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114th Congress    }                                       {       Report
                        HOUSE OF REPRESENTATIVES
 2d Session       }                                       {      114-445

======================================================================



 
         SATISFYING ENERGY NEEDS AND SAVING THE ENVIRONMENT ACT

                                _______
                                

 March 7, 2016.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

  Mr. Upton, from the Committee on Energy and Commerce, submitted the 
                               following

                              R E P O R T

                             together with

                            DISSENTING VIEWS

                        [To accompany H.R. 3797]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Energy and Commerce, to whom was referred 
the bill (H.R. 3797) to establish the bases by which the 
Administrator of the Environmental Protection Agency shall 
issue, implement, and enforce certain emission limitations and 
allocations for existing electric utility steam generating 
units that convert coal refuse into energy, having considered 
the same, report favorably thereon without amendment and 
recommend that the bill do pass.

                                CONTENTS

                                                                   Page
Purpose and Summary..............................................     2
Background and Need for Legislation..............................     2
Hearings.........................................................     5
Committee Consideration..........................................     5
Committee Votes..................................................     5
Committee Oversight Findings.....................................     9
Statement of General Performance Goals and Objectives............     9
New Budget Authority, Entitlement Authority, and Tax Expenditures     9
Earmark, Limited Tax Benefits, and Limited Tariff Benefits.......     9
Committee Cost Estimate..........................................     9
Congressional Budget Office Estimate.............................     9
Federal Mandates Statement.......................................    10
Duplication of Federal Programs..................................    10
Disclosure of Directed Rule Makings..............................    10
Advisory Committee Statement.....................................    10
Applicability to Legislative Branch..............................    11
Section-by-Section Analysis of the Legislation...................    11
Changes in Existing Law Made by the Bill, as Reported............    11
Dissenting Views.................................................    12

                          PURPOSE AND SUMMARY

    H.R. 3797, the Satisfying Energy Needs and Saving the 
Environment (SENSE) Act, was introduced by Rep. Keith Rothfus 
on October 22, 2015. The legislation addresses the application 
of the Environmental Protection Agency's (EPA) Cross-State Air 
Pollution Rule (CSAPR) and Mercury Air Toxic Standards (MATS) 
rules, issued pursuant to sections 110 and 112 of the Clean Air 
Act, to electric generating units that utilize coal refuse to 
generate electricity and serve critical environmental cleanup 
and remediation purposes. Key provisions of H.R. 3797 include 
the following:
           The bill would provide for limited 
        modifications with respect to the Cross-State Air 
        Pollution Rule by allocating additional sulfur dioxide 
        allowances to coal refuse-to-energy facilities.
           The bill would provide for limited 
        modifications with respect to the Mercury and Air 
        Toxics Rule for these coal refuse facilities by 
        providing for alternative compliance options with 
        respect to sulfur dioxide and hydrogen chloride 
        emissions standards.

                  BACKGROUND AND NEED FOR LEGISLATION

    This legislation seeks to ensure that innovative, 
environmentally beneficial facilities that use coal refuse as 
fuel, can continue to operate and will not be forced to shut 
down, due to unachievable requirements included in the 
Environmental Protection Agency's Cross-State Air Pollution 
Rule (CSAPR)\1\ and the Mercury and Air Toxics Standards 
(MATS).\2\
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    \1\On July 6, 2011, the Environmental Protection Agency (EPA) 
finalized the CSAPR. This rule was promulgated pursuant to section 110 
of the Clean Air Act (CAA) and requires reductions in sulfur dioxide 
(SO2) and nitrogen oxide (NOX) emissions from electric generating units 
located in the 28 States covered by the rule.
    \2\On February 16, 2012, EPA finalized the MATS rule. This rule was 
promulgated pursuant to section 112 of the Clean Air Act and requires 
reductions in emissions of mercury and other air toxics, as well as 
certain acid gases from power plants. On June 29, 2015, the U.S. 
Supreme Court ruled that EPA erred when the agency concluded that costs 
did not need to be considered in the MATS rule. EPA is still in the 
process of responding to this decision, and on November 20, 2015, 
proposed a supplemental finding concluding that consideration of costs 
would not have altered EPA's original rule.
---------------------------------------------------------------------------
    Coal refuse is the aboveground waste product of coal mining 
found near many abandoned mines in Pennsylvania and other coal 
mining areas.\3\ Coal refuse piles pose a number of 
environmental and safety threats, and the cost of addressing 
coal refuse has been estimated by State environmental 
regulators to be approximately $2 billion dollars in 
Pennsylvania alone, the most impacted State.
---------------------------------------------------------------------------
    \3\As the bill's sponsor, Rep. Rothfus testified at the 
Subcommittee on Energy and Power's February 3, 2016 hearing on the 
bill:
---------------------------------------------------------------------------
        [T]he coal industry has been a central part of 
      Pennsylvania's economy for many years. Unfortunately, 
      historic mining activity littered Pennsylvania and a few 
      other states with large piles of coal refuse (sometimes 
      called waste coal), which is essentially a mix of lower 
      quality coal, rocks, and dirt that remain after the mining 
      and processing of coal. Before technology was invented to 
      make use of this material, it accumulated in open spaces 
      alongside cities and towns, close to schools and 
      neighborhoods, and in fields across coal country.
    Coal refuse-to-energy facilities are specialized power 
plants developed to recycle the coal refuse by using it as an 
energy source to generate affordable, reliable electricity. 
There are 19 coal refuse-to-energy facilities, including 14 in 
Pennsylvania. In addition to creating an estimated 1,200 direct 
and 4,000 indirect jobs in areas, many of which are in 
economically distressed, these facilities have thus far removed 
214 million tons of coal refuse from the environment, at no 
expense to taxpayers.\4\ As Rep. Rothfus testified at the 
Subcommittee on Energy and Power's February 3, 2016 hearing on 
H.R. 3797:
---------------------------------------------------------------------------
    \4\In Pennsylvania, coal refuse-to-energy facilities are recognized 
in the Pennsylvania Alternative Energy Portfolio Standards Act. See 
Testimony of Vince Brisini, Director of Environmental Affairs for 
Olympus Power, LLC, testifying on behalf of ARIPPA, a trade association 
representing the coal refuse energy industry, Preliminary Transcript 
available at http://docs.house.gov/meetings/IF/IF03/20160203/104366/
HHRG-114-IF03-Transcript-20160203.pdf.

          [The] coal refuse-to-energy industry has been a 
        leader on solving this problem. With advanced 
        technology, this industry has been able to use this 
        previously worthless material to generate affordable 
        and reliable energy. In the process, they have removed 
        over 200 million tons of coal refuse in Pennsylvania 
        alone and remediated many formerly-polluted sites. 
        Thanks to the hard work of the dedicated people in this 
        industry, landscapes have been restored, rivers and 
        streams have been brought back to life, and towns 
        across coal country have been relieved of unsafe and 
        unsightly waste coal piles.
          And it is important to note that private sector 
        leadership on this issue has saved taxpayers millions 
        of dollars in cleanup costs. It has also created 
        hundreds of family-sustaining jobs in areas that have 
        been economically distressed for many years. These jobs 
        and the communities they support are at risk today, 
        unless we stand up to defend them.

    Similarly, at the hearing, the Chairman of the Western 
Pennsylvania Coalition for Abandoned Mine Reclamation, Dennis 
Beck, testified that ``[t]hese waste plants are a great example 
of ingenuity, cutting-edge technology and concern for the 
environment.''
    Despite the extraordinary environmental benefits of these 
facilities, the EPA has included certain emissions limits in 
the agency's CSAPR and MATS regulations that are not achievable 
for all coal refuse-to-energy plants. If these facilities shut 
down, the communities served by them will lose the electricity, 
jobs, and environmental cleanup provided by these coal refuse-
to-energy plants.

What the legislation would do

    The bill includes limited provisions that would allow these 
innovative coal refuse-to-energy facilities to generate 
affordable, reliable energy and continue their essential 
environmental remediation work in a responsible manner.
    Specifically, the bill would, with respect to the CSAPR, 
allocate additional sulfur dioxide (SO2) allowances to coal 
refuse-to-energy facilities. The allowances would be reduced 
elsewhere in the program so the overall cap does not change. 
The bill would, with respect to MATS, create an alternative 
means of demonstrating compliance with the hydrochloric acid 
(HCl) standard by using SO2 as a proxy and assuming that a 93 
percent reduction in SO2 demonstrates compliance with the HCl 
standard.
    At the hearing on H.R. 3797, concerns were raised that the 
bill would choose ``winners and losers,'' and that it favored 
coal refuse plants at the expense of other facilities. In 
response, Mr. Brisini testified that in this rulemaking EPA has 
effectively chosen ``winners and losers,'' and stated:

          I find it really interesting that we keep hearing 
        this--well, this SENSE Act picks winners and losers 
        when in fact the federal implementation plan picked the 
        winners and losers and they happened to pick in CSAPR 
        the bituminous coal-fired refuse plants to be the 
        losers in the CSAPR phase two allocation. . . . And 
        they also picked the bituminous coal-fired refuse 
        plants to be the loser in MATS because, as I have said 
        all along, the anthracite refuse plants can meet the 
        alternative 0.2 standard. . . . That is because the 
        sulfur content of the coal refuse in the anthracite 
        region is lower. It is not because the technology is 
        different or they have anything special and it is part 
        of the problem when you lump all of these things 
        together not recognizing the technical and the 
        differences in these kinds of fuels.

    In addition, at the hearing, some suggested that coal 
refuse-to-energy facilities can meet the requirements of the 
MATS rule, citing the District of Columbia Court of Appeals 
decision in White Stallion v. Environmental Protection 
Agency.\5\ The court in that case, declined to create a 
subcategory for coal refuse plants, finding that there were 
plants that could achieve the HCL and SO2 standards in the MATS 
rule. Notwithstanding the court's holding, Mr. Brisini 
testified that as a practical matter only two coal refuse 
plants are capable of meeting the limits. He specifically 
testified: ``There are actually two bituminous plants that can 
meet the hydrochloric acid [requirements]. No other plants, 
whether they are bituminous coal refuse anthracite coal refuse, 
they don't do it.''
---------------------------------------------------------------------------
    \5\See White Stallion Energy Center, LLC v. Environmental 
Protection Agency, Case No. 12-1100, U.S. Court of Appeals for the 
District of Columbia Circuit (April 15, 2014).
---------------------------------------------------------------------------
    Finally, at the hearing, suggestions were made that the 
legislation was unnecessary because States could provide relief 
to coal refuse facilities by reallocating allowances under 
CSAPR. Mr. Brisini testified, however, that States would be 
unlikely to provide timely relief because this would involve a 
lengthy process requiring approval from EPA:

          Now, as far as the authority to exempt or I can do a 
        surgical reallocation tomorrow, no, they can't. This is 
        a FIP. This is a federal implementation plan, and to 
        change that federal implementation plan you need a new 
        state implementation plan. EPA has up to 18 months to 
        respond to a federal implementation plan change. So the 
        idea that I can come in there and fix this tomorrow is 
        not true and I will say it that bluntly.\6\
---------------------------------------------------------------------------
    \6\Mr. Brisini further testified that ``Now, as far as the idea 
that [the legislation] is usurping states' rights I find that 
interesting because the federal government just did that in the FIP.''
---------------------------------------------------------------------------

                                HEARINGS

    The Subcommittee on Energy and Power held a hearing on HR 
3797 on February 3, 2016. The hearing was entitled, ``H.R. 
3797, the Satisfying Energy Needs and Saving the Environment 
(SENSE) Act and H.R. __, the Blocking Regulatory Interference 
from Closing Kilns (BRICK) Act'' and witnesses included the 
following:
           The Honorable Keith J. Rothfus, U.S. House 
        of Representatives, Pennsylvania;
           Davis Henry, President and CEO, Henry Brick;
           Creighton ``Butch'' McAvoy, President, 
        McAvoy Brick Company;
           Vincent Brisini, Director of Environmental 
        Affairs for Olympus Power;
           Dennis Beck, Chairman of the Western 
        Pennsylvania Coalition for Abandoned Mine Reclamation; 
        and,
           John Walke, Senior Attorney and Clean Air 
        Director, Natural Resources Defense Council.

                        COMMITTEE CONSIDERATION

    On February 11, 2016, the Subcommittee on Energy and Power 
met in open markup session to consider H.R. 3797 and forwarded 
the bill to the full Committee, without amendment, by voice 
vote.
    On February 25, 2016, the Committee on Energy and Commerce 
met in open markup session to consider H.R. 3797. During the 
markup, two amendments were offered and rejected by record 
vote. A motion by Mr. Upton to order H.R. 3797 reported to the 
House, without amendment, was agreed to by a record vote of 29 
ayes and 22 nays.

                            COMMITTEE VOTES

    Clause 3(b) of rule XIII of the Rules of the House of 
Representatives requires the Committee to list the record votes 
on the motion to report legislation and amendments thereto. The 
following reflects the record votes taken during the Committee 
consideration:

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                      COMMITTEE OVERSIGHT FINDINGS

    Pursuant to clause 3(c)(1) of rule XIII of the Rules of the 
House of Representatives, the Committee made findings that are 
reflected in this report.

         STATEMENT OF GENERAL PERFORMANCE GOALS AND OBJECTIVES

    H.R. 3797 would provide for limited modifications to CSAPR 
for coal-refuse-to-energy facilities by allocating additional 
SO2 allowances to coal refuse-to-energy facilities, and limited 
modifications to MATS for these coal refuse facilities by 
providing for alternative compliance options.

   NEW BUDGET AUTHORITY, ENTITLEMENT AUTHORITY, AND TAX EXPENDITURES

    In compliance with clause 3(c)(2) of rule XIII of the Rules 
of the House of Representatives, the Committee finds that H.R. 
3797 would result in no new or increased budget authority, 
entitlement authority, or tax expenditures or revenues.

       EARMARK, LIMITED TAX BENEFITS, AND LIMITED TARIFF BENEFITS

    In compliance with clause 9(e), 9(f), and 9(g) of rule XXI 
of the Rules of the House of Representatives, the Committee 
finds that H.R. 3797 contains no earmarks, limited tax 
benefits, or limited tariff benefits.

                        COMMITTEE COST ESTIMATE

    The Committee adopts as its own the cost estimate prepared 
by the Director of the Congressional Budget Office pursuant to 
section 402 of the Congressional Budget Act of 1974.

                  CONGRESSIONAL BUDGET OFFICE ESTIMATE

    Pursuant to clause 3(c)(3) of rule XIII of the Rules of the 
House of Representatives, the following is the cost estimate 
provided by the Congressional Budget Office pursuant to section 
402 of the Congressional Budget Act of 1974:

                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington, DC, March 4, 2016.
Hon. Fred Upton,
Chairman, Committee on Energy and Commerce,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 3797, the SENSE 
Act.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Jon Sperl.
            Sincerely,
                                                        Keith Hall.
    Enclosure.

H.R. 3797--SENSE Act

    H.R. 3797 would require the Environmental Protection Agency 
(EPA) to provide greater flexibility to certain power plants 
that are subject to emissions limitations under EPA's Cross-
State Air Pollution Rule (CSAPR) and the Mercury and Air Toxics 
Standards for Power Plants (MATS). Affected power plants 
generate electricity by burning coal refuse (a waste byproduct 
of coal) as their primary fuel source.
    The bill would require EPA to allocate to plants using coal 
refuse in 2017 and subsequent years the same number of 
emissions allowances for sulfur dioxide that have been 
previously allocated to those plants, rather than reducing 
allowances for those plants. The legislation also would 
prohibit those plants from transferring unused allowances to 
other entities and would allow coal refuse operators to bank 
those allowances for use in future years. The bill would not 
change the total number of allowances allocated to each state 
under the CSAPR.
    In addition, H.R. 3797 would require EPA to permit 
operators of plants using coal refuse to comply with an 
alternative emissions standard for sulfur dioxide that is less 
stringent than the current MATS.
    Based on information from EPA about the costs of modifying 
its existing regulations to comply with this legislation, CBO 
estimates that implementing H.R. 3797 would have an 
insignificant cost to EPA. Because enacting H.R. 3797 would not 
affect direct spending or revenues, pay-as-you-go procedures do 
not apply.
    CBO estimates that enacting H.R. 3797 would not increase 
net direct spending or on-budget deficits in any of the four 
consecutive 10-year periods beginning in 2027.
    H.R. 3797 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act.
    The CBO staff contact for this estimate is Jon Sperl. The 
estimate was approved by H. Samuel Papenfuss, Deputy Assistant 
Director for Budget Analysis.

                       FEDERAL MANDATES STATEMENT

    The Committee adopts as its own the estimate of Federal 
mandates prepared by the Director of the Congressional Budget 
Office pursuant to section 423 of the Unfunded Mandates Reform 
Act.

                    DUPLICATION OF FEDERAL PROGRAMS

    No provision of H.R. 3797 establishes or reauthorizes a 
program of the Federal Government known to be duplicative of 
another Federal program, a program that was included in any 
report from the Government Accountability Office to Congress 
pursuant to section 21 of Public Law 111-139, or a program 
related to a program identified in the most recent Catalog of 
Federal Domestic Assistance.

                  DISCLOSURE OF DIRECTED RULE MAKINGS

    The Committee estimates that enacting H.R. 3797 
specifically directs to be completed no specific rulemakings 
within the meaning of 5 U.S.C. 551 that would not otherwise be 
issued by the agency.

                      ADVISORY COMMITTEE STATEMENT

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act were created by this 
legislation.

                  APPLICABILITY TO LEGISLATIVE BRANCH

    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of section 
102(b)(3) of the Congressional Accountability Act.

             SECTION-BY-SECTION ANALYSIS OF THE LEGISLATION

    The legislation includes the following provisions:

Section 1. Short title

    This section provides the short title of ``Satisfying 
Energy Needs and Saving the Environment Act'' or the ``SENSE 
Act''.

Section 2. Standards for coal refuse power plants

    This section would modify the standards as they apply to 
coal refuse power plants.
    Section 2(a) provides definitions for the following terms: 
administrator, boiler operating day, coal refuse, coal refuse 
electric utility steam generating unit, coal refuse-fired 
facility, Cross-State Air Pollution Rule, electric utility 
steam generating unit, and Phase I of CSAPR.
    Section 2(b) provides less restrictive sulfur dioxide 
emissions allocations under CSAPR for coal refuse electric 
utility steam generating units.
    Section 2(c) provides an alternative compliance means for 
HCl and SO2 under MATS for coal refuse electric 
utility steam generating units.

         CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

    This legislation does not amend any existing Federal 
statute.

                            DISSENTING VIEWS

    H.R. 3797, the ``Satisfying Energy Needs and Saving the 
Environment (SENSE) Act,'' represents an effort by the 
Republicans to give special breaks under two Clean Air Act 
rules to power plants that use waste coal to generate 
electricity. The rules--the Cross State Air Pollution Rule 
(CSAPR) and the Mercury and Air Toxics Standards (MATS) rule--
are two of the most important rules for protecting public 
health from toxic air pollutants like mercury and sulfur 
dioxide. If this bill were to become law, waste coal facilities 
would be able to pollute at a higher rate than other power 
plants.

                             I. BACKGROUND

A. EPA's Cross-State Air Pollution Rule
    To help 28 states in the eastern, central, and southern 
United States meet the health-based ambient air quality 
standards for fine particulate matter (PM2.5) and 
ozone, the Environmental Protection Agency (EPA) issued the 
Clean Air Interstate Rule (CAIR) in March 2005. Under the rule, 
upwind states were required to reduce sulfur dioxide 
(SO2) and nitrogen oxides (NOX) 
emissions.\1\ This rule was promulgated pursuant to Clean Air 
Act section 110(a)(2)(D)(i)(I), which is known as the ``good 
neighbor provision.'' CAIR was overturned by the D.C. Circuit 
Court of Appeals in 2008.\2\
---------------------------------------------------------------------------
    \1\U.S. EPA, EPA Announces Landmark Clean Air Interstate Rule--
Major Step Forward in Eliminating `Smog' Days in New England (Mar. 10, 
2005) (online at yosemite.epa.gov/opa/admpress.nsf/
dc614f1d30c3fd66852572a000657b5a/
ff502720c7a5c8d2852570ca006ab475!OpenDocument).
    \2\State of North Carolina v. EPA (D.C. Cir. 2008) (on petitions 
for rehearing); State of North Carolina v. EPA, Reply in Support of 
Petition for Rehearing or Rehearing En Banc (Nov. 17, 2008).
---------------------------------------------------------------------------
    EPA promulgated CSAPR as a replacement for CAIR on July 6, 
2011.\3\ CSAPR requires states in the eastern, central, and 
southern United States to reduce power plant emissions that 
cause air quality problems in other states.
---------------------------------------------------------------------------
    \3\U.S. EPA, Federal Implementation Plans: Interstate Transport of 
Fine Particulate Matter and Ozone and Correction of SIP Approvals; 
Final Rule, 76 Fed. Reg. 48208 (Aug. 8, 2011) (final rule) (hereinafter 
``Cross-State Air Pollution Rule'').
---------------------------------------------------------------------------
    The timing of CSAPR's implementation has been affected by a 
number of court actions.\4\ On April 29, 2014, the U.S. Supreme 
Court issued an opinion reversing an earlier D.C. Circuit 
decision that had vacated the rule. Subsequently, on October 
23, 2014, the D.C. Circuit lifted its prior CSPAR stay.\5\ The 
D.C. Circuit also granted EPA's request to delay the rule's 
compliance deadlines by three years. Accordingly, CSAPR Phase 1 
implementation began in 2015, with Phase 2 beginning in 
2017.\6\ In December 2015, EPA proposed the CSAPR Update Rule 
to address interstate transport of air pollution under the 2008 
ozone National Ambient Air Quality Standards (NAAQS).\7\
---------------------------------------------------------------------------
    \4\On December 30, 2011, CSAPR was stayed prior to implementation. 
On August 21, 2012, CSAPR was vacated. EME Homer City Generation, L.P. 
v. EPA, No. 11-1302 (D.C. Cir. Aug. 21, 2012) (online at 
www.cadc.uscourts.gov/internet/opinions.nsf/19346B280C78405C852 
57A61004DC0E5/$file/11-1302-1390314.pdf).
    \5\EPA v. EME Homer City Generation, L.P., No. 12-1182, Slip Op. 
(2013) (online at www.supremecourt.gov/opinions/13pdf/12-
1182_553a.pdf); Order Granting EPA's Motion to Lift the Stay of the 
Transport Rule, EME Homer City Generation, L.P. v. EPA, No. 11-1302 
(D.C. Cir.) (online at www3.epa.gov/airtransport/CSAPR/pdfs/
CSAPR_Stay_Lift.pdf).
    \6\U.S. EPA, Cross-State Air Pollution Rule (CSAPR) (accessed Jan. 
31, 2016) (online at www3.epa.gov/crossstaterule/).
    \7\U.S. EPA, Cross-State Air Pollution Rule Update for the 2008 
Ozone NAAQS, 80 Fed. Reg. 75706 (Dec. 3, 2015) (proposed rule).
---------------------------------------------------------------------------
    In the CSAPR rules, EPA provides a multi-step process to 
address the requirements of the good neighbor provision. Under 
that process, if EPA determines that a downwind state expects 
to have problems attaining or maintaining an air quality 
standard, EPA would then look at which upwind states are 
contributing to these identified problems. EPA would then set 
up an ``emissions budget'' for those upwind states found to 
have emissions that significantly contributed to problems in a 
downwind state. A given state's emissions budget represents the 
allowable amount for emissions, after identifying and 
accounting for those emissions contributing significantly to 
nonattainment by a downwind state.\8\
---------------------------------------------------------------------------
    \8\U.S. EPA, Cross-State Air Pollution Rule Presentation (Dec. 15, 
2011) (online at www3.epa.gov/crossstaterule/pdfs/
CSAPRPresentation.pdf); U.S. EPA, FACT SHEET: The Cross-State Air 
Pollution Rule: Reducing the Interstate Transport of Fine Particulate 
Matter and Ozone (July 18, 2011) (online at www3.epa.gov/
crossstaterule/pdfs/CSAPRFactsheet.pdf).
---------------------------------------------------------------------------
    Once a state's emissions budget was established, EPA set up 
a tradable allowance program for the power plants covered by 
CSAPR. Power plants within a state were allocated emissions 
allowances that could be traded--subject to some requirements--
as needed to comply with the rule. Alternatively, states had 
the option of developing their own state implementation plan 
(SIP) to meet the rule's required emissions reductions.\9\
---------------------------------------------------------------------------
    \9\Id.
---------------------------------------------------------------------------
B. Clean Air Act Section 112
    Section 112 of the Clean Air Act requires the EPA to set 
technology-based standards to reduce air toxics. These 
hazardous air pollutants (HAPs) are known or suspected to cause 
cancer or other serious health effects, such as reproductive or 
birth defects or neurological effects, or adverse environmental 
effects. EPA rule makings aim to reduce the release of 187 HAPs 
including mercury, cadmium, lead, benzene and dioxin.\10\ EPA 
takes a technology-based approach to regulating HAPs in order 
to achieve substantial reductions in air toxics relatively 
quickly using readily available technology. EPA also follows 
the technology-based standards with additional standards where 
needed to protect health, as determined through risk 
assessments.\11\
---------------------------------------------------------------------------
    \10\U.S. Environmental Protection Agency, About Air Toxics (online 
at www.epa.gov/oar/toxicair/newtoxics.html).
    \11\Clean Air Act Sec. 112(f).
---------------------------------------------------------------------------
    Section 112 requires EPA to develop regulations for 
distinct source categories (e.g., power plants, boilers, and 
cement kilns) that set specific emission limits based on the 
emission levels already being achieved by similar facilities. 
These regulations are known as Maximum Achievable Control 
Technology (MACT) standards. For existing sources, the emission 
standard must be at least as stringent as the average emissions 
achieved by the best-performing 12 percent of sources in that 
source category. For new sources, the emission standard must be 
at least as stringent as the emission control achieved by the 
best-controlled similar source.\12\ These minimum emissions 
levels are known as the MACT floor.
---------------------------------------------------------------------------
    \12\Id. at Sec. 112(d)(3).
---------------------------------------------------------------------------
C. EPA's Mercury and Air Toxics (MATS) Rule
    Section 112 of the Clean Air Act directs EPA to complete a 
study of the hazards to public health reasonably anticipated to 
occur as a result of toxic air pollution from power plants. EPA 
completed the study and concluded that it was appropriate and 
necessary to regulate HAPs from power plants.\13\ Power plants 
are by far the largest U.S. source of mercury emissions into 
the air, and they also release other toxic metals, such as 
arsenic, chromium and nickel, which can cause cancer and other 
serious health harm.
---------------------------------------------------------------------------
    \13\U.S. EPA, Study of Hazardous Air Pollutant Emissions from 
Electric Utility Steam Generating Units--Final Report to Congress, 
Volume 1 (Feb. 1998).
---------------------------------------------------------------------------
    EPA's finding triggered a requirement for the Agency to 
finalize regulations to control toxic air pollution from power 
plants. In 2012, EPA issued the MATS rule, which established 
the first national standards to address power plant emissions 
of mercury and toxic air pollution.\14\ There were no federal 
standards requiring power plants to limit their emissions prior 
to this rule--despite the availability of proven control 
technologies, and the passage of more than 20 years from 
enactment of the 1990 Clean Air Act Amendments.\15\
---------------------------------------------------------------------------
    \14\U.S. EPA, National Emission Standards for Hazardous Air 
Pollutants from Coal-and Oil-fired Electric Utility Steam Generating 
Units and Standards of Performance for Fossil-Fuel-Fired Electric 
Utility, Industrial-Commercial-Institutional, and Small Industrial-
Commercial-Institutional Steam Generating Units, 77 Fed. Reg. 9034 
(Feb. 16, 2012) (final rule) (online at www.gpo.gov/fdsys/pkg/FR-2012-
02-16/pdf/2012-806.pdf) (hereinafter ``MATS Final Rule'').
    \15\U.S. EPA, Mercury and Air Toxics Standards (MATS) Basic 
Information (accessed Jan. 31, 2016) (online at www3.epa.gov/mats/
basic.html).
---------------------------------------------------------------------------
    EPA's MATS rule establishes MACT standards for HAPs emitted 
from coal- and oil-fired power plants, limiting the emissions 
of heavy metals and acid gases\16\ from these sources. The 
final rule will prevent 90 percent of the mercury in coal 
burned at power plants from being released.\17\ To achieve 
these reductions, the MATS rule sets numeric emissions limits 
for mercury, particulate matter (as a surrogate for other heavy 
metals), and acid gases for all existing and new coal-fired and 
oil-fired units.
---------------------------------------------------------------------------
    \16\Heavy metals such as mercury, arsenic, and chromium, and acid 
gases such as hydrochloric acid (HCl) and hydrofluoric acid (HF).
    \17\U.S. EPA, Fact Sheet: Mercury and Air Toxics Standards for 
Power Plants (Dec. 2011) (online at www.epa.gov/airquality/
powerplanttoxics/pdfs/20111221MATSsummary fs.pdf).
---------------------------------------------------------------------------
    The MATS rule also establishes work practice standards, 
rather than numeric emissions limits, to reduce emissions of 
certain organic HAPs, including dioxin/furan, that are a 
product of inefficient combustion. These work practice 
standards merely require utilities to perform annual 
maintenance and inspection at covered units to improve 
efficiency.\18\
---------------------------------------------------------------------------
    \18\Id.
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    Existing sources had three years--or until April 16, 2015--
to comply with the rule. In the final rule, EPA made it clear 
that the option of a fourth year--until April 16, 2016--for 
compliance would be broadly available.\19\
---------------------------------------------------------------------------
    \19\U.S. EPA, Mercury and Air Toxics Standards (MATS) Basic 
Information (accessed Jan. 31, 2016) (online at www3.epa.gov/mats/
basic.html); U.S. EPA, MATS Final Rule, 77 Fed. Reg. 9304, at 9410 
(``We believe that the permitting authorities have the discretion to 
use this extension authority to address a range of situations in which 
installation schedules may take more than 3 years'').
---------------------------------------------------------------------------
    During the MATS rulemaking process, EPA identified several 
power plants that, based on the data available, exhibited the 
ability to achieve all of the MACT standards for existing 
sources.\20\ Among those sources are both pulverized coal and 
circulating fluidized-bed power plants, and power plants 
burning bituminous coal, subbituminous coal, lignite, and coal 
refuse (or waste coal). The EPA has also noted that there are 
waste coal units that have installed add-on control technology 
that will allow them to be in compliance with MATS 
requirements.\21\
---------------------------------------------------------------------------
    \20\U.S. EPA, MATS Final Rule, 77 Fed. Reg. 9304, at 9397.
    \21\U.S. EPA, EPA's Responses to Public Comments on EPA's National 
Emission Standards for Hazardous Air Pollutants from Coal- and Oil-
Fired Electric Utility Steam Generating Units, p. 761 (Dec. 2011) 
(online at www3.epa.gov/airtoxics/utility/mats_rtc_chapters_foreword-1-
2-3-4_121611.pdf).
---------------------------------------------------------------------------
    A number of groups submitted comments on the MATS rule 
urging EPA to create a separate subcategory for waste coal 
units.\22\ However, in the final MATS rule, EPA noted that the 
HAP emissions from waste coal units are not sufficiently 
different from emissions from coal-fired power plants to 
warrant further subcategorization or a separate MACT floor.\23\ 
This approach was upheld by the D.C. Circuit Court of Appeals 
which concluded that ``. . . EPA reasonably decided that 
separate standards for coal-refuse-fired [circulating fluidized 
bed power plants] were not warranted.''\24\
---------------------------------------------------------------------------
    \22\U.S. EPA, MATS Final Rule, 77 Fed. Reg. 9304, at 9396-9397.
    \23\Id. at 9395.
    \24\White Stallion Energy Center, LLC v. EPA, 748 F.3d 1222, at 
1250 (D.C. Cir. Apr. 15, 2014).
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D. Use of waste coal

    As noted above, a subset of power plants in the U.S. burn 
waste coal as their fuel source. This waste coal is a byproduct 
of coal mining, physical coal cleaning, and other coal 
preparation operations, and also contains matrix materials, 
clay and other organic and inorganic materials.\25\ Waste coal 
is primarily found in large piles near abandoned mines, and 
once burned the resulting ashes are used in mine reclamation 
projects.\26\ The majority of these power plants are in 
Pennsylvania; however, some are located in other states like 
West Virginia and Utah.
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    \25\U.S. EPA, MATS Final Rule, 77 Fed. Reg. 9304, at 9484.
    \26\White Stallion Energy Center at 1250.
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 II. H.R. 3797, THE SATISFYING ENERGY NEEDS AND SAVING THE ENVIRONMENT 
                              (SENSE) ACT

A. Summary of the SENSE Act

    Section 2(b) relates to the treatment of waste coal 
facilities under CSAPR. The section requires the EPA 
Administrator to ensure that power plants using waste coal 
derived from bituminous coal would maintain the same allocation 
of Phase 1 SO2 emissions allowances under Phase 2. Section 
2(b)(1)(C) prohibits these waste coal plants from trading or 
banking the additional SO2 emissions allowances. Section 
2(b)(2) prohibits the EPA Administrator from increasing a 
state's emissions budget in Phase 2 to account for the extra 
allowances allocated to waste coal units.
    Section 2(c) relates to the treatment of waste coal 
facilities under MATS.\27\ Specifically, section 2(c)(2)(v) 
provides an additional compliance option for the hydrogen 
chloride (HCl) and SO2 standard, allowing waste coal 
facilities--or a group of waste coal facilities--to capture and 
control 93 percent of SO2 emissions.
---------------------------------------------------------------------------
    \27\Note: section 2(c) is not limited just to waste coal units 
burning bituminous coal.
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B. Issues raised by the SENSE Act

    The CSAPR provisions in section 2(b) raise a number of 
concerns. First, in the absence of the bill, Phase 2 SO2 
emissions allowance allocations would likely have decreased for 
all, or at least most, of the existing waste coal units. 
Second, preventing any increase to a state's emissions budget, 
as this section would do, is ostensibly to limit the impact of 
the resulting increased pollution from waste coal facilities on 
downwind states. However, the result of this provision would be 
that other power plants in a given state that are covered by 
CSAPR will have to cut their emissions to make up the 
difference. Third, this section gives the EPA Administrator a 
number of new authorities that the Clean Air Act currently 
reserves to states by tasking the Administrator with providing 
and allocating CSAPR emissions allowances.
    In essence, section 2(b) picks winners and losers--tipping 
the scales in favor of bituminous waste coal units, at the 
expense of all other covered units within a state. This 
provision would artificially reallocate emissions allowances, 
alter the CSPAR trading system, create inequities in the 
market, and impede a state's right to determine how to best 
comply with the requirements of the rule. In submitted 
testimony, EPA noted that the bill's changes to the CSAPR 
program ``would remove economic incentives to reduce emissions 
at coal refuse plants,'' and ultimately would result in ``a 
less efficient and more costly compliance with CSAPR.''\28\
---------------------------------------------------------------------------
    \28\House Committee on Energy and Commerce, Subcommittee on Energy 
and Power, Written Statement of Janet McCabe, Acting Administrator, 
Office of Air and Radiation, U.S. Environmental Protection Agency 
(EPA), Legislative Hearing on H.R. 3797, the Satisfying Energy Needs 
and Saving the Environment Act (SENSE) Act and H.R. __, the Blocking 
Regulatory Interference from Closing Kilns (BRICK) Act, 114th Cong. 
(Feb. 3, 2016) (online at docs.house.gov/meetings/IF/IF03/20160203/
104366/HHRG-114-IF03-20160203-SD004.pdf) (hereinafter ``Subcommittee 
Legislative Hearing'').
---------------------------------------------------------------------------
    Further, if a state wishes to allocate additional 
allowances to waste coal plants, it can already do so through 
the SIP process. During the subcommittee legislative hearing, 
John Walke from the Natural Resources Defense Council noted, 
``States today have the authority to differently allocate 
allowances within the emitters in their state. . . . So if 
Pennsylvania wants to incentivize waste coal energy production, 
they can do so by reallocating sulfur dioxide allowances within 
the electric sector.''\29\ EPA also raised concerns with this 
provision since it ``would potentially deny states control over 
allocations of allowances by rendering any submitted state plan 
with a different allocation to these units unapprovable'' by 
the Agency.\30\
---------------------------------------------------------------------------
    \29\Subcommittee Legislative Hearing, Response to Questions of John 
Walke, Natural Resources Defense Council (online at democrats-
energycommerce.house.gov/committee-activity/hearings/hearing-on-hr-
3797-the-satisfying-energy-needs-and-saving-the-0).
    \30\Subcommittee Legislative Hearing, Written Statement of Janet 
McCabe, Acting Administrator, Office of Air and Radiation, U.S. 
Environmental Protection Agency (EPA) (online at docs.house.gov/
meetings/IF/IF03/20160203/104366/HHRG-114-IF03-20160203-SD004.pdf).
---------------------------------------------------------------------------
    The MATS provisions in section 2(c) also raise a number of 
concerns. It is not known how many facilities would opt for the 
bill's new compliance option, but the end result is likely 
additional emissions of air pollutants. Proponents argue that 
waste coal plants are unable to meet the current HCl and SO2 
limits and need an alternative pathway to comply with the MATS 
rule. However a less stringent SO2 standard is not necessary 
since existing technology is capable of controlling 99 percent 
of HCl and 96 percent of SO2.\31\ At the hearing, Mr. Walke 
explained that ``[i]t is simply incorrect to suggest that coal 
waste plants burning any type of coal waste are incapable of 
achieving either the HCl or the SO2 standard in the existing 
MATS rule'' and that,
---------------------------------------------------------------------------
    \31\U.S. EPA, Regulatory Impact Analysis for the Final Mercury and 
Air Toxics Standards, at 2-8--2-9 (Dec. 2011) (online at www3.epa.gov/
ttn/ecas/regdata/RIAs/matsriafinal.pdf).

        [W]hen the D.C. Circuit in its decision heard the full 
        legal arguments from the trade association for waste 
        coal operators and looked at all the evidence they 
        presented and the evidence in the administrative record 
        that EPA had compiled, they squarely rejected those 
        claims in a three to nothing decision and that decision 
        was left untouched by the Supreme Court in that 
        relevant Respect.\32\
---------------------------------------------------------------------------
    \32\Subcommittee Legislative Hearing, Response to Questions of John 
Walke, Natural Resources Defense Council (online at democrats-
energycommerce.house.gov/committee-activity/hearings/hearing-on-hr-
3797-the-satisfying-energy-needs-and-saving-the-0).

    Democratic members offered two amendments during the full 
committee markup to address the concerns raised by the SENSE 
Act. Ranking Member Pallone offered an amendment to strike the 
bill's CSAPR sections, highlighting that the provision is 
unnecessary since states already have the ability to reallocate 
emissions allowances to benefit waste coal units if they so 
choose. Rep. Engel offered an amendment allowing a state to 
opt-out of the bill's CSAPR provisions if it determined that 
doing so would lead to an increase in the overall cost of 
complying with EPA's rule. The Engel amendment highlights EPA's 
concern that the bill interferes with the CSAPR market and 
would likely result in less efficient and more costly 
compliance. Both amendments also address the bill's states' 
rights issues by preserving a state's ability to determine the 
best method of compliance with CSAPR, which is currently 
afforded to them under the Clean Air Act. The Pallone and Engel 
amendments were each defeated by a party line vote of 22-29.

                            III. CONCLUSION

    We oppose H.R. 3797 and the legislative remedy offered by 
this bill. It comes as no surprise that the majority is once 
again offering legislation to undermine Clean Air Act 
regulations to benefit coal-fired power plants at the expense 
of public health. What is surprising is that the SENSE Act puts 
major coal-fired plants at a disadvantage relative to waste 
coal plants that receive regulatory relief under this 
legislation. H.R. 3797 undermines states' authorities to 
develop emission budgets tailored to the specific emission 
sources in their power and industrial sectors. And, H.R. 3797 
undermines the proven market-based approach of using emission 
credits to achieve improved air quality at the lowest cost.
    All of this is being done to benefit the approximately 20 
waste coal plants that exist in a handful of states. While 
these plants address one of coal's major legacy problems--
dangerous, polluting piles of coal mine tailings from abandoned 
coal mining operations--cleanup of these piles can and should 
be done without undue transfer of mercury, SO2 and other 
pollutants from the land to the air.
    It is ironic that those who routinely accuse President 
Obama and his administration of waging a ``war on coal'' are 
supporting H.R. 3797, a bill that will place greater emission 
reduction burdens on coal-fired utilities to allow waste coal 
facilities to emit more pollutants. The bill also deprives 
facilities of valuable emission credits that they would 
otherwise gain under current law for converting to natural gas 
or otherwise reducing their emissions.
    None of this is necessary. The states already have the 
authority to allocate additional emission allowances to waste 
coal plants if they choose to do so under CSAPR. This bill 
imposes a specific allocation solution on the states, a one-
size-fits-all solution that allows waste coal plants to emit 
more pollutants. In addition, there is no evidence that more 
generous emission allocations are necessary. There are waste 
coal plants that meet the CSAPR and MATS regulations today and 
there is technology available to enable waste coal plants to 
comply with the requirements of these rules. There is no 
justification for treating them differently from other coal-
fired generation facilities.
    For the reasons stated above, we dissent from the views 
contained in the Committee's report.
                                   Frank Pallone, Jr.,
                                           Ranking Member, Committee on 
                                               Energy and Commerce.
                                   Bobby L. Rush,
                                           Ranking Member, Subcommittee 
                                               on Energy and Power.

                                  [all]