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LIGHTS OUT II: SHOULD EPA TAKE A STEP BACK 

TO FULLY CONSIDER UTILITY MACT’S IMPACT 

ON JOB CREATION 

HEARING 

BEFORE THE

COMMITTEE ON OVERSIGHT 

AND GOVERNMENT REFORM 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED TWELFTH CONGRESS 

FIRST SESSION 

NOVEMBER 01, 2011 

Serial No. 112–133 

Printed for the use of the Committee on Oversight and Government Reform 

( 

Available via the World Wide Web: http://www.fdsys.gov 

http://www.house.gov/reform 

(II) 

COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM 

DARRELL E. ISSA, California, Chairman 

DAN BURTON, Indiana 

JOHN L. MICA, Florida 

TODD RUSSELL PLATTS, Pennsylvania 

MICHAEL R. TURNER, Ohio 

PATRICK T. MCHENRY, North Carolina 

JIM JORDAN, Ohio 

JASON CHAFFETZ, Utah 

CONNIE MACK, Florida 

TIM WALBERG, Michigan 

JAMES LANKFORD, Oklahoma 

JUSTIN AMASH, Michigan 

ANN MARIE BUERKLE, New York 

PAUL A. GOSAR, Arizona 

RAU ́ L R. LABRADOR, Idaho 

PATRICK MEEHAN, Pennsylvania 

SCOTT DESJARLAIS, Tennessee 

JOE WALSH, Illinois 

TREY GOWDY, South Carolina 

DENNIS A. ROSS, Florida 

FRANK C. GUINTA, New Hampshire 

BLAKE FARENTHOLD, Texas 

MIKE KELLY, Pennsylvania 

ELIJAH E. CUMMINGS, Maryland, Ranking 

Minority Member 

EDOLPHUS TOWNS, New York 

CAROLYN B. MALONEY, New York 

ELEANOR HOLMES NORTON, District of 

Columbia 

DENNIS J. KUCINICH, Ohio 

JOHN F. TIERNEY, Massachusetts 

WM. LACY CLAY, Missouri 

STEPHEN F. LYNCH, Massachusetts 

JIM COOPER, Tennessee 

GERALD E. CONNOLLY, Virginia 

MIKE QUIGLEY, Illinois 

DANNY K. DAVIS, Illinois 

BRUCE L. BRALEY, Iowa 

PETER WELCH, Vermont 

JOHN A. YARMUTH, Kentucky 

CHRISTOPHER S. MURPHY, Connecticut 

JACKIE SPEIER, California 

LAWRENCE J. BRADY, Staff Director 

JOHN D. CUADERES, Deputy Staff Director 

ROBERT BORDEN, General Counsel 

LINDA A. GOOD, Chief Clerk 

DAVID RAPALLO, Minority Staff Director 

(III) 

C O N T E N T S 

WITNESSES 

Cuccinelli, Hon. Kenneth, II, Attorney General, Commonwealth of Virginia 

Oral Statement .......................................................................................... 5 

Written statement ..................................................................................... 7 

Perciasepe, Hon. Robert, Deputy Administrator, U.S. Environmental Protection Agency 

Oral Statement .......................................................................................... 159 

Written Statement .................................................................................... 161 

Bivens, Josh, Ph.D., Economist, Economic Policy Institute 

Oral Statement .......................................................................................... 177 

Written Statement .................................................................................... 180 

APPENDIX 

Gansler, Douglas F., Maryland Attorney General and Summers, Robert M., 

Secretary of the Maryland Department of the Environment Committee 

on Oversight and Government Reform, 

Joint Statement of ..................................................................................... 189 

Banig, Bill, Director, Government Affairs, United Mine Workers of America, 

and President, UJAE; and Hunter, Jim, Director, Utility Department, International Brotherhood of Electrical Workers, and Vice President, UJAE, 

Joint Statement of ..................................................................................... 194 

Virginia DEQ-List of orders issued between January 1, 2010 and November 

1, 2011, 

Information provided for the record by Mr. Cuccinelli ........................... 195 

(1) 

LIGHTS OUT II: SHOULD EPA TAKE A STEP 

BACK TO FULLY CONSIDER UTILITY MACT’S 

IMPACT ON JOB CREATION 

Tuesday, November 1, 2011 

HOUSE OF REPRESENTATIVES, 

COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM, 

Washington, D.C. 

The committee met, pursuant to call, at 1:03 p.m., in 2154, Rayburn House Office Building, Hon. Darrell E. Issa [chairman of the 

committee] presiding. 

Present: Representatives Issa, Lankford, Amash, Gowdy, 

Cummings, Towns, Norton, Kucinich, and Connolly. 

Staff Present: Ali Ahmad, Communications Advisor; Kurt 

Bardella, Senior Policy Advisor; Robert Borden, General Counsel; 

Molly Boyl, Parliamentarian; Lawrence Brady, Staff Director; Joseph A. Brazauskas, Counsel; John Cuaderes, Deputy Staff Director; Linda Good, Chief Clerk; Ryan M. Hambleton, Professional 

Staff Member; Christopher Hixon, Deputy Chief Counsel, Oversight; Ryan Little, Professional Staff Member; Justin LoFranco, 

Deputy Director of Digital Strategy; Mark D. Marin, Director of 

Oversight; Kristina M. Moore, Senior Counsel; Jeff Solsby, Senior 

Communications Advisor; Rebecca Watkins, Press Secretary; Nadia 

A. Zahran, Staff Assistant; Beverly Fraser Britton, Minority Counsel; Claire Coleman, Minority Counsel; Kevin Corbin, Minority 

Deputy Clerk; Lucinda Lessley, Minority Policy Director Steven 

Rangel, Minority Senior Counsel; Dave Rapallo, Minority Staff Director; and Ellen Zeng, Minority Counsel. 

Chairman ISSA. The committee will come to order. 

The Oversight Committee exists to secure two fundamental principles. First, Americans have a right to know that the money 

Washington takes from them is well spent. And second, Americans 

deserve an efficient, effective government that works for them. Our 

duty on the Oversight and Government Reform Committee is to 

protect these rights. Our solemn responsibility is to hold government accountable to taxpayers because taxpayers have a right to 

know what they get from their government. We will work tirelessly 

in partnership with citizen watchdogs to deliver the facts to the 

American people and bring genuine reform to the Federal bureaucracy. This is the mission of the Oversight and Government Reform 

Committee. 

Today, a debate is unfolding in America that comes down to two 

fundamental questions about how much government do we need in 

our lives. From this side of Capitol Hill all the way to Pennsylvania 

2 

Avenue, there are hearings every day and listening sessions every 

day about the creation of jobs. 

Today, we are going to listen about whether or not a tsunami of 

regulations, some well intended, some expedited, some perhaps in 

conflict with each other, are creating an environment in which the 

economic downturn will be prolonged. On one hand, the Obama administration has been stubborn in its determination to issue costly 

regulations and paid little regard to the impact these mandates 

will have on the broader economy. On the other hand, the administration has admitted that there are at least 500 regulations that 

need to be withdrawn. They have talked in terms of duplicate regulations. They have talked in terms of relieving regulatory burdens 

on job creators. So much so that the Gallup Poll of job creators, of 

entrepreneurs, considers the number one impediment to job creation to be, in fact, regulatory excess. 

Today, we are going to hear about Utility MACT, the Environmental Protection Agency—EPA’s—proposed issue of this rule, 

which is clearly by its own terms an $11 billion rule, but in fact 

by most of the people on both sides of the aisle who are looking at 

the high end of what it could cost being ten times that, or more. 

Anything which causes the price of energy and its availability to 

suddenly change will disrupt markets, will change the balance of 

cost effectiveness here in America, because after all, if you increase 

the price of an essential fuel like electricity, you will by definition 

increase the cost of doing business, and particularly for manufacturing jobs, which often depend on a high volume of electricity in 

order to create efficiencies to offset advantages Third World countries have in less expensive labor. 

Whether you’re in Florida or—as our first witness today, Virginia—whether you’re a donor of the fuel of greatest choice, that 

being coal; or in fact you’re a recipient of that to power your power 

plants, you know that in fact the grid depends, at least 51 percent, 

on reliable power that today comes from coal. 

We applaud the EPA for continuing a tradition to try to find 

ways to continually clean up all of our energy sources, to reduce 

particulates, and particularly to set a standard for reducing mercury. We have no objections to the attempt to, on an ongoing basis, 

increase the reliability of our power plants to deliver clean energy. 

At the same time, 24 Attorneys General, both Democrats and Republicans, have requested the EPA to postpone issuance of its rule 

for 1 year. 

Today, we will hear from one of those Attorney Generals, along 

with the EPA and a think-tank individual, giving three different 

views from three different perspectives. This is not the last hearing 

we will have on the speed with which we can make air and water 

cleaner and the cost that it will have. 

In no case do we want anyone to misunderstand. If this rule does 

not take place, air and water will be as clean tomorrow as it is 

today. If this rule takes place a year from now and it is different 

and better, it will only increase the cleanliness and the reliability 

that comes with good clean energy here in America. 

The goal today is to hear: Is this the right time, is this the right 

speed, is the science ready, and most importantly, what will be the 

impact to the various States? 

3 

Chairman ISSA. With that, I would like to recognize the ranking 

member for his opening statement. 

Mr. CUMMINGS. Mr. Chairman, I’d yield to the gentleman from 

Virginia, Mr. Connolly. 

Mr. CONNOLLY. I thank the ranking member. 

It’s a shame that the committee majority shows so little interest 

in legislation that might promote technological innovation and improve management of Federal information technology. Instead, we 

are conducting another partisan hearing that isn’t really related to 

our committee’s primary jurisdiction. 

Now the committee is holding a hearing to attack commonsense 

EPA limits on mercury, arsenic, dioxin, and other pollution. Consider the pressing technology related topics in which this committee has not held a hearing: cloud computing, data consolidation; 

an update to FISMA; implementation of the Chief Information Office’s 25-point plan; or improvements to the acquisition workforce. 

We have not held hearings on filling the gaping holes in our acquisition workforce or about how to improve training for acquisition 

personnel. We have held markups and legislation to create new unfunded mandates and private sector relations—the DATA Act—but 

not on legislation to streamline or expedite data center consolidation or the shift to cloud-based data storage and processing. 

The Republican leadership of this committee has abandoned the 

most important issues in Federal technology and management 

issues, which are of vital importance to one of the most important 

job-creating sectors of our economy—technology. Instead of focusing 

on these important topics, the committee majority has decided to 

attack limits on mercury and other toxic pollution. 

The EPA is updating standards to regulate toxic mercury pollution because the courts found that a prior rule issued under the 

Bush administration on behalf of the polluters violated law. Under 

the Obama administration, the EPA actually is trying to do its job 

and reduce toxic pollution, as Congress directed in 1990. As the 

EPA attempts to administer the Clean Air Act, it is worth recalling 

that the Clean Air Act used to have bipartisan support. It was 

signed into law by a Republican President 40 years ago and 

strengthened substantially by a Republican President in 1990. 

By any empirical measure, the Clean Air Act is a wild success. 

It saves 160,000 lives annually by preventing deaths that would 

otherwise be caused by air pollution. Major regulations implemented in the Clean Air Act have saved far more money than they 

have cost to be implemented. 

Since the Clean Air Act was passed, the U.S. economy has grown 

by 200 percent and we have fostered a vibrant, new, clean-energy 

industry that creates jobs without creating diseases associated with 

fossil fuel production. The regulation this committee majority is attacking today is typical of the Clean Air Act regulations that will 

save lives and money. According to CRS, the Utility MACT rule 

would save 6,800 to 17,000 lives per year, with a net savings of at 

least $48 billion. 

The Republicans claim to be concerned that this lifesaving public 

health standard will threaten the reliability of electricity supply. 

Once again, we are presented with a false chase: in this case, a 

false choice between electricity and clear air. Those of us that have 

4 

been outside today breathe cleaner air right here in the Nation’s 

Capitol as a direct result of the Clean Air Act. And yes, there are 

far more cars on the road and kilowatts of electricity being produced than when Congress passed the Clean Air Act in 1970. 

The primary Republican witness, Virginia’s Attorney General 

Ken Cuccinelli, has used his office to focus on narrow ideological 

issues that in my view squander taxpayer investment. He subpoenaed, for example, former UVA Professor Michael Mann in 2010 

because he believed that Mann’s well-regarded climate research 

might qualify as fraud under Virginia law. Not surprisingly, a circuit court disagreed. Now, Attorney General Cuccinelli is appealing 

to the Virginia Supreme Court. 

The witch hunt has drawn condemnation from 800 Virginia scientists, the conservative Richmond Times Dispatch and almost 

every other major newspaper in the Commonwealth, the American 

Association of the Advancement of Science, and so many others. It 

is appalling that taxpayer money would be squandered in a vain 

attempt to discredit a single climate scientist. 

In addition, litigating against his own State’s premier university, 

founded by Thomas Jefferson, he filed a lawsuit against the Federal Government for the EPA’s finding that greenhouse gas pollution poses a danger to human health and welfare. Unfortunately, 

as a caricature for the modern Republican Party, Attorney General 

Cuccinelli has fulfilled the predictions of the Washington Post’s editorial board, suggesting that given his bizarre ideas, he would very 

likely become an embarrassment to the Commonwealth. 

I regret that we are holding this hearing instead of going into 

other topics that I think would be more productive and would in 

fact create jobs. 

With that, I yield back. 

Chairman ISSA. I thank the gentleman. 

Chairman ISSA. Members will have 6 days to submit opening 

statements and extraneous material for the record. 

We will now recognize our first witness, the distinguished Attorney General of the Commonwealth of Virginia, the Honorable Ken 

Cuccinelli. Pursuant to the committee rules, all witnesses here will 

be sworn in. Would you please rise to take the oath. 

Do you solemnly swear or affirm the testimony you are about to 

give will be the truth, the whole truth, and nothing but the truth? 

Let the record indicate the witness answered in the affirmative. 

Chairman ISSA. I am going to take a point of privilege, very briefly. I appreciate your being here today. I’m going to regret that 

there were some levels of the previous opening statement that may 

have seemed personal, and I apologize to the extent that you were 

offended. We appreciate your being here. We recognize you’re one 

of many Attorney Generals that is involved in this. And I think on 

an overall committee basis, I would say that we are very pleased 

to have you here as a representative and hope that you will take 

the spirit of the full committee without any questions that you may 

have from other opening statements. 

With that, you’re recognized. 

5 

STATEMENT OF HON. KENNETH CUCCINELLI, II 

Mr. CUCCINELLI. Thank you, Mr. Chairman. Chairman Issa, 

Ranking Member Cummings, members of the committee, I am Ken 

Cuccinelli, Attorney General for the Commonwealth of Virginia. I 

want to thank you for the invitation to speak about the MACT rule 

today. One of my duties as Attorney General, as is common among 

Attorneys General, is to serve as the attorney for utility customers 

in my State, advocating for fair rates for customers when electric 

utilities seek rate increases from the commission that approves 

them. 

As you know, public utilities that have their rates set by State 

commissions are entitled under the U.S. Constitution to recover 

from customers the necessary expenses they incur to provide utilities. That includes expenses to comply with Federal laws and regulations. That means every time new environmental regulations are 

placed on electric utilities, it is actually the customers that I represent who pay the cost. This isn’t to say that environmental regulations should automatically be rejected because they impose some 

costs, but it does mean the EPA should follow the proper procedures to ensure the alleged benefits of the regulation outweigh the 

real-world cost. 

Unfortunately, the EPA hasn’t been following normal procedures. 

In its regulatory impact analysis for the MACT rule, the EPA conceded that the result would increase electricity prices and would 

cost jobs in certain sectors. Yet the EPA admitted that it did not 

have sufficient information to quantify those losses. In fact, the 

rule will have a huge economic impact on this Nation. First, it will 

increase electricity prices over the course of the next 5 to 10 years 

of between 10 and 35 percent. That will vary, depending on where 

you are and what the conditions particularly of your generation 

and transmission are in your region. That can be a financial debt 

blow for businesses struggling to meet payroll and families on fixed 

incomes. 

Second, retrofitting power plants to meet the standards will, as 

you all know, be prohibitively expensive. So there’s no question 

that certain plants will close and the Nation’s electricity supply 

will decrease, leading to upward pressure on prices and likely 

brownouts and possibly blackouts in strained periods of use. The 

EPA even concedes that at least 10 gigawatts of electricity will be 

lost from the Nation’s power grid. Of course, FERC’s initial analysis says over 80. That is a pretty dramatic difference between the 

EPA and the people who you would expect to know better. 

Third, while the EPA says it can’t quantify the number, it acknowledges that jobs will be lost. Their estimates are 180,000 jobs 

per year between 2013 and 2020. 

For Virginia, the situation is even bleaker than for the rest of the 

Nation, though not Mr. Connolly’s part of Virginia, which is where 

I live. A majority of the electricity for southside and southwest Virginia is generated from coal. Since the MACT rule will significantly 

increase prices for electricity produced from coal, the poorest part 

of my State will face the largest price increases, including part of 

Appalachia, one of the poorest parts of America. 

But it gets even worse. The most important industry in southwest Virginia is coal mining. These regulations make coal more exVerDate Aug 31 2005 11:33 Jun 07, 2012 Jkt 000000 PO 00000 Frm 00009 Fmt 6633 Sfmt 6633 C:\DOCS\74039.TXT APRIL
6 

pensive and less desirable to use, which means the economy of 

southwest Virginia—again, including Appalachia—will be devastated by the destruction of the coal industry and the jobs lost 

along with it. 

Whatever you think of the benefits of the MACT rule, a decision 

about whether it’s prudent policy simply can’t be made without 

considering these other impacts—and not just for Virginia, but for 

the entire country. What’s even worse is that for regulation this 

important, the EPA set just 104 days, recently extended to 134, to 

review the more than 960,000 public comments on the impact of 

the rule, if you compare this to other significant rules where the 

EPA has set review periods of more than a year, with less comments. This abbreviated review period occurred because groups 

that support the EPA’s position sued the EPA and then, in a very 

friendly settlement, the EPA agreed to the short review period. 

This kind of gaming of the system is an affront to proper procedure and the rule of law and it really should concern people across 

the spectrum. This obvious attempt to rush the rule through was 

so outrageous that, as you noted, Mr. Chairman, I, along with 23 

other Republican and Democrat States attorney general, the Governor of Iowa, and the Territory of Guam, filed an amicus brief 

asking the court not to approve the consent decree’s short time period. Given these major economic issues, it’s not good enough for 

the EPA to say that it lacks sufficient information to quantify the 

negative effects of its regulations. It needs to collect that information before imposing the rule, to make sure the benefits in fact outweigh the costs. If the EPA needs more time, then it should take 

it, instead of gaming the system by entering into a consent degree 

that shortens the time for review. 

Thank you again for the opportunity to address these issues. 

Chairman ISSA. Thank you. 

[Prepared statement of Mr. Cuccinelli follows:] 

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Chairman ISSA. And even though I didn’t limit you to 5 minutes, 

you were perfectly prepared to deliver for 5 minutes. 

I will now recognize myself for 5 minutes. 

The chart up there, I think you are probably familiar with it, Attorney General. It is a little deceiving, though, for anyone watching 

it here. That large blue line represents that nearly million comments. The two others—I’ll read them because they look like 

they’re not there, but there’s actually lines there—represent 214 

comments; in the case of the middle one, for which there was 344 

days of intervening period to evaluate; and then in the case of Casper, 3,907, in which there were 278. 

Is there any logical reason from your experience both as an attorney and as a representative of your State, that you wouldn’t have, 

for nearly a million, at least as much time as you had for 214 comments? 

Mr. CUCCINELLI. No, not a logical reason. No. 

Chairman ISSA. Then what do you think the reason is? 

Mr. CUCCINELLI. Well, it’s hard to escape that this is being 

crammed forward. And I understand there’s policy goals. But given 

the impact—and I would venture to guess, having not read all 

960,000 comments—— 

Chairman ISSA. I’m sure no one has yet. 

Mr. CUCCINELLI. I’m sure that, even combined, no team has; that 

they probably relate primarily not to mercury, even though that’s 

where this all begins because of the massive impact across the 

economy and across the industries that are affected. 

Chairman ISSA. I’m going to put up another piece on this. This 

one baffled me a little bit. Perhaps you could help explain it. When 

we’re looking at health-related items in this new standard, if I read 

correctly, that little sliver of red there, that’s the mercury that’s 

going to be affected. All of the blue area represents particulates. Is 

that your understanding of basically what we’re dealing with here? 

Mr. CUCCINELLI. My understanding is that nearly all—and that’s 

consistent with this graph—of any alleged health benefits are going 

to come from the non-mercury elements of this rule. 

Chairman ISSA. So most of the technology that has to be developed and implemented almost overnight and most of the cost is 

going to come from, if you will, the comparatively not harmless— 

but particulate—not in fact mercury, as so many people are alleging. 

Mr. CUCCINELLI. That’s correct. The technology necessary to 

achieve the mercury benefits, if left to stand alone, is a lot simpler 

and cheaper to utilize than what’s necessary for the whole package. 

I’m sure that’s no surprise. But it also would cut dramatically, 

though it hasn’t been quantified, into the shutdowns of plants. 

Chairman ISSA. Let me ask one more question because you’ve 

looked at the regulatory impact much more than anyone on the 

dais has. My understanding is that EPA’s mandate to regulate particulates comes under NAAQS, a whole different discipline. 

Mr. CUCCINELLI. Right. 

Chairman ISSA. Doesn’t it appear here as though they’re combining 99 point-some percent of this bill’s effect under a section and 

a review process that isn’t appropriate? 

12 

Mr. CUCCINELLI. Absolutely. None of this is beyond EPA’s reach 

through more explicit authority that they have elsewhere in the 

Act. And yet it has been put in—I know there’s often in legislation 

there’s sort of catch-all phrases—and whatever else you think 

might be unhealthy kind of language. But when what gets 

crammed in there, along with the mercury, is explicitly addressed 

somewhere else, it seems highly inappropriate to address it this 

way. 

Chairman ISSA. A couple of quick followups. One of the ranking 

members from Virginia mentioned the 160,000 lives that the Clean 

Air Act saves each year, by EPA figures. Many of the estimates appear that at least 280,000 jobs will be lost as a result of this legislation in its current form. How does that impact your State of Virginia? 

Mr. CUCCINELLI. Well, again, I’d point to Virginia will be affected 

differently in different parts of the Commonwealth. If you go to 

Martinsville, where we have over 20 percent unemployment, 

there’s a lot of lost manufacturing there from the NAFTA era that 

we are rather hopeful if we can get an economic uptick and keep 

stable and relatively cost-effective energy prices, will become a 

manufacturing area again. This forecloses or makes it much more 

difficult for that to happen in that poor swath of Virginia where 

unemployment is particularly high. I already mentioned what happens in southwest Virginia, which is not a rich area either. 

Chairman ISSA. You’re known for clean coal, but this would still 

be coal that would be offset. 

Mr. CUCCINELLI. Yes. 

Chairman ISSA. Back to manufacturing. I wanted to focus on this 

because I’m a former manufacturer myself. The nature of American 

manufacturing, as I understand it, is we take affordable energy 

and we leverage it to compete against less expensive labor in Third 

World countries. And this essentially would take your maybe 2-cent 

a kilowatt an hour power and increase it by maybe three or four 

times. It’s a huge increase if your base fuel is coal and it becomes 

natural gas. Isn’t that correct? 

Mr. CUCCINELLI. It certainly is. I can’t speak to the exact degrees 

of increase, but there’s no question the state we’re in, it’s much 

more marginal for us to become economics competitive. Anything 

close to the types of change that you’ve described takes us—makes 

us uncompetitive with large swaths of the world. 

Chairman ISSA. Thank you. My time is more than expired. I yield 

to the ranking member. 

Mr. CUMMINGS. Thank you very much. 

Mr. Attorney General, it is good for you to be here. I would like 

to put into the record—have entered a joint statement from the Attorney General of the State of Maryland, my State, Doug Gansler, 

and Robert M. Summers, the secretary of the Maryland Department of Environment. The statement asserts that Maryland has 

successfully implemented a law that required major reduction in 

mercury emissions from coal-burning power plants. Maryland 

power plants have already reduced mercury emissions by 88 percent without affecting reliability. And in doing so, has created jobs 

in Maryland. 

I ask that that be a part of the record. 

13 

Chairman ISSA. Without objection, so ordered. 

Mr. CUMMINGS. Thank you, Mr. Chairman. 

Mr. Attorney General, it’s been documented that exposure to 

toxic pollution from power plants, such as hydraulic acid, the mercury, arsenic, and other metals, causes a wide variety of health 

conditions. These include asthma, which I suffer from, and other 

respiratory ailments, developmental disorders, neurological damage, birth defects, cancer, and death. Do you disagree with any of 

those findings? 

Mr. CUCCINELLI. I’m really not in a position to give you a medical 

assessment. I’m just here to talk about the legal side. 

Mr. CUMMINGS. I understand that. But you are sworn to protect 

the people of your great State, are you not? 

Mr. CUCCINELLI. Sure am. 

Mr. CUMMINGS. I would think you would take into consideration 

anything that might cause deaths, particularly from all of these different things. That’s why I asked you. I’m not trying to take you 

out of your purview. 

Mr. CUCCINELLI. We certainly take those into consideration, always looking for a balance 

Mr. CUMMINGS. Sure. It has also been reported that among industrial sources in the United States, coal and oil-fired power 

plants emit the most toxic air pollution and accounted for nearly 

50 percent of all pollutants in 2009. Do you disagree with that? 

Mr. CUCCINELLI. I’m not in a position to disagree. I would note 

that we have some co-located among our utilities, oil and coal. One 

thing we’d love to have seen, because we use the oil very infrequently—only when we have peak demand—if those had been excluded from this rule, that’s one way they might have provided 

more flexibility for peak demand while still achieving many of the 

pollution reduction goals that they’ve set here. But there was no 

exception made for that. 

Mr. CUMMINGS. It has been estimated that the proposed air toxic 

rule would save up to 53,000 lives by 2016. Have you heard that? 

Are you familiar with that? 

Mr. CUCCINELLI. I’ve have heard that, yes. 

Mr. CUMMINGS. Do you have any reason to disagree with that estimate? 

Mr. CUCCINELLI. It strikes me as quite optimistic, yes. But I 

don’t—it’s such a large number, but I haven’t done any independent research on that, no. 

Mr. CUMMINGS. Mr. Attorney General, I understand that you 

asked a Federal judge—and you testified to this—to delay the final 

Air Toxic Rule for 1 year, making many of the same arguments you 

made here today. Was that in the form of a brief? 

Mr. CUCCINELLI. It was, yes. 

Mr. CUMMINGS. And are you aware that the Air Toxic Rules have 

been legally required by the Clean Air Act since 1990, 21 years 

ago? 

Mr. CUCCINELLI. I am aware of that, yes. 

Mr. CUMMINGS. I’d like to enter into the record the order of the 

judge denying this request. The same arguments we are hearing 

today have failed legal scrutiny, and Congress shouldn’t give them 

but so much weight. I would ask they be admitted in the record. 

14 

Chairman ISSA. Without objection, though I would note that it 

went hand-in-hand with the 30-day extension and may not be germane 30 days from now. 

Mr. CUMMINGS. I understand. 

These are basically the same arguments. Is that right? 

Mr. CUCCINELLI. That same judge told the EPA that if they need 

more time, they could come back and she’d grant it. So it is not, 

from our perspective, a closed question. 

Mr. CUMMINGS. I understand. 

With that, I yield back. 

Chairman ISSA. I thank the gentleman. 

We now go to the gentleman from the coal-producing alternate 

capitol, Cleveland, Ohio, Mr. Kucinich. 

Mr. KUCINICH. Happy birthday, Mr. Chairman. 

Chairman ISSA. Thanks, Dennis. 

Mr. KUCINICH. Mr. Attorney General, welcome to this committee. 

As Attorney General, isn’t part of your responsibility to protect 

the residents of Virginia and not put them at greater risk for illness or even premature death due to air pollution? 

Mr. CUCCINELLI. Certainly protecting the people of Virginia is an 

important part of my job, yes. 

Mr. KUCINICH. Is it your responsibility to protect the people of 

Virginia from air pollution-related illnesses that could cause premature death? 

Mr. CUCCINELLI. Part of what we do in my office is enforce environmental laws. And we are aggressive about doing that. So, yes. 

Mr. KUCINICH. How many prosecutions have you had of environmental polluters since you’ve been in office? 

Mr. CUCCINELLI. Ordinarily, the way those are resolved is with 

joint decrees that involve the EPA. I don’t know how many. I know 

that we have had a regular flow of them. 

Mr. KUCINICH. Have you recommended prosecution for polluters; 

and how many have you recommended? Can you be quite specific? 

Mr. CUCCINELLI. We have resolved all of them with consent decrees, meaning those who are defendants—— 

Mr. KUCINICH. ‘‘We,’’ meaning who, Mr. Attorney General? 

Mr. CUCCINELLI. Inevitably, it is our Department of Environmental Quality which we typically are negotiating on behalf of, and 

the EPA, with polluters—— 

Mr. KUCINICH. Have you ever been involved personally in any of 

the negotiations related to resolving pollution—complaints over air 

pollution? 

Mr. CUCCINELLI. My personal involvement has related to approving those resolutions negotiated by the attorneys in my office and 

with the EPA and with the defendants in question. 

Mr. KUCINICH. And do you know what the outcome of those have 

been? Have they been consent agreements on behalf of communities that have had complaints about pollution? 

Mr. CUCCINELLI. Yes, that’s exactly how they’ve been resolved, 

with typically fines and requirements going forward, enforced by 

court order, for additional care to be taken, specific steps to be 

taken. 

Mr. KUCINICH. So your office has been instrumental, you’re saying, in causing polluters to be fined. 

15 

Mr. CUCCINELLI. Yes. 

Mr. KUCINICH. Do you have any information you can present to 

this committee right now about specific cases? 

Mr. CUCCINELLI. I did not bring specific cases. 

Mr. KUCINICH. But you could produce—will you produce—for this 

committee a list of such cases? 

Mr. CUCCINELLI. I’d be glad to. 

Mr. KUCINICH. Could you tell members of this committee—and I 

was particularly interested in some of the equations you were talking about. You said that clean air standards—I’ll paraphrase it— 

that they can cost jobs. Is that your position? 

Mr. CUCCINELLI. Sure. 

Mr. KUCINICH. What kind of jobs do they cost? Can you be specific as to the types of occupations? 

Mr. CUCCINELLI. For starters, the most obvious is, since we are 

a coal State, southwest Virginia and the coal industry is affected, 

and unlike, say, the part of Virginia where I am from, northern 

Virginia, which has a fairly diverse economy, there’s not an economic alternative in southwest Virginia. So there is that challenge, 

which is the most overt. Then comes the industries and businesses 

reliant on energy as a major component of their costs. Certainly, 

any manufacturing that would take place which we have in Virginia, primarily though not at all exclusively, in the southern part 

of Virginia and up the western part of the State, though again it 

is scattered, those would be—— 

Mr. KUCINICH. Thank you. You’re saying that they cost jobs, by 

definition, in the coal industry. That’s your position. 

Mr. CUCCINELLI. Sure. I assume that’s—— 

Mr. KUCINICH. Is it possible if you don’t have clean air standards, that it could also create health problems for people? 

Mr. CUCCINELLI. Sure. That’s the tradeoff here. That’s the tradeoff. 

Mr. KUCINICH. Now, is dirty air good for poor people? 

Mr. CUCCINELLI. Dirty air is not good for anybody. 

Mr. KUCINICH. Because there would be less poor people if the air 

is dirty; or is it good for poor people because there will be less poor 

people if there is dirty air? 

Mr. CUCCINELLI. Dirty air isn’t good for anybody. Jobs are good 

for everybody. 

Mr. KUCINICH. Can you tell me—if you’re looking at job calculations—about the jobs that are created by poor air standards? Can 

you think of jobs that are created by poor air standards? 

Mr. CUCCINELLI. The comparison that we are looking at—and it 

isn’t our own, we are sort of swallowing all the studies, or as many 

of them being done—is compared to where we are now versus what 

is proposed. We are not suggesting anything ought to be undone, 

though I do think it would be far more appropriate for EPA to decouple some of the elements of the rule they’re now proceeding on. 

Mr. KUCINICH. Thank you, Mr. Chairman. I just wondered if the 

gentleman was including in his advocacy the jobs that are created 

for undertakers when people don’t survive as a result of poor air 

standards. 

Mr. CUCCINELLI. No. 

Chairman ISSA. The gentleman may respond, if you would like. 

16 

Mr. CUCCINELLI. Sarcastically, or in general? 

Chairman ISSA. You’re the witness. 

Mr. CUCCINELLI. No. We’re trying to look at this in the aggregate. As I said, the one overt industry that can really be addressed 

from a Virginia standpoint is the coal industry and the spinoffs 

there. After that, it becomes the energy costs associated with the 

gradual rise in costs as those are incorporated through the utilities. 

Because the utilities pay none of this. It is the ratepayers who pay 

for all of this. 

Mr. KUCINICH. Mr. Chairman, I appreciate you giving the gentleman a chance to respond, because he talked about the aggregate, 

which is what we’ve been talking about, because we’re saying that 

17,000 lives a year are on the line with respect to these regulations. 

Thank you, Mr. Chairman. 

Chairman ISSA. I thank you both. 

We now recognize the gentleman from Virginia, Mr. Connolly, for 

5 minutes. 

Mr. CONNOLLY. Thank you, Mr. Chairman. And welcome, again, 

Mr. Attorney General. 

The National Capital Region, including northern Virginia, is classified as a non-attainment region in terms of air pollution. Do you 

know what percentage of that air pollution is migrating pollution 

from coal-fired power plants? 

Mr. CUCCINELLI. I do not. 

Mr. CONNOLLY. Would it surprise you to learn that about a third 

of the air pollution in this region is attributed to those migrating 

pollution sources from coal-fired power plants not in this region? 

Mr. CUCCINELLI. Well, I certainly wouldn’t expect everything we 

deal with this in region to have started here. I grant you that. But 

the specific numbers, I can’t really suggest. 

Mr. CONNOLLY. But certainly as the Attorney General of Virginia, representing, as you point out, all of Virginia, you can understand some of the anxiety and concern in the northern part of the 

State with respect to pollution caused by coal-fired power plants. 

Mr. CUCCINELLI. I don’t think that concern is quarantined to 

northern Virginia. I think it’s shared across Virginia. 

Mr. CONNOLLY. A point well taken. 

Mr. CUCCINELLI. What is additionally shared is just a desire for 

balance to be achieved as we gradually try to keep our air cleaner 

and improve the standard of living in this country. 

Mr. CONNOLLY. Mr. Attorney General, the proposition here is 

that, should this regulation go into effect, it would have devastating effects both on sources of electricity and on jobs. In 1990, 

with the Clean Air Act amendments, similar arguments were 

made. Do you know what happened to the price of electricity in the 

Commonwealth of Virginia? 

Mr. CUCCINELLI. Not in 1990, no. 

Mr. CONNOLLY. No. In the intervening 21 years, did it go up or 

down? 

Mr. CUCCINELLI. I can speak to you back to the last decade or 

so but I can’t go back to 1990. 

17 

Mr. CONNOLLY. Would it surprise you to learn that actually electricity rates in the Commonwealth of Virginia in that time period 

have actually fallen by 35.6 percent? 

Mr. CUCCINELLI. It would not entirely surprise me. 

Mr. CONNOLLY. Well, does that not call into question perhaps, 

then, the claims that in this particular case, that won’t work and 

in fact electricity rates are going to go up? Given the experience 

we’ve had in the last 21 years, why should we put credence in such 

an argument? 

Mr. CUCCINELLI. Certainly it would be a lot easier to analyze 

that argument if there were more than 134 days to look at 960,000 

comments, presumably not all of which are substantive, but if you 

just compare them to other rules. You all had your own here from 

this committee. I would look at some others, like the chemical recovery combustion was 21⁄2 years; reciprocating internal combustion 

engine, a year and a half. For cement, the Portland cement manufacturing. We’re looking at 41⁄2 months to consider the very questions you all are lobbing this way with assumed answers. 

Mr. CONNOLLY. Mr. Cuccinelli, unfortunately, my time is limited. 

Certainly, the Clean Air Act amendments of 1990 were far more 

sweeping than what’s in front of us now. What happened to electricity rates, for example, in other States with coal-fired power 

plants—and I’ll list them: West Virginia, North Carolina, Pennsylvania, Ohio, Kentucky, and Alabama. Are their electricity rates in 

the intervening 21 years since that sweeping set of amendments, 

are they higher or lower relative to 1990? 

Mr. CUCCINELLI. I don’t study other States’ electricity, specifically. I study the national and compare it to Virginia, unless something borders Virginia and we have a rate case where that’s relevant. 

Mr. CONNOLLY. Would it surprise you to learn they’re also cheaper? 

Mr. CUCCINELLI. No, I wouldn’t be surprised either way, not 

knowing it. 

Mr. CONNOLLY. Mr. Cuccinelli, correct me if I’m wrong, I was 

under the impression that, for example, under the Health Care Reform Act, the Affordable Care Act, you were an advocate for nullification. You supported legislation in the General Assembly of 

Virginia that made universal mandates illegal under the Commonwealth of Virginia. Is that not correct? 

Mr. CUCCINELLI. ‘‘Nullification’’ is an incorrect term and it suggests you don’t know history. ‘‘Nullification’’ is when a State says 

we’re not going to obey your Federal law. That isn’t what happened 

in Virginia. The General Assembly on a bipartisan basis passed a 

law. Two weeks later, the President signed PPACA, and those two 

were in conflict. As our constitutional structure provides, we went 

to court to resolve the disputes of authority related to those two 

laws. That is not ‘‘nullification,’’ Congressman. 

Chairman ISSA. If the gentleman would suspend. 

Attorney General Cuccinelli, you can answer any question you 

choose to answer. However, you’re only bound to answer questions 

that are within the germaneness of the subject for which you were 

brought here. 

You may continue. 

18 

Mr. CONNOLLY. Mr. Chairman, if I may—The purpose of my 

question was not to focus on health care. I wanted to give the opportunity to the Attorney General to explain his position, because 

my question has to do with whether—you don’t like ‘‘nullification.’’ 

I’ll call it preemption. Does the Commonwealth of Virginia have a 

similar preemption right, if you don’t want to use the word ‘‘nullification,’’ with respect to this regulation, in your view as the Attorney General of Virginia? 

Mr. CUCCINELLI. I think the commerce clause very clearly gives 

the Congress, and therefore the Federal Government, the broad 

power to address something like pollution across State lines. 

Whereas, if you compare that to the health care example, ordering 

a particular individual to go buy a product; not regulating them 

once they’re in commerce, but ordering them into commerce, is a 

completely different comparison. I have no constitutional complaints with what is going on in terms of the exercise of Federal 

authority here. My concerns are policy concerns and legal process 

concerns. 

Mr. CONNOLLY. So you see the two as different. 

Mr. CUCCINELLI. Oh, absolutely. We put those processes in place 

to protect not only the rights but to achieve the best policy outcomes. And I know, regardless of the opinions here, everyone would 

like to achieve the best possible outcomes for this country. I think 

that we are more likely to do that if we actually take a legitimate 

amount of time to consider the material that is now before us that 

is simply it is not humanly possible to consider all the comments 

that are now before us on this rule in the incredibly short time 

frame. 

Mr. CONNOLLY. Thank you, Mr. Attorney General. 

Chairman ISSA. I’d now ask unanimous consent that we be able 

to place in the record the details of the 1990 Clean Air Act, showing a 5-year period for rulemaking exception. Additionally, I’d ask 

unanimous consent that the statement by the Unions for Jobs and 

the Environment—these are all union organizations combining— 

that says EPA data implied that no coal unit in the United States 

meets all the proposed new sources, HAPS standards, regardless of 

the type of coal consumed or the effectiveness of its pollution control devices. 

Again, that’s Unions for Jobs and the Environment public comments. 

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Chairman ISSA. With that, I would now recognize the former 

chairman of the committee, Mr. Towns. 

I apologize. I now recognize the distinguished lady from the District of Columbia, Ms. Norton. 

Ms. NORTON. That’s all right, Mr. Chairman. I thank you. 

Welcome, Mr. Attorney General. 

There appear to be two separate forks to your complaint. One is 

the process; the time for the process. I’d like to get to the substance, because it would appear that some States already implement stringent mercury emission limits that are even more stringent mercury emission limits than EPA is now proposing. So I 

went to a set of States close by, by the way: Connecticut, New Jersey, New Hampshire, Massachusetts, and New York. 

Now, here is what the Massachusetts Department of Environmental Protection said: Experience in Massachusetts in imposing 

stringent emission limits for mercury and other pollutants clearly 

shows that EPA’s proposed limits are achievable and effective. For 

example, although Massachusetts’ mercury emission limits for existing coal-fired power plants are considerably more stringent than 

those proposed by EPA, Massachusetts facilities have been able to 

install control equipment with no impact on reliability of electric 

power and have demonstrated consistent compliance with the limits. 

Mr. Attorney General, aren’t those the same technologies available to the State of Virginia, for example? 

Mr. CUCCINELLI. Well, presumably they’re available everywhere, 

Congresswoman. 

Ms. NORTON. Well, have you considered the possibility of using 

those very same technologies to achieve the results in Virginia that 

have been achieved even beyond those that the EPA is proposing 

by nearby States? 

Mr. CUCCINELLI. Congresswoman, I think you’re focusing on 

what amounts to less than 1 percent of what the EPA is doing— 

and that is the mercury piece of this. The mercury piece is a lot 

more achievable with a lot less damage than if you pile everything 

else on top of it. All of your statements with respect to mercury, 

I’d just accept them as stated and would suggest that it wouldn’t 

cause nearly, not on an order of magnitude, the kind of challenge 

that the whole rule that EPA is advancing. 

Ms. NORTON. But, Mr. Attorney General, the Northeast States 

for Coordinated Air Use says of EPA’s proposed rule—and here’s 

what they say of the rule itself: The successful track record demonstrates that there are no unsurmountable technology costs—emphasis on cost, or at least I put the emphasis there, as you appear 

to—or timing barriers to achieving EPA’s proposed mercury and air 

toxic standards. 

They are speaking beyond the mercury standards. Do you disagree with that statement? 

Mr. CUCCINELLI. I’m not quite sure what they mean by the air 

toxics. I assume they mean the acid gases. You’ve got the mercury 

acid gasses, you’ve got the particulate matter. So if you take 

the—— 

Ms. NORTON. They say ‘‘air toxics,’’ so I assume they’re talking 

about all the air toxics. 

121 

Mr. CUCCINELLI. Well, if they’re talking about all of them, then 

no, I would not agree with that statement. If they were strictly 

speaking of the mercury piece—— 

Ms. NORTON. Well, they’re not strictly speaking of that. 

Mr. CUCCINELLI. I do think the mercury piece is probably within 

reach. 

Ms. NORTON. And you think Virginia, in fact, could move forward 

on the mercury piece. 

Mr. CUCCINELLI. If you strip the other stuff out and—— 

Ms. NORTON. These people went ahead on their own, Mr. Attorney General, because they care about the health and welfare of 

their people. And they are beyond what EPA is now proposing. So 

you’re going to wait for EPA? 

Mr. CUCCINELLI. No, ma’am, they are not. They are beyond what 

EPA is proposing in the area of mercury, and mercury alone. 

Ms. NORTON. So they are beyond what they are proposing in 

mercury alone. 

Mr. CUCCINELLI. Yes. 

Ms. NORTON. They went ahead before EPA proposed. I’m asking 

you, don’t you think Virginia might go ahead on mercury alone, 

since you think that is achievable? 

Mr. CUCCINELLI. Virginia could do that, but it obviously has 

made the policy decision not to do that. I would note that this all 

has, as I said before, the balancing consequences. We have a much 

lower unemployment rate than any State you just named. We have 

a higher economic growth rate than any State you just named. Despite the economic challenges—— 

Ms. NORTON. Mr. Attorney General, I don’t know if that is the 

case. And I will not accept that until I look at those figures. Let’s 

look at your concern with the process—— 

Chairman ISSA. I ask the gentlelady have an additional 30 seconds. 

Ms. NORTON. I thank the gentleman. 

Are you aware that the rule finalized—apparently, to be finalized 

in December, you’d not have to comply with until 2015, and then 

extensions could be gotten after that if you demonstrated that an 

extension was necessary? 

Mr. CUCCINELLI. I’m aware that if the rule goes into effect—or 

is approved in mid-December, it would go into effect in January 

and have a 3-year implementation timeline. I also know what it 

takes to replace, to permit, to do all the steps necessary for the 

utilities in my State to replace certain power generation that will 

have to be withdrawn in that time period. And we can’t match the 

two up. We can get kind of close, but not match them up. 

Ms. NORTON. In which case an extension, it seems to me, would 

be justified. 

Thank you, Mr. Chairman. 

Mr. CUCCINELLI. The extensions would undoubtedly be helpful. 

That is always true. However, there is a limit on the EPA’s authority to just extend. And relying on that from a business planning 

standpoint is not something that I can argue before my State Corporation Commission when the utilities come in and say we have 

to meet this. They don’t have to rely on the extension. And the law 

of Virginia, as dictated by the U.S. Constitution, because they are 

122 

granted a right of return, is that those rates will pass through to 

all of our citizens—poorest, richest, and everyone in between. 

Chairman ISSA. I thank the gentlelady. And I thank the Attorney 

General. 

With that I recognize the former chairman of the full committee—I’m sorry, Mr. Chairman, you’re going to have to wait 5 

more minutes. With that, I recognize the gentleman from Oklahoma for 5 minutes, Mr. Lankford. 

Mr. LANKFORD. Thank you Mr. Chairman. I do apologize for taking a little bit of the former chairman’s time. 

Chairman ISSA. We’ll make it up to him. 

Mr. LANKFORD. That would be great. 

Thank you for being here, Attorney General. Glad for you to be 

able to be here. 

My concern is that if I went back 35 years ago, Congress was 

conducting hearings and conversations about pushing power generation out of natural gas into coal and into nuclear because we 

were ‘‘running out’’ of natural gas. And so, no more natural gas 

power plants out there. Folks that were using that need to go into 

coal. 

Now, plus 35 years, now the Federal Government is saying, no, 

coal might not be a good idea; let’s try natural gas and see how 

that works and see if that’s better. Or, see if we can use wind. As 

we continue to adjust the preferences to the Federal Government 

and now use a series of studies to be able to justify how we want 

companies to be able to move, that is very difficult on power generation, who can’t just plan for next year, they have to plan on the 

next decade for what they are going to construct. My concern is the 

cumulative effect of all those regulations and if that has been evaluated. 

Is it your opinion, of all the things that are coming down—and 

I’ve got 3 pages worth of different regs that are coming down right 

now out of EPA on power generation, whether it be 316(b), whether 

it be the cross-State rules, whatever it may be from coal—and 

there’s a whole litany of different issues from coal, from the time 

it comes out of the ground, all the way until it’s fly ash at that 

point at the end—do you feel like that has been adequately studied 

in this hurry to be able to get through this almost a million different comments that have been made? Was the cumulative effects 

also evaluated in this? 

Mr. CUCCINELLI. If you’re asking if I think it was done adequately, absolutely not. This hasn’t even gone to OMB yet and they 

are still setting a finalization date in the middle of December. 

That’s normally itself a 90-day process. Of course, it’s November 

now. So that isn’t going to happen if they’re going to keep to the 

schedule they’ve laid out. That has absolutely not been looked at. 

You mentioned something that triggered a thought, and my Congressman had mentioned it earlier, with respect to greenhouse 

gases. I think of the switching of fuels. The fact that we had sued 

EPA over their improper process over the greenhouse 

endangerment finding was raised earlier. And what’s interesting 

about this is if that’s so important, this makes it worse. That hasn’t 

been looked at either in any serious way. Or maybe it’s buried in 

123 

those 960,000 comments. But it seems the timeline has been set up 

so that they won’t be reviewed, not so that they will. 

Mr. LANKFORD. That is my concern is there has not been enough 

time to able to go through this. The President has been very urgent 

to say we need to look at cumulative effects of regulations, if that 

has not occurred, to be able to gather cumulative effects of all these 

different regs that are coming down and the speed that they’re 

coming down, and the size of them. 

One of the statements that was made by EPA was that this may have a potential of, what is it, $10.9 billion in annual costs on the 

economy. Just that one regulation alone, $10.9 billion. Then you 

start adding to it all the different areas of 316(b) and everything 

else that’s coming down on it. It’s fairly significant, what’s happening. 

And I understand previous comments that have been made to 

say we continue to add regulations to the power industry but the 

power continues to go down. I would presuppose at some point that 

doesn’t work anymore. You can’t just throw in a thousand regulations and say, We’re going to continue to drive the costs down by 

adding more regulations. It doesn’t work that way. At some point, 

you’ve got to have some common sense. Agree or disagree with that 

comment? 

Mr. CUCCINELLI. I would certainly agree with that. And I would 

also note that Executive Order 13–563 requires EPA and other regulators, ‘‘to tailor its regulations to impose the least burden on society consistent with attaining regulatory objectives, taking into account the costs of cumulative regulations.’’ And EPA has not performed a cumulative regulation cost analysis for the Utility MACT. 

Mr. LANKFORD. What about the effect on reliability of power in 

the days to come? 

Mr. CUCCINELLI. I understand that is widely debated here. It’s 

not much debated in Virginia. We’re looking at, just for one of our 

utilities, probably $250 million of transmission infrastructure costs. 

Again, those by law pass right through to the ratepayers. On top 

of that, from a public policy standpoint, I was in the State senate. 

These are the ones people scream about. This is where power lines 

are going to be built across 50, 60 miles of people’s backyards that 

do not now exist, and are going to be necessary to provide the flexibility in the grid to meet the reliability requirements that you’d expect of a modern electrical grid. So we’re also looking at that challenge. We haven’t talked about that at all. 

Mr. LANKFORD. I would say again, if we’re going to make a major 

decision that is going affect billions of dollars and it’s going to affect future planning, we better make it right. You go back 35 years 

ago when we said, Let’s go to coal, because that’s more abundant 

than it is for natural gas. Now we’re trying to reverse that. Obviously, we should have done more studies 35 years ago instead of 

doing a knee-jerk reaction. If we do the same knee-jerk reaction 

again, we’re going to have the same kind of consequence if we don’t 

do this right. 

So with that, I yield back. 

Chairman ISSA. I thank the gentleman from a major natural gasproducing State. 

Mr. LANKFORD. Absolutely. 

124 

Chairman ISSA. With that, we recognize the former chairman of 

the full committee, whose picture adorns the area just behind us, 

Mr. Towns, for 5 minutes. 

Mr. TOWNS. That only means I’ve been here a long time. 

Chairman ISSA. Okay. We’ll make it 6 minutes. 

Mr. TOWNS. Mr. Attorney General, you testified today that one 

of the impacts of the Air Toxic Rule would be closure of coal-fired 

power plants, which will in turn cause job loss. Is that correct? 

Mr. CUCCINELLI. And with the increased electricity costs that 

come with it, yes. 

Mr. TOWNS. But evidence from our previous hearings on this subject before the Subcommittee on Regulatory Affairs suggests that 

many of these coal-fired power plants are older and would have 

gone out of business anyway. What’s your answer to that? 

Mr. CUCCINELLI. I think that you are certainly accelerating the 

retirement of part of the coal fleet I don’t think in a way that the 

utilities envision, necessarily. But certainly that will be where they 

try to sacrifice some of their generation. That’s just logic. 

Mr. TOWNS. Let me ask you this. At a meeting on June 1 with 

investors, the chairman of American Electric Power, a gentleman 

by the name of Michael Morris, told investors the following: ‘‘As 

you know, those are high-cost plans. Throughout almost all of 2009, 

those plants probably didn’t run 5 percent of the time because of 

natural gas prices. When we shut those down, there will be some 

cost saving as well, and on balance we think that that is the appropriate way to go.’’ 

What is your response to that? Do you agree or disagree? 

Mr. CUCCINELLI. Our second biggest utility is one of their subsidiaries. APCO is an AEP subsidiary. 

The 5 percent comment. We have some plants that fit in the category he described. I use the oil-fired as an example. Mind you, 

there is some value to keeping fuel flexibility. Even if they are 

dirtier plants, even if they aren’t what you’d want run all the time, 

to have them available for peak time in the winter and summer is, 

I would suggest, of great value on both a cost basis and a reliability 

basis that far outweighs the benefits you might get by shutting 

them down permanently, which is, as his comments suggest, what 

is going to happen. 

I think when you—moving them perhaps from a run 24/7/365 position to using them as peak power would be a great alternative 

for America. It would achieve, even if you just accept all the health 

claims, everything, without disputing any of that, just moving them 

from one position to the other would be a huge boon, with tremendous cost savings from an opportunity cost perspective that aren’t 

dropped on ratepayers because you move them over instead of 

shutting them down. But that is not an option under this rule, it 

is not an option under this rule. It is in fact the opposite, where 

you’d have to put in all the upgrades whether you use them 100 

percent of the time or five, for a 5 percent plan, so of course you’re 

going to shut it down. 

Mr. TOWNS. AEP plans to close two plants in Virginia, I think 

Clinch River and Glen Lyn; is that true? 

Mr. CUCCINELLI. Well, I can’t speak for AEP, but I certainly 

would expect that they are on the block, yes, for this. 

125 

Mr. TOWNS. And AEP agreed to retire those plants under a 2007 

consent decree over violations of environmental laws; isn’t that 

right? 

Mr. CUCCINELLI. I don’t know that shutting them down was part 

of any consent decree. 

Mr. TOWNS. I know my time is about to expire. Mr. Attorney 

General, it seems to me that your testimony before us today is a 

transparent attempt to blame the government for the fact that 

many high-cost, dirty coal plants could not compete in today’s market even before the air toxins rule goes into effect. 

Mr. CUCCINELLI. Then they’d be shut down of their own course. 

Mr. TOWNS. You know, I know your answer has been that you 

only represent Virginia, but when you—actually in the position of 

Attorney General, you have to look at what happens in other 

States as well, and then you make an opinion—actually to evaluate 

was it good, bad, or indifferent, you have to compare it with something. So I want you to know you have to look at other States; you 

can’t just look at Virginia. 

Mr. CUCCINELLI. Yeah. My comment to that effect was only with 

respect to the specific data from those particular States. I agree 

with you that you have to draw from the experiences of other parts 

of the country and other States, and I do do that in trying do 

what’s best for Virginia. 

Mr. TOWNS. I yield back and thank you very much for coming to 

testify. 

Mr. LANKFORD. Let me make just a quick comment as well. I will 

just take a quick moment, and I will yield to Mr. Connolly a quick 

moment, and then we are going to conclude this panel so we can 

make a transition as well. 

Just a comment. There are 25 other States, obviously, that are 

represented in this brief. It is not just Virginia we’re talking about 

at this point. So this is not just a single State issue, this is a national issue on all that is happening, and that currently what is in 

place on this is not just dealing with a small group of plants that 

are very out of date, but there are no coal plants that can abide 

by this nationwide; no one is at that standard at this point. So that 

is the challenge, to try to figure out what do we do with this that 

no single utility will not be affected by this process on it. 

A quick question for the Attorney General on it as well, and that 

is dealing with the combined regulations. As we talked a little bit 

before about the cumulative effects of this, the American Coalition 

for Clean Coal Electricity estimated that some of the combinations 

here we’re talking about an increase of electricity somewhere between 12 and 23 percent. I know we were guessing earlier on some 

figures. Twelve to 23 percent hits the poor pretty tough, especially. 

What numbers have you seen, what estimates would you—— 

Mr. CUCCINELLI. In our last round of utility rate cases, and I’m 

in—we’re now awaiting orders in what is the sound round since 

I’ve been Attorney General. In the last round, we actually analyzed 

the rate increases as it related to Federal, not State, just the Federal environmental regulation, and about 35 to 40 percent of the 

base rate increases were a pass-through of these environmental 

costs. 

126 

In Virginia unlike, say, North Carolina, our utilities can absorb 

these costs as they incur them on a rolling basis. In North Carolina, utilities can’t incur them until they flip the switch and throw 

the new plant on line, which of course builds up cost and it keeps 

their rates a little lower for a while and then they spike. So it happens a variety of different ways but it goes up. 

I’ve only had to have a couple of town hall meetings as Attorney 

General and they were both on utility rates in the poorer parts of 

our State, because it is hard to describe from people who are not 

from poor parts of the State what utility rates mean to the people 

in these households. When you talk about 10 bucks a month or 20 

bucks a month more, it’s real money. It’s real money in a small 

house that’s pulling maybe 1250 kilowatts, which is an APFO average. That’s big dollars to them. It hurts when they are on fixed incomes, as a large swath of that portion of Virginia is relative to the 

rest of Virginia. We see that a lot, again in the poorest parts of Virginia. 

And make no mistake about it. There are going to be economic 

consequences. There’s always a trade-off. You all make these decisions all the time about where thee trade-offs should land. But 

make no mistake about this: The people hurt first and the people 

hurt worst economically are the poor. They are the poor. That’s 

who you’re going to hurt first and that’s you’re going to hurt the 

worst. 

Thank you, Mr. Chairman. 

Mr. LANKFORD. Thank you. With that I yield 3 minutes to Mr. 

Connolly. 

Mr. CONNOLLY. Thank you, Mr. Chairman. I would note that the 

Attorney General’s view of history and mine might be slightly different with respect to utility rates in even the poorer parts of Virginia. Many of the rate increases he’s referring to occurred subsequent to the reregulation legislation passed by the General Assembly of Virginia, highly favorable to industry, not particularly favorable to consumers. 

Mr. Attorney General, let me ask you just one question. You 

talked about utilities. The largest utility in the Commonwealth of 

Virginia is Dominion Resources. Has Dominion Resources requested that you challenge the air toxic rule legally or that legislation be introduced to try to prevent it from being implemented? 

Mr. CUCCINELLI. No. As I mentioned earlier on your 

mischaracterization of nullification, Virginia isn’t in a constitutional position to step in on Federal environmental regulation of 

this type, with a constitutional objection. Even if we had legislation, the supremacy clause of the Constitution has Federal law 

trumping State law. The health care case you asked about earlier, 

the supremacy cause contains an exception when the Federal law 

is not constitutional. No one I’m aware of is alleging that what 

EPA here is doing here is unconstitutional. Inappropriate, incredibly unique in terms of the speed, particularly in light of the volume of the comments and the potential impacts which, even if you 

accept the EPA’s perspective, are still wildly in dispute. 

Mr. CONNOLLY. So the answer is that so far that largest utility 

in the Commonwealth has not asked you to seek to overturn the 

rule? I mean in the Federal level? 

127 

Mr. CUCCINELLI. I’m sorry, you mean in the what? 

Mr. CONNOLLY. At the Federal level. I’m not referring to nullification. Have you received as the Attorney General of Virginia 

any communication or indication from the largest utility in the 

Commonwealth that it would like you or others to in fact try to 

seek to overturn this pending rule? 

Mr. CUCCINELLI. No. My concern is more with the ratepayers 

than it is with the utilities. 

Mr. CONNOLLY. Thank you. Mr. Chairman, I would just end—my 

colleague from Virginia and I do disagree in terms of interpretation 

and history. Frankly, when a State seeks to preempt Federal law 

and to argue on its own that that law is, in advance, unconstitutional, is ‘‘nullification’’ by any other sense of the word. 

Mr. CUCCINELLI. Not if you know what you’re talking about. 

Mr. CONNOLLY. I think I do know what I’m talking about and I 

think you have an agenda, Mr. Attorney General. It is just one I 

happen to disagree with. With that, I yield back. 

Chairman ISSA. Mr. Chairman? 

Mr. LANKFORD. Yes. 

Chairman ISSA. Before you end the hearing or recess the hearing, 

I wanted to take just a moment if I may. 

Mr. LANKFORD. Certainly may. We had 3 minutes going all the 

way around so. 

Chairman ISSA. Thank you. 

Mr. Attorney General, I want to thank you for your presence 

here. I want to thank you for working for the interest, like nearly 

half of all Attorneys General have, to try to make sure that we get 

this new regulation right. I appreciate your being calm and deliberative in explaining what your goal is, what Virginia could do 

more expeditiously, and, quite frankly, the need to have nearly a 

million public comments evaluated in the way that it is appropriate 

before we set a regulation that people may ask for extensions on, 

but which may in fact be a different regulation than if all these 

comments are properly viewed in a public way. 

So your attention here, your willingness to come on short notice, 

we very much appreciate. And, again, I appreciate people willing 

to come before this committee. It is not always pleasant, but your 

testimony was essential. I yield back. 

Mr. LANKFORD. Thank you, Mr. Chairman. With that we will 

take a short recess so we can shift to the next panel. 

[Recess.] 

Chairman ISSA. [Presiding.] The hearing will reconvene. We now 

recognize the Honorable Robert Perciasepe. He’s the deputy administrator of the United States Environmental Protection Agency, and 

it’s an honor and a pleasure to have you here today. 

Pursuant to the committee rules all witnesses are to be sworn. 

Would you please rise to take the oath. Would you raise your right 

hand. 

Do you solemnly swear or affirm that the testimony you are 

about to give will be the truth, the whole truth, and nothing but 

the truth? 

Thank you. Let the record reflect the witness answered in the affirmative. Pursuant to the normal routine, I know you have 5 minutes or more to give, your entire statement will be placed in the 

128 

record. You may read off of it or you may summarize it, and we’d 

only ask that you try to remain fairly close to the 5 minutes to 

allow time for questions. And with that, you’re recognized for 5 

minutes. 

STATEMENT OF HON. ROBERT PERCIASEPE 

Mr. PERCIASEPE. Thank you, Mr. Chairman and Representative 

Connolly and members of the committee. I appreciate the opportunity to appear before you today on the mercury and air toxic 

standards. 

Chairman ISSA. Is your microphone on? Can you hear? 

Mr. PERCIASEPE. I’ll move in a little closer. 

EPA’s clean air power plant rules are necessary to protect public 

health and the environment from pollution produced by these 

plants, especially the oldest and dirtiest and least efficient of them 

all. The EPA will issue a final mercury and air toxic standard, 

which is the topic of today’s hearing, on December 16, 2011. 

We are not the first administration to recognize the need to clean 

up power plants and to issue rules to address that need. In fact, 

since 1989, when President George H.W. Bush proposed what became the Clean Air Act amendments of 1990, power plant cleanup 

has been the continuous policy of the United States Government 

under two Democratic and two Republican presidents. 

While past EPA rules have made progress in reducing the harmful effects of pollution, more remains to be done to ensure all Americans have the clean environment to which they are entitled. 

The two clean air power plant rules, the mercury and air toxic 

standard and the cross-State air pollution rule, finalized earlier 

this summer, will achieve major public health benefits for Americans that are significantly greater than the cost. These pollution 

reducing rules are affordable and they are technologically achievable. 

There’s tremendous public support for moving forward with these 

rules. Since March, we have received hundreds of thousands, as 

has already been mentioned, of comments from the public urging 

us to reduce mercury emissions from power plants. 

The mercury and air toxic rule have a significant public health 

benefit. For example, it will reduce mercury, which can cause neurological damage in children who are exposed before birth. The 

rule, as proposed, also is protective to avoid thousands of premature deaths, thousands of nonfatal heart attacks, and hundreds 

of thousands of asthma attacks. This rule would provide Americans 

with 5- to $13 in health benefits for each dollar it costs. 

Our analysis and past experience indicate that warnings from 

some of dire economic consequences of moving forward with these 

important rules are exaggerated. While not as focused, the mercury 

and air toxic standard rule has the potential to improve productivity and provide jobs. We estimate that the proposed rule would 

result in 850,000 fewer workdays missed due to illness, and could 

support 31,000 job years of short-term construction work, the net 

of $9,000 of long-term utility jobs. 

Monies spent on pollution control at power plants provide highquality American jobs in manufacturing steel, cement, and other 

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129 

ing the equipment, and in operating and maintaining the equipment. And many of these jobs are jobs that will not be and cannot 

be shipped overseas. In fact, the United States is the leading exporter of pollution-control equipment. 

Our publicly available analysis shows that the EPA rules affecting power plants are affordable. This is corroborated by other outside groups and some in industry who recognize that issuing the 

rules in the same time frame helps provide power companies with 

the certainty they need to make smart and cost-effective decisions. 

As we did more than 2 decades ago, we are also hearing claims 

that our rules will lead to potential adverse impacts on electric reliability. EPA’s analysis projects that the agency’s rules will result 

in only a modest level of retirements that are not expected to have 

an adverse impact on electric generation resource adequacy. Our 

rules will not cause the lights to go out. 

While there are some industry studies suggesting that these 

rules will result in substantial power plant retirements, in general 

they share a number of serious flaws. Most notably, as the Congressional Research Service emphasized in August, these studies 

often make assumptions about requirements of the rule that are inconsistent with and dramatically more expensive than the EPA’s 

actual proposals. In some cases, the analyses were performed before many of the regulations in question were even proposed. 

In closing, I would like to suggest that the committee should be 

clear about what is at stake here, and those who have stalled in 

cleaning up their pollution—those who have stalled in cleaning up 

their pollution call for further delays. Delay encourages companies 

to avoid upgrading America’s infrastructure and putting people to 

work modernizing their facilities. And, most importantly, delay 

means the public health benefits of reducing harmful pollution are 

not realized. 

Thank you and I look forward to answering your questions. 

Chairman ISSA. Thank you. 

[Prepared statement of Mr. Perciasepe follows:] 

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Chairman ISSA. I want to recognize myself for the first 5 minutes. 

I will take your opening statement in reverse order. If I understand the nature of every time there is one of these pollutant 

standards, I just want to understand, you really don’t usually do 

much to the overall facility. It’s normally a bolt on some additional 

cleaning equipment. Isn’t that true in this case? 

Mr. PERCIASEPE. Yes, but obviously from an engineering perspective, it has to be integrated into the operation of the facility. 

Chairman ISSA. That begs the bigger question. Isn’t it true that 

today there is no utility that you can show us that is able to implement this entire standard today? I know there are pieces of it in 

various places, but no utility is currently able to implement it; isn’t 

that true? 

Mr. PERCIASEPE. I don’t believe that that is correct. I believe we 

look at the best performing plants around the country—— 

Chairman ISSA. But we looked at that, and you looked at each 

plant and you put together various plants and said, If you do this 

and this and this, like Frankenstein, you can get one person. But 

you make the assumption that you can put together the best of all 

these plants. Some of these plants have different non-combinable 

operations at the current time; isn’t that true? 

Mr. PERCIASEPE. I believe that the plants can meet these standards, and some do. But I would like—— 

Chairman ISSA. Is there any plant that meets this standard 

today? You said some do. 

Mr. PERCIASEPE. I believe they do. 

Chairman ISSA. If you would answer for the record of a single 

plant that meets this standard today, we would be thrilled to hear 

that. Because we just had an Attorney General, one of 25—24, I’m 

sorry, who have asked for a delay, as you know, in order to get 

public comment; but most importantly, have asserted as does—and 

I’ll put it into the record—the Unions for Jobs and the Environment Public Comments, a union—a combined trade union organization who believe that today there are—there is no standard. 

Isn’t it not uncommon that the EPA believes that a standard will 

be—- compliance for the standard can be achieved within the time 

parameter and that it might be—and I want to give the benefit of 

the doubt—it might be that they could achieve it by 2015. Isn’t that 

part of the assumption? Not that it exists today, but if you take all 

of the analysis, that they could achieve it by 2015? 

Mr. PERCIASEPE. The air toxic standards that we are proposing 

for power plants has to be based on available technology that is 

currently performing at the level that we are proposing. 

Chairman ISSA. Okay. So if you will, for the record, have the 

EPA deliver us one power plant of, let’s just say, a megawatt or 

above, that uses coal that currently meets the standard, we would 

appreciate having that for the record. We will hold the record open. 

Mr. PERCIASEPE. Thank you. 

Chairman ISSA. Now, if we could put back up the pie chart. Earlier we had one of those 24 Attorneys General who said, although 

he’s not a scientist skilled in this area, but that he believed that 

when it came to the area that would be under this normal regulatory process, which is the mercury, that incredibly small sliver of 

140 

pink, that if this standard were only affecting mercury, he believed 

that a shorter comment period with a great likelihood of achievement was possible. 

Do you agree with that, that mercury is not what’s driving most 

of the objections, from what you can tell? 

Mr. PERCIASEPE. That is the—that chart is correct, the best I can 

tell, Mr. Chairman. 

Chairman ISSA. Okay. I mean from your analysis, but we 

couldn’t resist using your own figures because they seem compelling. 

So isn’t it disingenuous, a term we like to use here in Washington more often than maybe we should, but isn’t it disingenuous 

for the EPA to talk endlessly about mercury and its effects, all of 

which we’re very concerned about, when in fact the vast majority 

of this regulation has to do with particulates and, if not 920 out 

of 960,000 comments, the vast majority of those comments are 

about the mercury portion, a portion which is probably achievable 

well within the time parameter. 

Mr. PERCIASEPE. The effects of mercury on children affects their 

neurological—— 

Chairman ISSA. No, no, no. My question is very narrow. It’s not 

about the effects of mercury. It’s if, in fact, the technology exists 

today, or can predictably exist in time to meet the 2015 as to mercury, isn’t the combining of particulate, normally covered by another part of your authority, a fairly disingenuous use of the benefits? Because the benefits of reducing the mercury and the technology to reduce the mercury appears not to be in widespread conflict. In fact, if this was a mercury-only standard, you might likely 

have much quicker—much greater support for a much quicker implementation. 

Mr. PERCIASEPE. You have to let me try a little bit here to answer that question. 

Chairman ISSA. Of course. 

Mr. PERCIASEPE. First of all, we can’t quantify all those benefits 

from those neurological impacts on children. Those are not completely quantifiable as we are able to quantify some of the fine-particle co-benefits. And the reason we have co-benefits is because the 

pollution-control equipment that you would use for mercury, for arsenic, for nickel, chromium, and the acid gases, which are all regulated under the air toxic program, all of which have public health 

implications—we think having co-benefits is a good thing and that 

those co-benefits also have substantial public health benefits. 

So it is those same pollution-control—it is that same pollutioncontrol equipment that is making those reductions in fine particles. 

It isn’t like we have asked for a separate control for fine particles. 

These are the controls that will reduce those other emissions. 

Chairman ISSA. With that, I recognize the ranking member from 

Virginia, Mr. Connolly. 

Mr. CONNOLLY. Thank you, Mr. Chairman. If you want to continue, I would certainly yield to the chairman. 

Chairman ISSA. Very quickly. I just want to run one followup. I 

thank the gentleman. 

As I understand it, roughly 90 percent of the benefits that you’re 

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141 

late reduction under MACTs; isn’t that true? In other words you’re 

double-counting. You have another regulation that would cover 90 

percent of this. You’re counting 100 percent of the reduction in particulate when, in fact, 90 percent is going to occur—and most of the 

benefit. 

So I guess for the record, would you tell us what that last—the 

differential between the two standards, that last 10 percent on particulate, what portion of the co-benefit would actually occur? In 

other words, the numbers for what is the last little fraction of reduction? 

Mr. PERCIASEPE. Did you say MACTs? 

Chairman ISSA. By the MACTs program. In other words, the 

amount of reduction here, and the cost, my understanding is that 

about 90 percent of the particulate reduction under that part of the 

regulatory authority is already ordered, basically. 

Mr. PERCIASEPE. All I can—what I have to answer here is this 

rule is aimed at reducing the toxic—air toxic emissions. Those air 

toxic emissions that I mentioned, those metals and acid gases are— 

associate the same control technologies are used—— 

Chairman ISSA. No, I understand that. But here’s the point. 

Much of this standard for particulate is below what you say is safe 

by your own figures. So under NAAQS, when you say you get down 

to this level, you now have clean air. You’ve defined ‘‘clean’’ and 

‘‘safe.’’ And yet in this regulation, you’re regulating a standard 

lower than what you say is necessary. In a nutshell, isn’t it true 

that your regulatory authority ends at the point in which air is 

safe? 

Mr. PERCIASEPE. We are—— 

Chairman ISSA. Now, wait a second. Your staff is shaking ‘‘no’’ 

behind you. So if you can answer that you think you have a regulatory authority beneath a threshold which is safe by your own 

standard, I would like to hear it. 

Mr. PERCIASEPE. Two quick points. We are regulating air toxics 

here, and it’s a technology standard that’s looking at the best available technology, the maximum available control technology—that’s 

what the MACT stands for—those air toxics. It gets those benefits, 

it gets those co-benefits of reducing fine-particle pollution which we 

think is great, and there are health benefits even below the standards. 

Chairman ISSA. The ranking member has been very generous. 

Then why is it you have 15 milligrams per cubic meter per billion, 

et cetera, et cetera. You have this 15-milligram standard, and yet 

you’re your new standard, you’re now setting—that’s what you considered safe on one hand. And then you come in below 11.5 milligrams, M3. I can’t think in terms of that small, but I agree that 

particulates, even in these small amounts, are important to look at. 

But why wouldn’t you change your standard, support it with 

science, change your standard to an amount below 11.5 before regulating before 11.5 and claiming benefits below 11.5.? Doesn’t it 

seem like you declared clean as 15, and you’re regulating below 

that and taking credit for cleaner—I’m not a scientist, and I will 

not claim to have any expertise in this. I can just look and say 

there is an inconsistency, like a set of books that don’t balance, you 

may not know where the missing money is, but if they don’t balVerDate Aug 31 2005 11:33 Jun 07, 2012 Jkt 000000 PO 00000 Frm 00145 Fmt 6633 Sfmt 6633 C:\DOCS\74039.TXT APRIL
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ance, you go looking for it. Why not have a standard that is adjusted based on science to match this greater regulatory request 

you’re making? 

Mr. PERCIASEPE. We are regulating the air toxics here, the nickel, the arsenic, the mercury, the acid gases. The control technologies that we use—— 

Chairman ISSA. But you’re claiming the benefits from the particulate. 

Mr. PERCIASEPE. But those benefits are real. Those benefits will 

accrue to the American public. 

Chairman ISSA. Then why not lower the standard to 11.5 or 

below, so that you’re consistent in what you say you want to reduce 

the particulate level? 

Mr. PERCIASEPE. The National Ambient Air Quality Standard is 

set under a science process where we have science advisors that advise us on what level is adequate—adequate for the protection of 

public health. It doesn’t mean that there aren’t public health benefits below that level, and that’s what we are looking at here. These 

are co-benefits from controlling the air toxics. That is the objective 

of this particular rulemaking. 

Chairman ISSA. Well, it’s clear as mud, but I thank you for your 

efforts. I now recognize the ranking member. 

Mr. CONNOLLY. I thank the chair. Mr. Perciasepe. 

Mr. PERCIASEPE. Perciasepe. 

Mr. CONNOLLY. I’m sorry, Perciasepe. 

The chairman asked you the question of whether any coal-fired 

power plants in the United States could possibly be compliant with 

the proposed new rule. I have a list in front of me of existing coalfired power plants—it’s a partial list—that are already fully compliant with EPA’s proposed rule, including four in my native State of 

Virginia. Despite the testimony of the previous witness that nobody 

in Virginia could be compliant, I have got four coal-fired power 

plants that are fully compliant today. Are you aware of this list? 

Mr. PERCIASEPE. I know there are some that are in compliance 

with the rules. I just don’t—— 

Mr. CONNOLLY. I would ask, without objection, this list be entered—— 

Mr. PERCIASEPE. I do know there is a new one under construction 

in your State at Virginia City. 

Mr. CONNOLLY. Mr. Chairman, I’d ask unanimous consent that, 

to the extent it exists, it be provided for the record. 

Mr. GOWDY. [presiding.] Without objection. 

Mr. CONNOLLY. I thank the chair. 

Is it not also true that nearly 60 percent of all coal-fired power 

plants that report emissions to EPA are compliant currently with 

EPA’s proposed limit for mercury? 

Mr. PERCIASEPE. I don’t know the exact number. Perhaps my 

staff behind me have an exact number. 

Mr. CONNOLLY. Again, I would ask that this be entered into the 

record. 

Mr. PERCIASEPE. To be clear, we can’t base the standard on 

something that hasn’t been met by an existing—— 

Mr. CONNOLLY. Correct. My point in asking you this question is 

that this notion that the hobnail-booted government is going to deVerDate Aug 31 2005 11:33 Jun 07, 2012 Jkt 000000 PO 00000 Frm 00146 Fmt 6633 Sfmt 6633 C:\DOCS\74039.TXT APRIL
143 

stroy industry and consumers and cut off the source of electricity 

in the United States is a false premise, given the fact that 60 percent are already compliant on the mercury standard. Is it not further true that 73 percent of all reporting units are already compliant with the proposed limit for HCI? 

Mr. PERCIASEPE. It’s likely. 

Mr. CONNOLLY. I would ask that be entered into the record, too. 

Mr. CONNOLLY. And almost 70 percent of all units comply with 

the EPA’S proposed limit for PM, particulate matter? 

Mr. PERCIASEPE. True. 

Mr. CONNOLLY. So what we’re trying to do is make at the margin 

an improvement for those not compliant, some of which, as we already heard in previous testimony, are all the plants that are probably on the chopping block anyhow, and would serve both consumers and the breathing public if they sort of used this occasion 

to perhaps move on. 

We also heard from the chairman concerns about, well, why 

didn’t you just take a lower level? Didn’t the previous administration try that tack, and wasn’t there a court ruling that it was—it 

required more rigorous enforcement? 

Mr. PERCIASEPE. On fine particles? I think it was on ozone that 

there might have been a court ruling or court activity, but I don’t 

know about fine particles. The bottom line is that there are health 

benefits, you’re talking about this rule? 

Mr. CONNOLLY. Yes, this rule. 

Mr. PERCIASEPE. Yes. The previous administration—first of all, 

there’s a 20-year—— 

Mr. CONNOLLY. Please finish your sentence. 

Mr. PERCIASEPE. There is a 20-year history here. 

Mr. CONNOLLY. You were about to say, ‘‘The previous administration’’—— 

Mr. PERCIASEPE. The previous administration proposed controls 

for mercury in 2004. 

Mr. CONNOLLY. And what did a court of law—— 

Mr. PERCIASEPE. The court threw those out because they did not 

comply. 

Mr. CONNOLLY. Yes,, that is the answer to the chairman’s question. Why are you doing this? It is not unique to the Obama administration. The previous administration tried doing what the chairman suggested: Why not just settle for a lower level? And a court 

of law said ‘‘not good enough,’’ and it told EPA in a court suit, you 

have to come up with new regulations that are tougher than that; 

is that not correct? 

Mr. PERCIASEPE. The court said that the—yes, that’s correct. 

Mr. CONNOLLY. Yes. 

Mr. PERCIASEPE. It had to be regulated under a different part of 

the Clean Air. 

Mr. CONNOLLY. Thank you. So that’s the answer to why you are 

doing what you are doing today. A court told you you had to. And 

throughout the Bush administration attempt to look to have a 

lower standard. 

It isn’t because you just in some lab somewhere decided to just 

be a pain in everyone’s side by coming up with tough, hard-to-reach 

144 

regulations, and as the data shows, they aren’t, since the majority 

of units reporting already meet one or more of the regulations. 

Was this standard on toxic pollutants envisioned or incorporated 

in the 1990 Clean Air Act amendments? 

Mr. PERCIASEPE. Yes. 

Mr. CONNOLLY. Why did it take 21 years, then, to implement the 

law passed in 1990, signed into law by a Republican President? 

Mr. PERCIASEPE. Well, it’s hard to imagine that it has taken 21 

years to get to this particular point, which obviously flies in the 

face that we’re going too fast. It has been looked at numerous times 

by EPA. There have been proposed regulations that were not properly completed. And we are in the situation now in this administration of having to be guided by the judicial branch toward the end 

that we are now aiming at. 

Mr. CONNOLLY. Thank you, Mr. Perciasepe. Thank you, Mr. 

Chairman. 

Mr. GOWDY. I thank the gentleman. 

Social studies was a long time ago for me, civics. I’m familiar 

with the legislative branch, I’m familiar with the executive branch, 

and even occasional executive branch overreach. ‘‘Sue and settle’’ 

was new to me until I got here. Does EPA ever encourage groups 

to sue them? 

Mr. PERCIASEPE. No. In fact, usually we get sued when we’re not 

doing what Congress asks us to do, and that usually is what results in us getting on a schedule that’s different than the schedule 

that Congress set. 

Mr. GOWDY. So you never invite lawsuits? 

Mr. PERCIASEPE. No. 

Mr. GOWDY. And there would never be anything to indicate that 

you had suggested that someone sue? A friendly lawsuit, shall we 

say? 

Mr. PERCIASEPE. No. 

Mr. GOWDY. Never? 

Mr. PERCIASEPE. Not that I know of. 

Mr. GOWDY. What is so talismanic about December 2011? 

Mr. PERCIASEPE. Twenty-one years waiting, health benefits denied, the—— 

Mr. GOWDY. If we waited 21 years and we have almost a million 

comments, wouldn’t you think we ought to wait maybe 22 so we 

can fully digest all 1 million comments? 

Mr. PERCIASEPE. It might be good to say something about those 

million comments since they’ve come up, if you would appreciate 

that. Of those million comments, 960,000, the vast majority are in 

favor of the rule. And of those million comments, as you know, as 

some people have systems that they can reply, only about 22,000 

are unique as opposed to duplicates of comments. 

Mr. GOWDY. Well, 22,000 is still a lot. It’s not a million. Twentytwo thousand seems like a lot to digest between now and Christmas. 

Mr. PERCIASEPE. It is a lot, but it’s not between now and Christmas. Again, we’ve been working on this rule for a long time. The 

comment period, we left the comment period open longer than we 

normally do so that we would—we expected to get a lot of comments. 

145 

Mr. GOWDY. Have you asked the court for more time? 

Mr. PERCIASEPE. Pardon? 

Mr. GOWDY. Have you asked the court for more time? 

This is a court decree, I assume. 

Mr. PERCIASEPE. That’s correct. 

Mr. GOWDY. A judgment? 

Mr. PERCIASEPE. And we recently asked the court for another 30 

days to finish the work. We have read every one of those comments, and we will be replying to every one of those comments in 

the Response to Comments document that we are currently working on. We knew that we would get a lot of comments, because we 

left the comment period open longer than we normally do, and 

therefore we put the staff to task that we would need to be able 

to review those comments. 

Mr. GOWDY. Did you have an opportunity to listen or watch the 

President’s joint address to Congress several weeks ago? 

Mr. PERCIASEPE. I did. 

Mr. GOWDY. He mentioned regulations and he mentioned some 

that are having a deleterious, pernicious effect on industry. Then 

he said we should have no more regulation than is necessary for 

the health, safety, and security of the American people. I think he’s 

identified 500 that—at least 500 that can be done away with. 

It strikes me as curious—let me ask before I say it strikes me 

as curious. Are you arguing that the imposition of this regulation 

is actually going to create jobs? 

Mr. PERCIASEPE. We believe that construction jobs and then the 

operation and maintenance jobs will be a net positive in this sector. 

Mr. GOWDY. How many coal jobs do you think will be lost? 

Mr. PERCIASEPE. You know, we expect—you know, one of the 

things you have to realize, we’re investing in—we, the country, not 

me, EPA—we are investing with this rule in coal-fired power 

plants. We are going to make a major capital investment—— 

Mr. GOWDY. I probably didn’t ask my question artfully. How 

many coal jobs do you think we’ll lose? You think we’re going to 

add some construction jobs. How many jobs will be lost? Because 

neither one of us are naive enough to believe there aren’t going to 

be jobs lost. 

Mr. PERCIASEPE. I expect that the amount of coal that is used 

will be roughly flat. The plants that we will invest in here, which 

will be many—— 

Mr. GOWDY. What analysis—— 

Mr. PERCIASEPE. —will then lock in the fact that we’re going to 

be using coal for many, many years. 

Mr. GOWDY. What analysis did EPA do with respect to job loss? 

Mr. PERCIASEPE. We have a range that we’ve identified; 9,000 

permanent job gains is in the middle of the range. There are some 

that go just slightly below zero—— 

Mr. GOWDY. I am just asking about job loss. I haven’t gotten a 

jobs gain. What analysis did EPA do about job loss? 

Mr. PERCIASEPE. Best estimate of the net gain is 9,000. 

Mr. GOWDY. So EPA did factor in the losses to the coal industry 

and others? 

Mr. PERCIASEPE. Yes. 

146 

Mr. GOWDY. Okay. My time’s up, sorry. We want to thank you 

on behalf of Mr. Connolly and myself. Give me one second. 

Thank you, and we will be briefly in recess as the third panel 

approaches. 

Mr. PERCIASEPE. We will provide the information, as I suggested 

to the chairman, in followup. And, of course, every question that 

you all have we’ll follow up with as quickly as possible. Thank you 

for your time and I appreciate the questions. 

Mr. GOWDY. Very well, thank you. 

We will be in recess for 5 minutes. 

[Recess.] 

Chairman ISSA. [Presiding.] The hearing will now reconvene. We 

now welcome Mr. Josh Bivens, he’s an economist at the Economic 

Policy Institute. Mr. Bivens, I noticed that you were here for the 

previous panel, so you recognize that pursuant to our rules all witness are sworn. Would you please rise to take the oath. Raise your 

right hand. 

Do you solemnly swear or affirm that the testimony you are to 

give will be the truth, the whole truth, and nothing but the truth? 

Once again, let the record reflect the witness answered in the affirmative. And once again, the witness is recognized for 5 minutes 

for his opening statement. 

STATEMENT OF JOSH BIVENS, PH.D., ECONOMIST, ECONOMIC 

POLICY INSTITUTE 

Dr. BIVENS. I thank the committee for the invitation to testify 

today. My name is Josh Bivens. I’m an economist at the Economic 

Policy Institute in Washington, D.C. 

My professional, peer-reviewed research standard for the ratio of 

benefits to costs of the EPA’s air toxics rule are very large. But 

somewhere along the way the debate moved on to the grounds of 

job creation, which is a little odd, because regulatory changes just 

aren’t big drivers of job growth. 

But in my testimony, and especially in my written testimony, I 

sketch out how regulatory change in general and the air toxics rule 

specifically can affect job creation and unemployment. I conclude 

that the air toxics rule, like almost all related regulatory changes, 

will have trivial effects on job growth over the longer run, but that 

over the next couple of years, particularly if the unemployment 

rate remains high, the rule will actually on net create jobs and 

lower the unemployment rate. 

Further, it’s precisely because the unemployment rate is high 

today that the rule, as implemented, as planned, would have clearly positive impacts on job creation. So in short, calls to delay implementation of the rule based on vague appeals to wider economic 

weakness, have the case entirely backward. There is no better time 

than now, from a job creation perspective, to move forward with 

these rules. 

My research which I summarize in my written testimony indicates the adoption of the air toxics rule would lead to the net creation of about 28,000 to 158,000 jobs between now and 2015. The 

primary economic impact of these rules will be in significantly 

boosting health and quality of life, leading to benefits that are at 

least five to ten times larger than the cost. But since we are here 

147 

to talk about jobs, or at least that’s why I’ve been asked here today 

is to talk about jobs, let me just say a couple of words on it. 

The job impacts of regulatory changes depend on the wider macroeconomic context. When the economy is functioning well, job impacts from regulatory changes are going to be quite small for two 

main reasons. The most important reason is just that in a wellfunctioning economy, the Federal Reserve can neutralize any boost 

or drag on overall employment growth that may result from regulatory changes through their conventional monetary policy measures. They can raise or lower short-term interest rates. 

We may criticize the specific targets that the Fed adopts at given 

times. But in a well-functioning economy they will be able to hit 

these targets. Moreover, the direct first-round impact of regulatory 

change on employment growth are going to be modest anyway, because they carry offsetting influences. So the Fed won’t even have 

to do that much to counterbalance them: On the one hand, employment, because of regulatory changes, boosted because of the extra 

investments needed to bring producers into compliance, so power 

plants, purchasing and installing scrubbers; on the other hand, a 

rise in the price level of energy because of the regulatory change 

may be transmitted to the overall economy by causing a slight rise 

in overall prices, and this may cause a reduction in spending. 

But it is clear that the first-round impacts, before the Federal 

Reserve decides to neutralize them, of regulatory change are indeterminate. It’s important to note that even regulations that have 

large measured compliance costs are no more likely to lead to job 

losses than those with smaller compliance costs. Compliance costs 

go on both sides of the job creation ledger. They represent both the 

scales, investments needed to bring firms into compliance, and they 

represent sort of the potential increase in prices that may result 

from them. 

When the economy is not functioning well, especially at a time 

like today when unemployment is high, even as the short-term policy interest rate controlled by the Fed sits at zero, this analysis 

changes. The most important way it changes is that the Fed can 

no longer neutralize any effect of regulatory changes on employment growth. So instead of the Fed counterbalancing any change, 

these changes are actually likely to have multiplier effects so they 

will ripple through the economy. 

The briefing paper that my written testimony is based on assesses the positive and negative first-round effects as well as the 

effect of the likely multipliers to the economy. And it comes to the 

finding that positive effects dominate. I just want to point out 

quickly that estimates are awfully conservative. Basically they are 

conservative because the only real adjustment to the results I make 

is the assumption that the Fed can’t or won’t lean against whatever happens to employment because of regulatory changes. But actually there’s plenty of reason to think that there will be very little 

scope for the overall price level to actually rise, given how much 

slack demand is in the economy today. Basically the idea that the 

capacity utilization rate of utilities is at the lowest rate on record, 

that regulatory changes will lead to large price spikes, is a very 

hard thing to believe. 

148 

And second, when you have economies with high rates of unemployment, chronic excess supply, they often see rapid disinflation. 

That’s what the U.S. economy is seeing, basically since what we 

now call the ‘‘Great Recession’’ started. And this disinflation actually leads to real interest rates rising, even while the Federal Reserve is trying to keep them down, and this provides a break on 

economic growth. So even if the price increase and the power generating sector is passed on to the overall general price level, this 

will actually arrest the upper pressure on real interest rates and 

this would be as likely as not to be positive for overall demand. I 

don’t include this latter consideration an effect in my paper. 

So in short, I think my estimates of the likely job impacts of the 

air toxics rule by 2015 actually allow the widest scope possible for 

the negative impacts to run free. So I think they are very conservative. 

To conclude, I want to be clear, this is not a major jobs program. 

It’s something that should be done because it will help Americans’ 

health, but it will not reduce job growth. 

[Prepared statement of Dr. Bivens follows:] 

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Chairman ISSA. I thank the gentleman and yield myself 5 minutes. First of all, I want to compliment you. I have never seen an 

economist with so many ‘‘ands.’’ I tried to listen to your opening 

statement and it was pretty amazing, because it did balance so 

many but, but, but, but—so I will look forward to going through 

your conclusions once again after the hearing and see if I can’t reconcile them. 

But let me go through a few things that I think are appropriate 

to your presence here today. First of all you’re here, funded by the 

Blue-Green Alliance; is that right? 

Dr. BIVENS. No. 

Chairman ISSA. No. 

Dr. BIVENS. I’m an employee of the Economic Policy Institute. 

Chairman ISSA. Do you work with the Blue-Green Alliance? 

Dr. BIVENS. Yes, I have. 

Chairman ISSA. Would you say it is fair to say that a coalition 

of unions and environmentalists are essentially the people that you 

work with closely? 

Dr. BIVENS. I have worked with closely, yes. 

Chairman ISSA. Would it surprise you to know that the International Brotherhood of Electric Workers, the AFL–CIO, opposed 

the implementation of this standard at this time? 

Dr. BIVENS. I did know that. 

Chairman ISSA. Without objection, I would like to enter that letter into the record. Without objection, so ordered. 

Chairman ISSA. I’m not an economist. I don’t have a Ph.D., So 

I’m going to try and make everyone who looks at the record of this 

hearing a little bit simpler. And I appreciate the breadth of your 

knowledge and capability to balance it. I’m not taking away from 

it, but I just think that most of us have to understand this a little 

differently. 

This standard does not create new, less expensive energy; is that 

correct? 

Dr. BIVENS. No, it does not do that. 

Chairman ISSA. It does, however, when fully implemented in 

2015, reduce pollutants and thus has positive health benefits; is 

that right? 

Dr. BIVENS. That’s my understanding. 

Chairman ISSA. Okay. And although there are some jobs created 

as a result of implementing this standard, those jobs are by definition either temporary, the 37,000 or so, or permanent. The permanent ones are, by definition, greater ongoing costs to producing the 

same amount of electricity; is that correct? 

Dr. BIVENS. Yeah, I think that’s correct. 

Chairman ISSA. Okay. So to put it in terms that my economist— 

economics professor at Kent State would have said, those are rocks 

in the knapsack. The benefit is you get cleaner air, and whatever 

you get from that is fine. But your ability to walk long distances 

are impeded by the rock in the knapsack. And this is an additional 

burden, an additional ongoing costs to producing the same amount 

of electricity. Would you say that’s correct? 

Dr. BIVENS. With one caveat. We’re using more labor to produce 

the same amount of energy, but we are producing cleaner energy 

than we would have without that layer. 

166 

Chairman ISSA. And the benefit of cleaner energy would be the 

health care benefits clearly, and we all agree to that. So on one 

hand you have got a rock in a knapsack; you’ve got this cost, and 

the cost is at least 9,000 permanent greater jobs, estimated to be 

about $1 billion by what we might call the low side, the EPA’s own 

estimate of best case. We will forget about the dollars. Just understand that you will have 9,000 more jobs to produce the same 

amount of electricity, and those jobs will add forever to the cost of 

producing that energy. 

So with that assumption, as we look at the speed with which 

they want to implement this, 3 years after only basically a 3-month 

look-see period, now extended by about a month, what if 100 percent of the mercury and 90 percent of the particulate worked out 

to be an answer which could be implemented with more available 

technology today? 

In other words, what if you could get 99 percent of the benefit, 

all of the mercury reduction, and 90 percent—and I’m using that 

as a hypothetical figure—of the particulate reduction, you could get 

that for a fraction of the cost. Let’s say $1 billion in additional 

costs, representing only hundreds of additional workers, hypothetically. If that were the case, as an economist wouldn’t you want 

that cost-benefit looked at, vast majority of the savings perhaps in 

health benefits, 100 percent, because at some point as you reduce 

particulates, you have a drop-off in the health care benefit improvement. I grew up in Cleveland, a place that all the walls were black, 

you could see the air when I was a young man. So I’m very aware 

of improvements made since the sixties. 

So my question to you is: Wouldn’t you as an economist want to 

have that information at your disposal to make a calculation of 

cost-benefit to the economy on a long-term basis? 

Dr. BIVENS. Yes. Basically what you’re saying is could we achieve 

the same goals more productively, less labor needed. I would say 

in the long run that sounds exactly right. I would say in the short 

run we have a jobs crisis in the country, everyone agrees with that. 

And actually those compliance costs over the next 4 years represent 

job-creating investments that will be made, that the corporate sector is showing no sign of making any other way. Instead they are 

showing signs of sitting on massive amounts of savings without 

seeing any need to do those job-creating investments. 

And so that to me is why now is the time, assuming we have 

done all the due diligence about whether or not these rules should 

be done, and if that is the case, and it strikes me it is the case, 

now is the time to do them. It is what will help solve the job crisis 

we have over the next couple of years. 

Chairman ISSA. I don’t if you were here earlier, but in the earlier 

testimony, what we had explained to us is it was 5 years of rulemaking and implementation after the passage of the Clean Air Act 

in 1990. There has been as much as a full year for less controversial, less expensive proposed rules, while this one enjoyed roughly 

3 months, now extended by a month. 

So the question would be, not as an economist, but from a standpoint of wanting to know, if going through nearly a million comments and evaluating those and evaluating the cost-benefit that 

comes from those suggestions, if that would get you 90 percent for 

167 

10 percent, and of course allow additional technology to get the 

rest, wouldn’t that be advisable for your finding the optimum benefit to the economy in the way of affordable energy, cleaner air, 

and, of course, job creation, on both sides? 

Dr. BIVENS. Yes, it would be useful to know if that was a possible 

scenario. 

Chairman ISSA. Well, we hope it is. With that, I recognize the 

ranking member. 

Mr. CONNOLLY. I thank the chairman. By the way, Mr. Chairman, you had asked earlier whether there were any coal-fired 

power plants that might meet this new standard. I think maybe 

you were out of the room when I entered into the record a list of 

coal-fired power plants right now that would in fact fully meet the 

standard, including four in my native Virginia, which contradicts 

the previous testimony. 

I now have been corrected. There are actually at least six. The 

Chesterfield power station and the Virginia City plant, both run by 

Dominion Resource, would be fully compliant today. 

Chairman ISSA. Well, hopefully the EPA will take and codify that 

list as exactly that. And I appreciate the gentleman. 

Mr. CONNOLLY. I thank the chairman, and I would also point out 

for the record that all of the at least six coal-fired power plants in 

the Commonwealth of Virginia that would be compliant are south 

of Rappahannock. They are not in Northern Virginia. 

Chairman ISSA. You don’t get to represent them? 

Mr. CONNOLLY. I don’t get to represent them, but our first witness does. You may recall his concern for poor communities bearing 

this brunt. 

Dr. Bivens, following up on the chairman’s question about trying 

to follow testimony, you’re now our third witness, and we’ve had 

actually three different sets of data in terms of job numbers. 

Our first witness cited an industry-funded study that claimed 

that perhaps as many as 180,000 jobs could be lost. Our second 

witness from EPA said that the midpoint in their analysis was 

9,000 jobs would be created. And you just indicated, if I heard you 

correctly, somewhere between 28,000 and as many as 150,000 net 

positive jobs created between now and 2015 if this rule were to go 

into effect. 

To what do you attribute the variance in these estimates? It is 

awfully hard as a Member of Congress to sort of make the right 

decision policy-wise with such a wide array of job loss or creation 

estimates. 

Mr. BIVENS. I can speak pretty clearly between the difference between my estimates and EPA. The industry-funded study is pretty 

opaque, so I can only guess what is driving it. The difference between mine and EPA’s is EPA restricted itself to looking only at 

the likely job impact within the utility sector itself, and with one 

supplying industry—steel—that is going to supply the scrubbers. I 

think they’re missing a good chunk of the likely job impacts by not 

looking at the full range of jobs created by the investment spurred 

by the need to meet the regulatory change. So that is what my 

study tries to do. It tries to look at, both within the utility sector 

and outside it, looking at both the positive and the negative. 

168 

The industry studies that I’ve seen that have chalked up big 

losses regarding this rule I think make two big common problems, 

generally. Each one is a little different. The first one is there seems 

to be a big discordance between their compliance costs and their 

price implications. So basically they have compliance costs that 

look relatively vague; say, two times as large as the EPA. But then 

they have price spikes that are like four times as large. 

Given that the compliance costs, that dollar value, is the scale 

of investments that actually support jobs, those should actually 

move pretty much in tandem with the price increases. Because the 

only reason you have to raise prices in response to regulatory 

change is if you have to hire new people in order to do the stuff 

you have to do to comply with the new regulatory regime. And so 

I think that they have consistently had price increases that are 

well out of line with what the rest of the study looks at. 

The other thing they don’t do, I think, is properly account for the 

very different macroeconomic environment we’re in right now. They 

basically assume it’s kind of what would these investments do, 

dropped into the U.S. economy at a normal point in time. We’re not 

at a normal point in time. We’ve had 9 percent unemployment for 

3 years, even while the Fed short-term interest rates are stuck at 

zero. In the jargon that’s called a liquidity trap. It’s a really important context for how the U.S. economy is operating right now. 

Mr.CONNOLLY. My time is limited. So let me ask you this question. Thank you. 

We’ve heard assertions made that this kind of regulation is a job 

killer, going to crush industry, going to actually pass on significant 

costs to consumers. And yet when one looks at the data of the 

record of implementation of the Clean Air Act since 1970, and the 

Clean Air Act amendments since 1990, the data suggests the opposite. I wonder, as an economist, would you comment? 

Dr. BIVENS. I agree with that characterization. I would urge people to look at a paper my Institute did by Isaac Shapiro and John 

Irons. They looked exactly at that; sort of forecast for what regulatory changes were going to do to jobs, price increases, things like 

that; and consistently, in the end, the cost of the regulation was 

almost always much smaller than what was forecast ahead of time. 

Mr. CONNOLLY. And the price of electricity? 

Dr. BIVENS. I’m not sure if they looked at the price of electricity. 

I would say I think the best estimate for what’s going to happen 

to the price of electricity is the EPA’s—and I see a lot of the other 

studies out there—that look far out of line. 

Mr. CONNOLLY. Just for the record, I’d repeat, in my native 

State, the Commonwealth of Virginia, since 1990 the net cost of 

electricity has actually gone down by 35.6 percent. 

With that, I yield back, Mr. Chairman. 

Chairman ISSA. I thank the gentleman. But if I can ask the gentleman a question about your State. In Virginia, for those to go 

down, I’m presuming that since it’s a rate base on their cost, that 

in fact that’s a matter of efficiency. In order to reduce costs over 

that same period of time, they produced more electricity at lower 

cost, where they’re getting a return on their capital—a regulated 

return on their capital. So in this case, where the EPA, by its own 

estimates, has a cost of implementation, those costs would be 

169 

passed on. So there would be at least a temporary spike in what 

otherwise is a cost-benefit reduction that they have been achieving 

for that period of time. 

Mr. CONNOLLY. I think the chairman makes a fair point that obviously that could happen. I would only point out, though, that contrary to our first witness’ testimony, the reason for price spikes in 

especially rural parts of Virginia, has to do with the reregulation 

of the industry, a bill that was written by the industry, in the General Assembly of Virginia. It had nothing to do with Federal regulation. 

Chairman ISSA. I appreciate that explanation. I will tell you that 

as somebody who’s seen our State go through deregulation, dramatic reduction in cost, and then blackouts, and we have partial 

reregulation, although not complete, it is one of the challenges—do 

we give the regulated utilities—and this is what I’m going to ask 

one last question to the witness—regulated utilities, when they’re 

given a cost-plus situation, they love cost. They often do not complain about cost drivers because they can pass it on, which essentially grows the benefit to their stockholders, while at the same 

time they will say they want a free market system, but not unless 

it gives them greater profit margins. 

I think the gentleman has a good point in your State, as I do in 

mine. 

Mr. CONNOLLY. I agree with the chairman. 

Chairman ISSA. At this point, I should adjourn. But I want to 

thank the witness. Dr. Bivens, you were very helpful. Your entire 

statement will be there. 

Additionally, because you had not as many witnesses but you 

had some questions related to some economic hypothetical that 

may be beyond what even in your thorough comments you provided, any additional for the next, let’s say, 7 days, and if you need 

longer, let us know, we’ll keep the record open so that anything you 

believe are missing analyses, either on the upside or the downside, 

we’d appreciate having. 

Additionally, if you could do me a personal favor, or the committee a personal favor, to the extent that you could try to deliver 

us a timeline cost of money; in other words, the cost of a delay as 

they just had of 30 days in the implementation, and the benefit 

that is potentially there from slight adjustments in the final standard, how you think the parameters of best case of a slight change 

and worst case of a slight change; because delay has a cost to 

cleaner air. Well, getting it right may have a benefit to lower cost 

and ultimately greater affordability. I didn’t see that in your earlier 

stuff. It is kind of esoteric. But I think for all of us who want to 

weigh—not just on this bill but in future hearings—do we delay to 

get it right? What is the cost of delay? Something that since we are 

talking about 1990 until today, I think we have to put in that perspective. 

I would yield to the ranking member. 

Mr. CONNOLLY. Mr. Chairman, I support your request. And I 

think in the endeavor to try to better understand the economics of 

that, that would be helpful. 

I wonder if the chairman would also entertain asking Dr. Bivens 

to provide a little more analysis on his answer to the question 

170 

about the job number variation we’ve heard in this hearing, because we’ve heard three different sets of numbers. I certainly 

would welcome Dr. Bivens taking some time to help us better understand the different methodologies that led to those different sets 

of numbers. 

Chairman ISSA. Absolutely, to the extent that you could. 

The ranking member said it maybe more artfully than I did, because we do see where one side is looking at the costs of jobs— 

higher utility costs, and so on—and the other side, self-servingly 

and rightfully so, is looking at the jobs created. And obviously we 

want to look at the balance, particularly in regulated utility States. 

I think the doctor’s comments were exactly right on. In a free-market regulatory State, much of this could be a compression of profits 

of the utilities. Well, in those States that are cost-plus or regulated, 

it is going to be passed on. I think that is one of the things the 

ranking member made such a good point of. 

With an affirmative yes, we stand adjourned. 

[Whereupon, at 3:15 p.m., the committee was adjourned.] 

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