This commentary is by John McCormick, director of the Bristol chapter of the Louise Diamond Committee to Protect Next Generations.
Agency of Natural Resources Secretary Julie Moore’s Senate testimony opposed the Affordable Heat Act. She estimated it would increase fuel oil 70 cents per gallon.
My dealer delivers 100 gallons: $70 extra I will pay for the Affordable Heat Act. It could impact a Low Income Heat Energy Assistance Program client paying that increase out of pocket. LIHEAP will have exhausted its federal block grant.
My last order cost about $3.50 per gallon. The increase is 20% of that. Add the $70 to $350. That $420 is going to cause me to burn more wood and cut back the heat register. A lot of us will be in this unfair, unreasonable predicament. We should be desperate for an alternative.
Read S.5 and understand how it is going to hurt fuel customers and shake up a lot of people in the fuel delivery sector.
S.5 was a creature of the Vermont Climate Council. When the Transportation Climate Initiative died, from $5 gasoline, the council lost its preferred large-scale CO2 reduction plan with no substitute for the deceased TCI. Energy Action Network’s 2022 Summit invited ideas and proposals for consideration. Regulatory Assistance Program made a video presentation called “Clean Heat for a Cooler Planet.” It was welcomed and became the outline for S.5.
It was then offered to the Climate Council — a very thankful council. It took a look, without much analysis, and included it in the Climate Action Plan submitted to the Legislature on Jan. 15. It then went to the drafting table and became S.5. Its sponsors did not mention costs and impacts as S.5 approached the committees. Most legislators had, in the previous General Assembly, some understanding of S.5 but the weight of the Vermont Public Interest Research Group and all its allies muted any serious discussion about a price tag.
Secretary Moore’s Jan. 26 testimony began with: “This is a massive and complex undertaking with real costs and practical challenges. So, I am here again today to implore you to proceed in a manner that leads to data-informed and durable climate policy.”
S.5 authorizes the Public Utility Commission to design the Affordable Heat Act and implement it after the Legislature approves the recommendations of a two-year study by experts (some of whom wrote “Clean Heat for a Cooler Planet”. A PUC control system would be established to gradually limit the amount of delivered heating fuels each year to create CO2 reductions that comply with the Global Warming Solutions Act that mandated CO2 reductions by 2025, 2030 and 2050.
The PUC would achieve this reduction by regulating fuel dealers as public utilities and controlling the amount of fuel they deliver by selling credits allowing them delivery of this essential household need.
The council used a consulting firm, Cadmus, to put numbers to the Clean Heat for a Cooler Planet plan that would achieve the Global Warming Solutions Act mandates. Cadmus calculated it would require 145,000 heat pumps, 85,000 homes weatherized and 125,000 heat pump water heaters. Estimated total cost: $2 billion from 2026 to 2030.
Given the pace and scale envisioned by S.5, it is reasonable to assume that a higher level of incentive will be required to ensure compliance with the Global Warming Solutions Act. That financial incentive will be coming directly from the money the PUC collects from fuel dealers, and that means we are going to pay those incentives to our neighbors by spending an extra $70 for a 100-gallon order. Maybe the legislators were hoping all the building owners would pay for the heat pumps, etc. Quoting Sen. Becca White’s May 11 commentary: “…people don’t have to do anything if they don’t want to.” So, that is the bottom line.
All fuel customers — even those who retrofit — will have to pay more for the fuel because the dealer has to pass on the cost of the credits. That is how S.5 envisions all the needed retrofit will be subsidized by us.
Think of people like me who cannot accommodate a heat pump in my log home, or the manufactured home owners using propane, not pellet stoves. We cannot retrofit but we pay the penalty.
There is an alternative. Rep. Jim Masland’s 2-cent fuel fee amendment passed the House in 2019.
Using Act 62, the PUC recommended to the Legislature a “Thermal Efficiency Benefit Charge” be assessed on oil, kerosene and propane. It would generate revenues, for thermal efficiency, that benefit homeowners and prioritizes grants to low- and moderate-income Vermonters using their share of the state’s 260 million gallons.
Another 2 cents ($2 per 100 gallons) nets $5 million for weatherization, workforce training (weak link in the weatherization chain), more and greater incentives for owners to add another heat pump, workforce housing, relocating flood victims, affordable housing. Four cents nets $10 million; reasonable, given workforce shortages. I put that against the $70 cost of S.5 credits.
