Tuesday, November 1, 2011

AG Cuccinelli testifies to U.S. House Committee on EPA effects

Virginia Attorney General Ken Cuccinelli

Attorney General Cuccinelli testifies to U.S. House today on harmful economic effects of EPA rule on electric utility customers, jobs particularly in Virginia.

The hearing was carried live today at 1:00 pm ET at C-SPAN.org

WASHINGTON, DC (November 1, 2011) – Virginia Attorney General Ken Cuccinelli testified to a U.S. House committee today on the potentially harmful effects Environmental Protection Agency rules would have on consumer energy prices and jobs, particularly in Virginia.

Cuccinelli testified to the House of Representatives Committee on Oversight and Government Reform on behalf of Virginia electrical utility customers about the EPA’s Maximum Achievable Control Technology (MACT) rule. The regulation creates national standards for emission levels for certain utilities.

The attorney general argued that the cost of complying with EPA regulations on utilities ends up being borne by electrical customers, with the hardest hit customers residing in the poorest part of Virginia.

The testimony is below. In addition to his testimony today, Cuccinelli added:

“Not only would EPA’s regulations drive up the cost of electricity significantly for families and businesses already reeling from a bad economy, but the EPA openly admits that it did not gather sufficient information to calculate the potential job losses and total costs to the American economy due to its regulations.

“We must also remember the inevitable economic impact on our state’s poor people. With increased energy costs and potential job losses in the coal industry, the reality is that they are hurt first and worst by new regulations.

“How long can we pretend that these costs do not exist and that every regulation will bring large improvements for little expense? When we do not take these costs into account when deciding to move forward with regulations, we cripple the very economy that gave us our healthy environment.

“I am not against environmental protection. I have seven children who will live on this earth for the better part of this century, and I certainly have a vested interest in seeing that they have clean water, clean air, and clean land. But I also have a vested interest in seeing that my children have the opportunity to get good jobs and achieve at least the same standard of living we have today – if not a better one.”

U.S. House of Representatives


to the

Committee on Oversight and Government Reform

November 1, 2011

Chairman Issa, Ranking Member Cummings, and members of the committee, I am Ken Cuccinelli, attorney general for the Commonwealth of Virginia. I want to thank the committee for its invitation to speak about the MACT rule.

One of my duties as attorney 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 the

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 the 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 I represent who pay the cost.

This is not to say that environmental regulations should automatically be rejected because they impose some costs. But it does mean that the EPA should follow the proper procedures to ensure the alleged benefits of the regulation outweigh the real world costs.

Unfortunately, the EPA has not been following normal procedures. In its Regulatory Impact Analysis for the MACT rule, the EPA conceded that the rule would increase electricity prices and would cost jobs in certain sectors. Yet 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 between 10 and 35 percent. That can be a financial death blow for businesses struggling to meet payroll and families on fixed incomes.

Second, retrofitting power plants to meet the standards will be prohibitively expensive, so there is 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 blackouts. The EPA even concedes that at least 10 gigawatts of electricity will be lost from the nation’s power grid; but FERC says over 80 gigawatts.

Third, while the EPA says it cannot quantify the number, it acknowledges that jobs will be lost. There are estimates of 180,000 jobs per year between 2013 and 2020.

For Virginia, the situation is even bleaker than for the rest of the nation. 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 expensive 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 is prudent policy simply cannot be made without considering these impacts – and not just for Virginia, but for the entire country.

What is even worse is that for a regulation this important, the EPA set just 104 days to review the more than 960,000 public comments on the impact of the rule. Compare this to other significant rules where the EPA set review periods of more than a year – and there were less comments.

This abbreviated review period occurred because groups that support the EPA’s position sued the EPA and then, in a friendly settlement, the EPA agreed to the short review period. This gaming of the system is an affront to proper procedure and the rule of law.

This obvious attempt to rush this rule through was so outrageous that I, along with 23 other Republican and Democrat states attorneys general, the governor of Iowa, and the territory of Guam, filed an amicus brief asking the court to not approve the consent decree’s short time period. (Democrats: Arkansas, Mississippi, West Virginia, Kentucky, and Tennessee.)

Given these major economic issues, it is not good enough for the EPA to say 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 outweigh the costs. If EPA needs more time, it should take it, instead of gaming the system by entering into a consent decree that shortens the time for review.

Thank you again for the opportunity to address these issues.

[END of testimony.]

Posted By Valerie Garner

Categories: National, Politics, State Politics

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