A successful veto override by the Vermont House of Representatives on Thursday has cleared the way for a regulatory body to begin work this summer on a “clean heat standard” that supporters say will reduce carbon emissions, and opponents say will increase the cost of heating fuels.
House lawmakers voted 107 to 42 to override Gov. Phil Scott’s veto of a bill that Democratic lawmakers have called the “Affordable Heat Act.” The Senate held its own override vote Tuesday, meaning the bill is now law, despite the Republican governor’s objections.
By requiring fuel dealers to earn “clean heat credits,” Scott said, the Legislature will force companies to engage in efficiency projects whose costs will be passed onto customers in the form of higher home heating bills.
Barre Town Rep. Gina Galfetti said the legislation will effectively “set the stage for a carbon tax.”
“Once the bill is enacted and the wheels are set in motion,” Galfetti said during a floor debate Thursday, “it will be impossible to turn back.”
Democratic lawmakers, meanwhile, say the proposal establishes the market-based incentives that will be needed to insulate Vermonters from volatile spikes in the cost of fossil fuels.
While financially secure residents are already installing heat pumps and weatherizing their homes to reduce their dependence on heating fuels that topped $5 a gallon this winter, St. Johnsbury Rep. Scott Campbell said lower-income Vermonters are being left behind.
“Our challenge, the challenge of every time, is to adapt. And the challenge of helping our constituents to adapt lies in smoothing the transition, the inevitable transition, to a dramatically less fossil fuel dependent lifestyle,” Campbell said. “It will not be, it cannot be, entirely cost free. But the longer we delay, the higher the costs and the greater the disruption, especially to those closest to the edge economically.”
While lawmakers have initiated the process to design the clean heat standard, lawyers who work for the Legislature say the plan cannot go into effect unless a future Legislature approves whatever rules and regulations the Public Utilities Commission submits.
The PUC will start designing the marketplace this July, and fuel companies in the state will have to register with the commission in January of 2024. The PUC and department of Public Service will share an in-depth report with lawmakers in 2024, detailing how the policy will affect fuel prices and the economy, and then submit draft regulations to lawmakers in January 2025.
Lawmakers will have to pass a second bill to codify those regulations before the core parts of the marketplace can be stood up.
Dover Rep. Laura Sibilia, an Independent, said if the economic analysis forecasts severe increases in heating costs for Vermonters, then it’s unlikely a future Legislature will enact the program into law.
“I have a feeling that if that analysis comes back to us as a 70-cent potential pass-along increase to Vermonters, we’ll be talking about that quite a bit,” Sibilia said.
During the pandemic, heating buildings surpassed transportation as theleading source of greenhouse gas emissions in Vermont.
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Projections from Vermont’s latest greenhouse gas inventory suggest that by the end of the decade, home heating will solidly surpass transportation as the biggest source of emissions in the state.
Vermont has taken some steps to secure emissions reductions from transportation by adopting California’s Advanced Clean Cars II and Advanced Clean Trucks rules, which will require that every new car auto manufacturers deliver to Vermont dealerships be electric in 2035.
Projections in the latest greenhouse gas inventory for the state, compiled by the Agency of Natural Resources, suggest that absent additional policy solutions, Vermont is not on track to meet its 2030 emissions reduction deadline under the Global Warming Solutions Act.
Lawmakers say the clean heat standard would expedite the transition off of fossil fuels by compelling fuel dealers to help their customers use less of them. Projects for which companies could be eligible to earn clean heat credits include weatherizing a drafty home, installing cold climate heat pumps or a high efficiency pellet stove, among other options.
Scott and other opponents of the bill say many Vermonters won’t be able to afford upfront capital costs associated with those projects, or find workers available to install them.
They also say the bill will overly burden small fuel dealers in the state, many of whom run their businesses on margins too small to absorb the cost of changing their business models or paying a fee to comply.
They say those businesses will be forced to pass on that cost to their customers.
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