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How the 'Affordable Heat Act' could transform how Vermont heats buildings

four images of different home heating resources and fuels, including, from left: a snow-covered outdoor propane tank; a wood stove burning a bright orange flame with firewood stacked nearby; an indoor hot water radiator; and a snow-covered heat pump outside near an orange-painted house
photos via iStock
More than 70% of Vermonters use fossil fuels to heat their homes and other buildings. This hour, we look at the Affordable Heat Act and what it means for Vermonters.

Vermont lawmakers are considering a sweeping new bill—S.5, often called the Affordable Heat Act—that would transform how the state heats its homes and buildings. The bill is part of efforts to fight climate change and reduce Vermont’s greenhouse gas emissions. This hour, we'll talk with a primary sponsor of the bill, the state's top environmental official and a small business owner about what the bill would mean for Vermonters.

Our guests are:

  • Sen. Becca White, of Windsor County, a primary sponsor of the S.5 Affordable Heat Act
  • Julie Moore, Secretary of the Vermont Agency of Natural Resources; the agency is responsible for the state's compliance with mandatory emission reduction targets stipulated in the 2020 Global Warming Solutions Act
  • Rob Stenger, partner-owner of Simple Energy, delivering heating fuels and servicing heating systems in Vermont and New Hampshire

A transcript of portions of this conversation has been edited and condensed for clarity.

Connor Cyrus: Sen. White, this bill is being promoted as a way to address emissions in Vermont, meet our state's climate goals, and transition our heating off of fossil fuels. And the way to do this is to establish a bill that calls for a "clean heat standard." Will you explain what this bill is and how the clean heat standard would work?

Sen. Becca White: Thank you so much for the question, because I think what most Vermonters are concerned about is how we meet those [legally binding] Global Warming Solutions Act requirements, making sure that we reduce our carbon [emissions].

So, to do that, the AHA—which, as you described, is a transition name from the Clean Heat Standard, previously—that name change wasn't symbolic. That was because we wanted to address some important concerns we heard coming from constituents.

So, what is the AHA? Well, it prioritizes energy-burdened Vermonters by helping to kickstart the availability of "eligible measures," things like [installing] cold-climate heat pumps, weatherization, modern wood heating, biofuels. All with the endeavor to have more affordable heat. It's designed to help Vermonters reduce their dependency on the high-cost, extremely price-volatile and polluting fossil fuels that we see in our state. The "clean heat measures" are really the core of the bill, because we ask our fossil fuel dealers—the folks who are profiting off the pollution with fossil fuels—to be a part of the solution ... This was what we heard from the Vermont Climate Council, it was their number-one recommendation [for reducing heating or thermal emissions]. I'll just note that the bill has an estimated $2 billion worth of savings for Vermonters, with an average of $7,500, if you broke that out per household.

Where did those numbers come from? Because I know that a lot of the discussion and debate around this particular bill has to do with how much this is going to cost. And we have heard so many numbers. Where do you get the numbers?

My number comes from the marginal cost abatement curve report , which was done by the Agency of Natural Resources at the request of the climate council. So, to take a big step back: a clean heat performance standard is something that would be new to Vermont. What we've seen in the transportation sector of other states, like Oregon, with fuel performance standards, is a reduction in cost, a stabilization of costs and cleaner fuel types. So, the purpose of the bill and where we get some of those costs estimates come from that marginal cost abatement curve report. And, I believe, there's nine other reports that we've done on this topic, so, very well researched. And, also, from comparisons we see with other states who have moved forward with performance standards, like Oregon.

Jerry in Irasburg writes: Instead of a "state approach" to addressing climate change, shouldn't there be a New England or regional approach? This bill might seem like a right model to pursue, but Vermont is just too small to effectively have an impact in solving THE climate change dilemma.”

Sen. White, how do you respond to this idea?

I'm really proud to be a Vermonter. Because what I've seen Vermont do, time and time again, is clean up our side of the street. And Vermonters, unfortunately, we have the highestper-capita carbon emissions in New England. So, while we might be a small state, we are a part of the difficult challenge of producing carbon. But what I see as our opportunity as a state is to prioritize Vermonters now, because the status quo isn't working.

As I've heard from many constituents, the price volatility of fossil fuels has been making [people confront] extremely difficult choices between food, between medical support, and between fuel. So, while the carbon emission side really motivates me, I see us, as a state, having an opportunity to respond to our moral obligation to respond to the climate crisis, and to grow resiliency and be adaptable as a state in ways that we've done time and time again.

Caller Michael in Burlington shared: I’ve walked through countless low-income neighborhoods where I see blankets covering windows, lining the bottoms of doors, thin plastic film protecting windows. And I think the carbon discussion is important, the cost for the state discussion is important, but we're one of the wealthiest nations in the world. People shouldn't have to wear their winter coats and winter hats inside, and have to decide between paying for life-saving medication or heating their homes. And a bill like this will make a huge impact on weatherizing low and middle income homes.

Following on Michael’s question, this bill focuses a lot on weatherization and efficiency efforts. Would anyone be required to do anything differently under this bill? Would homeowners face fines or fees if they don't, say, weatherize? Or replace oil furnaces with heat pumps?

That’s been a point of misinformation that I think has been shared widely, which is that [this bill has] some kind of mandate or requirement that individuals have to switch from fossil fuels. And, in reality, if Vermonters are like me, I heat my home with oil because that's what was in my home when I moved in. I don't love oil. So, I need support with the upfront cost to be able to make the switch, which is what most Vermonters need.

So, this bill, rather than mandating or requiring or having a tax if you don't make a transition away from fossil fuels—instead, it puts the obligation on our fuel dealers, similar to what we did with our electric utilities, to build in ways to transition their customers off of fossil fuels. And that can play out in a myriad of scenarios. Whether you are someone who needs weatherization, and you might not qualify for free weatherization services, that group of people we would especially want to help [if they] fall between the cracks of not being low-income enough to get free weatherization, but not necessarily having the income to afford some of the upfront cost. But in the long term, [they] would see tremendous savings from switching. That is the group of people that we're trying to support, in addition to our lowest-income Vermonters. For folks who are concerned that this is a mandate, that's just a falsehood.

This bill encourages zero-emissions heating, like heat pumps, but it also encourages lower-emissions fuels like biofuels, biodiesel and biomass. Can you explain these fuels and why they're included in this bill?

Vermonters will still have fuel furnaces, boilers, all of that good stuff in their basements for many years to come, because of investments we've made. Biofuels being a part of the mix in the bill is a way for Vermonters to transition over time. Meaning you could have a blended mix of a biofuel that is lowering carbon emissions, but ultimately, better than [only using] fossil fuels.

It's a part of the bill that we tweaked between last session to this session, in part from hearing concerns from environmental groups. We have put forward in the bill something called the “carbon intensity score,” that looks at the lifecycle emissions of any fuel type. In particular, biofuels is the one we've talked about. Because not all biofuels are created equal. Having a cooking oil that's reused, that you're heating your home with, is different than some biofuels that might be coming from farther distances away. So, the bill has a carbon intensity score, while looking at how each individual biofuel scores there. It also tapers down, over time, the ability to use those more carbon-intense fuels over time.

So, it really allows Vermonters who do have an investment in a fuel-burning source [of heat] in their home to, over time, transition away. That’s while also being a part of transitioning themselves to fewer carbon emission. So, I actually think it's a critical part of the bill.

Another critical part of the bill is this idea of the clean heat credit system. Why have it? And, what would it do?

There are a lot of ways that you could lower our carbon emissions. And again, this [credit system] was the number-one recommendation from the Climate Council. And that's because it gives us a lot of flexibility with this tradable credit market, to allow for fuel dealers to be a part of the transition. What I think about, when I think about fuel dealers, is not that they're just fuel dealers. But they're people who are heating our homes. They're the people providing comfort.

So, what a tradable credit market that we envision within this performance standard does, is it keeps them as a part of the transition. Your local fuel dealer has a few options. They may not be an “obligated party” in the bill. That's largely going to be our fuel depots, or our larger gas utilities, but that still gives your fuel dealers the opportunity to either do the work themselves, meaning they help their customers and they create a new part of their business to support either heat pumps, installation, weatherization, modern wood heating, all of that. Or, they can choose to have the market—they can actually assign a designated delivery agent—to be the organization that is creating the credit. So, you could see that as a weatherization organization, or something similar to what we have with Efficiency Vermont [but] for our thermal sector.

Jeffery in Bradford emailed: The Senate Natural Resources and Energy Committee say this bill will provide a steady stream of funding to support the equity aims of the bill that support low-and-moderate-income Vermonters. How will that work, and how will the clean heat credit trading market work? 

Let me me take a step back and just say that we are endeavoring on a rulemaking process with this bill. The Public Utilities Commission—the PUC—we’re tasking through a rulemaking process to actually create the program. So, some of the nitty-gritty questions of “what is the value of a clean heat credit?” will be worked out through the Technical Advisory Group identified in the bill.

But, what Vermonters need to know about equity is that, the complexity of this bill is in part because of our need to have equity. We could very simply do a lot of changes to our thermal sector, but that would leave behind the most vulnerable Vermonters, who are the most energy burdened, who are already struggling to play their fuel bills.

So what this market does is, it allows flexibility for our fuel dealers. It's technology-neutral in that way. And it also encourages the investment on the part of our fuel dealers to move their customers away from fossil fuels. So, I envision it similarly to what we've seen in the electric sector with Efficiency Vermont, where, over time, we’ve had the most stable electric rates of the state in the New England area, while also reducing our use of electricity [and] having major energy savings.

Kathy and Windsor called and asked: I’d like to ask the question about what the Global Warmings Solutions Act requirements are. One of the things they'll require is weatherizing 90,000 homes, and installing 120,000 cold climate heat pumps, by 2030. Evidently, this is supposed to be subsidized. I want to know, what the subsidies will cost Vermonters? And about electricity, there’s no LIHEAP [low-income home energy assistance program]. There's no LIHEAP for electricity. And we all know that if you increase your electric usage, your electric bill will go up. Will there be a subsidy similar to LIHEAP for Vermonters who can't afford their increased electric bills when all of this takes place?

The bill does not envision a program like LIHEAP for electric use. There are programs if you're a Vermonter struggling to pay your electric bill. But let's really talk about the question of affording how to heat your home, which, I think, many Vermonters are struggling with. If you're keeping track of fossil fuel prices, you'll notice that it went up about $2 per gallon this last year. And, I think the number we got was a 41% increase in kerosene, for example, year over year. So, the unaffordable way to heat our homes is fossil fuels. And when you compare that to strategic electrification, like making a choice towards a cold climate heat pump, you're not only lowering your fuel usage—you're getting off of that extremely volatile rollercoaster of fuel prices—you’re also using a far more efficient way to heat your home.

I think they're worried about the upfront cost. How does that work, in terms of helping people save money now?

Well, that's the point of the bill. There's a gap right now, where I hear from constituents that they want to be a part of the transition, but it's not affordable to them. So, we need to do this now, because we have federal dollars coming our way, which will help Vermonters make the transition, to subsidize that work. And, we also need to ask our fuel dealers, who are profiting off of this type of fuel, to be a part of the solution, in the same way that we've required our electric utilities for decades.

ANR Sec. Julie Moore and the Agency of Natural Resources are in charge of emissions reductions in Vermont, and would be the ones to have to implement the AHA if it gets passed. Sec. Moore, can you explain what your role is with ANR and specifically around emissions?

Sec. Julie Moore: Sure, so I'm the secretary of ANR which provides a myriad of different services when it comes to Vermont's natural resources. From stewarding fish and wildlife, to forest land, to issuing regulatory permits and programs around everything from solid waste to drinking water and wastewater, but also to air pollution. And so we have a role preparing Vermont's annual greenhouse gas inventory and tracking our emissions over time. In addition, ANR has played a leading role in the Vermont Climate Council. Many of the contracted services that have supported the work of the council have been managed by the agency. And we now have a climate action office within ANR that will be tracking our implementation efforts.

Do you and ANR support this bill?

I think we share the goal of the Clean Heat Standard, absolutely, to drive down carbon emissions associated with how we heat our homes and businesses.

I think we also have concerns with how the bill is currently laid out.

So is that a yes or no?

I would say it's an “it depends.” You know, the goal is absolutely one that that we need to get after. Vermont does need to reduce its carbon emissions and work towards the 2050 target established by the Intergovernmental Panel on Climate Change to effectively decarbonize home heating. And building heat in general is about a third of all the carbon emissions in the state of Vermont. So clearly, there is work to be done in that space. And I think the clean heat standard may be a good approach. But, the timeline and many of the unknowns when it comes to costs are challenging, and I think questions we need to have answered before we launch forward.

The role of ANR is one about tracking implementation and understanding progress being made towards our greenhouse gas reduction requirements that were established in the Global Warming Solutions Act. As currently envisioned, the PUC would play the primary role in administering the Clean Heat Credit program. And then my sister agency, the Department of Public Service, would be the one who actually calculate the value of the credits, and determine how many types of different measures are required to meet our goals.

In January, you spoke to the Senate Natural Resources Committee about the up-front costs of implementing the Affordable Heat Act. And you said at the time that the numbers you used were “back of the envelope math” and that you were “confident this is wrong.”

Some policy makers and climate activists took you to task for sharing those numbers anyway, and VT Digger reports Jared Duval, a member of the Vermont Climate Council and executive director of the Energy Action Network, called your remarks “inappropriately selective, improperly done and deeply misleading.”

Now that you’ve had more time to talk with policy makers and other stakeholders, what do you think about the up-front costs of this bill today?

I stand by the estimate I offered. We have the pathways report that was developed as part of the work of the climate council that shows that there are approximately $2 billion in costs that will be accrued before we reach those long term benefits that Sen. White spoke to. And I really prepared the cost estimate to generate a conversation, because the focus has been on the long-term benefits [of the AHA] with no real discussion of the upfront costs. It's clear the legislature and advocates were offended by my simplified analysis. But again, I'm just trying to get that conversation started. We can't talk about the long term benefits without understanding what this will mean to Vermonters in the near term.

Sec. Moore, the authors of the bill say that the issue has been studied extensively, and it's really premature to give specific costs when the implementation is years down the line. Is it ethical to use numbers that you yourself said are wrong?

I think it is. I think it's a starting point for a conversation. It wasn't intended to suggest that there is no cost. I don't believe that anyone think the upfront costs of this this bill are zero. We know that to install [hundreds of thousands of] heat pumps and weatherize [a similar number of homes] very much comes with a price tag associated with it. There are federal subsidies that are available right now that we think will cover up to a third of that cost. But then there's two-thirds of that balance that remains. And some of that will inevitably translate into higher prices on home heating bills. And, we just we don't fully know what that looks like. But I think we owe it to Vermonters to dig into those numbers and understand them.

I would call [these numbers] simplified. And the way I frame them, when presenting to committee, is that I grew up in water quality modeling. That's where I started my career, and had a mentor in that space that would often say “all models are wrong, some models are useful.” That's the way I'm using “wrong.” And, in the context of framing the [alleged increase by 70 cents per gallon for heating fuel], I also think it's useful. It reminds us that the cost for this work is not going to be zero, it's going to come from somewhere, and we need to understand what the effect will be on home heating fuel bills before proceeding.

Broadcast live on Monday, Feb. 27, 2023, at noon; rebroadcast at 7 p.m.

Have questions, comments or tips? Send us a message or check us out on Instagram.

Connor Cyrus was co-host and senior producer of Vermont Edition from 2021-2023.
Matt Smith worked for Vermont Public from 2017 to 2023 as managing editor and senior producer of Vermont Edition.