The state Senate gave preliminary approval to a bill on Thursday that many consider the most significant piece of climate legislation in the Statehouse this session.
The bill, H.715, passed by a voice vote, proposes a clean heat standard, which is designed to radically reform the state’s thermal sector.
Using a credit system, it would require and incentivize heating-fuel distributors to decrease the amount of fossil fuels they sell over time, switching instead to a list of heating technologies and fuels that produce fewer greenhouse gas emissions.
Many lawmakers and climate advocates have underlined the importance of passing the bill this session to help Vermont meet the mandated emission-reduction requirements outlined in the 2020 Global Warming Solutions Act, the first of which is coming up in 2025. Vermont’s thermal sector is responsible for 34% of the state’s greenhouse gas emissions, second only to the transportation sector.
“As there is no other bill offered this session by any party inside or outside the Statehouse to address this obligation, we need to work together and examine the clean heat standard. Saying ‘no’ is not an option,” Sen. Chris Bray, D-Addison, told lawmakers on the Senate floor on Thursday.
The bill directs the state’s Public Utility Commission, which regulates many aspects of energy distribution and usage in the state, to develop and implement the final clean heat standard by 2025.
As approved Thursday by the Senate, the bill includes a “check back” amendment, which was requested by Gov. Phil Scott’s administration. It requires the Public Utility Commission to report back to the Legislature in both February 2023 and January 2024, when its members know more about, for example, how the program will impact ratepayers and reduce fossil fuel use.
The Legislature then would need to approve the clean heat standard again, with updates, for it to move forward.
While the amendment makes the bill more likely to clear the governor’s desk, some environmentalist groups said the measure makes Vermont’s emissions requirements less reachable.
“This move by the Senate injects a level of uncertainty at a moment when Vermont should be making clear to the fossil fuel industry — and Vermonters — that cleaner heating options are the future,” Johanna Miller, energy and climate program director at the Vermont Natural Resources Council, said in a statement on Thursday.
The governor’s press secretary, Jason Maulucci, said that “it’s too soon to say whether (Scott) will support the final product” because there have been many recent changes in the bill.
Scott “remains concerned about the financial implications on already-overburdened Vermonters as a result of the policy,” Maulucci said. “That is why he, various members of the Administration, and several legislators from both parties, have pushed for the bill to include language that would require full legislative action once the details, costs and implications are known, before the program can be implemented.”
The governor won’t support a bill that doesn’t have that language, Maulucci said.
The legislation is thorny and complex, and some lawmakers who spoke on Thursday said they have had trouble describing the bill to their constituents, partly because many of its details have yet to be determined.
In essence, the clean heat standard would require “obligated parties” — businesses that bring fossil fuels for heating into the state to sell — to purchase an amount of credits that would increase over time. Vendors who install or sell the “clean heat measures” listed in the bill would gain credits, thus establishing a credit market.
“Clean heat measures” in the bill include: “thermal energy efficiency improvements and weatherization; the supply of sustainably sourced biofuels; renewable natural gas; green hydrogen; cold-climate heat pumps and efficient electric appliances providing thermal end uses (for example, water heating and refrigeration); advanced wood heating; and renewable energy-based district heating services.”
A pair of concerns
Two points of opposition are commonly levied against the clean heat standard.
The first, raised by environmental activists, Indigenous leaders and conservatives, relates to measures the bill encourages and considers “clean,” such as biofuels. Some biofuels carry significant emission price tags and are associated with practices that harm the environment, such as deforestation.
Sen. Kesha Ram Hinsdale, D-Chittenden, said she plans to introduce an amendment before the Senate takes its final vote on the bill to address the use of fuels the bill calls “clean.”
“To me, it’s very important that we recognize that not all of these fuel sources named as eligible for clean heat measure credit are created equal,” she told lawmakers on the floor.
The bill would establish a technical advisory group to analyze the emissions associated with the entire life cycle of the clean heat measure and assign credit values to each of them.
The second concern is a fear that the program would raise heating prices for Vermonters who continue to use fossil fuels to heat their homes — particularly people who have low incomes. The bill’s advocates, however, contend it’s designed to actually reduce heating costs because it moves away from the volatile fossil fuel market.
A separate, equity-focused advisory group would assist the Public Utility Commission “in developing and implementing the Clean Heat Standard in a manner that ensures an equitable share of clean heat measures are delivered to low-income and moderate-income Vermonters.”
While Ram Hinsdale voted in favor of the bill, she told lawmakers she’s heard “disappointment on all sides.”
“Some people think this goes too far. Some people think this doesn’t go far enough,” she said. “Some people horseshoe around and both want to recognize the plight of low-income Vermonters and those most marginalized — and I think that is an area where we often all do find agreement, even if we don’t agree on the means to get there.”
