By Paul Bean

Legislation to repeal the Clean Heat Standard (CHS) is on hold after a six-hour debate in the Senate Finance Committee on Wednesday. As of Thursday, March 20 calendar, S.65 has yet to be advanced to the Senate floor. 

According to Matt Cota, representative of the Vermont Fuel Dealers Association, it’s not the CHS repeal that caused the pause. “It’s the first section of S.65 that is holding up the repeal,” said Cota.

Late last week the Senate Natural Resources and Energy Committee voted out a soft repeal of the controversial bill. Tacked onto S.65, regarding Efficiency Vermont climate change priorities and spending, a small, recently-added section repeals the Clean Heat Standard (see pg. 187) and would delay for two years the imposition of a CHS fuel dealers’ registry. S.65 was termed “legally unsound” by the Public Utilities Commission in a March 12 letter.

The PUC testified Wednesday against the part of the bill that allows Efficiency Vermont to spend more of the electric efficiency funds on things that increase electricity consumption, such as electric heat pumps.

Efficiency Vermont was created in 1999 by the Vermont Legislature and the Vermont Public Utility Commission to provide a unified, statewide approach to energy efficiency, replacing fragmented utility programs. The program’s goal was to reduce Vermonters’ energy costs. During the first 15 years of the program, Efficiency Vermont incentivized fossil fuel sellers to remove electric heat and install more efficient gas and oil equipment. This has changed as Vermont’s energy policies place a greater focus on reducing greenhouse gas emissions.

Right now, Efficiency Vermont helps buy down the cost of electric heat pumps using funds from the Regional Greenhouse Gas Initiative (RGGI). A much larger pot of money comes from the ‘energy efficiency utility’ (EEU) charge on your electric bill. But that money is supposed to be for reducing electricity consumption, not increasing it. The legislation, S.65, would change that, allowing EVT to use more money on heat pump incentives, which, of course, increases electricity consumption.

Vermont energy experts told lawmakers the “soft” repeal of the Clean Heat Standard was not ready and needed more work in the Senate Natural Resources committee Wednesday.

Public Utilities Commission Chair Edward McNamara, echoed this sentiment yesterday telling the committee, “…this is moving really quickly, and quite honestly, is a little sloppy at this point. And for something so fundamental to electric service, especially when we’re trying to decarbonize…. it’s just not moving in a pace that’s better with the significant impacts.”

Ken Nolan, general manager of Vermont Public Power (VVPSA) told the committee: “The expansion you’re talking about here provides almost a one hundred percent overlap,” in reference to S.65 and the expansion of Efficiency Vermont. “We’re very concerned that this mandate for Efficiency Vermont will actually drive up our cost to comply with the tier three portion of their Renewable Energy Standard.”

Last month McNamara gave similar testimony to the Senate Natural Resources Committee saying, “I think in Vermont, we tend to see a program that works and then either double down on it regardless of whether it’s the same work, or we take something else and slap it on top because we don’t wanna get rid of the existing program, So we end up with duplicate programs.”

It seems that S.65 has caused many utilities and energy providers to ask, why make a duplicate of an existing program? “I think it requires a broader conversation about other choices before we double down on an electric efficiency charge at the same time that we are asking folks to electrify more,” said Candice Morgan, a representative of Green Mountain Power. “So I think in general, this bill has a lot of unanswered questions in our mind about what those added costs might be for customers. And if we shift the dollars away from efficiency to more of the greenhouse gas emission reduction work without having a broader conversation.”

Supports of S.65 say however that this policy would support electrification, which has been the policy of the state overall as a means to met carbon reduction goals. “Since 2008, you have directed Efficiency Vermont to pursue greenhouse gas emission reductions as one of the top four priorities. This bill isn’t adding greenhouse gases to it as a priority. It’s not. It’s simply saying we wanna elevate. You want us to elevate that as a priority,” said Peter Walke, managing director of Efficiency Vermont arguing that this bill is not a drastic as it has been made out to be and they are seeking to align with the goals of the state through S.65.

“Since 2008, you have made that clear,” Walke continued. “So this is not a drastic shift in public policy. This is simply a reiteration of where you have been for the last seventeen years. There are not a lot of questions about what this means for ratepayer costs and how this affects. Electrification is the policy of the state. That is what is driving the increased gain electrification and the electricity costs associated with electrification.”

“With all due respect to my good and old friend Peter Walke, I have to categorically disagree with the assertion that this is a modest bill,” Cota testified. “This is a very truly significant change, both in principle and practical effect to how these various programs are designed to find it… I see no limitations on how much of this budget can go to fossil fuel reduction or any parameters around potential impacts and and an explicit prioritization of that direction.”

VDC will follow up with any developments later this week.