WASHINGTON, DC – Building off its previous work examining the EPA’s new cap and trade rules, the Energy and Power Subcommittee, chaired by Rep. Ed Whitfield (KY-01), on Thursday held a hearing examining the legal issues relating to the EPA’s carbon dioxide (CO2) regulations for new and existing power plants. The EPA’s regulations, including two final rules and a third proposed rule, seek to fundamentally change the way we generate, distribute, and consume electricity in the United States.
Subcommittee Chairman Whitfield commented, “Unilateral EPA micromanagement of electricity generation is a recipe for higher bills, reduced reliability, and job losses that are well out of proportion to any environmental benefits. The fact that 16 states have no choice but to sue the agency over these rules is a sure sign of an unhealthy federal-state relationship and a policy that won’t work. The House passed the Ratepayer Protection Act to address the legal and policy shortcomings of the rule for existing plants. The whole regulatory scheme rests on an implicit deception – a bait and switch.”
Elbert Lin, Solicitor General of West Virginia, challenged the legality of the EPA’s regulations for existing plants in his testimony, stating, “The Section 111(d) Rule – called the ‘Clean Power Plan’ by EPA – was unlawful when EPA first proposed it in 2014 and remains unlawful today. … The plain language of Section 111(d) does not authorize the Power Plan, and therefore the entire rule is illegal. … EPA’s novel interpretation of Section 111(d) would transform this environmental regulator into the most powerful central planner in the federal bureaucracy…”
Allison Wood, Partner at Hunton and Williams LLP, echoed the legal challenges to the regulations for both new and existing power plants, saying, “All of these rules suffer from legal flaws. The final rule for existing power plants under section 111(d) continues to suffer from legal deficiencies.” Ms. Wood also touched on how these rules would impose a cap-and-trade plan on states, testifying, “EPA’s proposed federal plan and model trading rules seek to establish a cap-and-trade program that would be used to implement the existing power plant regulations in states that do not submit acceptable state plans.”
Raymond Gifford, Partner at Wilkinson Barker Knauer LLP discussed the practical effects of the regulations stating, “When you study the Rule, its structure, and the incentives it creates, the states are essentially presented with a Hobson’s choice where the most palatable and achievable state plan is a mass-based trading platform, across the region or across the country. … The states will inevitably gravitate to a national cap and trade platform, instituted through each state plan.” Mr. Gifford also testified in response to a question from Representative David McKinley (R-WV) that prices would increase for consumers in states like West Virginia.