Nomination of Carolyn Hessler-Radelet to Be Director of the Peace Corps

Floor Speech

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Ms. MURKOWSKI. Madam President, I come this afternoon to speak about the regulations proposed by the administration on Monday relating to the Environmental Protection Agency. This time the agency's target is a 30-percent reduction in greenhouse gas emissions from existing powerplants by the year 2030.

The regulation that has been announced, which has been the subject of a great deal of conversation this week, should not be confused with EPA rules for cooling water intake or for proposed powerplants or for cross-state air pollution or for boilers or for ozone or for incinerators or for regional haze or for fuel economy or for the waters of the United States or for renewable fuels or for cement kilns or for coal ash or for effluent limitations or for any other number of regulatory actions that the agency has taken or is expected to take.

This rule--and there have been so many of them, it almost feels like this should be EPA's rule of the week or rule of the month--is a unilateral effort to bypass Congress and to force into place policies that we in Congress have not approved. The goal is to push our electric supply away from coal and, I think, ultimately, away from natural gas as soon as possible.

As the ranking member on the energy committee, I can attest that energy is always the flip side of the environmental debate. If we have a discussion about energy, we always have a discussion about the environment.

I believe we should advance policies that make our energy abundant, affordable, clean, diverse, and secure. To that end, our environmental goals must be balanced with our energy needs.

Because of this, I have for years expressed concern that EPA's relentless onslaught will harm the affordability and the reliability of our electric supply. In fact, I even released a white paper on this matter earlier this year.

We still do not have an accurate accounting of the cumulative costs associated with all of these EPA rules that I just gave in the laundry list, but we do know not to trust their math because EPA has dramatically underestimated the powerplant retirements in very recent past.

I will give you some examples. For the mercury and air toxic rules, EPA estimated only 4.7 gigawatts of coal-fired capacity retirements by the year 2015. But then we see the contrast. The labor unions forecast that MATS alone would result in 55 gigawatts of coal plant retirements and the loss of some 250,000 jobs. Government experts have determined that approximately 10 to 20 percent of existing coal capacity could be retired by the middle of the next decade. This is a calculation that really dwarfs EPA's number and one that doesn't include the potential impact of the latest proposal.

Now, I know that the EPA has an important job to do, and I appreciate that, but I also recognize that it does not and cannot regulate in a vacuum. Baseload coal and the ancillary services that it provides account for almost 40 percent of our power. In many instances the EPA's regulations will render generating units uneconomic, with compliance requiring retrofitting, the use of best available technology, and downtime for installation. So I am concerned--greatly concerned--that the EPA's rules, particularly when you combine them with one another, will result in a grid that is less stable and less reliable. The cumulative effect of federal regulations on baseload capacity resources, whether they are coal or nuclear, which produce electricity on demand has to be looked at. We have to examine and appreciate the cumulative effect of this loss of production and not discount or ignore it.

Many this past winter got a taste of what life in Alaska is like in the wintertime when we experienced the polar vortex here in the lower 48. The polar vortex caused 50,000 megawatts of powerplant outages. For one key system 89 percent of the coal capacity that is scheduled for retirement next year because of an EPA rule was called upon to meet the rising demand.

So again, just think about that.

We had a tough winter. We had coal-fueled facilities that were able to step up and provide for that increased demand--89 percent of that capacity was utilized during this polar vortex. That is fine. But what happens when those facilities are now offline, when they are in retirement, when you do not have that backup?

The question we really need to be asking is, What happens when that capacity is gone? Hoping for a mild winter isn't a viable strategy. You cannot have a hope-and-prayer energy policy, hoping that the weather is not going to be so bad. Our Nation relies on installed dispatchable power generation during extreme weather, which is why we need to ensure grid reliability through a diversity of baseload capacity.

Today it is unclear how many plants will retrofit to comply with various EPA regulations--including this most recent one--as opposed to making a decision to just shut down. It is uncertain if there will be enough time--to say nothing of sufficient capital available for investment--to build these new facilities or other forms of generation needed to ensure the continued reliability of the grid.

I have been talking about grid reliability for a long while now, and I think it speaks to our system that while we may have been pushed to the edge of getting nervous, we have been able to meet that reliability requirement Americans have just come to expect. They want to know that when they want to have the lights on or keep cool or keep warm, there is that availability. Reliability is key here. I am even more troubled that the EPA, which has conceded that a single rule may result in what they have called a ``localized effect,'' has not sought from our grid regulators, FERC and NERC, an analysis of the cumulative impact its rules may have. Understanding the impacts of these rules by checking in with our grid regulators, FERC and NERC, as part of a formal process is an important part of what needs to go on. Yet we are not seeing that follow-through. Instead, EPA appears to be morphing into an industrial planning agency for the energy sector. That is not what they are designed to do. This latest rulemaking makes it even more important for FERC and the Department of Energy to step up, to really go toe-to-toe here with EPA to protect the reliability and the affordability of our power supply.

The current chairwoman of FERC, while she has not called for a formal official role for the commission--as many of us would like--is certainly up to the task in my view. But with that situation at play right now within the Federal Energy Regulatory Commission, it appears that the White House doesn't want to keep the acting chair in charge. Its nominee to serve as chairman is both short on energy experience and largely unaware of the electricity reliability implications of EPA's rules.

In response to a hearing question about grid reliability from Senator Manchin, the nominee conceded that he ``has not been following the decisional process at EPA closely enough to know.''

I find that response not only disturbing, but I think it raises the question of whether anyone within the administration is actually following the EPA process closely enough to know what will happen to our electric grid. I can tell you that I don't think the EPA knows the impact for my State of Alaska. The Agency readily admits that its proposal ``fails to account for the expected costs and benefits for areas outside of the contiguous United States.''

Alaska is one-fifth the size of the country, and we are part of the country. But the EPA, in advancing these proposed regulations, admits that ``we don't know.'' We don't know the cost-benefit for Alaska. We don't know the cost-benefit for Hawaii. That does not mean that my State is exempt from this rule as some reports have led Alaskans to believe. Instead, without the benefit of any analysis, EPA has directed Alaska to reduce our emissions by 26 percent and this while EPA ignores--totally ignores--the likely inflationary costs and increases inherent in requiring the revamping of so much power production likely within a single decade.

The EPA has recommended that States work together, work together to figure out how we are going to make these cuts. But again, when you are not part of the contiguous United States, it is a little more difficult for us in Alaska and our neighbors to the south in Hawaii if we are not part of an interstate electricity grid. Alaska is really in many ways on its own. Because of our constant need for Federal approvals or at best Federal cooperation that is too often slow to come, we are not even able to develop our clean hydropower.

Some may ask: Well, I understand that you have about 25 percent of your power in the State of Alaska coming from hydro. That is correct. But because of other Federal policies--whether it is the roadless rule or other policies--we are truly hamstrung in our ability to build out more hydro. Based on more than 50 years of delay or broken Federal promises, there is no guarantee that we will be able to develop fully our abundant natural gas or even our vast renewable resource potential.

We have challenges and we acknowledge them. We are working on those challenges. We are working diligently because there is nobody who wants to get reliable, affordable, clean diverse energy supplies to our State more honestly and earnestly than myself. But it is challenging. So as we work towards that transition, we need that flexibility. We need that time.

Now the EPA has suggested a series of strategies for reducing greenhouse gas emissions. But of the five powerplants in Alaska that are directly impacted by this proposed rule, four are natural-gas-fired plants, and they are located near each other and Anchorage. So in the whole State of Alaska there are only five plants that are impacted by this regulation. Everything else is small enough or doesn't sell its power. So of the five, four of them are already natural gas. The fifth already has clean coal technology. The proposed strategies of switching to natural gas, dispatch changes or retiring plants are really just unworkable given the configuration we have in my State. Given that we live in this polar vortex every winter--everywhere is polar vortex in Alaska--many of our houses are well insulated to protect from the cold. So efficiency programs will provide comparatively small gains.

Having said that, I know that we can and must do more when it comes to efficiencies, and I will continue to push on that because that is an area where I think we can make a difference. But trying to get to this 26-percent reduction is a challenge. I am still canvassing my State, but it will be difficult for Alaska to reach our 26-percent emissions reduction without serious economic impact.

Electricity is already more expensive in Alaska than in most of the rest of the Nation. We have to reduce these prices, not engage in policies that will raise those prices even higher. In the lower 48 States, on average, an American family spends a little over 4 percent of their household budget towards their energy--keeping the lights on and keeping the house warm or cool--depending on the season. In many parts of my State of Alaska we have households that pay between 40 and 50 percent of their household budget to stay warm and to keep the lights on. So I am looking at this very, very critically. While I want to ensure that our air is clean, that we are working to reduce health risks, we don't have any room in Alaska to increase our energy costs. We have to be working aggressively with one another to reduce those costs.

So I look at the proposal that has come out from the EPA this week, and I am very concerned about how a State such as mine will achieve the level that the EPA has imposed on it without extraordinary increases to cost.

Some have labeled this recent EPA proposed regulation ObamaCare 2.0, and in many ways it is. The administration insists that there will be no cost increases associated with this rule. All we are missing here is an awful Web site and a pledge that if you like your current electricity bill, you can keep it. The President promises the electricity bills will shrink, but I am not buying that. The Wall Street Journal has rightly labeled this a huge tax on the poor and the middle class, and no one understands what will happen if States perhaps refuse to move forward with their own plans. Again, you have to ask the question: Does anybody really think that the EPA has the ability to impose its Federal will while simultaneously keeping the lights on and keeping power affordable to all 50 States?

Despite negative economic growth last quarter and despite far better approaches pending in Congress to promote energy efficiency and energy innovation, such as an energy efficiency bill that my colleague from Ohio has been working doggedly to try to advance--a measure that I think is smart and sound and built on good policy--to not only help States like mine but all across the country, we do have some good proposals out there. We have initiatives we can move forward. But instead the President has decided to push ahead and to propose sweeping new regulations on our still weak economy.

We must keep costs and reliability in mind as regulatory mandates push more and more baseload coal plants offline. FERC must be the unambiguous champion of reliability with a formal and a documented role with respect to EPA's rulemaking process.

Powerful regulatory laws must be judicially administered, and only Congress--not the EPA--should decide such consequential changes for our energy supply, our economy, and our people. I think anything less is unacceptable and could very well yield significant negative consequences for a wide variety of American families and our businesses.

I thank the Presiding Officer for her attention and the opportunity to discuss a very important issue for our entire country.

With that, I yield the floor.

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