THE WHITE HOUSE
Office of the Press Secretary
______________________________________________________________________________
___________________________________________
For Immediate Release
August 2, 2015
PRESS CALL
WITH EPA ADMINISTRATOR GINA MCCARTHY
AND SENIOR ADVISOR TO THE PRESIDENT BRIAN DEESE
ON THE CLEAN POWER PLAN
Via Conference Call
4:08 P.M. EDT
MR. BENENATI: Hey, everyone. And thank you so much for joining us on this Sunday
afternoon, and apologies for being a few minutes late. So today we will speak to the Clean
Power Plan, which is being released tomorrow. And you will hear from Gina McCarthy,
Administrator of the EPA; and Brian Deese, Senior Advisor to the President.
This call is on the record and embargoed until the conclusion of the call. And with that, I
will turn it over to Brian.
MR. DEESE: Great. Thanks, everybody, for joining. I’ll be very brief at the top and
then turn it over to Gina to walk through some of the more specifics of the rule.
So as Frank said, and as I think you all know, tomorrow the President, here at the White
House, will release the final version of America’s Clean Power Plan. In doing so, the President
will take the single biggest step that any President has made to the curb carbon pollution that is
fueling climate change. And this will mark another major step in this administration’s effort,
under the President’s Climate Action Plan, to address the threats that climate change poses to our
economy and our national security in a way that also helps support a strong clean energy
economy and job growth here in the United States.
If you look at the Clean Power Plan, along with other major policy initiatives that this
administration has pushed forward, including landmark standards for -- fuel economy standards
for cars and trucks, we’ve put the United States in a position as an international leader on climate
change. And you’ll continue to see the President and the administration pushing forward and
working internationally to try to make sure that there’s a level playing field and that all countries
are coming together to try to reach an ambitious international agreement as well.

 And the announcement tomorrow will be the continuation of an all-out push by this
administration to elevate this issue of climate change, and speak directly to the American people
and the global community about the opportunities and the need to act. This will include the
President going to Nevada later this month to speak about the potential for deploying renewable
energy around this country. The President will be the first President to travel to the Alaskan
Arctic, which will happen at the end of this month, where he’ll speak quite frankly and directly
about the challenge that climate change poses to our nation as an Arctic nation, and to the world.
He intends to talk about climate change with the Pope, when the Pope visits in September, as
well.
So this is a big moment for the administration, and we’re very excited about the
opportunity to put this plan in place. With that, I want to turn it to Administrator McCarthy to
walk through the plan.
ADMINISTRATOR MCCARTHY: Thank you, Brian, and thanks, everybody, for
joining. No matter who you are, where you live, or what you care about it, climate change is
personal and it’s affecting your family today. Ask any homeowner -- climate change brings more
extreme heat and cold, more intense drought, floods, fires and storms, and those extremes
threaten our homes, dry up by utility bills, raise insurance premiums, and they can knock out the
power for days or weeks.
Ask a parent whose kids has asthma. Over the last 30 years, the percentage of Americans
living with asthma has more than doubled. But we hope to change to that. Ask farmers -- they
know the weather is getting more extreme. Longer, hotter summers, and more intense storms
and droughts are affecting their bottom line.
Here’s the really great news: Our country’s clean energy transition is happening faster than
anybody anticipated -- even as of last year when we proposed the rule. The accelerating trends
towards clean power and the growing success of energy efficiency efforts means carbon
emissions are already going down, and the pace is picking up. That means the air pollution is
decreasing, and we're improving public health year by year. The Clean Power Plan will surely
accelerate these trends, building momentum for a cleaner energy future.
Now, let me tell you a little more about the final rule. We already limit smog and pollutants
as well as toxics like mercury from our power plants. But before this rule, there were no limits
on carbon pollution. With this plan, carbon pollution from our power sector in 2030 will be 32
percent below 2005 levels.
The EPA received 4.3 million public comments in our proposal. We hosted hundreds of
meetings with states, utilities, communities and others. And we listened. Based on public
feedback, we’re finalizing a plan that mirrors how electricity already moves around the grid.
We’re setting fair, consistent standards across the country. And we’re giving states and utilities
the time and the flexibility they need to adopt strategies that work for them.
Along with tools like interstate trading and emission averaging, this means states can achieve
these standards while protecting affordable, reliable power. Electricity moves across state lines

 in an interconnected grid. So utilities told us, why should we treat power plants inconsistently
across the country? We should treat them consistently -- and that’s what we’ve done. Using
uniform national carbon pollution rates with similar types of power plants, we’ve set individual
state goals based on where each states currently gets its energy.
In short, a plant in Ohio is now treated the same as a plant in New Mexico. But just
because the standards are uniform, it does not mean that the plan is cookie-cutter. It isn’t. It’s
flexible, customizable, and puts states in the driver’s seat.
States and utilities told us they needed more time than the proposal gave them, and we
listened. That’s why in the final rule we require pollution reductions -- sorry -- the required
pollution reductions don’t kick in until 2022. That’s a two-year extension. We want to make
sure utilities have plenty of time to take carbon pollution into account with the investments
they’re already making and make that shift to a low-carbon future.
But to encourage states to stay ahead of the curve and not delay planned investments,
we’ve created a Clean Energy Incentive Program that will help states transition to a clean energy
faster. It’s a voluntary matching fund program that states can use to encourage early investment
in wind or solar projects, as well as energy efficiency projects in low-income communities.
Because states requested it, we’re also proposing a model rule they can adopt right away, one
that’s cost-effective and guarantees they meet EPA’s requirements, and will let their power plants
use interstate trading right away.
But they have to use our plan. They can cut carbon pollution in whatever way makes the
most sense for them. The uniform national rates in the plan are reasonable and they’re
achievable because no plant has to meet them alone or all at once. Instead, they have to meet
them as part of the grid and over time.
Here’s what I mean. Utilities can improve efficiency, run cleaner plants more, shift
towards cleaner fuels, or use renewables. States can take those reduction all the way through
energy efficiency and trading programs within their state or with other states.
Trading lets states turn their reductions into savings for consumers. We all know the cheapest
energy to generate is the energy we never need in the first place. So energy efficiency remains
an incredibly important and cost-effective part of the solution.
When the plan is fully in place in 2030, carbon pollution from the power sector will be 32
percent below 2000 levels, and dropping. That represents about 870 million less tons of carbon
pollution in 2030, and even less in future years as this momentum continues.
Our clean energy transition will protect Americans from other harmful air pollutants, too. But
2030, sulfur dioxide emission from power plants will drop 90 percent to be at the 2005 levels,
while emissions of nitrogen oxide from power plants will drop 72 percent. But the final rule is
also more achievable, thanks to the wide range of options states can use to meet their goals.

 Climate change is an incredible economic opportunity, and the Clean Power Plan propels
progress already underway. And when we protect the environment and our health, we all win. In
2030, our nation will see up $46 billion in net benefits from the Clean Power Plan. That means
we’ll avoid thousands of premature deaths and have thousands fewer asthma attacks and
hospitalizations by 2030 and beyond.
The Clean Energy Incentive Program means more states will take action early, so we’ll
see those health benefits quickly. Some special interest critics will tell you that it can’t be done.
They’ll say we have to focus on the economy at the expense of the environment. They’ll tell you
EPA’s plan will turn the lights off and send utility bills through the roof. But they are wrong.
They were wrong in the ‘90s when they opposed our limit on acid rain causing pollution from
power plants. Instead of the Doom’s Day some critics predicted, we slashed avid rain by 60
percent while prices stayed stable and the lights stayed on.
A safe environment is the foundation of a strong economy, When we act to protect it we
also grow opportunity. EPA has proved it again and again. Over the last 40 years, we have cut
air pollution 70 percent while our economy has tripled.
Over the next few days, we’ll hear the same, tired plays from the same special interest
playbook, but the American people know better. They made clear in their comments that they
need energy to stay affordable and reliable. EPA agrees. I would never accept a scenario where
affordability or reliability came into question, because electricity is the engine of our economy.
We've worked with the Federal Energy Regulatory Commission
-- or FERC -- and the Department of Energy to make sure of it.
We've even created a reliability safety valve so that if a
catastrophe threatens reliability we can respond.
That's why I'm optimistic about the future, because I see
ingenuity and the hard work of Americans all over the country who
are developing new technologies, transitioning their businesses
to clean energy, and pushing for climate action. And when the
United States leads, other nations follow. Since we proposed a
rule last year, the U.S. has made joint announcements with China
and Brazil, where each country made new commitments to cut carbon
pollution. Since three of the world’s largest economies stepped
up, we're confident other nations will follow, and the world will
reach a climate agreement in Paris later this year.
So we're proud to finalize our historic Clean Power Plan.
It helps protect what’s most precious to each one of us -- our
family’s health, our economic opportunity, and the planet we call
home for generations to come.
With that, I'll take some questions.
Q
Thanks very much for doing the call. Have you
considered an update to the cost estimation of $7.3 to $8.8

 billion to take into account the changes you're making? And if
so, what is it? And then also, can you explain what these
credits are that states will get if they ramp up renewables
early? Are these like pollution credits that they could use to
offset increased emissions also in their system?
ADMINISTRATOR MCCARTHY: Let me start with the cost
benefits. I gave you the net benefit numbers, and I can
certainly give this to you again, but the total cost, $8.4
billion; the total benefits, $34 to $54 billion, which leaves net
benefits of $26 to $45 billion.
MR. DEESE: And then with respect to your second question,
which was about the credit program and the Clean Energy Incentive
Program, the way that it will operate is that states will be
incentivized to match a state credit with a federal credit that
they could apply to renewable deployment or efficiency deployment
in low-income areas, and that those are credits that would count
against compliance during the compliance period.
Q
Thanks so much. Could you explain how state targets
might have changed after all these changes have been introduced?
ADMINISTRATOR MCCARTHY: Sure. Basically, a lot of comments
came in saying that it was usual and customary for the Clean Air
Act to look at every unit that was similar have unit rates, look
at performance goals. And when we took a look at that we found
that many of those comments were compelling. So we looked at
establishing similar rates -- we used what we call uniform
standards. So a coal unit is equal to a coal unit in another
state. And the same for natural gas. So every state goal is now
being looked at as basically how that uniform standard applies
and what their energy mix will dictate what those standards are.
MR. DEESE: And at the end of the day, what you’ll see is
state targets that are more uniform and less varied as a result.
ADMINISTRATOR MCCARTHY: Yes, the major differences between
the states will be much more narrow and states will be able to
understand that in addition to having a slight change in their
standards, they also will have a significantly revised
opportunity or enhanced opportunity to achieve compliance in a
variety of different ways.
We're putting out a model rule that is going to allow some
easy access to creating opportunities, and we're still
maintaining -- in fact, enhancing the opportunities for

 compliance. So while the state goals may have changed, the
ability to actually achieve those goals will now be much broader
-- well beyond state borders, reaching out to the large
interconnects that actually form the grid in a way that utilities
will be able to take advantage of and will be very familiar with,
because that's how the energy system works. That's how other
programs in EPA work for the utilities.
Q

Thanks for doing this. Two quick questions. Gina,
could you give out perhaps a comparison, a contrast between
states -- if states were under the formula from the proposed
rule, how that's changed with this new approach in terms of a
uniform standard and in terms of numbers? And second, is there
any opportunity to further strengthen or make more ambitious the
U.S. contribution to the Paris talks from this -- from the final
rule?
ADMINISTRATOR MCCARTHY: I think the rule is entirely
consistent with the President’s international concerns about
showing domestic leadership. In terms of looking at comparing
one state to another, I can't give you that comparison. I think
we'll be releasing state numbers tomorrow. But it is fair to say
that it remains -- all of these standards remain reasonable and
achievable for every single state. So while those numbers may
change, they’re all entirely doable and it's affordable, and it
will not threaten energy reliability or affordability.
MR. DEESE: And I would just say on the international side,
that this rule actually enhances in important ways our ability to
achieve the international commitments that we have made in
addition to supporting the 2020 and 2025 targets that we've made
by reaching a more ambitious emissions reduction goal in 2030 of
getting the total goal to 32 percent, up from 3o percent in the
proposal. That will help drive deeper decarbonization not just
in 2030, but in subsequent years as well.
So we feel that this rule gives us a strong foundation to
keep pushing forward against our international commitments and is
stronger when you look out at 2030 and beyond.
Q
Do you have a sense of how many states might take until
2022, and how many are poised to take earlier action, even if
it's just a ballpark range?
ADMINISTRATOR MCCARTHY: I do not know individually how many
states will in the program, but we are anticipating that these
incentives will be well-utilized. And any state that doesn’t

 choose to at a certain time will actually (inaudible) the states
that actually want them. So we think this will be fully
subscribed.
Q
I was wondering if you could explain more about states
can for credits trading systems without entering into (inaudible)
agreement. I'm wondering if that's legally enforceable, and also
wondering if that was put into the rule to address Mitch
McConnell’s argument that states need congressional approval to
form those sort of agreements.
ADMINISTRATOR MCCARTHY: No, actually we looked at the legal
issues that were made and we think we were fine with the proposal
and we're fine now. But this is just an opportunity to actually
allow states to choose many different paths toward trading that
they want. The model rule will be in place that sets the
structure for all states to follow if they choose. It's very
easy. And then we will have other systems that require
accountability to be transparent and for EPA to be able to track
it to ensure compliance.
Both of those systems will be legally enforceable and will
meet the test of the Clean Air Act. So we can provide the
flexibility and still stay within the four corners of the Clean
Air Act, and we can be assured that those reductions are
happening.
Q
I want to know when is this rule going to be published
in the Federal Register? And the rule is expected to face legal
challenges once it is finalized. Does the administration plan to
seek an expedited review of any sort, judicially at least?
ADMINISTRATOR MCCARTHY: I can't give you an exact date, but
it's going to follow a standard process, and we're ready with the
rule tomorrow. So you will be able to access it on the EPA
website. I would say bring your toothbrush, it's kind of long.
Q
I have two quick questions. One, utilities have
expressed worry about how it's going to be very expensive to
rewire the grid to accommodate all the new renewable electricity
that the rule is set to encourage. So what is the
administration’s response to those costs -- or the concerns of
those costs?
And secondly, a broader question on the overall target. So
you're giving more credit to the nuclear power plants under
construction and then scaling back natural gas, and taking out

 energy efficiency as part of the formula setting the 32 percent
target, and then, lastly, starting the rule two years late, while
creating the incentive program -- which I understand is optional
-- so can you explain how you make all those changes, which they
seem to be somewhat concessions to the industry, and you get a
target that was greater than you had last year?
ADMINISTRATOR MCCARTHY: Well, they’re clearly not
concessions to anybody. One of the things we did was to actually
solicit broad comment. What you're seeing is that we got really
good comment, and they questioned how we were doing things and
whether there was a different, more flexible approach. So in
terms of putting a scale on any particular energy generation, we
did not. We simply looked at the best way of getting the carbon
pollution reductions done under the Clean Air Act. And we are
not initiating a launch of renewables; we are actually seeing a
larger momentum towards renewables that we're taking cognizance
of.
We didn’t really decide to delay the startup of the
mandatory; we decided that the mandatory was best to start up
there for a variety of reasons, but there were still ways in
which we could make sure that there was continued incentive to
actually construct renewables and to do energy efficiency.
So you're absolutely right, there are a lot of changes.
They are direct results of comments that we have in the record,
new ideas of the way we can get this done in a way that better
fell within the four corners of the Clean Air Act, in a way that
allowed cost-effective reductions to be taken, in a way that may
change and enhance the flexibility that states have to achieve
these that address many issues that comment has raised. So we
did each one; we looked at them thoroughly. And this is how the
bottom-up approach of the Clean Air Act works. And in the end,
we did result in greater reductions, but those reductions come at
lowered cost and better public health benefits.
Q
I was wondering if you could explain a little bit the
difference in the treatment of nuclear power between the proposed
rule and this final rule.
ADMINISTRATOR MCCARTHY: Sure. I'm sorry, I forgot to
mention that. A few things remain with nuclear. First of all,
we had indicated that any nuclear facility that was under
construction would be considered as part of the standard-setting
process. We received comment on that and we felt that the
comment raised significant issues so that the new nuclear that's

 under construction is going to not be included in the standard
setting, but will be included as a compliance strategy.
We also indicated -- and this is I don't believe different
from the proposal that operates of nuclear facilities will be
credited because it's new, zero-carbon generation that will be
credited as part of a compliance strategy. We think that's
entirely consistent and appropriate and was a good opportunity
for us to listen to the comments that came in.
Q
I'd like to ask you about the role of natural gas.
Last year in the original plan, you were envisioning a big shift
from coal to gas generation. You now dropped that and you seem
less enamored generally with the idea of natural gas as a bridge
fuel. Can you just explain why that's changed, and address
whether that has anything to do with environmental concerns
around fracking and water pollution, air pollution, earthquakes,
that kind of thing?
ADMINISTRATOR MCCARTHY: Actually, I don't want you to get
the impression that we are putting our finger on any particular
type of energy generation. If you take a look at the energy mix
you’ll see that natural gas still remains a very strong part of
the energy mix.
What changed that figure was the decision that we were
compelled by a number of comments in the record that it would be
smarter and it would address the liability more head on if we
actually started the program -- the mandatory program in 2022,
which would also give us an opportunity to develop the Clean
Energy Investment Program that would continue to drive reductions
in 2020 and ’21, that would make sure that renewables wouldn't
have any delay in terms of their investment, but also gave us a
great opportunity for states to sit back and look at the
efficiency, which is also a very large part of the compliance mix
and the most cost-effective choices.
So when we made that shift, it might have resulted in less
immediate investment in new natural gas, but it certainly hasn’t
done anything to eliminate or reduce the importance of natural
gas in the energy system in 2030 -- or even coal, for that
matter. Fossil fuel still remains a consistent and important
part of the energy supply.
So all we're doing is looking for the most cost-effective,
flexible way that we can get carbon pollution and allow states to
actually drive those decisions home.

 Q
Two quick questions. For the proposal, you guys have
projected that coal will remain about 30 percent of the energy
mix in 2030. Do you guys have an equivalent figure for the final
rule? And then also, how can states translate their rate targets
to mass-based targets? Are there default limits that they can
opt for, or how would they do that?
ADMINISTRATOR MCCARTHY: The figure for coal in 2030 is 27
percent. And there are numbers in here for both mass-based and
rate-based for each state.
Q
Just a couple questions. When you said the $8.4
billion for total implementation or compliance costs, is that
through the run of the program? And then just a second question
-- can you explain the reliability safety valve a little bit more
in detail?
ADMINISTRATOR MCCARTHY: The $8.4 billion is the total cost
through 2030. In terms of the reliability safety valve, there
are a number of things that people actually should consider for
reliability purposes. One was to think about addressing what
they call the early cliff. We're taking care of that through the
startup change as well as more gradual interim step-down
standard.
We also were asked to take a look at if they were
reliability threat, to do what we did in the mercury toxic
standard and consider some type of a safety valve. We did that.
This is an opportunity to deal with a situation that, frankly, we
don’t see happening, but it’s an opportunity for us to have an
insurance policy against any situation that would threaten the
energy system that would require us to provide some opportunities
for additional flexibility.
So we’ve narrowly crafted it. You’ll be able to take a look
at it. We will be working with the Federal Energy Regulatory
Commission and the Department of Energy moving forward to make
sure that we are responding to any concerns and to continue to
monitor the situation. But we really don’t expect that safety
valve to ever have to be used.
MR. DEESE: And this is Brian. I just wanted to put one additional context on the cost
benefit on the numbers that Gina put forward. This rule has net benefits that are between four
dollars and seven dollars for every one dollar of cost. So this is a very strongly net-beneficial
rule. So I know your question was about the gross cost question, but it’s important, as we do

 with all regulatory steps, to look at the net impact. And you’re looking at four to seven dollars of
benefit for every dollar of cost.
ADMINISTRATOR MCCARTHY: The only other point that you might want to think about
is that utility industries themselves indicate that they spend about $100 billion a year on
investments in the system and in their upgrades and their technology improvements. So this is
not a considerable amount, but it is a direction -- a long-term investment direction signal that I
think the energy world will be able to take cognizance of.
Q Administrator McCarthy, what did you do with the 111b rule? Are you still using CCS as
the standard there?
ADMINISTRATOR MCCARTHY: Yes, we are. CCS employed as a -- it was a lower capture
rate, so it’s a simple CCS unit. We think that remains reasonable as well as available for new
coal units moving forward.
Q Just following up on the carbon (inaudible) storage question. So will that be -- CCS will
still be a mandate for new plants then in the new rule, or will it simply be an option? Has
anything changed with respect to the earlier proposal on this current rule?
ADMINISTRATOR MCCARTHY: The actual amount of capture has been lowered. We
asked a bunch of questions and received information in the comment period. But CCS will be
required for coal units. Natural gas will also have a similar rate to what was proposed. So, yes,
it will be required. It will be required as a lower rate. And that’s it.
Q Just to circle back to the question that I think my colleague asked earlier. You’re taking
building block four out of the original calculations. That presumably leads to less net benefits.
So what in the proposal offsets that change, and allows you to get to 32 percent rather than a 30
percent reduction?
ADMINISTRATOR MCCARTHY: Let me repeat that we weren’t shooting for a particular
goal, we were just looking at the numbers. There’s two things that I can readily point to. One is
that the projections that we are seeing from the energy agency for renewables is much more
aggressive than what we anticipated even a year ago when we proposed. So we have larger
amounts of renewables that are anticipated to be in the energy mix regardless of this rule. And
then we also see increased and consistent energy demand reduction, which also has a significant
influence on how much energy is generated from fossil units.
So those things in and of themselves change the baseline that we were looking at and
made the list that we needed to make through this rule a lot lower in order to achieve those more
aggressive numbers.
Now, we also, when we deployed renewables and looked at what was available, we looked at
the multi-state interconnects, the way in which the grid works, as opposed to looking at how
states set renewable fuel standards. Because we received a lot of comment on this, and the
energy world says this is how the energy world moves electrons -- why are you not following

 that? And so we did do that. And so we looked at renewables that are available across the
interconnects and we established a standard using that, and we ended up with the numbers that
we have.
Q Quick question. Do you see the new version of the rule to be more lenient on coal, or
about the same? Any perspective along those lines?
ADMINISTRATOR MCCARTHY: No, I don’t know whether I can do a comparison because,
frankly, this rule is taking advantage of cost-effective reductions that are available, using current
technology, and that’s what we’re supposed to do. And so we think that all of these reductions
by state and by units can be done reasonably and effectively and cost-effectively.
MR. DEESE: And the virtue of the rule and structure of the Clean Air Act is that as EPA sets
standards, states have broad flexibility to develop plans that work for them. So I think that’s
what you see in this rule, and that the outcomes will drive towards the most cost-effective
solutions.
Q I’m wondering if there’s any mention of a carbon tax for the method of compliance in the
final rule. And have any of the legal justifications changed?
ADMINISTRATOR MCCARTHY: No, there is no mention of a carbon tax. We basically
mention a number of standard ways in which we do business and the utility world does business
as available to them.
I’m sorry, you had one more question. Legal justification. We just made sure that we are
explaining legally why the changes were made and how this remains within the four corners of
the Clean Air Act. It is a, legally, very strong rule.
MR. BENENATI: Great. Thank you, Gina. Thank you, Brian. And with that, we’re
going to have to wrap. Again, this call was on the record and the embargo has been lifted. Just
for planning purposes for everyone on the line, EPA will host another more technical press call
tomorrow after the rule is posted to answer some of the more specific questions. So look out for
that from the EPA tomorrow.
If you have any follow-up questions, please email press@who.eop.gov. And thanks
again for your time on a Sunday afternoon.
END
4:47 P.M. EDT