S711. UNITED STATES ENVIRONMENTAL PROTECTION AGENCY WASHINGTON, D.C. 20460

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THE ADMINISTRATOR The Honorable Terry E. Branstad Governor of Iowa State Capitol Des Moines, Iowa 50319

Dear Governor Branstad:
Thank you for your letter of August 3, 2011, expressing concern over potential impacts of the proposed Mercury and Air Toxics Standards ("utility MACT"), and the recently finalized Cross-State Air Pollution Rule (formally called the "Transport Rule").
Let me first address the Mercury and Air Toxics Standards proposal which you asked us to withdraw. The comment period recently closed and we have received over 840,000 comments from the public, the majority of which are highly supportive of these standards that will dramatically reduce harmful air pollutants emitted from power plants across the country.
You state that the costs of compliance with these standards are not justified by the health benefits and therefore, the proposal should be withdrawn. The facts show otherwise. The proposal includes a "full and technically accurate economic impact assessment and robust modeling" as you call for. If you review the analysis you will find that the public health and economic benefits far outweigh costs of implementation. The U.S Environmental Protection Agency estimates that for every dollar spent to reduce pollution from power plants, the American public and American businesses will see up to $13 in health and economic benefits. The total health and economic benefits of this standard are estimated to be as much as $140 billion annually.
In addition, the EPA carefully analyzed the issue of electricity pricing, working closely with the Department of Energy. Our modeling shows that these proposed standards would result in relatively small changes in the average retail price of electricity, primarily due to increased demand for natural gas, keeping electricity prices below 1990 levels. This translates into a 1.3 percent increase in residential natural gas prices and a consumer electricity price increase of approximately $3-4 per month.
The proposed standards, which will save thousands of lives and prevent tens of thousands of asthma and heart attacks, are both reasonable and achievable, and many sources already are meeting them. Investing in pollution control at power plants creates high-quality American jobs in manufacturing steel, cement, and other materials needed to build pollution control equipment, and in installing, operating and maintaining that equipment. The EPA estimates this proposed rule will provide employment for thousands by supporting 31,000 short-term construction jobs and 9,000 long-term utility jobs. These jobs would be distributed nationwide, in proportion to the number of coal-fired units that need upgrades.
Likewise, the Cross-State Air Pollution Rule, which the EPA finalized in early July, also includes a full cost and benefit analysis which shows the health benefits far outweigh the costs. Following the Clean

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.http //www epagov Recycled!Recyclable . Printed 'with Vegetable Oil Based Inks on 100% Postconsumer, Process Chlorine Free Recycled PaperAir Act's "Good Neighbor" mandate to limit interstate air pollution, the rule will help states that are

struggling to protect air quality from pollution emitted outside their borders. The rule will protect over 240 million Americans living in the eastern half of the country, resulting in up to $280 billion in annual benefits. The benefits far outweigh the $800 million projected to be spent annually on this rule in 2014 and the roughly $1.6 billion per year in capital investments already underway.
Finally, you mention that fine particulate matter (PM) is already regulated under the Clean Air Act and therefore the power plant rules are duplicative of existing regulations. That is not the case. The existing PM air quality standards establish limits on ambient concentrations of PM to protect public health and welfare. These standards impose no controls on emissions sources. The EPA works with states and local areas to help identify cost-effective implementation solutions to meet those standards. The Cross-State rule and the MATS proposal are examples of such national and regional solutions that will provide significant emissions reductions to help bring areas into attainment with the PM ambient standards.
I too appreciated the opportunity to meet and our discussion back in June, and thank you again for your letter. If you have further questions or concerns, please contact me or your staff may call Sarah Hospodor-Pallone, Deputy Associate Administrator for Intergovernmental Relations, at 

### (202)-564-7178.