Abby L. Harvey
GHG Monitor
8/22/2014
In a letter sent to Environmental Protection Agency Administrator Gina McCarthy last week, Rep. Lamar Smith (R-Texas) called on the agency to develop a new analysis of its recently proposed carbon emissions guidelines for existing coal-fired power plants. The proposed regulations in question set emissions reduction targets for each state and mandate that the states develop action plans to reach their individual targeted reduction goals. The analysis done by the EPA on the proposed regulations, Smith says in the letter, was done using “non-transparent methodologies” and models that are not publicly available. “Rigorous analysis through an open and transparent framework cannot be sacrificed in the name of expediency. Reassurances of ‘flexibility’ are inadequate when considering regulations of this magnitude. Americans deserve an opportunity to see the facts,” Smith wrote.
EPA’s modeling finds that the regulations, dubbed “The Clean Power Plan,” will have “public health and climate benefits worth an estimated $55 billion to $93 billion per year in 2030, far outweighing the costs of $7.3 billion to $8.8 billion,” according to an EPA fact sheet. Further, the EPA’s analysis also finds that by 2030 electricity bills will decrease. “States, cities, businesses and homeowners have been working for years to increase energy efficiency and reduce growth in demand for electricity. EPA projects that the Clean Power Plan will continue – and accelerate – this trend. Nationally, this means that, in 2030 when the plan is fully implemented, electricity bills would be expected to be roughly 8 percent lower than they would be without the actions in state plans. That would save Americans about $8 on an average monthly residential electricity bill, savings they wouldn’t see without the states’ efforts under this rule,” according to an additional EPA fact sheet. The EPA is currently reviewing Smith’s letter, a spokesperson told GHG Monitor.
The modeling used by the EPA does not paint the whole picture, Smith wrote. “EPA’s incomplete modeling disregards a number of technical, regulatory, and economic realities. These omissions have the effect of downplaying the possible energy and economic impacts of this proposal while simultaneously ignoring the lack of climate benefits,” Smith wrote. To address these issues, Smith called on the EPA in the letter to do another analysis, which would be publicly available. “The Agency should provide an analysis that takes real-world contingencies into account. Although Congress is currently acting on legislation that would prohibit EPA’s use of non-transparent methodologies in the development of its rules, EPA continues to rely on models that are not publicly available,” Smith wrote, referencing the “The Secret Science Reform Act of 2014” introduced by Rep. David Schweikert (R-Ariz.) in late June which would prohibit the EPA from developing any rules unless all scientific and technical information used is publicly available and is sufficient for independent analysis and reproduction. “Consequently, we are simultaneously asking the [U.S. Energy Information Administration] to independently model the same specifications. Tandem analysis by EPA and EIA will allow for a side-by-side comparison results and provide a more comprehensive accounting of the possible impacts of the agency’s proposal,” Smith wrote, requesting such an analysis by Sept. 15.
Government Accountability Office Investigates EPA Analyses
In the letter, Smith noted a recent Government Accountability Office Report released to the public last week. The report, while it does not address the regulations in question directly, points out some flaws in the EPA’s analyses for past regulations. “The information EPA included and presented in the [Regulatory Impact Analyses] was not always clear. According to [Office of Management and Budget] guidance, RIAs should communicate information supporting regulatory decisions and enable a third party to understand how the agency arrives at its conclusions. In addition, EPA’s review process does not ensure that the information about selected elements that should appear in the analyses—such as descriptions of baselines and alternatives considered—is transparent or clear, within and across its RIAs. As a result, EPA cannot ensure that its RIAs adhere to OMB’s guidance to provide the public with a clear understanding of its decision making,” the GAO report says.
The report found that the “EPA did not monetize certain benefits and costs related to the primary purposes or key impacts of the rules GAO reviewed, such as reducing hazardous air pollutants and water quality effects,” and that the “EPA estimated effects of its regulations on employment, in part, using a study that, according to EPA officials, represented the best reasonably obtainable data when they conducted their analyses. However, the study was based on data that were more than 20 years old and may not have represented the regulated entities addressed in the RIAs.”
In response to the GAO report, Tom Reynolds, Associate Administrator for the agency’s Office of External Affairs and Environmental Education, posted a blog post on the agency’s website. “EPA customizes our analysis to each regulation, quantifying employment impacts when data and techniques are available, and noting the challenges with any approach we use. GAO’s report acknowledges that ‘limited methods, studies, and models [are] available for assessing the potential effects of regulation on employment.’ While GAO notes that one peer-reviewed study which EPA used for some rules had limitations, GAO noted in their report that ‘EPA acknowledged in the Regulatory Impact Analyses that the study has these limitations,’” Reynolds wrote.
