Encourage Sensible Regulatory Approach

The Kentucky Chamber of Commerce believes economic growth, energy independence and environmental protection are compatible and complementary goals. We recognize that legitimate uses of the environment should be protected and business activities may affect environmental quality. To achieve rational regulatory objectives, the Chamber encourages legislative and administrative actions that satisfy the following criteria: scientific validity, technical feasibility and economic rationality.

The need for government action should be established on the basis of objective information on which meaningful consensus can be achieved. Such information should demonstrate that any proposed action would cost effectively result in the avoidance of environmental harms or the creation of environmental benefits.

To achieve the true objective of environmental regulation, government must consider technical feasibility in setting standards. In addition, government should be a conduit for information on available control technologies for businesses but not control the supply/demand of the marketplace. Government action and requirements for compliance should reflect a proper balance of the benefits provided by a standard and the cost to society of achieving it. In setting standards, an agency should consider their impact on jobs and low income groups and the ability of business to operate profitably within the confines of any legal framework. Also, state government, utilities and businesses should work hand-in-hand to maintain a process to balance ratepayers’ desires for competitive rates through the least-cost option with incentives for energy production innovations, clean coal technologies and energy efficiency.

The Kentucky Chamber supports efforts by the Kentucky Energy and Environment Cabinet to ensure existing environmental laws and regulations are applied and enforced in a consistent, non-discriminatory manner at both public and private facilities. In addition, the Chamber urges the Cabinet to aggressively assert its authority as primary administrator of delegated environmental programs in cases where federal agencies attempt to overstep their oversight role or demand action inconsistent with past state regulatory actions or determinations.

Currently, federal agencies including the Environmental Protection Agency (EPA) and Office of Surface Mining Reclamation and Enforcement (OSMRE) are issuing an unprecedented number of federal mandates that will have a significant impact on the businesses and residents of Kentucky due, among other things, to the impact of those mandates on utility rates as a result of the cost of compliance and loss of existing coal-fired power supplies. Those attempts at regulation by the federal agency, in some cases with questionable legal authority, include but are not limited to:

  • EPA regulation of carbon dioxide from new and existing electric generating units; standards for new coal-fired power plants require use of carbon capture and sequestration technology that is not yet commercially viable; carbon dioxide limits for existing units cannot be met by the current fleet of power plants in Kentucky;
  • EPA revisions to National Ambient Air Quality Standards for sulfur dioxide, ozone, particulate matter and nitrogen oxides (regardless of whether the updates are currently required based on the schedule established by the Clean Air Act), as well as revisions to the implementation of the standards that could drastically increase the number of non-attainment areas and increase the difficulty of planning for attainment of the new standards;
  • EPA first-time regulation of hazardous air pollutants from coal-fired power plants through imposition of maximum achievable control technology requirements under the Mercury and Air Toxics Standards program;
  • EPA changes in water regulations and interpretations of existing rules without close examination of all costs and benefits; EPA should ensure any new water regulations (such as the Waters of the United States), or changed interpretations of water quality requirements, are flexible, efficient and recognize the role of the states in addressing their own water quality issues;
  • EPA new selenium recommended criterion which is lower than Kentucky’s proposed standard for water column in flowing water bodies, and the importance of maintaining the precedence of fish tissue data over water column concentrations where available;
  • Extension of the President’s Climate Action Plan to further regulate volatile organic compounds (VOCs) and methane from the oil and gas industry through updates to the new source performance standards for new and modified sources; and development of rules for existing facilities;
  • OSMRE Stream Protection Rule that provides duplication of water quality regulation and excessive new data collection and analysis requirements; and
  • Continued abuse of agency authority by the EPA as the agency moves to implement new requirements by regulating through guidance without following the rulemaking process.

The Chamber supports postponement of rules where legal challenges are present until the courts complete their review of the case and any appeals. Costly regulations such as those impacting electric utilities require significant investment that cannot be refunded to the ratepayers when a rule is vacated.

The Chamber supports rigorous rulemaking processes whereby stakeholders such as the business community are involved and have adequate time to review and comment on proposed rules. It is imperative the General Assembly and administrative offices of Kentucky, including the Energy and Environment Cabinet, continue to weigh in on the federal rulemaking processes and use their influence to impact the outcome of these regulatory programs. Allegations of the use of “sue and settle” tactics whereby environmental activist groups and organizations reportedly collaborate with the EPA to file suit over regulatory issues and then enter into court approved settlements to take certain actions without engaging in customary rulemaking procedures is a concern to the business community and should be monitored. The General Assembly and agency representatives should continue to be vigilant to avoid similar efforts in the Commonwealth as such activities undermine confidence in the rulemaking process.

The U.S. Fish & Wildlife Service (USFWS) implements the Endangered Species Act (ESA) and is required to consider candidate species within a one-year timeframe. The Chamber recommends the ESA be modified to allow additional time to consider these candidate species rather than restricting the timeframe to one year. This will enable USFWS to prioritize its listing process, create good science and manage its resources while protecting endangered and threatened species. In addition, the Chamber recommends discussion as to whether or not the ESA should be modified to allow the delegation of this program to an appropriate state agency that has exhibited the resources and expertise.

The U.S. Army Corp of Engineers (USACOE) will reissue nationwide permits. This program provides for streamlined permit actions that affects all industries in Kentucky. The Chamber will engage the USACOE in developing and ensuring the business community’s interests are represented in these discussions.

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