As he promised last week, Gov. Phil Scott has vetoed S.5, a bill that would create a clean heat standard.
“When we pass laws, we must clearly communicate both the burdens and the benefits to Vermonters. From my perspective, S.5 conflicts with these principles, and I cannot support it,” Scott wrote in a letter to lawmakers on Thursday.
Leaders of the Vermont House and Senate still hope to pass the bill, which they have titled the Affordable Heat Act, and are organizing override votes.
House leaders said last week they’re confident they have the votes to override the veto. If lawmakers in the Senate continue their voting patterns on the bill, they, too, would have the numbers for an override. (Both bodies need a two-thirds majority of those present to do so.)
The goal of the bill is to reduce greenhouse gas emissions that come from heating and cooling Vermont’s buildings and lower the cost of heating, though the feasibility of the latter goal has sparked great controversy.
According to the most recent data, Vermont’s thermal sector emits more greenhouse gases than transportation or any other category, including the electric and agricultural sectors. The data is specific to 2020, when transportation decreased due to the Covid-19 pandemic, but the trend is expected to continue because of new state policies designed to move the market for new passenger cars to all-electric in the coming decade.
In the thermal sector, some Vermonters are voluntarily upgrading their heating systems to ones that pollute less, but no policy currently exists to ignite significant change. Without such a policy, analysts say Vermont will almost certainly not meet its legally-binding greenhouse gas emission requirements, which could open the state to lawsuits.
Much of the debate about the bill, which is the most significant piece of climate legislation this session, has focused on whether it will lower or raise heating costs for Vermonters.
The clean heat standard would establish a credit market in which some of the state’s fuel dealers would owe a certain number of credits to offset the emissions footprint associated with fossil fuels they brought into the state.
Those credits would fuel the clean heat market. Fuel dealers and others would earn credits by installing “clean heat measures,” including cold-climate electric heat pumps, home weatherization, advanced wood heating systems, using some biofuels and other measures.
But S.5 does not implement this program. Rather, according to lawmakers and their lawyers who drafted the bill, S.5 directs the state’s Public Utility Commission to set up the system and report on its impacts to the 2025 Legislature, which would then need to pass another bill to set the program in motion.
The commission would be charged with striking a tricky balance. If fuel dealers owed a large amount of credits, the credits would create a more robust clean heat market — but that cost could be passed on to consumers. If fuel dealers owe less, the clean heat market may not be as robust, or help Vermonters transition to new heating systems at the desired rate.
But Scott’s doubts about the bill’s process seemed to be his most significant issue with the bill.
“It’s important to note despite significant concerns with the policy, I would not veto a bill that directs the Public Utilities Commission (PUC) to design a potential clean heat standard – provided it’s returned to the Legislature, in bill form with all the details, and debated, amended, and voted on with the transparency Vermonters deserve,” he wrote. “The so-called ‘check back’ in S.5 does not achieve my simple request. Instead, the ‘check back’ language in the bill is confusing, easily misconstrued, and contradictory to multiple portions of the bill.”
Lawmakers have refuted this claim, saying that the bill will, indeed, come back through the Legislature.
“It’s really hard to see where the disagreement is here,” said Rep. Laura Sibilia, I-Dover, who recently presented the bill on the House floor to lawmakers. She said the check-back amendment requires the commission’s plan to be “presented to us in bill form” and “go through the regular legislative order.”
The veto spurred a slew of objections from environmental, social and lobbying groups such as the Vermont Natural Resources Council, the Vermont Public Interest Research Group, Vermont Conservation Voters, Rights and Democracy, Vermont Businesses for Social Responsibility, the Vermont Sierra Club and the Conservation Law Foundation.
“He’s vetoing a process that’s going to get a lot of good information in the hands of everyone, including himself,” said Ben Edgerly Walsh, a climate and energy lobbyist for the Vermont Public Interest Research Group.
A statement from the groups pointed to the greenhouse gas emissions report released by the Scott administration’s climate office on Tuesday, which predicts that Vermont will miss its emissions requirements.
“The data shows the largest portion of that shortfall will be driven by a lack of action in the thermal sector — one of the central components of the Affordable Heat Act,” the statement said.
A statement from lawmakers in the Climate Solutions Caucus pointed to the price of fuel oil, which rose by $2 per gallon in just over a year. The reality, the statement said, is that, “for both people and the planet, business as usual doesn’t work.”
“Here’s the bottom line,” Scott wrote in his letter to lawmakers. “The risk to Vermonters and our economy throughout the state is too great; the confusion around the language and the unknowns are too numerous; and we are making real and measurable progress reducing emissions with a more thoughtful, strategic approach that is already in motion.”