Policy: Environment & Energy

EPA Administrator Gina McCarthy: 'EPA listened' on carbon rules

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Environmental Protection Agency Administrator Gina McCarthy on Monday attempted to assuage fears about a forthcoming carbon emissions rule for existing power plants, as she said it would contain flexibility for states.

"The only thing I really hope when this proposal goes out is that people look at it and say 'EPA listened,' " said McCarthy, speaking at a Washington event hosted by the Bipartisan Policy Center. The agency sent the proposed rule to the White House Office of Management and Budget last week for review.

McCarthy emphasized the numerous meetings the agency held with states, regulators and industry interests when it was crafting the rule, the tone of which she said left her "pleasantly surprised."

She noted the rule is not designed to be a cap-and-trade system or carbon tax — both methods that irk conservatives and industry groups. That doesn't mean, though, that those aren't some of the potential options available to states for complying with the rule.

"There's enormous flexibility in the definition of a state plan," she said, stressing the "partnership" aspect between states and the federal government. "We're going to take full advantage of that."

The greenhouse gas emission rule and another for new power plants are the cornerstones of President Obama's strategy to combat climate change.

The rules are politically controversial. Many Democrats, environmental and public health groups, however, say they will save billions of dollars in medical costs and help blunt climate change.

But red-leaning states, industry organizations, centrist Democrats and Republicans have warned they will raise energy costs. They're also worried about complying with the rules, which are scheduled to be finalized in June 2015.

States are strapped when it comes to having the resources to design a plan and collaborate with the EPA, said Colette Honorable, president of the National Association of Regulatory Utility Commissioners.

"From a state perspective, it's tight at best," Honorable said. "It's a very short timeline."

McCarthy didn't discuss exactly what was on the table, noting the draft sent to the White House could differ greatly from what gets released for public comment.

Honorable said it was too soon to tell whether the rule would affect electric grid reliability by, for example, forcing significant amounts of coal-fired generation to shut down in certain regions.

"We have to see what the rule says first," Honorable said.

Republicans and some Democrats on Capitol Hill have increasingly raised concerns about reliability after a winter cold snap pushed the PJM Interconnection, which oversees the bulk electric grid in the Mid-Atlantic, to the brink.

Some electric utilities, such as American Electric Power, noted that during that period it relied on an overwhelming majority of the generators it plans to shutter to comply with an EPA mercury and air toxic emissions rule that goes into effect next year.

McCarthy said the EPA has gone to lengths to coordinate with the Energy Department and the Federal Energy Regulatory Commission to ensure reliability and technology issues are settled.

"We have done a very good job to work with DOE and pick their brains," she said. "And the same with FERC."

To states who want to risk not complying with the rule, McCarthy had a message: Don't.

"This carbon pollution standard is going to be federally enforceable," she said.

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