This commentary is by L. Owen Farnsworth, a carpenter and retired software engineer who lives in Lincoln.
Last year, we finished up an 1,800-square-foot cottage in Lincoln I have spent the last 20 years building as a hobby.
In 2014, I had replaced the salvaged windows from Recycle North that I’d used earlier during construction. At today’s prices, my new Anderson Energy Star Low-E replacement windows would cost $20,169. Last March, the spray foam insulation was installed at a cost of $22,359. The Mitsubishi heat pumps were installed in October at a cost of $11,750 after my Efficiency Vermont $850 rebate.
These costs totaled $54,278. My installer has offered a $470 annual maintenance contract for servicing the heat pumps.
According to the installer, the heat pumps had increased in cost by 30% since 2019. That’s when the Legislature’s climate study committee did its “affordability” calculations. And, since they were installed in October, the cost of the heat pumps has increased another 6%.
From the relatively mild winter of November through mid-January, until I shut the heat pumps off as the temperature dropped to 22 below zero, my electric bills totaled $610. Green Mountain Power electric rates are 18 cents per KWH plus a flat regressive 6% tax rate for Efficiency Vermont and severe weather surcharge of 2.7%. The GMP rate for February totaled 19.57 cents per KWH.
Like many retired Vermonters, we’re snowbirds. We migrate to Idaho for the winter. Idaho Power’s electric rates are the lowest in the nation. The average electric rates in Idaho are 8.17 cents per KWH. Idaho’s low-cost hydro power is just 42% of the cost of GMP and Hydro-Quebec’s electricity.
The money I pay Idaho Power stays in Idaho. However, GMP and Hydro-Quebec are Canadian companies that profit from Vermont ratepayers. Really, I should have put the heat pumps in Idaho.
There are 41 other states in the country with lower electric rates than Vermont. The national average is 11.1 cents per KWH. For those who might consider relocating to save money while doing your part to tackle climate change, please visit here.
Vermont’s electric rates must now increase significantly. Efficiency Vermont spent 25 years reducing the amount of electricity used by Vermonters. Along the way, the electric grid was sized to handle that lower amount of electric use. But now the goal is reversed; electricity is seen as the solution to climate change and needs to replace fossil fuels.
Vermont business and household electric usage will double or triple. It follows that the electricity infrastructure must increase proportionately. Vermonters will one way or another pay for upgrading that infrastructure. Going forward, Vermonters will face even higher electric rates and may even face rolling blackouts, just as Tennessee Valley Authority customers did last year.
Concerning electric vehicles, Washington Electric has warned its customers to call before purchasing an electric vehicle. Many rural customers have transformers and service entrances that are too small to support stage 2 charging stations.
The new heat pumps maxed out my 100-amp service. Purchasing an electric vehicle and stage 2 charger will require that I spend a few thousand more dollars to upgrade my electric service entrance. But, if I can afford that, I will get the one-third rate reduction that GMP offers with its EV chargers.
I’ve spent a lot of money for my small contribution to address climate change. Can you afford to? The Vermont Legislature would require that you do so.
But, there is a silver lining for those of us who convert to electricity earlier. Sen. Chris Bray’s “Affordable Heat Act,” S.5, as written would place a highly regressive flat “tax” on fossil fuels, but there is no such surcharge proposed for electricity. So, once you reduce your fossil fuel usage, you will no longer be paying this “sin tax” to help moderate- and low-income Vermonters. Rather, they will be paying it.
As more Vermonters reduce their use of fossil fuels, the revenue raised by this “tax” will decrease. Unless this fossil fuel “tax” is increased year by year, there will be less revenue to help the remaining moderate- and lower-income Vermonters.
Well, maybe this isn’t really a silver lining, but rather a Catch 22. Perhaps, those of us who go first should be required to help others that follow.
I think the revenue raised and grants needed to address climate change should be handled within the Vermont Tax Department. Addressing climate change should not be structured with a great deal of complexity, as described in S.5. It should not be handled by private for-profit companies creating and selling credits through a “default delivery agent” (let’s call it One Heat).
One Heat will have high administrative costs, salaries and profits. It will report to an appointed committee that will set and modify rates and policies. In turn, this committee will file annual reports to the Legislature. No further legislative action required. (How’s that for keeping political liability at “arms-length”?)
The Vermont Tax Department is not out to make a profit. It can ensure Vermonters’ financial privacy. The climate tax should be progressive, based on individual income and property value. The grants will need to be substantial and should flow to moderate- and low-income households as needed.
These financial policies should continue to involve all Vermonters while we address climate change. However, this won’t happen, for this Legislature lacks the political courage to enact such a progressive tax policy. Better to use a regressive sin tax.
