The Vermont Senate’s Natural Resources and Energy Committee unanimously signed off on Friday on the latest version of last year’s failed “clean heat standard” bill. The legislation, intended to clean up Vermont’s heating sector, has a new name and new momentum — but is drawing the same objections from fossil fuel dealers worried it might put them out of business. Gov. Phil Scott vetoed a version last year over concerns that it would raise heating fuel prices. Lawmakers fell one vote shy of overriding Scott. The new version, which the Democratic supermajority calls its top climate priority this session, has been rewritten and rebranded as the Affordable Heat Act.
The moniker aims to highlight how low- and moderate-income residents would receive the bulk of the program benefits, such as subsidized home weatherization and electric heat pump installation.
“This is a huge win for the environment and a huge win for people’s fuel bills,” Sen. Anne Watson (D/P-Washington) said after the vote, “because the only way to get their fuel bills to be lower is to get them off fossil fuels.”
Vermonters paid about $650 million more for heating fuel this winter than last, said committee chair Sen. Chris Bray (D-Addison). That’s roughly $1,000 for every person in the state.
In the face of such price volatility, it is imperative that lawmakers create a program to help people shift away from fuels that not only harm the climate but their wallets, as well.
“The cost of inaction is very real, and people are feeling it right now,” Bray said.
The cost of complying with the program could be too much for many fuel dealers, however, predicted Matt Cota, government affairs director of the Vermont Fuel Dealers Association.
Many, especially smaller ones in rural areas, would either fold or sell to larger companies because they couldn’t afford to accumulate enough “clean heat credits” to avoid steep penalties, Cota said.
“The smaller fuel dealers will find it incredibly difficult to maximize their ability to capture those credits,” Cota said.
The bill would require fuel dealers to decrease the amount of fossil fuel they sell over time. In the alternative, they could offset sales by supplying more biofuels, installing heat pumps and pellet stoves, and weatherizing homes for efficiency.
Fuel dealers who didn’t do so would be subject to “noncompliance payments.” These funds would be pumped back into clean heat projects.
Exactly how those payments would be calculated remains to be determined, but many assume the program would be similar to — and likely even run by — Efficiency Vermont, the statewide program that since 2000 has focused on reducing electricity usage.
Regulators would need to have the program in place by June 1, 2025. The goal is for the program to help the state achieve a 40 percent reduction in emissions by 2030 and 80 percent by 2050, as required by the 2020 Global Warming Solutions Act. Heating is responsible for about a third of the state’s emissions.
While supported by most environmental groups in the state, the bill has been lambasted by some. Annette Smith, founder and executive director of Vermonters for a Clean Environment, dismissed the bill as the “Stupid Heat Standard” in part because of its complexity. The conservative Ethan Allen Institute has called it a stealth carbon tax.
One challenge is determining how much credit to give fuel dealers for switching to alternative fuels, such as biofuels.
There is fierce opposition in some environmental circles to creating financial incentives for utilities and fuel dealers to shift to sources that are “renewable” but still produce significant greenhouse gas emissions.
Methane generated from landfills or farm waste is being promoted by Vermont’s only natural gas utility, VGS, as an important source of “renewable natural gas.” The utility has similar aspirations for “green” hydrogen. Fuel dealers like Bourne’s Energy have promoted biofuel made with fryer oil as a cleaner heating option.
Critics have blasted such alternatives as false climate solutions that, unlike solar and wind, don’t actually reduce emissions and are meant to extend the life of the nation’s oil and natural gas infrastructure.
The bill calls for these fuels, and others such as hydrogen and electricity produced by burning wood, to be closely scrutinized before fuel dealers or utilities can receive “clean heat credits” for switching to them.
The “carbon intensity value” of alternatives would have to be significantly lower than heating oil, factoring in the fuel’s generation, delivery and combustion.
“If it’s only a little bit better, it’s only going to get a little bit of credit,” said Ben Edgerly Walsh, climate and energy program director at Vermont Public Interest Research Group.
One change made to the bill was to clarify that “fugitive emissions,” meaning leaks from pipelines, would need to be factored into any analysis. Some critics of natural gas say those leaks are far worse than previously understood or publicly acknowledged by the industry.
VGS, the state’s largest supplier of fossil fuel, said it supports a “balanced” set of rules that offer “clear guidance” to the industry.
“The Affordable Heat Act’s framework holds promise to spur thermal sector transformation, allowing innovation in balance with the overriding goal of preserving affordability for our customers in northwest Vermont,” the company said in a statement.
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