Final
STAFF SUMMARY OF MEETING

COMMITTEE ON LEGISLATIVE COUNCIL

Date:03/25/2011
ATTENDANCE
Time:01:35 PM to 03:39 PM
Boyd
X
Cadman
X
Place:HCR 0112
Ferrandino
*
Hodge
X
This Meeting was called to order by
Kerr J.
X
Senator Shaffer B.
Kopp
X
Levy
X
This Report was prepared by
Morse
X
Katey McGettrick
Nicholson
X
Nikkel
*
Pace
X
Priola
X
Renfroe
X
Scheffel
X
Stephens
E
Todd
X
McNulty
X
Shaffer B.
X
X = Present, E = Excused, A = Absent, * = Present after roll call
Bills Addressed: Action Taken:
State Implementation Plan Review-


01:36 PM -- State Implementation Plan Review

President Shaffer called the meeting to order. He stated that the hearing is being held pursuant to Section 25-7-133 (2)(a), C.R.S. Under this statutory provision, any member of the General Assembly can request a hearing to review changes or additions to the State Implementation Plan (SIP). He explained that the hearing requests submitted by Representative Kerr J. and Senator Renfroe focused on the changes and additions to the Regional Haze State Implementation Plan adopted by the Air Quality Control Commission (AQCC). In particular, the requests focus on the commission's adoption of emission control strategies for certain Public Service Company of Colorado (PSCo) facilities that were included in the Emission Reduction Plan adopted by the Public Utilities Commission, pursuant to House Bill 10-1365, also known as the Clean Air, Clean Jobs Act. The scope of the hearing was limited to the following question: "Did the AQCC act properly and in accordance with state and federal laws in incorporating the PSCo Emission Reduction Plan into the SIP?".


01:38 PM

Tom Morris, Office of Legislative Legal Services, reviewed what he would cover in his presentation. He provided the committee with a binder of materials (Attachment A). He explained that the purpose of the hearing is for the Legislative Council to determine whether the SIP is in compliance with state and federal law. He first discussed the federal Clean Air Act requirements (see page 5 of Attachment A for more information). He also explained to the committee members best available retrofit technology (BART) requirements under federal law, and allowable alternatives to BART. He next discussed the SIP requirements under state law. He explained that once the state includes something in the SIP, it must receive permission from the federal Environmental Protection Agency (EPA) to remove anything from the plan. He reviewed specific provisions in state law that address concerning SIP stringency requirements. (see page 7 of Attachment A).

110325AttachA.pdf

01:44 PM

Mr. Morris next discussed the stringency issue in detail, noting three potential determinations the committee can consider: 1) the SIP is not more stringent than federal law, which he noted is the position of the Air Quality Control Commission; 2) the SIP is more stringent and violates law; and 3) the SIP includes things that are more stringent, but HB 10-1365 requires such.

01:48 PM

Mr. Morris next discussed the provisions of House Bill 10-1365 (see page 30 of Attachment A). He discussed the rate-regulated utility requirements and the Public Utilities Commission (PUC) requirements (see pages 12 and 13 of Attachment A). Mr. Morris directed the members to page 80 of Attachment A. The chart notes nitrogen oxide emission rates, PUC decisions for coal-fired generating units, which include: replace and retire, convert to natural gas, and emission controls. He specifically discussed Arapahoe County, and then proceeded to walk the committee members through the chart.

01:56 PM

He reviewed the options for Legislative Council: 1) take no action. The members who signed the letter must make notice by Monday, March 28, 2011, to introduce legislation;or 2) vote on drafting legislation. This prohibits the members who requested the review from introducing legislation. He noted the implications of changes that could result in the federal government withholding federal funds. Senator Renfroe asked Mr. Morris to detail the timeline for the decisionmaking process under HB 10-1365. Mr. Morris responded, with Senator Renfroe asking following up questions about the hearing process for the AQCC and the PUC.


02:01 PM

Garry Kaufman, representing the Air Quality Control Commission and the Colorado Department of Public Health and Environment (CDPHE), and William Allison, First Assistant Attorney General, Natural Resources and Environment Section, Colorado Department of Law, and counsel for CDPHE, introduced themselves to the committee. Mr. Allison explained his role in representing CDPHE in the Haze SIP. He explained that Mr. Kaufman will review the substantive decisions from the AQCC. Mr. Allison stated that the SIP review process accomplished the requirements of the state Clean Air, Clean Jobs Act. He explained that the commission followed its normal procedures for hearings, discussing the process for issuing a public notice on the rulemaking hearing and noting that there was extensive public comment, both written and oral. Mr. Allison stated that the hearings included the many stakeholders who were interested in the process, and named specific parties who participated in the process. He explained that the only objections were from the coal industry representatives. He noted that the National Parks Service cited the SIP analysis done by the state as some of the most comprehensive in the country.

02:06 PM

Mr. Allison continued his remarks, noting that HB 10-1365 set forth tight timeframes, which resulted in Xcel submitting a plan in September, the AQCC reviewing it that same month, and then PUC considering it in December, after which the commission took final action on the plan. He explained the AQCC did not object to the PUC recommended plan. Mr. Allison also detailed the public notice issued by AQCC as part of the process, noting the transparency in the process and the relatively minor nature of the changes when they are considered within the context of the entire SIP. He next addressed the question of stringency, stating that, to the extent there is conflict in state statute, the most recently enacted legislation prevails. He also stated the act is not intended to block voluntary measures, and that the BART alternative is required by federal law and not more stringent than federal law. He discussed the purposes of allowing states to implement BART alternatives, which is to provide increased flexibility.

02:12 PM

Mr. Kaufman noted that Mr. Allison reviewed the procedural requirements and he will review the substantive requirements. Mr. Kaufman noted that, while there have been many procedural objections, the substantive objections have been few. He stated that the Haze SIP is very technical and would not review it in detail with the committee. He focused on the emission reduction goals of the SIP and enumerated specific emission reduction target levels for nitrogen oxide and sulfur dioxide. Mr. Kaufman noted how the AQCC met the requirements of state and federal law, and reviewed the requirements under HB 10-1365 for AQCC. He further noted that the commission adopted what was envisioned by HB 10-1365, and that despite concerns being raised about attempts to eliminate coal, the plan in fact does not, and in fact, recognizes the importance of coal in addressing Colorado's energy needs.

02:19 PM

Mr. Kaufman continued his remarks, noting that if the state fails to produce a plan, a federal implementation plan (FIP) will be established for the state by the federal EPA. He noted that funds were withheld contingent upon the passage of HB 10-1365. He noted lawsuits that have been filed by environmental organizations. He explained that Oklahoma and New Mexico have FIPs. He concluded his remarks, stating his belief that the process was fair, clear, and open. He urged the committee to approve the SIP and have it be submitted to the EPA for approval. Representative J. Kerr asked Mr. Kauffman how the amount of particulate is calculated. President Shaffer asked Representative J. Kerr to explain the purpose of his questioning. Discussion on the applicability of questioning the witnesses on the calculations of particulate matter and whether it falls under the scope of the hearing ensued.







02:24 PM

Senator Renfroe asked how the scope of the hearing was determined. President Shaffer explained that he consulted with OLLS. Discussion on how the scope was determined ensued, with President Shaffer citing examples of the types of questions the committee may seek clarification on. Senator Renfroe asked if visibility analysis and modeling is required under state law. Mr. Kaufman responded, noting that it is not required for a BART alternative and state law does not require visibility analysis.

02:28 PM

The following people testified:

02:28 PM -- Dennis Arfmann, representing Black Hills Energy, stated that the process was fair and open and consistent with the law. He requested that the SIP be submitted to the EPA as a whole, and not in part. He expressed concern about the possibility of a FIP being implemented.

02:29 PM --
Ken Lloyd, representing the Regional Air Quality Control Council, shared the mission of his organization and encouraged the members of the committee to endorse the SIP and forward it to the EPA. Mr. Lloyd responded to questions from the committee.

02:32 PM --
Carol Kirkstadt, representing herself, explained that her prepared remarks appear to go beyond the scope of the hearing and asked whether it was appropriate to continue. She expressed her desire for a public forum to address these issues. President Shaffer explained that while it is beyond the scope, given that she travelled to testify, she could proceed and if she provided her remarks to staff, they would be included in the record (Attachment B).

110325AttachB.pdf

Ms. Kirkstadt shared her concerns with the regional haze plan, noting the types of energy used in her community and remarked on nitrogen oxide emission reductions in Craig and Rawhide stations. She recommended that these stations not be included in the SIP. Senator Cadman asked Ms. Kirkstadt about her knowledge and involvement in the public hearing process.

02:42 PM --
Will Rowe, representing Encana Energy, Noble Energy, and Chesapeake Energy, made remarks on the purpose of the Clean Air, Clean Jobs Act. He indicated that the procedural process followed by the state agencies was in compliance with state law. He urged the adoption of the SIP and noted the importance of clarity to the business community and federal government. He responded to questions from the committee regarding the plan adoption and who was present at public hearings.

02:49 PM --
Frank Prager and Karen Hyde, representing Xcel Energy, offered to answer questions about the SIP. Mr. Prader stated that Xcel is in strong support of the legislature approving the SIP and forwarding it to the EPA. Senator Kopp asked what the federal government will do if the state fails to act. Mr. Prager explained that he could not say for sure, but he expressed concern about the potential costs of those federal decisions. Committee discussion ensued about potential federal actions in the absence of a SIP.

02:55 PM --
Mimi Larsen, representing herself, commented on the AQCC rulemaking process, citing her concerns with the process. Ms. Larsen also expressed concern with the memorandum prepared by OLLS. She responded to questions from the committee about the procedural process for adopting the plan.






03:08 PM

Ms. Larsen continued to respond to questions from the committee regarding the procedures followed in the plan adoption process and she referred the committee to a statutory cite that requires the AQCC to vacate and reissue another rule making notice when there are changes to what the PUC approved.

03:11 PM

Mr. Kaufman and Mr. Allison returned to the table to address additional questions regarding public notice and the appeals process. Mr. Allison stated that the act in whole must be looked at, and the intent of the legislation, in order to understand the vacate provision in statute. Senator Cadman asked if there is conflicting language in state law regarding the SIP. Mr. Allison responded that it is a question of statutory interpretation, and he believes that there is no conflict. Mr. Alison discussed the changes in the retirement dates for Cherokee Stations 1 and 3, noting that the minor change was to provide flexibility to Xcel to comply with one date or the other. He disputed Ms. Larsen's testimony, noting that the statute requires the PUC to dispute the changes and therefore there was no need to renotice the rulemaking process.

03:17 PM

Senator Renfroe sought clarification whether state statute requires a new review, regardless of the magnitude of the change. Mr. Allison responded that the issue was fully discussed by the commission, and it was clear that commission was granting the request for the change, but not rejecting the PUC plan. Senator Renfroe asked additional questions about visibility modeling and analysis. Mr. Kaufman explained that modeling is not required and differs from a visibility analysis. Representative Levy asked about the "reasonably foreseeable" requirement, asking whether the issue was addressed in the rule promulgation. Mr. Kaufman responded, stating the commission addressed the issues raised, but did not reach out to determine if there were issues other than those it was asked to consider. He noted the differences between the PUC's charge and the commission's charge, which was to determine whether the haze plan met state and federal law. Representative Levy asked whether restarting the rulemaking process would have resulted in a FIP. Mr. Allison noted that while it is not definite, he believes it would have resulted in a FIP.

03:24 PM

Senator Cadman asked how members of the public who are not aligned with a specific association become aware of these meetings. Mr. Allison detailed how the meetings are publicized, which includes newspaper notices, emails to counties, and information on the CDPHE website. He explained that four hours were set aside for public comment from interested citizens, and approximately 30 minutes of comment was provided, with most of the citizens in support. Mr. Allison also responded to a question from Senator Kopp regarding the authority of the commission in adopting the SIP. Senator Renfroe expressed concern about the conflicts in current law regarding the reasonable and foreseeable standard and the stringency requirement. Mr. Allison responded that if there is a conflict, the most recently enacted legislation and promulagted rules prevails, so, therefore, the Clean Air Clean Jobs Act controls in determining what to follow.

03:29 PM

Speaker McNulty asked the witnesses to discuss the adequacy of notice and process as presented in Ms. Larsen's testimony. Mr. Allison detailed the process, noting it was explicitly followed according to state law, which prescribed a specific timeframe.



03:32 PM --
Pamela Campos, representing the Environmental Defense Fund, asked that the committee adopt the SIP.
BILL:State Implementation Plan Review
TIME: 03:34:42 PM
MOVED:McNulty
MOTION:Moved that the Legislative Council recommend a bill to ratify the changes and additions to the SIP and to postpone the automatic expiration of the rules contained in the plan (Attachment C). The motion passed on a 17-0-1 vote.
SECONDED:
VOTE
Boyd
Yes
Cadman
Yes
Ferrandino
Yes
Hodge
Yes
Kerr J.
Yes
Kopp
Yes
Levy
Yes
Morse
Yes
Nicholson
Yes
Nikkel
Yes
Pace
Yes
Priola
Yes
Renfroe
Yes
Scheffel
Yes
Stephens
Excused
Todd
Yes
McNulty
Yes
Shaffer B.
Yes
Not Final YES: 17 NO: 0 EXC: 1 ABS: 0 FINAL ACTION: PASS

110325AttachC.pdf


03:38 PM

President Shaffer explained that the SIP statute gives members the right to introduce a bill affecting the SIP that is exempt from the 5 bill limit. The members who signed either the letter that was sent to the Speaker of the House or the President of the Senate have the ability to avail themselves of that right. He explained that if such a bill is introduced, it would not need delayed bill authorization and that leadership can establish reasonable bill request and introduction deadlines for any SIP bills. The President outlined the following deadlines: Friday, April 1, is the deadline for SIP bill requests and Friday, April 8, is the deadline to introduce a SIP bill. Members are limited to one SIP bill request and the remaining deadlines are waived. These deadlines will be formalized through a joint memorandum of the Senate and House Committees on Delayed Bills.

With no other business before the committee, the meeting was adjourned.