Institute for 21st Century Energy, U.S. Chamber 

Carbon Regulations in the United States," pp. 2, 6- 

6Institute for 21stCentury Energy, U.S. Chamber 

Carbon Regulations in the United States," p. 7. 

of Commerce, "Assessing the Impact of Potential New 

7. 

of Commerce, "Assessing the Impact of Potential New 

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THE CLEAN AIR ACT, SECTION 111(d) IS SUBJECT TO THE LIMITATIONS 

CONGRESS IMPOSED UNDER SECTION 112. 

By this proposal, EPA attempts to require action by entities which are not directly 

subject to regulation under the Clean Air Act. In doing so, EPA exceeds its authority. 

There is no question that existing coal-fired electric generating units are regulated under 

Section 112 of the Clean Air Act. Therefore, these units should not be regulated under 

Section 111(d) as EPA seeks to do. 

Further, the Clean Air Act forbids Section 111(d) regulations that are based on 

emission reductions that cannot be achieved at individual facilities. EPA's goal 

calculation to be imposed on Alabama cannot meet this requirement, but instead relies on 

reductions by an entire system, state, and region to include facilities and state 

governments acting in tandem.7 

Section 111(d) expressly states that the EPA is prohibited from regulating any air 

pollutant emitted from an existing source category that is regulated under Section 112 of 

the Clean Air Act. EPA has already imposed extensive regulations on existing coal and 

natural gas-fired power plants pursuant to Section 112. Regulation under Section 112 of 

the Clean Air Act precludes regulation of these sources under Section 111(d). 

EPA's proposed regulation seeks to perform an "end run" around the 

Congressional mandate and limitations under Section 112. The proposed regulation 

unequivocally violates Congress' expressed intent under Section 112 of the Clean Air 

Act. This overreach ignores the constitutional principle of separation of powers between 

the Executive and the Legislative branches of government, and runs headlong into the 

sovereign right of states to protect the general welfare of its citizens. 

Testimony of Alabama Attorney General Strange before the Senate Committee on Environment & Public 

Works Subcommittee on Clean Air and Nuclear Safety, June 18, 2014. 

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INCREASED ELECTRICITY COSTS AND IMPACTS ON RELIABILITY 

Historically, Alabama's retail electricity suppliers have achieved their goals in 

large part by maintaining a balanced mix of generation resources. These resources 

include hydro-electric, coal, natural gas, nuclear, and renewables. In our view, the 

proposed rule effectively bans traditional coal-fired generating technology as a future 

supply option, despite the fact that this base-load technology has provided reliable, cost 

effective electricity to Alabama consumers and to our nation for many decades. 

The predictable result of coal plant retirements would sharply increase the cost of 

electricity to Alabama households and businesses. Coal plant retirement would result in a 

diminished capacity of 114 gigawatts, or about 40% of existing capacity.8This means 

that coal-fired generations' share of total electricity generated must decrease from 

approximately 40% in 2013 to 14% in 2030, and correspondingly, natural gas shares 

increase from 27% to 46%. (See, Footnote 8). 

While EPA promises Alabama and other states "flexibility," it actually deprives 

them of the most meaningful flexibility by reducing their use of the lowest cost and most 

reliable sources of electricity generation, i.e., coal-fired generating plants and hydroelectric generation from existing plants, by forcing reliance on more expensive, volatile, 

and intermittent sources, such as wind and solar.9 

The predictable effect is to push the nation's electric grid over the edge. Philip D. 

Moeller, Commissioner, Federal Energy Regulatory Commission, observed that, "The 

experience of this winter strongly suggests that our nation's bulk power system is at its 

8 

U.S. Chamber of Commerce, "Assessing Impact of Potential New Carbon Regulations in the United 

States," p. 3. 

9 79 Fed.Reg. 34867. 

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limits." Also, Michael Kormos, PJM Interconnection, observed that, "Because less 

expensive coal generation is being replaced by high energy cost resources, excess 

generation will narrow and energy prices could become more volatile due to increasing 

reliance on natural gas for electricity generation." 

EPA's proposal jeopardizes reliability by reducing available resources for power 

generation during peak times of use and demand. The extreme and prolonged cold of last 

winter provides the unmistakable lesson that fuel diversity is necessary to achieve 

reliability, a cost effective solution to our nation's power needs. Electricity typically 

represents 60% to 75% of the direct operating costs for some of Alabama's largest 

industries. The loss of low cost energy sources will adversely impact Alabama's ability 

to attract industry and to create jobs in our state. 

The elimination of coal as a fuel for new electric generation would have far 

reaching implications for electricity prices and for the economy and job creation in 

general, not only in Alabama, but would also affect the competitiveness of manufacturing 

in America. 

THE IMPACT ON ALABAMA MINERS AND COAL PRODUCTION. 

Governor Bentley is gravely concerned that the EPA's proposal will adversely 

affect the coal production industry and its employees. The coal mining industry is very 

important to Alabama's economy and employs more than 4,500 workers. In 2013, 

Alabama mining companies had more layoffs in our state than any other industry.10 

Not only does the coal industry support many direct jobs, it also supports many 

other businesses that provide ancillary services to the mining industry, creating even 

lo 

Birmingham Business Journal, February 21, 2014. 

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more jobs for Alabamians. Those related businesses include railway, transportation, 

trucking, and manufacturers of mining equipment. If the EPA moves forward with these 

regulations and proposed carbon standards, many of the indirect jobs in Alabama are at 

risk. 

Alabama believes that the proposed rules, if they become effective in 2015, will 

condemn 50% of the Alabama miners to the unemployment line and result in a much 

lower standard of living for the families of miners. Today in our state, there are many 

hard-working families who depend on the coal industry to make an honest living and who 

will not be able to maintain that standard of living if the proposed GHG standards are 

promulgated by the EPA. 

CONCLUSION 

The link between affordable energy and economic growth cannot be ignored. 

Affordable energy is a vital necessity for every resident and business alike in Alabama, 

and is the cornerstone of a vibrant U.S. economy. Coal, as part of a balanced mix of 

generation resources, is readily available to support affordable and reliable energy for 

decades to come. The low cost and dependability of coal will mitigate energy impact and 

move the U.S. closer to energy independence. 

The use of alternative energy sources is not adequate to supply the nation's 

electric grid. As electricity use rises in the next 20 years, the nation's supply will be in 

grave jeopardy. 

The State of Alabama and Governor Bentley strongly oppose EPA's proposed 

mandate to effectively restructure the electric sector. It will have disastrous 

consequences for electric reliability and the economy. It will devastate the Alabama coal 

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industry. The EPA's proposal seeks to expand the scope and reach of Section 111(d) and 

would do so at the expense of Alabama's authority that is expressly identified and 

preserved in the Clean Air Act and is within the unquestionable jurisdiction of the states. 

The minute effect on global warming and the vague health benefits to Alabama citizens 

comes at too high a price. There is simply no rationale that can support this regulation. 

The Agency should heed the collective warnings of interested stakeholders, and, in the 

end, halt this regulation. 

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