November 16, 2015

S.J. Res. 23 – Disapproval of New Power Plant Rule

Noteworthy

Background: Senator McConnell introduced S.J. Res. 23, a joint resolution providing for congressional disapproval under the Congressional Review Act of the Environmental Protection Agency’s final rule governing greenhouse gas emissions from new, modified, and reconstructed power plants. The Environment and Public Works Committee discharged the resolution today. The resolution has 47 co-sponsors. The House Energy and Commerce Committee’s Subcommittee on Energy and Power forwarded H.J. Res. 71, an identical resolution, to the full committee by a vote of 15 to 12 on November 3, 2015.    

Floor Situation: This week, the Senate is expected to conduct a roll call vote on the motion to proceed to S.J. Res. 23.

Executive Summary: The resolution disapproves the final rule published by the Environmental Protection Agency on October 23, 2015. It deems that the rule shall have no force or effect. It prohibits the rule from being reissued in substantially the same form.

Overview of the Issue

The EPA’s rule governing carbon dioxide emissions from new power plants establishes emissions limits of 1,000 pounds of CO2 per megawatt hour on a gross output basis for new natural gas-fired power plants, and 1,400 pounds of CO2 per megawatt hour on a gross output basis for new coal-fired power plants. The rule states that the best system for emissions reductions for new natural gas-fired power plants is natural gas combined cycle technology, and for new coal-fired power plants is a new highly efficient supercritical pulverized coal unit with partial carbon capture and storage.

According to a September 22, 2015 Congressional Research Service report:

“In 2014, EPA proposed regulations to reduce [greenhouse gas] emissions from fossil-fueled (coal, oil, and natural gas) power plants, which EPA refers to as electric generating units (EGUs). The agency proposed standards for new EGUs in January 2014 and for existing and modified units five months later. It finalized these rules August 3, 2015. EGUs are the source of one-third of the nation’s GHG emissions, so it is difficult to envision a regulatory scheme that reduces the nation’s GHGs emissions without addressing their contribution. At the same time, affordable and reliable electric power is central to the nation’s economy and to the health and well-being of the population …

“Of the six [greenhouse] gases, carbon dioxide (CO2), produced by combustion of fossil fuels, is by far the most prevalent, accounting for 80% of annual emissions of the combined group when measured as CO2 equivalents.

“Members from both sides of the aisle, including a majority of the House in the 112th – 114th Congresses, have expressed concerns about EPA proceeding with GHG regulations that could have major economic impacts. Some argue that the case for GHG controls has not been proven. Others maintain that EPA should delay taking action until Congress more explicitly authorizes it.”

S.J. Res. 23 was filed under the Congressional Review Act. This statute provides fast-track procedures for Senate consideration. Most notably, it cannot be filibustered, enabling passage by two simple majority votes – first on the motion to proceed, then on final passage. If the motion to proceed is agreed to, the resolution of disapproval is subject to a maximum of ten hours of debate before a vote on final passage. Amendments are not permitted. If the Senate and House pass these resolutions, and if the president signs them into law, the CO2 rules will not take effect and cannot be issued in “substantially the same form” as the disapproved rules.

Considerations on the Resolution

A coalition of 23 states led by West Virginia has filed a lawsuit arguing that the CO2 rule for new power plants would require the plants to incorporate carbon capture and sequestration technology, even though CCS has not been adequately demonstrated on a commercial scale. In 2013, a former top Obama administration energy official said it was “disingenuous to state that the technology is ready” because the costs of CCS are “much too high to be commercially viable.” He admitted that the technology “increases the cost of generated electricity by 80 percent.” Incorporating CCS also reduces a plant’s efficiency by as much as 40 percent.

It is true that in recent years low natural gas prices have helped persuade utilities to switch from coal to natural gas. But natural gas prices are volatile. When they spike in the future, coal-fired power will be needed to ensure stable, affordable electricity rates. By prohibiting the construction of new coal-fired power plants, the rule removes an important tool for ensuring a diverse, affordable, and reliable supply of electricity and a critical hedge against higher natural gas prices in the future.

Notable Bill Provisions

Joint Resolution

Resolves that “Congress disapproves the rule submitted by the Environmental Protection Agency relating to ‘Standards of Performance for Greenhouse Gas Emissions from New, Modified, and Reconstructed Stationary Sources: Electric Utility Generating Units’ (published at 80 Fed. Reg. 64510 (October 23, 2015)), and such rule shall have no force or effect.”

Administration Position

The administration has not issued a Statement of Administration Policy at this time.

Cost

CBO has not issued a cost estimate at this time.

Amendments

Amendments are not permitted on Congressional Review Act resolutions of disapproval in the Senate.