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environmental officials from california, indiana, wyoming, wisconsin and new york testified on the hill this week on the challenges and successes with the epa's greenhouse gas emissions rule for power plants. the senate environment and public works committee convened the hearing. senator jim inhofe chairs the committee while senator barbara boxer serves as ranking member. this is just shy of two hours.

good morning. before we begin let me get clarification senate armed services committee -- embraced by everyone but we'll use it that is when we hit the gavel whoever is here we'll go by the early bird -- we'll go by seniority. then those who come in after the gavel we'll get to them after everyone is already taken care of. so with that i'll make note of who is here. if you would do that. we'll bring this meeting to order. great to have the panel. had a chance to meet each one of you. i really do think the most important thing when we get into these rules and regulations is the state perspective because they are the ones who have to carry these things out, have to pay for all this stuff. so we're here today with state official officials and on the co-2

regulations for power plants the clean power plant is unpre unprecedented on what it will impose on state governments what you have to carry out. the proposal undermines the long standing concept of the cooperativeness and clean air act where the federal government is network in partnership with states to achieve the underlying rules. the rule forces states to redesign the ways they generate, manage and use electricity in a manner that satisfies president obama's extreme climate agenda. to date we have 32 states who opposed the rule. 12 states including my state of oklahoma are suing the agency over a lack of authority promulgate the proposals. nine states have passed resolutions in their legislatures that express limits

to the proposals application. five states have passed laws that would limit the proposals application. had the epa engaged in meaningful dialogue with these states the agency would not be rushing ahead to impose such an unfair and unworkable and likely illegal regulation. while the epa is busy selling this as a plan to save the world from global warming we know that this rule will have impactminiscule impacts on the environment. last week mccarthy admitted the agencies has done any modelling that would measure the impacts on temperatures and sea level rise. there's a reason for that. the reason is that nara a very highly respected group on economic modelling and analysis used the epa's models and numbers and found after spending $479 billion over a 15 year

period we would see the double digit electricity process increase in 43 states, reduce grid reliability resulting in voltage collapse and cascading outages. however the clean power plant would reduce co-2 concentrations by less than 0.5% global average temperatures rise would be reduced by only 0.01 degrees fahrenheit and sea level rise would be reduced by 0.3 millimeters which is the thickness of three sheets of paper. any perceived benefits would be rendered pointless by the continued emissions growth in india and china. hold that up higher so we can see it. that a good chart there. you can see the problems. this is the whole point that administrator jackson was talking about you know what we

do unilaterally here in the united states isn't going to have that much effect on other countries. these results or lack thereof show that this rule is not about protecting the environment or saving lives of the local citizenry, this proposal is about expanding the government's control into every aspect of american lives as m.i.t. climate scientist richard lind don't and he's one of the foremost climologyists in the country. controlling climate is a bureaucrat's dream. you control carbon you control life. epa's rush timeline in practical assumptions and arbitrary mandates pay no mind to the fact this will be damaging to state economies and local residents. their proposals are nothing more than blatant and selfish power grab. we have been through these arguments multiple times before most recently when the president failed to garner enough support for cap and trade under the democratic controlled house and

senate. back when nancy pelosi was a majority and the white house and house and senate. couldn't get a majority vote in order to support this. so i appreciate very much all of the people coming so we can hear the voices from the states. and it's nights of you to take the time to be here. senator boxer. >> thanks so much mr. chairman and i want to welcome all of our witnesses and very proud that mary nichols is here. she's really a legend in our state. and has worked on the environment for her whole adult life. and she now is executive director of the california air resources board. she's going to describe the successes that we're having. i'm also proud that my home state of california has been a leader in this field and here's the deal. we're prospering. we have to reduce carbon pollution in order to address dangerous climate change. and we can't wait any longer because we're seeing the impacts all around us. according to nasa the ten

warmest years on record occurred since the year 2000. in 2014 was the warmest year on record. now people can put their head in the sand but that's the fact and facts are stubborn things. according to a new peer review research and the proceedings of the national academy of sciences and i trust my colleagues respect that, california's record temperatures are driving the state's extreme drought and scientists predict it will get worse over the coming decades. just two weeks ago scientists at nasa and at or kneel and columbia found if we fail to act aggressively to cut carbon pollution we have an 80% chance of a mega drought in the entire west. in the face of all this peer review science showing the impacts from uncontrolled dangerous carbon pollution, states really should be working together to find solutions to prevent climate change. let me say we know the american people want action. this isn't a guess.

this is a poll. in a stafford poll 83% of americans including 61% of republicans if nothing is done to reduce emissions global warming will be a problem in the future. again you can sit here and say it's not an issue but the american people are in disagreement with that conclusion. ultimately climate change deniers in the senate continue to attack the landmark clean air act just last week our majority leader senator mcconnell told state governments to ignore the clean air act. imagine ignore the law of the land and one of the most popular legislative actions in our history. so we know we can reduce carbon while growing the economy and i want to talk about california here and the regional greenhouse gas initiative where new york is prospering. california is on a path to cut

its carbon pollution by 80% by 2050 as required under our greenhouse gas emissions law. ab 32. the people who tried to overturn that lost at the ballot. during the first year and a half of the state's cap and trade program, california added 491,000 jobs, a growth of 3.3% which out paces the national growth rate of 2.5%. we are living proof that growing the economy and a safe environment go hand-in-hand. and we are a very large state. this has benefitted the middle class. i want may interest you to know that the energy information administration found last month that california's monthly residential electric bill averaged $90 compared to oklahoma's monthly bill which averaged $110. under california's climate program many consumers are even receiving twice a year climate

credit of $35. that further lowers their utility bill. so california, new york and other states around the country should be proud of their leadership in putting forward real solutions to climate change. and showing that meeting the goals of the clean power plan will benefit our states and our people. i look forward to hearing from today's witnesses. thank you, mr. chairman. >> thank you, senator boxer. we're going to have some introductions by their request of some of our members of the panel. let's start with senator grasso. >> thank you very much. it gives me great pleasure to bring greeting from the committee to one of our, those witnesses this morning which is todd parfitt who is the director of the wyoming department of equality. he has a long history of working in wyoming and specifically working in this department. you'll remember mr. chairman our

former wyoming department of environmental quality spoke here testified a number of years ago. todd has worked closely with him and has succeeded with him and is now our director. it's interesting mr. chairman, because today as todd was the he will have worked with the democrat governor and a republican governor in wyoming and as always has put wyoming first, has done what's best for our state and our environment and it's privilege for me to introduce one of those testifying director of the department of environmental quality for wyoming todd parfitt. thank you. >> thank you senator grasso. anyone else here for introductory purposes? we'll go ahead and start with our testimony. we would like to ask you to do your best to confine your time to the time required. we'll start with you mr. myers and work to the end to ellen nowak.

you're recognized. >> thank you chairman inhofe ranking member boxer and the committee for inviting me here to testify. i'm michael myers. my perspective is slightly different from those of other members of the panel. as an environmental lawyer i've worked for the past 15 years at the attorney general's office counselling state regulators on legal issues related to air pollution and climate change and litigating those issues in the courts. it's particularly appropriate that the committee should seek to hear state perspectives because under the provision of the clean air act section 111-d states are in the driver's seat. but for us to succeed in this critically important area, each state has to be willing to take the wheel. from the perspective of state new york that's already taken action to cut power plant greenhouse gas emissions i have

good news for other states. you can significantly reduce these emissions from the power sector and do so in a way that helps grow your economy. new york and other states in the regional greenhouse gas initiative have reduced by 40% from 2005 levels and reinvesting the proceeds from the oxygen of pollution allowances in renewable and energy efficiency projects has kept down electricity costs in our region. epa's clean power plan would build off the work that the states like california have done. it would cut greenhouse gases from power plants by 730 metric tons equivalent to the annual emissions of powering half the homes in america. the shift to cleaner generation would also result in substantial public health benefits. including 150,000 fewer asthma

attacks by 2030. but back to the point i started with. for this plan to work, states have to be willing to step up. some are discouraging states from doing so on the grounds that the clean power plan is unlawful. my written testimony highlights why such arguments are meritless. first, under section action under section 111-d to address greenhouse gases from fossil fuel power plants are required. law requires epa to ensure that states achieve emission reductions from power plants necessary to protect human health and welfare from the harms of carbon pollution. second, epa's regulation of hazardous air pollutants from existing power plants under one provision of the clean air act does not preclude the use of section 111-d to require those floonts cut their greenhouse gas emissions. the implication of that claim is

that epa had a choice. it could either use the act's hazardous air pollution program to cut power plant mercury emissions that ss that poison the fish we eat or use the provision the supreme court says speaks directly to power plant carbon emissions. not only does this interpretation defy common sense it's wrong as a matter of law. third, it is clear that epa has the authority to set substantive emission limitations for states to meet. in the absence of such a benchmark state plans could vary widely in terms of their stringency and effectiveness. states have a lot of flexibility, however on how to achieve they're emission targets in a way that best suits their respective circumstances. fourth, it's also clear that epa has the authority to interpret the best system of emission reduction to reflect the various

ways in which states and utilities have reduced greenhouse gas emissions from the electricity sector. epa's building blocks approach appropriately recognizes successful strategies such as cap and invest programs, renewable portfolio standards and energy efficiency. that states and utilities have already shown can significantly reduce carbon emissions and do so cost effectively. in conclusion here's what i would urge state regulators to consider. the world scientists are telling us that we need to act now if we're to have a chance of avoiding catastrophic harms from climate change. our faith leaders are telling us we have a moral imperative to act. the law, the clean air act requires us to act. and epa's plan for cutting greenhouse gas from existing power plants is on sound legal grand. we're open to working with you on how best to cut emissions in

your state. the time is now for state leadership so take the wheel. thank you for the opportunity to testify and i look forward to answering the committee's questions. >> thank you, mr. myers. mary nichols is the chairman of the california air resources board. you're recognized. >> thank you, chairman inhofe ranking member boxer members of the committee. thank you for inviting me to be here. i am mary nichols chair of the california resources board and i'm honored to be here to support epa's proposed clean power plan which we believe will unlock state innovation across the country to protect our people and grow our economies. the framework proposed by epa is a workable, practical plan that will cut carbon pollution along with other forms of pollution with a focus on increasing energy efficiency and the use of cleaner domestic energy sources. it provides an opportunity for a better future. this is a future that we are already working to create in

california. our success story has been one of bipartisanship. the 2006 california warming global warming solution act was signed by our republican governor schwarzenegger who appointed me to this position and our democratic governor jerry brown who has reappointed me and also more importantly put clim change at the core of his agenda championing our successful carbon market ramping up green energy programs and working nationally and internationally to spread solutions that will protect our vulnerable citizens our extremely valuable agricultural industry, our coastline and our forests against the already growing reality of climate change. californians overwhelmingly support our board's efforts to move california towards cleaner and more efficient sources of

energy. and to address the grave athlete that global warming poses to america and to the world. i'm here today to share some of our successes with you and to emphasize that the epa is using its clean air act authority in a way it was meant to to spread success across the country and to encourage each state to develop its own plan to cut carbon pollution and to grow its economy. and i'm going to skip some of what's in the prepared testimony because i really want to focus on the fact that we believe that working together not just as an environmental agency but under the direction of our governor with the public utilities commission and our energy commission as well as the independent system operator that controls the transmission wires we can deliver not only a more resilient energy system but we

can also meet an even exceed the targets that epa has set. we're on track for a third of our state's energy needs to be met by renewable energy by the year 2020 and governor brown has establish ad goal of getting to 50% of our energy from renewable resources by 2030. our carbon wide carbon intensity has already fallen by nearly 5% since 2009 and it will keep falling. now that's not only due to electrical power plants. it's also due to cleaner fuels and cleaner vehicles which are an integral part of our plan, the power plan, the epa power plan is only one piece of the overall president's climate plan but it is an important one. but the main thing i want to emphasize is that this is happening at the same time that california is prospering. we're growing jobs. we're growing our economy faster than the rest of the country. we have grown our jobs since the carbon market has gone into

operation by 3.3%. personal income and wages are up. again, growing at rates well above the national average. our electric power grid delivers power reliably, resiliently and efficiently thanks to the continued stewardship of the transmission operators and as senator boxer indicated, power bills are actually down. californians pay the ninth lowest electricity bills in the country. states all across the country and we do talk to many of our colleagues are discovering that clean energy pace big dividends. for example oklahoma is on track to exceed its 15% renewable energy target for 2015 thanks to a very successful wind energy industry. a policy that has yielded billions of dollars in investment in that state and hoped the cut pollution. of course california and oklahoma are not alone. we know that texas often billed

as our rival in many ways leads the nation in wind industry and many states in the midwest as well as the west and south are taking action to ensure their ratepayers and their citizens against risks to reliability that come from dirty and inefficient coal plants by replacing them with cleaner power and energy efficiency investments are being used again in states red and blue to cut power bills. we think that the clean power plan will encourage states to take broader advantage of strategies that they are already using, saving money and invigorating economies across the country and, of course, to the extent that they choose to work together around their regional grids they will do even better because we all know that a regional approach will be more cost effective for all. as a result, we believe that the net benefits of this plan amount to something like 48 to 82

billion dollars in 2030 representing lives saved, six days avoided and climate risks abated as well as greater productivity lower costs and more efficient and secure energy system. so bottom line is clean power plan builds 40 years of success. federalism and confronts us with an opportunity to address one of the host to severe challenges of our time in a way that can also create new jobs and increase our energy security. thank you very much. >> thank you, miss nichols. thomas easterly is commissioner of the indiana department of environmental management. you're recognized. >> thank you, chairman inhofe ranking member boxer and members of the committee. good morning. my name is thomas easterly and i'm the commissioner of the indiana department of environmental management known as item. i bring you greetings from the governor and i appreciate the opportunity to share with you

indiana's current perspective on the environmental protection agency's proposed 11-d regulations for fossil fuel electric generating units. the proposed regulations will detrimentally impact indiana for a number of significant reasons. we are the most manufacturing intensive state in the united states. more than 80% of indiana's electricity comes from coal. we have a 300 year supply of coal in our state and 28,000 hoosiers are employed in the coal industry. we recognize that we need all forms of energy to power our economy and the administration is developing an undated energy plan for the state that will continue to foster greater use of renewables and other energy source but at the same time we know coal is a crucial hoosier energy resource that must continue to be utilized. our mission is to protect hoosiers and our environment. following release of the proposed rule my office carefully examined the proposal in light of our mission.

we also engage private-sector stake holeders and state agencies in an extensive review of the proposal and its potential impacts. our analysis came to one conclusion. this will cause significant harm to hoosiers and most residents of the united states wouldn't providing any measurable off setting benefits. for those reasons indiana's office of energy defendant, office of consumer, department much natural resources, and my agency filed joint comments urging the usepa to withdraw this proposal. the letter from the governor has been shared with the committee. the most ironic impact of the proposed regulations is that they are likely to increase worldwide greenhouse gas emissions by decreasing the international competitiveness of u.s. business due to increased energy costs. competitive businesses have been

engaged in savings for decades. the total cost of the products produced in the united states will need to increase eroding our international competitiveness and resulting in the loss of manufacturing jobs in indiana and across the nation. when these businesses close u.s. emissions will decrease but worldwide greenhouse gas emissions will increase as our businesses move to areas with less efficient and more intensive carbon supplies. indiana once held a competitive advantage due to our low cost of electricity. not any more. indiana's low cost of electricity advantage has slipped and epa regulations have significantly contributed to that change. state utility forecasting group in indiana has forecasted a 30% increase in indiana electrical costs in part from usepa regulations already in place and the 111-d proposal will add additional costs on top of that 30%. usepa itself predict its 111-d

proposal will increase the cost of natural gas and cost per kilowatt hour by 10% in the next six years. furthermore increase in energy costs hit the poor, elderly and most vulnerable in our society first. at a time when indiana is doing all that it can to grow its economy and create jobs the epa's proposal create as very real possibility that the increased energy costs will slow our economic progress and raise people's utility bills. in indiana we're obviously concerned about the economic impact of the epa's proposed rules on business and consumers but we have filed 31 pages of technical comments. we want to make sure the rule does not result in unintended consequences such as reduced reliability resulting in brown outs or not yet having all the necessary infrastructure in place to convert from coal to natural gas. for purposes of due diligence

indiana is investigating all proposed responses from submitting a state plan to participating in a regional approach or simply refusing to comply at all known as just say no option. however the fact that this misguided policy will harm hoosiers and other people in our country while actually increasing the worldwide level of the very emissions it is designed to increase compels indiana to oppose the proposed regulations. thank you for the opportunity to share our views and we welcome your questions. >> thank you, mr. easterly. todd parfitt is the director of the wyoming department of environmental quality and you're recognized. >> good morning, chairman inhofe. ranking member boxer. and members of the senate environment and public works committee. my name is todd parfitt. i am the director of the wyoming department of environmental quality. i thank the committee for inviting the state of wyoming to share its perspective on the clean power plan. state of wyoming has provided

extensive comments to the environmental protection agency on its proposed rule. in wyoming we take great pride in how we manage our natural resources providing for environmental stewardship and energy production. as our governor has stated it is a false question to ask do we want energy production or environmental stewardship. in wyoming we must and do have both. wyoming sends electricity to both the eastern and western power grids. reaching from iowa to washington. wyoming generated 49.6 million mega watt hours of electricity in 2012 with 66% of this electricity consumed beyond our borders. this electricity generation includes 88% coal and 9% wind. epa's proposal impacts states differently. each state has unique characteristics in energy portfolios that drive the application of each of the four building blocks. for wyoming the proposed-goal is

problematic and unrealistic to achieve. epa is proposing a compressed timeline in which states are to develop and submit their state plans. considering the complexity of proposal and developing a compliance plan along with any state need legislation the timelines are problematic if not unrealistic. wyoming he's emission reduction required by 2020 which is 70% of the proposed state goal is far greater than can be achieved. this disparity is often referred to as the cliff. wyoming's evaluation identified data errors. renewable energy, since i want has the largest impact on wyoming's proposed goal. 100% of co-2 emissions from fossil fuel power plants regardless of end user will be attributed to the energy

producing state. 66% of electricity generated in wyoming is consumed outside its borders. according to epa renewable energy credits will be attributed to the consuming state not the producing state. 85% of 4.3 million mega watt of wind energy generated in wyoming is consumed outside its borders. yet when epa cal can you littled wyoming's state goal they applied 6% escalation factor to all 4.1 mellon mega watt generated hours in wyoming. more than half of the land in wyoming is owned and managed by the federal government subjecting many renewable transmission projects to nepa. while the intent is good the process is slow. a high priority wind project took over four years for nepa decision. now the fish and wildlife service requires an additional decision. two federal fast track transmission projects in wyoming

are in their eighth year of the nepa process. both are still awaiting a final decision. finally, epa's assessment of available land in wyoming for wind energy development failed to consider high priority environmental conflicts such as greater sage grass habitat, other designated critical habitats and protected areas of cultural and historical significance. factoring in these considerations reduce available lands for renewable as proposed by 83%. all of these factors thread an unrealistic goal for wyoming. now directing your attention to the two graphs. graph one depicts as a bar graph wyoming's glide path as proposed by epa. >> which one is one? >> graph one is to your right. >> thank you. >> graph one depict as bar graph of wyoming's path as proposed by

epa. one can observe the dominant influence of the renewable component as shown in green. after review wyoming determined what is practically achievable given epa's proposed avenues. this shown in graph two. the line in the graph represents wyoming's carbon emission requirements according to epa's analysis. the colored bars were derived through extensive analysis by the state representing what may be possible in wyoming. as can be seen there's a wide gap between epa's and wyoming's analysis. based on the proposed goal and with limited openings the simplest is to consider how many power plants have to be closed. four plants need to be closed representing 4200 megawatts of the state's total coal fleet of over 6600 megawatts. stranded investment for these

four would be nearly $1.5 billion and doesn't include the cost of replacement power. we look forward to continued die wlog the epa and other states as epa considers our comments and reconsiders their proposal. thank you for allow noticing provide input to your committee. >> thank you, mr. parfitt. ellen nowak is the commissioner of public service commission of wisconsin. you're recognized. >> good morning chairman inhofe ranking member boxer and members of the committee. thank you for the opportunity to speak on behalf of the state of wisconsin and provide with you a summary of our state's assessment and concerns with the epa's clean power plan. my name sell len nowak. i'm the chair person for the public service commission of wisconsin. last fall i was intimately involved with the construction of the comments that the state of wisconsin submitted to the epa and i submitted those comments together with our analysis with my written testimony for the record. wisconsin is a manufacturing

heavy state of with industrial customers representing over one-third of energy sales and more than 60% of our state's power generation comes from coal. if the problems in the clean power plan are not remedied the work wisconsin has done to restore our manufacturing sector will be threatened. as regulator i remain concerned about the reliability of the grid considering the dramatic fast shift in energy production required by this proposal. with that background and because of the far reaching impacts of the epa's clean power plan, we brought together an interdisciplinary team. this team consisted of public service commission in utility rate modelling economics and engineering along with department of natural resource experts in environmental regulation, particularly the clean air act. using a standard accepted utility modelling program we forecasted the cost of this regulation under a number of

scenarios with varying assumptions about the future. candidly, our team felt that taking into account the impacts of this regulation on every family and every business in the united states is the kind of analysis that should have been done by the epa before making such a proposal. the results of our analysis have been provided to the committee. here are two highlights. first, this single federal regulation will cost wisconsin ratepayers between 3.1 billion and 13.4 billion dollars. this is only a production cost increase. it does not include necessary upgrades to the gas and electric transmission infrastructure that will add significantly to the cost of compliance. these costs are also on top of the 11.6 billion in carbon dioxide reduction measures that wisconsin ratepayers have paid for since 2000. not only do we not receive credit for these investments under the clean power plan but the proposal actually penalizes

wisconsin for being an early actor. second, as our assumptions about this rule became more realistic the cost rose. for instance would you assume this massive increase in reliance on natural gas would drive natural gas prices high center that very reasonable assumption significantly raises the cost of this regulation. at the heart of the matter, we question the very foundation of this proposal. the epa constructed four building blocks, each of which was evaluated independently then to determine the foundation for each state's target reduction the best system of emission reduction or bscr they anticipated the carbon dioxide reduction from each of those individual building blocks. unfortunate the epa ignored how the building blocks would affect each other when all four were implemented together. increasing reliance on natural gas would decrease the heat rate achieve to far below the 6%

required under building block one. furthermore epa used indiscriminate and unsupportable approaches to determine the four building blocks. building block one applies a national level heat rate improvement to each coal fired plant regardless of the ability of an individual plant to realize these gains. in contrast building block three state renewable goals takes a regional approach sean driven by average renewable portfolio standard found in states arbitrarily ground together. as it is currently written under any previous interpretation of the clean air act the bscr system proposed by the epa is actually not a system at all. first, the building blocks are outside of the coordination and control the emission owner operator. and they cannot guarantee a certain conclusive greenhouse

gas emission reduction when implemented as a whole. engineers at the public service commission modeled the epa plan and concluded the building blocks would have a reduction. this is a far cry from the 34% that epa claims is attainable and necessary for wisconsin to comply. finally the compliance timelines in the proposal are unrealistic and unworkable. lead time required for planning per migt and construction not to mention the epa's own requirements will require the full proposed compliance period through the end of to 30. in conclusion i sincerely appreciate the opportunity to speak to this esteemed committee today. we can all agree on the need to protect our environment. but this proposed rule does not strike the right balance in protecting public health

reliability of the grid and economic security. thank you very much. >> thank you, miss nowak. in fact the end of your remarks answered the first question i was going to ask you, the problem that if you submitted in compliance with building block one and yet came along and said no we have to have a federal program for two, three and four would that create a problem and i think you adequately answered that. but very similarly i would like to ask you, north carolina proposed to delay the clean power plan until a final ruling by the courts on the plan's many legal uncertaincies the. during our budget hearing the administrator of the epa talked about, i think it was $3.5 million to hire a bunch of new attorneys because of all the lawsuits and problems and i would ask you in your, in the state of wisconsin you could end up taking steps to comply with

the clean power plan that the state came back and found that it was ultimately out of compliance. so what kind of a problem would that be for wisconsin? >> it create as lot of uncertainty. as a regulator the parties would regulate ratepayers all want and deserve certainty about where rates are going to go and what we may do. you know, when we become commissioners they don't give us crystal balls. unfortunately we can't flook to the future but have to make the best decision based on the information before us. we ran into a similar problem in the cross state air pollution rule and utilities are starting to make movements to attempt to comply and we have to do the best to allow them to try to recover but we have to be judicious in spending rate payer dollars. we'll work closely and obviously northern the legal proceedings and any legal proceedings that wisconsin is involved in so we

don't unnecessarily spend rapist payer dollars. >> mr. easterly in your written testimony you talked a little bit and elaborated a little bit more on how the clean power plan proposal could actually increase increase the cost and increase the amount of emissions and this is a position i've held ever since lisa jackson said that no doing something unilaterally in the united states is not going to be effective. is this where the problems are as you saw in this chart with china. dew point to elaborate any more on that concept, could increase instead of decrease emissions? >> most of our businesses the basic bottom of our economy, the steel industry, the auto industry rely on energy costs and they are internationally competitive. you can buy steel from baz. you can buy steel from india.

you can buy steel from russia and use it. why would you gore bring the steel to the united states. you just bring the finished product here. so, the emissions will happen in those countries. some of those countries have decided to, like i understand that china signed an agreement to consider stopping the growth of their emissions by about to 30 but between now and 2030 those emissions, they are still much higher per unit production than we have here. so as our businesses, have to stay in business by being internationally competitive, i'm very concerned that total emissions will go up. >> thank you very much. miss nowak, have you done an analysis as to how much of a rate increase would the psc have to approve to implement this plan? >> we expect it to be in the double digits. depending on which method of compliance we use. it could be easily into the

upper 20% of an increase. right now we have more of an aggregate number three to 13 billion dollars for the state to comply. how that's broken down on a per rate payer increase will be flushed out as we know more details and utilities come in and ask for recovery. but this is going to be a significant increase on rate payers all across the board, low-income to large manufacturers. >> thank you. and i'm going to be either asking you for the record, mr. myers, or if there's time at the end of my six minutes if you would agree with the position that many have taken that wouldn't it be better to wait until these controversial legal issues are cleared up before requiring them to comply? i hope we have time because i do want to hear your answer to

that. so i would say to miss nowak, mr. easterly and mr. parfitt, what parts of the clean power plan will require enactment of new laws in your state and how long would it take to develop pass and impleamen these laws? let's start with you mr. parfitt. you haven't been asked yet. >> mr. chairman, as far as legislation that may need to be put into place, anything that would replate to a multi-state plan if there were to be one developed would certainly need some legislative discussion. anything dealing with renewable portfolio standard basically the building blocks three and four would likely require some sort of legislation. now, the timing of that is our legislature meets for a 40 day session and then a 20 day session. so alternating. our next session coming up is a budget session. so you know there's some

timing concerns related to when something could be brought forth to the legislature in a meaningful way through an interim topic study as well. >> mr. easterly? >> so in indiana our legislature also doesn't meet year round so the next time when they could consider things is 2016. we don't have authority for building blocks two, three and four and then if i have to pass rules within an 18 month rulemaking process. years out. >> any further comment? >> we have at least a three year rulemaking process on a controversial rule which i would submit this would be one. we would also have to change -- we don't have authority over building blocks three and four if we were to increase our rps or change our efficiency standards that requires legislative action as well which adds to the timeline. >> senator boxer? >> thank you. what i'm stunned by is some of the states attitude of gloom and doom when we have states that are doing this, prospering far more than your states and that's

what kind of stuns me. but it's okay. i respect your view. i want to ask mary nichols this question. when you listen to mr. easterly respond to my chairman and they said actually these rules could mean that we would be increasing carbon worldwide because some companies will leave the states because they will be so upset at these rules. have we found companies running away from california? last i checked silicon valley was booming everybody was -- we have increases in manufacturing. am i wrong on the point? >> you're not wrong senator boxer. we have experienced growth across the board but particularly in the clean energy sector in california because of our policies. we are the leading state in terms of investment and clean technology. and also in renewable energy in the country right now, solar energy in particular is booming,

obviously we have some natural advantages in california in terms of renewables. and i think it is important to say that there needs to be transition time for all industries and all states. when we implemented our cap on carbon emissions with a trading program there were many who were concerned about rising costs of electricity to our manufacturing sector. it's a critical concern for everybody along with reliability. no state, no governor can afford to take risks with the lights going out in their state. that is job one no matter how much we care about the environment or greenhouse gases and we do profoundly we know that our job is also to make sure that the lights stay on. so, i think it's important to recognize that this proposal that epa has put out does have within it the flexibility and the time that's needed. i recognize the concerns of my

fellow states. i think they are legitimate concerns. but i would assert that the proposal as epa has put it out which admittedly they will be modifying as they go forward can address those concerns. >> i think that's such an important point because you make it very clear that we need a transition time and we started a little earlier and i think epa does get that. jean mccarthy gets that. she's very sensitive to the states. mr. myers, i wanted to ask you. last rather former epa administrator who served under george w. bush testified before our clean air subcommittee that it was settled law that the clean air act can be used to control carbon pollution. are epa's proposed carbon standards supported by the three supreme court decisions in massachusetts v epa 2007, american electric power v connecticut 2011 and utility air

regulatory group versus epa, june 23rd, 2014? >> yes, they are, senator. the massachusetts versus epa case as you may recall recognized that epa has the authority under the clean air act to regulate greenhouse gas emissions, and the connecticut versus american electric power case was a case that was new york was involved in where we >> the supreme court, again reaffirmed epa's authority under the clean air act to bring down greenhouse gas emissions. and they're found that one of the acts in the source permitting program if you're

emitting a certain amount of pollutants, then you also have to provide the best available control technology for co2 emissions. so i think all tolled, those decisions provide a sound foundation. >> thank you. last month, the chief en environment al environmental regulated utilities surf of wyoming stated with the clean power plant, and i quote, and i'd like to get your reaction to that. if the state wants to push back against the plan, that's okay. but we really do have to have a back-up plan because if not, to be caught in the situation, we don't have any option. and that's the worst of all positions to be in. she also stated the clean power plants 20-30 tar gets are achievable and urged wyoming to collaborate with other states.

do you agree with rocky mountain power that wyoming would be best served by completing a state compliance plant? >> i can't speak specifically, but what i can say is that our evaluation to look at the entirety of the plan, it doesn't prove for wyoming. as shown in the charts, the building blocks don't work for wyoming.

>> yes, we have provided comments and have had discussions since the comment period. >> good, thank you. >> thank you, mr. chairman. . during the time that we were on the campaign trail, one of the items that we talked about a lot was one of the an tis pated costs and the increase and their cost for electric rates. the united states chamber of commerce last summer, i believe, estimated that the average cost to the average american family would be approximately $1400 more per year in their electric rates. i was curious, mr. parfit in a

recent statistic that comes in the case of my state south dakota, that our electric rates would increase probably about 20% or more as a result of the clean power plant. this is significantly more than the 8.8 cents per kilowatt hour that south dakota is paying now. compliance costs for the 111-d proposal could well-exceed if the dollars per ton of carbon. what impacts would this have not only on rate payers in wyoming, but also on rate payers in surrounding states. i know that people in south dakota have received power from wyoming. as you indindicated earlier, you've been an exporter of power. could you share a little bit about what this would have to rates or people in the other states, as well. >> well, yeah.

and we do provide power to many other states. and if our compliance paetth, as we've viewed it based on the proposal, results in the pre-mature chose sure of plants and the stranded assets, it would likely result in raising of rates for all the customers, not just those in wyoming. that would be shared across the network. >> how does the epa propose that you respond to those stranded costs. what's their expectation? >> this is an issue that we had raised with epa before the proposal was put out to notice. in hopes that that would be

taken into consideration. we don't see, at least at this point, the off ramp. we've expressed this concern with the epa and comments and we're waiting to see how they might respond in june when they come out with the final proposal. >> so you have not had a comment back? or there is not a process in place within this to get a response back for the stranded state that you had and other states would also expect the electricity or the places where your organization of contracts would provide on going electrical power? >> at this point, epa has not conveyed to us how they would address that particular comment. the conversations we've had with epa have been primarily to get verification on some of the corrections that we pointed out within the proposal itself. >> the epa claims that the rules

give states flexibility to create their own plans. but it appears that it overlooks the fact that electricity transmission does not stop at state borders. many states help support their own electricity generation and support the reliability of the grid and suggest that under the 111-d proposal 111 could cut its generation by 1.75 million megawatt hours. how will you continue to power and is that an 5:00 rat state? >> as far as how we would continue if we were looking at closing down existing power plants that would create a reliability issue, however this is getting a little bit out of my expertise within the expertise of the public service

commission, in terms of how to maintain the reliability of service to all of its customers. >> thank you chlgt appreciate your time. mr. chairman, i yield back. >> thank you, senator rounds. senator carver? >> glad to see you. thanks for the work you do and the thoughts to us and responding to questions. i come before a lot of these issueses, not as a sitting senator, but as a recovering governor. i want to share a little bit with you from the perspective of the state of d e de ke. delaware. >> i could have shut down the economy of my state. and we would have been out of compliance. and the reason why is because the folks who were cleaning cheap electricity to the west of us, somebody put bad stuff up in the air and it came out of the way.

i'm a big believer in the golden rule. epa needs to be mindful of them, as well. but i just want you to know that there are other folks that have been adversely affected by the able of some people able to develop cheap electricity, dirty electricity. and we suffer the consequences. we went to court to stop that and we finally have succeeded. get in the car with me and use your imagination. we're in southern delaware. we're driving on pine hook road to the east to the delaware bay. and we get to the delaware bay. it used to be a parking lot there. a big parking lot there. it's not there anymore. well, actually, it is. it's under water. you look off to the right,

you'll see a bunker sticking up out of the water ab500 feet out. it used to be about 500 feet on the land. and now it's 500 feet out in the water. something is going on here. we don't make this stuff up. and the key is, for us, how can we have cleaner air. how can we address the issues of cleaner air. i'm not interested in seeing epa jam anything down your throats. but we need to think of how to work on this together. one of the issues to create a lot of electricity, my understanding of the rules that are being con testimony plated here, you don't get a lot of credit for that. and the credit, i guess, goes to california and those e those other states. we ought to be able to figure out how to deal with that. we ought to be anyone to use some common sense in figuring out how to deal with that. okay? i want to ask a question -- the lady from california.