Gov. Phil Scott and members of his administration are using a new state-commissioned study to double down on their opposition to both the clean heat standard and the state’s global warming law.
Advocates have responded by saying Scott and others have misused the figures in the study to incorrectly claim that the clean heat standard would be expensive for Vermonters, and to score political points. They say that the clean heat standard, if implemented, would contain safeguards to make sure the program wouldn’t cause prices of fossil fuels used for heating to rise significantly in the coming years.
That back-and-forth sets up what’s expected to be a contentious issue this legislative session starting in January 2025. That’s when lawmakers are expected to decide whether to implement the program, which the state’s Public Utility Commission and two technical advisory groups have been studying since 2023.
If legislators vote to follow through with the clean heat standard, the program would require businesses that import fossil fuels used for heating buildings to offset the greenhouse gas emissions associated with their products. To do so, they would need to either directly provide clean heat measures, such as delivering biofuels and installing electric heat pumps, or pay a fee. Money collected through the program would be used to bring down the cost of clean heat measures, making weatherization and heat pumps cheaper.
A high cost?
When consulting group NV5 and the state’s Department of Public Service, which hired the firm, presented their study earlier this month, they emphasized that it should not be used to estimate what a clean heat standard would cost consumers.
That warning hasn’t kept the program’s potential cost from driving debate over the last several weeks. Opponents have pointed to the study to emphasize what they characterize as unacceptably high cost increases for Vermonters who don’t switch to heating systems that pollute less. Advocates have pushed back, saying it would be irresponsible, this early, to extrapolate from the report about the cost.
Last Thursday at his weekly press conference, Scott called the potential cost increases “alarming.”
Natural Resources Secretary Julie Moore, who also spoke, tied what she described as the program’s high costs to the state’s 2020 Global Warming Solutions Act, which allows the state to be sued for failing to reduce emissions in set amounts by 2025, 2030 and 2050.
“Meeting the reduction requirements will require a complete transformation in how we heat, provide hot water, as well as in the vehicles we drive, by mid-century,” she said. That means Vermont must “significantly accelerate emissions reductions work over the next five years to achieve a 40% reduction in our emissions from 1990 levels by 2030.”
Aside from the clean heat standard, Vermont does not have a plan to reduce greenhouse gas emissions that come from heating and cooling buildings in the state — about 30% of the state’s overall emissions.
As it stands, the transition is primarily taking place in the private sector, as people have voluntarily installed electric heat pumps, for example, but it’s not happening fast enough to meet the state’s legally-binding climate goals.
In an interview, Moore argued that the state’s short window to meet the 2030 deadline increases the cost of a clean heat standard.
One way to implement the clean heat standard at a lower cost, she said, is to “meet people where they’re at.” Heating appliances have life expectancies, and if the program adds an incentive to switch to a new heating system when a person’s furnace is failing, the program would catch that person when they’re already expecting to incur a significant cost.
“Generally, the incentives can be smaller than if you’re talking to somebody whose furnace is in decent working order, whose hot water heater is okay, and you’re asking them to make the switch,” she said.
Given the compressed timeline, Moore reasoned that the program would need to be aggressive enough to incentivize a bigger group of people to make that switch — not just the people who already need an upgrade.
Moore argued that any program designed to reduce emissions related to heating and cooling buildings would have to be aggressive to meet the 2030 Global Warming Solutions Act deadline, and could potentially put a financial strain on Vermonters. The only way to alleviate that concern, she held, would be to adjust the deadline.
If the state doesn’t have a plan to reduce heating-related emissions by the end of the session, the law opens the state up to being sued. In that case, a judge could require the Agency of Natural Resources to develop a new set of regulations to meet the deadline.
“There’s only hard choices here, right?” Moore said. “We need to reduce greenhouse gas emissions. To my mind, the end goal of decarbonizing by 2050 is essential. The costs are real.”
Matt Cota, a lobbyist for fuel dealers, is helping to craft the details of the clean heat standard on the Public Utility Commission’s technical advisory group. He’s concerned that his task has been focused on meeting the mandate of the Global Warming Solutions Act, rather than creating a program that succeeds on its own merits.
The “friction,” Cota said, is whether “to design a program to comply with the law, or to design a program that is economically and politically feasible. These are the really tough decisions that both the Public Utility Commission in the legislature will have to make over the course of the next six months.”
‘Scare tactic’
Jared Duval, a member of the Vermont Climate Council and executive director of the Energy Action Network, which analyzes Vermont’s climate emissions data, often pushes back against the Scott administration’s characterization of the clean heat standard. His criticism of the first draft of NV5’s study resulted in the firm cutting the clean heat’s cost estimate almost in half.
This time, Duval said that some of the numbers in the newly-published study don’t make sense to him. For example, a table in the study that shows the cost of the clean heat standard in MMBtus, or millions of British thermal units, of fuel oil, propane and natural gas — a figure that can easily be converted to a per-gallon price — represents 25 years of costs in one figure, he said.
“The idea of taking 25 years of costs and turning that into a single, per-gallon price, and making people think they’re going to pay it next year is — like, I have a lot of sympathy for people who are calling that just a scare tactic,” Duval told VTDigger. “It’s not serious.”
Instead, Duval points to a study completed in November 2023 by the Energy Futures Group, which was also hired by the state. That study estimated that fuel prices would increase by an average of 1 to 2 cents per gallon per year from the date the program takes effect until 2030.
Those numbers were “more appropriate,” Duval said, because the Energy Futures Group looked at prices for individual years.
Duval also said that people who are concerned about upward prices on fuel oil can switch to biodiesel, which doesn’t require major equipment changes and is likely to become cheaper through a clean heat standard.
“It’s so incomplete and misleading to just talk about cost increases on the fossil side as though that’s the only heating option that people have,” he said.
In addition, there’s already a “circuit breaker” in the 2023 law that would allow lawmakers to pause the program if it’s causing financial hardship, Duval said, and lawmakers can add an additional measure into the law that prevents prices from exceeding a certain threshold.
The Global Warming Solutions Act “is written the way it is for a reason,”Duval said. “It’s to align with the national commitment in Paris, which in turn, is based on a science-based target to do our part to avoid the worst impacts of climate disruption.”
Legislators weigh in
For clean heat standard advocates like Sen. Chris Bray, D-Addison, the debate about cost has become frustrating. Bray, the lead sponsor of the clean heat standard bill in 2023, has introduced other programs throughout the last decade aimed at reducing climate emissions in the heating sector, but none have made it through the legislature, he said.
Of course, reducing emissions earlier would have required less dramatic measures.
“The math is pretty clear and direct,” Bray told VTDigger. “The slope of a line drawn from 2013, if we’d started then, to 2030 is flatter than if you start in 2026.”
Bray said he is talking to “people who are living, eating, breathing this stuff, who have lots of analytical chops” who are interpreting the NV5 study in different ways. It’s far too soon, Bray said, to consider moving a deadline within the Global Warming Solutions Act.
“It’s a necessary transition,” he said. “There’s a moral obligation to do it. We know we’re doing damage. We should stop doing that.”
In a statement sent over text, House Speaker Jill Krowinski, D-Burlington, indicated a similar position, saying any discussion about moving the deadline was “premature.”
“It’s crucial to allow the committee to complete its review and ensure a comprehensive public process,” she said. “We must be mindful of both the urgency of our climate challenges and the need for careful, informed decision-making.”
Bray said he does not plan to move forward with a program that would cause Vermonters economic pain. He said he imagines the program would be dynamic and give Vermonters flexibility to choose the heating system that works best for them. Still, reducing climate emissions is “going to cost something,” he said.
“We have a whole economy built around fossil fuels,” he said. “How do we do it as affordably as possible?”
Rep. Laura Sibilia, I-Dover, an advocate for the clean heat standard in the House, said if moving the 2030 Global Warming Solutions Act deadline was the only way to make a clean heat standard affordable, she would consider pulling that lever. Still, to her, the program is a necessary piece of regulation in a world that is already transitioning away from heating buildings with fossil fuels.
“It’s a little absurd to think that legislators would impose a $3 or $2 increase — willingly and knowingly impose that type of an increase — on Vermonters’ cost for fuel,” she said. “On the flip side, the fossil fuel industry, which is fueling the fears about that, has absolutely zero qualms about unpredictably allowing rates to rise.”
The clean heat standard, she said, is “the best frame that I have seen thus far” to have “some regulatory frame” for the fossil fuel industry during the clean energy transition, she said.
