U.S. Chamber Report Reveals that EPA’s Takeover of States’ Regional Haze Programs is All Cost, No Benefit

Thursday, July 12, 2012 - 8:00pm

WASHINGTON, D.C. – The U.S. Chamber of Commerce today unveiled a report revealing how the Environmental Protection Agency (EPA) is usurping state authority to manage their congressionally delegated regional haze programs.  EPA’s takeover of these programs to manage visibility in national parks will cost states millions of dollars to implement with no discernable enhancement of visibility.

The Chamber commissioned this report, authored by William Yeatman, to illustrate how a regulatory tool known as “sue and settle rulemaking” is being employed by the EPA to force states to relinquish their authority and accept EPA’s plans that are much costlier to implement and  increase utility costs for consumers. “Sue and settle rulemaking” is a regulatory tactic where an organization sues a federal agency in a distant court to initiate a rulemaking, only to have the agency settle behind closed doors. Since the lawsuit is only between the private organization and the federal agency, there is no notice given to the public about the settlement until the agreement is filed with the court.

“Sue and settle agreements allow EPA to convert a state Regional Haze program into a major new set of federal mandates, with no recourse for those affected until it’s too late,” said Bill Kovacs, the Chamber’s senior vice president for Environment, Technology & Regulatory Affairs.  “The report outlines the potentially disastrous effects of this regulatory tool being used by the EPA to disregard states sovereignty and take over what Congress clearly determined to be a state environmental responsibility. These federal haze requirements offer only high costs for states, utilities and consumers, with no benefit.”

“Despite all the publicity for other regulations, one of EPA’s more dubious, and arguably illegal regulatory efforts remains below the radar to many: the Regional Haze rule,” said William Yeatman, Assistant Director of the Center for Energy and Environment at the Competitive Enterprise Institute and author of the study. “EPA is now implementing a program that tramples over states’ authority.  In the long term, EPA’s abuse of its Regional Haze authority could present a persistent problem for all states.  With the EPA poised to impose similar constraints on several other states in the immediate future, it’s clear that no state is immune from having its rightful Regional Haze authority trumped by EPA at profound costs for virtually nonexistent benefits.”

Among the key findings from the 8 state case studies detailed in the report:

• In Arizona, EPA’s Regional Haze regulation threatens to increase the cost of water would force the state to spend an additional $90.2 million per year to implement the federal regulation.

• In Montana, EPA’s proposed Regional Haze controls are almost 250% more expensive than what the agency’s standing rules presume to be “cost effective” for Regional Haze compliance.

• In 2011, the EPA disregarded New Mexico’s submitted Regional Haze plan and imposed a federal plan that requires nearly $840 million more in capital costs.  According to the operators of the San Juan Generating Station, EPA’s plan would raise utility bills  for each household in New Mexico by $120 annually.

• Although North Dakota is one of only 12 states that achieves all of EPA’s air quality standards for public health, it would not be able to achieve EPA’s Regional Haze goals for visibility improvement even if all industry in the state shut down.  In addition, EPA’s proposed plan would cost North Dakota nearly $13 million per year.

• Refusing to approve Oklahoma’s Regional Haze plan, the EPA’s plan would cost the state $282 million per year.

• In Wyoming, the EPA proposed a federal implementation plan that would cost almost $96 million more per year than the state’s plan.

• Minnesota is subject to back-to-back Regional Haze regulations, where EPA is claiming authority to regulate regional haze twice in succession at the Sherburne County Generating Plant.

• EPA’s proposed plan would cost Nebraska almost $24 million per year to achieve “benefits” that are invisible.

The U.S. Chamber of Commerce is the world’s largest business federation representing the interests of more than 3 million businesses of all sizes, sectors, and regions, as well as state and local chambers and industry associations.