State senators working on the session’s largest climate bill have been fending off concerns following testimony from the head of the state’s Agency of Natural Resources, who gave a self-described “back-of-the-envelope” analysis about the bill’s potentially high upfront cost for Vermonters.
Lawmakers on the Senate Natural Resources and Energy Committee, which is working on the bill, have said they don’t consider Natural Resources Secretary Julie Moore’s analysis to be a complete picture, or even a helpful model of the projected costs.
“A back-of-the-napkin analysis that’s incomplete and inaccurate by the author’s own definition shouldn’t be given the same weight as the professional studies — of which there are eleven, and a twelfth is currently being done right now,” said Sen. Chris Bray, D-Addison, who chairs the committee. “We’re trying to do our due diligence, and we’re using the best professional analysis we can in order to do that work.”
Jared Duval, a member of the Vermont Climate Council and executive director of the Energy Action Network, provided a rebuttal to the committee earlier this week, in which he called Moore’s remarks “inappropriately selective, improperly done and deeply misleading.”
The Affordable Heat Act, outlined in S.5, would establish a clean heat standard in Vermont. It is designed to dramatically reduce climate emissions by transitioning the state’s heating and cooling systems away from fossil fuels — and, eventually, save the state $5 billion, according to Duval.
The report that Duval presented, which he said has been reviewed by the Vermont Climate Council and was commissioned by the Agency of Natural Resources, shows “an expected net lifetime savings of $2 billion, or $7,500 per household, as a result of actions taken between now and 2030.”
Through a credit system, the bill would incentivize Vermonters to heat and cool their homes and businesses more efficiently by, for example, weatherproofing buildings and installing electric heat pumps. In turn, entities that import fossil fuels for heat into the state would need to obtain credits over time.
Moore expressed concerns about the cost of switching to cleaner heat systems, saying the program could cost Vermonters $1.2 billion in upfront expenses and estimating that it could increase the price of fuel by 70 cents per gallon — a figure challenged by environmentalists and lawmakers.
Moore works in Gov. Phil Scott’s administration. Scott vetoed the clean standard last session, citing concerns about costs for Vermonters.
Bray said Moore’s analysis contained a number of gaps. For example, it left out that the program applies to commercial and industrial users, Bray said, which skews the numbers.
Moore also assumed that people would pay for clean heat projects all at once instead of obtaining loans or financing projects over time, Bray said. He pointed to a new program that significantly lowers the cost of home weatherization, amounting to payments that can be as low as $15 per month.
Duval said Moore’s testimony did not accurately account for the way fuel importers would amortize clean heat projects, and said Moore’s math could be off by a factor of between 20 and 28.
“It’s a very awkward place for us to be in, because she didn’t provide a formal analysis,” Bray said.
A discussion between lawmakers and fuel dealers, who would be regulated under the program, put that awkwardness on display Friday morning.
“As far as affordability, I don’t think it’s fair to ask the Vermont fuel dealers to absorb that, where we’re looking at a 70 cent-per-dollar tax per gallon … if there’s a dollar tax, that’s going to the customer,” Anthony James, owner of James Plumbing and Heating Oil, told lawmakers during Friday’s committee meeting.
Moments later, Bray interjected.
“A quick note, without getting into a debate about the impact of fuel price, the 71-cent-per-gallon figure was, the presenter said, sort of ‘back-of-the-napkin’ math,” Bray told the fuel dealer. “We’ve subsequently looked at it more carefully, and I think those numbers — I think it’s not a very good estimate of the impact.”
Meanwhile, Moore stands by her analysis.
Duval’s presentation assumed that Vermonters would be able to finance projects over time, “which will require fuel dealers to carry those costs for a period of 15 to 20 years, I think he assumed,” she said. “That just doesn’t seem realistic.”
While Duval’s analysis was focused on benefits of the program, hers focused on upfront costs, and the two aren’t an apples-to-apples comparison, she said.
“What I haven’t heard people push back on is that this transition will cost money,” she said. “And it’s likely significant money, up front.”
Sen. Becca White, D-Hartford, said she’s focused on transitioning Vermonters away from the steep costs of the volatile fossil fuel market. She pointed to the Renewable Energy Standard, which has been considered a success in transitioning Vermont’s electric sector away from fossil fuels, as an example of a similar regulatory program that has provided benefits for the state.
“I want Vermonters to have a smooth landing as we transition off of fossil fuels, and this is our best opportunity to do that,” she said.
Bray said, based on his 15 years in the Legislature, he doesn’t know of many bills that have moved forward with more analysis than the Affordable Heat Act — and the law would act only as a blueprint. The state’s Public Utility Commission would flesh out the program, after which it would be reviewed again by lawmakers.
“The only regret I have about the program is that we didn’t start years ago, because right now, Vermonters are facing the second winter of record high fuel prices,” Bray said. “And if we had started five years ago, there would be thousands of Vermonters who wouldn’t be getting hit in that wallet the same way right now.”
Clarification: A previous version of this story misstated Jared Duval’s portrayal of the way amortized expenses would impact the cost estimate of the clean heat standard.