UPDATE 1-EPA chief in hot seat as lawmakers dissect carbon rule

Wed Jul 23, 2014 1:35pm EDT

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(Updates with comments from McCarthy, senators throughout)

By Valerie Volcovici

WASHINGTON, July 23 (Reuters) - U.S. Environmental Protection Agency Administrator Gina McCarthy told lawmakers on Wednesday that the agency's plan to slash carbon pollution from power plants does not overstep its authority, as some critics have said.

McCarthy testified before the Senate Environment and Public Works Committee on the EPA's first mandatory carbon cuts in the power sector, the largest source of domestic emissions. She faced questions about whether the agency had stretched the parameters of the Clean Air Act.

"EPA goes beyond the plain reading of Clean Air Act Section 111 (by) directing states to achieve questionable emission reduction targets from a limited menu of economically damaging and legally questionable 'options'," said Senator David Vitter of Louisiana, the committee's top Republican.

McCarthy said the EPA was not "expanding our authority" in crafting the proposal, adding that each state can comply with the rules as it best sees fit.

She was also questioned by Senator John Barrasso, Republican of Wyoming, about a recent New York Times article contending that the Natural Resources Defense Council, environmentalists he called "high powered Washington lobbyists," effectively wrote the plan for the EPA.

"I know how hard the great staff at EPA worked to design this rule, basically from whole cloth," McCarthy said, adding that she met more times with electric utilities than she met with the NRDC.

To mollify lawmakers who contend the EPA is waging war on fossil fuels, McCarthy said that coal and natural gas will remain a part of the U.S. energy mix.

"This plan ... builds on action already under way to modernize aging plants, increase efficiency and lower pollution, and paves a more certain path for conventional fuels in a clean energy economy," McCarthy said.

The rule sets the country's power sector on a course to reduce carbon dioxide emissions by an average of 30 percent below 2005 levels by 2030. Each state will have a customized target to reduce the carbon intensity of electricity production below 2012 levels by 2030.

Manufacturing and energy industry groups aired concerns in a letter sent to McCarthy on Tuesday.

The Partnership for a Better Energy Future, a coalition of business organizations formed in January to lobby against the EPA's plans, said the proposal would be too disruptive to the U.S. energy system and should be dumped.

The group also hinted at potential legal action, arguing that the EPA had overstepped the bounds of the Clean Air Act to draft its complex rule.

"Even more fundamentally, the proposal is based on a flawed interpretation of the Clean Air Act. We therefore urge EPA to go back to the drawing board on this rule," the group wrote. (here)

McCarthy said the proposal was not a radical approach to slashing carbon emissions.

"This proposal is designed to be moderate in its ask," McCarthy told senators. "We will get significantly more benefit than we are requiring." (Reporting by Valerie Volcovici; Editing by Ros Krasny, Ken Wills and Jan Paschal)

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