As the biggest climate change bill of Vermont’s legislative session approaches the end of its journey through the Statehouse, a debate over the meaning of its language has consumed the conversation.
Lawmakers who support S.5 and their lawyers say the bill would require the state’s Public Utility Commission to establish a clean heat standard and design its blueprint — but not implement it without explicit consent from the Legislature through a separate bill in 2025.
Gov. Phil Scott and some lawmakers who oppose the bill say its language does not obligate the Legislature explicitly enough to sign off on the plan two years from now. Rather, they argue, it establishes channels for a clean heat standard to be implemented and enforced sooner.
The most basic goal of S.5 is, through a clean heat standard, to require businesses that bring heating-related fossil fuels into the state to help fund the transition to new heating systems that pollute less.
The bill has passed the Vermont Senate and the House and will soon land on the governor’s desk, where it’s almost certain to face a veto.
Parties on both sides have advanced passionate arguments about the proposal. Those who oppose it have expressed certainty that a clean heat standard would make home heat more expensive.
Those who support it say the system softens a transition that’s already underway to cheaper, less polluting heating systems. A lack of action poses a greater threat of leaving vulnerable Vermonters behind, supporters say.
And, there’s the matter of climate change. The clean heat standard is designed to reduce climate emissions that come from heating and cooling buildings, which is responsible for about 34% of greenhouse gas emissions in Vermont.
But for now, the debate is focused on several paragraphs in the bill.
Different interpretations of the “check-back” provision — which would require the Public Utility Commission blueprint to come back to the Legislature in 2025 — have led both the governor and House Speaker Jill Krowinski, D-Burlington, to issue statements accusing those on the other side of the debate of misinforming Vermonters.
“Unfortunately, in rare instances, misinformation is deliberately spread to create fear and uncertainty amongst Vermonters to sidetrack the conversation from the real issues,” Krowinski wrote on Tuesday. “This year that bill is S.5, the Affordable Heat Act.”
What’s in the bill?
The clean heat standard would operate through a credit market. Every year, fuel dealers would owe a certain number of credits to offset the emissions footprint associated with fossil fuels they brought into the state. (While only fuel dealers who buy fuel in another state and sell it in Vermont would be regulated by the bill, fuel dealers say that’s a large percentage of such businesses in the state.)
At the same time, anyone — a homeowner, a plumber, a fuel dealer — could earn credits by installing certain “clean heat” measures. Those include improving a home’s energy efficiency by adding insulation or sealing windows, installing cold-climate electric heat pumps, advanced wood heat or solar hot water systems and using some biofuels, among others.
Under the system, fuel dealers could fulfill their credit obligation in two ways: by installing clean heat measures, or by paying a fee. Money collected from fuel dealers would be funneled back into the market and used to install clean heat measures.
The bill directs the state’s Public Utility Commission — a three-person body with about two dozen support staff that regulates utilities and the siting of energy projects in Vermont — to set up and study the proposed clean heat standard over the next two years. Then, the body must present its plan and findings to the Legislature in 2025.
The idea is that, before lawmakers move ahead with a clean heat standard two years from now, they’d have a better understanding of its impact on Vermonters. Legislators could change the commission’s plan, set restrictions, or decline to move toward a clean heat standard at all.
Scott’s statement, issued Friday, expressed concern “that the PUC plan will not be returning to the Legislature in normal bill form and go through the full legislative process and, if passed, go to the Governor for signature.”
Ellen Czajkowski, a member of Legislative Counsel who has helped draft the bill, discussed the check-back amendment with lawmakers in the Senate Natural Resources Committee on Thursday.
The check-back in the bill reads: “Notwithstanding any other provision of law to the contrary, the Commission shall not file proposed rules with the Secretary of State implementing the Clean Heat Standard without specific authorization enacted by the General Assembly.”
The word “enacted,” Czajkowski said, means “that it needs to pass through both bodies and be sent to the governor, where the governor can either sign, let it become law without signature, or veto, at which point the Legislature could have the opportunity to override said veto.”
The confusion results from an earlier paragraph in the bill, which seems to say the opposite.
It states: “The requirements to adopt rules and any requirements regarding the need for legislative approval before any part of the Clean Heat Standard goes into effect do not in any way impair the Commission’s authority to issue orders or take any other actions, both before and after final rules take effect, to implement and enforce the Clean Heat Standard.”
According to Czajkowski’s testimony on Wednesday, the check-back provision overrides everything else. While there are several places in the bill that give the commission authority to “adopt rules” or “issue orders,” the check-back provision “prevents rules from taking effect without legislative authorization enacted in a bill,” she told lawmakers.
In addition, according to a different section of the bill, the credit market can only be established through a rule, not an order.
The same debate took place on the Senate floor on Thursday afternoon while senators decided whether to finalize changes made in the House and send the bill to the governor’s desk. They voted in favor of the changes, 20-10.
Sen. Jane Kitchel, D-Caledonia, who chairs the Senate Appropriations Committee, added the first version of the check-back amendment while the bill was in her committee’s jurisdiction.
Some of the confusion, she told lawmakers on the floor, is that the language of the bill has evolved over a period of two years in the Legislature. A similar bill that also would have established a clean heat standard nearly passed last year, missing an override of the governor’s veto by a single vote.
Kitchel said the bill “got out of sequence” and has become very confusing. Still, she said, she has confidence that the bill “is allowing the planning and the conceptual work and design to move forward so that we have a better understanding of exactly what this concept would look like, what implementation would mean, what the cost would be, the impact, the feasibility.”
“It’s with the confidence that our legal counsel, Legislative Counsel, and numerous attorneys in (Legislative) Counsel have looked at this language that has assured me that nothing has changed, and that our intent that came from Appropriations with this amendment is still intact,” she said.
Some, such as Sen. Dick Sears, D-Bennington, expressed concern that the Public Utility Commission could issue orders to implement the clean heat standard. Sen. Chris Bray, D-Addison, who chairs the Senate Natural Resources and Energy Committee, responded that the commission could implement only procedural orders, such as requiring fuel dealers to register with the state.
Matt Cota, a lobbyist for fuel dealers in Vermont, said in an interview that he worries about those provisions in the bill, which would be certain to move forward in the next two years if lawmakers passed S.5.
He pointed to retroactive credits for clean heat measures, requirements that fuel dealers register with the state by January 2024, and money spent to have the commission study the issue.
The Public Utility Commission would receive $825,000, and the state’s Public Service Department would receive $900,000.
The commission would also designate a “default delivery agent” that would manage the program in 2026 if lawmakers implemented the clean heat standard then.
“These things are real,” Cota said. “They spent money and they will change what certain industries are required to do, and there’s still uncertainty in how this all comes together.”
But implementing or enforcing the credit market within the clean heat standard — the teeth of the bill — would be difficult anytime soon. The commission would need to establish values for the crediting of clean heat measures and designate an agency to handle the day-to-day transactions that would come with the program. Right now, there would be no one for the fuel dealers to pay and no clear direction about how much they would owe.
While confusion and debate continue, lawmakers who support the bill have expressed certainty that the commission could not implement or enforce the credit system without lawmakers’ approval in 2025.
Sen. Becca White, D-Windsor, worked on the bill while it was in the Senate Natural Resources and Energy Committee and co-chairs the Vermont Climate Caucus. She said the back-and-forth has contributed to a loss of trust from Vermonters.
“It causes my constituents to call me in fear that we are pushing through something, because they trust the governor, and they trust him to be truthful, and to understand what we’re doing as a Legislature,” she told VTDigger.
White said the version of the bill in front of her now represents a compromise. Ideally, she said, the clean heat standard would be fully implemented, instead of waiting two and half more years. That urgency, for her, comes from both a climate change and affordability perspective.
Meanwhile, Scott remained unconvinced as of Thursday afternoon.
In response to questions about Czajkowski’s testimony regarding the check-back provision, Jason Maulucci, Scott’s press secretary, pointed to the contradiction and confusion over the bill, saying it shows “how poorly crafted the legislation is and how unworkable their ‘check-back’ is.”
“It is not responsible to move forward with such a potentially impactful policy based on a leap of faith. It must be done with fact and assurance,” he wrote.
Rep. Laura Sibilia, I-Dover, presented the bill on the House floor last week.
“The governor has been pretty clear about what it is that he wanted the Legislature to bring forward in his statements, and in terms of us being accountable,” she said in an interview. “We’ve done that.”