Fuel dealers in Vermont have asked the Public Utility Commission to specify the date at which they would be required to comply with a potential clean heat standard if the measure clears the Legislature next year.
At issue, they say, is the pricing for pre-buy fuel deliveries for the upcoming winter, which dealers typically offer from May until September.
Lawmakers passed what’s often described as a blueprint for a clean heat standard during the 2023 legislative session. They directed the state’s Public Utility Commission to fully design the system, with a deadline to present a plan to the Legislature by Jan. 15, 2025. At that point, lawmakers would vote to implement it — or not.
In an April 25 filing to the commission, the Vermont Fuel Dealers Association said that dealers who sell heating oil, propane and kerosene must soon decide whether they’ll offer customers the option to pre-buy fixed price heating plans for the 2024-2025 winter. To make their decision, they said, they want to know when the clean heat standard would begin to apply to them, if it’s implemented.
“Most local heating fuel dealers provide customers the opportunity to pre-buy their winter heating fuel or enter into fixed-price contracts,” the filing, written by attorney Joshua Diamond, states. “These popular price protection plans provide price stability, and in most years, they lower costs compared to fuel purchased only during the colder, winter months.”
The goal of the proposed clean heat standard is to require businesses that bring heating-related fossil fuels into the state to help fund the transition to new heating systems that pollute less, thereby reducing the greenhouse gas emissions that cause climate change.
It would operate through a credit market: Fossil fuel dealers would owe a certain number of credits to offset the emissions footprint associated with the fossil fuels they brought into the state. The requirements are expected to apply to a large percentage of fuel dealers in the state.
Fuel dealers could fulfill their credit obligation by paying a fee or installing clean heat measures. Those measures would 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.
Money collected from fuel dealers would be funneled back into the market and used to subsidize installation of clean heat measures. Other Vermont businesses and individuals could earn credits by installing clean heat measures, too.
Fuel dealers have often expressed frustration about the uncertainty baked into the process. Until the commission’s process is farther along, fuel dealers won’t know how much the clean heat standard will change the cost of bringing their product into the state.
Matt Cota, a lobbyist for the fuel industry and owner of Meadow Hill Consulting, serves on the Technical Advisory Group, a collection of stakeholders who are helping to advise the commission. Some of the advisory group members have interpreted Act 18 — the Affordable Heat Act, which put the clean heat standard in motion — to mean that fuel dealers would need to pay into the system beginning in January 2025, Cota said.
Others believe the fuel dealers would begin owing credits in January 2026, at the earliest, because the Legislature likely wouldn’t finalize the clean heat standard until the end of the 2025 legislative session.
What’s more, on April 18, the Technical Advisory Group unanimously recommended Jan. 1, 2026, as the earliest start date.
Rep. Laura Sibilia, I-Dover, told VTDigger on Wednesday that her understanding of the law, which she worked on throughout the 2023 session, is that fuel dealers would not be obligated until after the legislature approved the clean heat standard in 2025.
“I think the earliest I could start is 2026,” she said.
As of Wednesday, the Public Utility Commission had not replied to the association’s request.
“We understand (the commission) can’t answer what the Legislature will do. That’s a crystal ball game,” Cota said. “We understand that they can’t tell us what the fee is now — they will tell us later, but not now. What they can tell us is whether, January 1, gallons delivered in the calendar year 2025 could become obligated, should this become law.”
