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Every week, Vermont Public's politics team provides a succinct breakdown of some of the biggest issues at the Statehouse.

Capitol Recap: Major climate bill aimed at transforming home heat takes key step forward

The Vermont Statehouse, which is made of pale stone and has a gold rotunda, against the backdrop of a steep, tree covered hillside. There is snow on the steps and on the branches in the background.
Abagael Giles
Vermont Public
This week, lawmakers in the Senate Committee on Natural Resources and Energy voted to advance a bill that aims to dramatically reduce greenhouse gas emissions from heating buildings.

With a goal to cut carbon pollution, a group of Senate lawmakers held a key vote Friday on a bill that would transform the way Vermonters heat their homes and businesses. It’s one of the major recommendations in Vermont’s Climate Action Plan, and it’s an especially complex piece of legislation.

On this week’s Capitol Recap, Vermont Public’s Jenn Jarecki spoke with climate and environment reporter Abagael Giles about what’s in the Affordable Heat Act and what it would do. Their conversation below has been edited and condensed for clarity.

Jenn Jarecki: So Abagael, can you give us the 30,000-foot view of what’s in this bill?

Abagael Giles: Broad strokes, the goal of this bill is to make the companies that supply fossil fuel heat in Vermont start to change their business models to sell lower carbon heat to their customers.

This could be through things like supplying biofuels in lieu of traditional fossil heating fuels, or weatherizing homes or installing cold climate heat pumps or high efficiency wood heat.

And it’s kind of like what Vermont has done to regulate our electric utilities to make them provide more renewable and low carbon electricityover time.

The bill would create a marketplace that companies bringing fossil heating fuels into Vermont would have to participate in.

More fromBrave Little State: How much does Vermont’s power grid depend on fossil fuels?

Every year these companies will have to show they have accumulated enough so-called “clean heat credits.” And the credits will be based on how much carbon pollution was saved, factoring in the whole lifecycle of the fuel they help people switch to and away from.

And there will be two ways businesses can do this. They can pay a fee to someone that’s been vetted by state regulators to do this work. Or they can apply for a permit to do that work themselves. In either case, they’ll have to make sure a certain percentage of that work serves low and middle income households.

Why do lawmakers want to set up this marketplace now? 

Vermont has committed by lawto reduce greenhouse gas emissions really dramatically in the coming decades.

Almost 60% of Vermont households use fossil fuels for heat. And if we’re going to change that, we need a way to fund this transition for low and middle income homes, for renters, for mobile home residents.

And they want to nudge small businesses to start adapting their business models. The hope is this will do both.

OK, Abagael, but Gov. Phil Scott vetoeda similar policy last year. Does this new bill address his concerns?

Based on testimony we’ve heard, the governor does not support this bill. And that’s for two major reasons. The bill is kind of like a blueprint lawmakers will send to the Public Utility Commission to stand up this marketplace.

Scott thinks lawmakers should have to come back and pass a second law to approve that marketplace after it’s been stood up and we have a better idea of how it will impact fuel prices.

Right now, there’s a sort of a softer check back — a less formal opportunity for lawmakers to tweak the policy over the next two years. But it’s not a second approval process by the full Legislature.

More fromVermont Edition:Vermont lawmakers start new session with Affordable Heat Act, other climate concerns

Democratic Sen. Chris Bray of Addison County chairs the Senate Natural Resources Committee and he says that should be sufficient for the governor:

“It’s a bit of a chicken and egg. If you don’t start now and develop a program, and develop like, the cost analysis and all the rest, you don’t have anything to evaluate,” Bray says. “So we’re saying, ‘OK. Let’s get going.’”

Interesting, so we don’t really have a concrete idea of how this will affect heating prices yet?

Yeah, that’s right — at least in the near-term for individual households. A lot of numbers are being tossed around by all sides and none of them are fully fleshed out. There’s a lot still to be studied.

There are a lot of people who agree with the governor that we shouldn’t approve this policy until we know for certain how this will affect heating fuel prices. Then others say, ‘Yes, we need to know more, but we can gather that information as we go.’

Here’s another perspective, from Ben Edgerly-Walsh at VPIRG, one of the climate groups that supports the policy. He points out it’s not like fossil fuels are an affordable option for people right now, either.

“The status quo is incredibly unaffordable for Vermonters. And it leaves Vermonters at the whims of a global fuel market that we have absolutely no control over," he said.

So who would be regulated under the bill and what do they think?

Lawmakers would have loved to regulate the big companies — the regional wholesalers of fossil fuels. But there’s some legal question about whether the state can do that, since most are outside Vermont.

So they settled on the business that first sells these fuels in Vermont. But that includes many small family businesses: local fuel dealers who have to travel across state lines to get their fuel from those wholesalers.

And it’s interesting Jenn, the biggest fossil fuel companies in Vermont, they supportthe bill. One thing worth noting: Vermont Gas was involved in designing this policy from the beginning. And it really gives them a lot of flexibility in how they can comply. Global Partners, a big wholesaler of liquid fuels in Vermont, they like that it regulates both retailers and wholesalers.

Most small fuel dealers don’t. Here’s Matt Cota, a lobbyist who represents them.

“We’re gonna miss something when the smallest dealers can’t compete with the largest dealers,” he said.

Cota says if Vermont wants this industry to shift towards things like electrification, where we already have a workforce deficit, we could do more to fund and support small businesses and their employees in doing that.

Abagael, what about environmental groups? Where do they stand on this proposed legislation?

Most of the big climate advocacy groups support the bill. But some of the organizations around the state that tend to focus on environmental justice — 350 Vermont and Vermonters for a Clean Environment — they oppose the bill.

They think it should do more to consider how new heat options will affect human health. And many feel companies shouldn’t be allowed to supply bioenergy. These are things like fuels made from soybean oil and also natural gas made from landfill and cow methane. That’s because of how they could affect farming and land conversion.

The Vermont chapter of the Sierra Club supports the policy, but expressed concern in recent testimonyabout a provision that allows Vermont Gas to earn credits by buying landfill gas from out of state.

Where does the bill go from here? And do lawmakers think they have the votes to pass it?

This bill has a long way to go — and a lot could still change.

Its next step is to the Senate committee that deals with spending. And then if it makes it through the Senate it still has to go to the House.

At the earliest, this marketplace would go into effect in 2026.

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I think everybody agrees that we need to pollute less with home heat. And there’s good data to show that doing that is eventually going to save everyday people a lot of money in the long run.

But how much will it cost to get there and who pays for the switch?

The real question of the session will be: can Democrats sustain the votes they need to override a likely veto from Gov. Phil Scott?

Have questions, comments or tips?Send us a message or get in touch with reporter Abagael Giles@AbagaelGiles.

Corrected: February 18, 2023 at 1:20 PM EST
This story has been corrected to say that the Vermont Chapter of the Sierra Club endorses S.5. A previous version of the story incorrectly reported that they oppose the bill.
Abagael is Vermont Public's climate and environment reporter, focusing on the energy transition and how the climate crisis is impacting Vermonters — and Vermont’s landscape.

Abagael joined Vermont Public in 2020. Previously, she was the assistant editor at Vermont Sports and Vermont Ski + Ride magazines. She covered dairy and agriculture for The Addison Independent and got her start covering land use, water and the Los Angeles Aqueduct for The Sheet: News, Views & Culture of the Eastern Sierra in Mammoth Lakes, Ca.
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