By Alison Despathy
Vermont’s fuel dealers are pushing back against a proposed Clean Heat Standard that they say is a serious threat to the survival of their small, locally-owned businesses.
“If you want to get rid of small fuel providers and eliminate the competition, this is an ideal program. But if you value local competition and companies that take care of the people in their small towns, you will recognize the clean heat standard for what it is and send it back to the legislature for further review,” Judy Taranovich, President/Owner of Proctor Gas, said in a statement to the PUC.
The Vermont Public Utilities Commission has been charged with developing regulations for the Clean Heat Standard created by Act 18, the ‘Affordable Heat Act.’ In an effort to meet legislatively-mandated carbon emission reduction goals, the Clean Heat Standard requires fuel dealers either provide eligible measures such as non-fossil fuel heating (i.e. heat pumps) and efficiency alternatives to offset fossil fuel sales or pay a surcharge. Surcharge revenue will then be diverted to subsidies for the non-fossil fuel alternatives. A recent state-commissioned study found implementing the Clean Heat Standard would cost $17 billion.
Planning the total makeover of heating homes and businesses has proven complex, costly and time-consuming, with the PUC extending the deadline for this process as a result. As part of the planning process, the PUC has solicited and received feedback from the Vermont heating fuel industry regarding their proposals. Several responses are included below, and all can be found here.
Taranovich said the draft plan for the Clean Heat Standard “ has me worried sick for business, my employees and my customers” because the draft PUC proposal demands an accurate crystal ball – or else.
“It asks us to literally forecast the weather by estimating sales volumes up to fifteen months in advance,” Taranovich said. If the fuel dealers arrive at the wrong number, they could pay two times the compliance fee. Judy wonders, “How will I even be able to open my doors if faced with a fine for not accurately predicting the weather?”
Fuel dealers across the state – Proctor Gas, Onsite Propane, Fred’s Energy, Fyles Brothers, Johnson Energy and others– submitted letters to the PUC in response to this proposal explaining how it’s both impossible and threatening to the survival of their businesses.
Paul Beauregard of Onsite Propane stated, “I’m alarmed by the nature of the proposal and how it ultimately puts my business at a disadvantage in the market. Overall it seems to discriminate against small businesses like mine and favor large national organizations.”
Beauregard urged the PUC to consider the impacts of their request on small businesses like his that employ Vermonters with a good livable wage and keep thousands of Vermonters warm and stocked with propane for their water, cooking and generator needs.
“It is clear the PUC has no working knowledge of the propane industry,” Beauregard said. “Designating and purchasing fuel is more of an art versus a science. Many factors determine how and when fuel is purchased, and they are constantly moving.
“For example, the value of the US dollar, the economy in Asia, what’s happening with the price of a barrel of oil, significant storms, railroad strikes, weather as a whole, crop drying in the Midwest. It’s basically impossible to forecast where our gallons will be purchased that far out with any accuracy.”
Manny Fletcher of Fyles Brothers stated: “If a small business like ours should be put in a situation where we are at risk of noncompliance and penalties, it would be detrimental to the survival of our company.” Not to mention their employees, their customers and the economy.
Fyles Brothers requested the PUC reconsider this proposal. “We feel that only the larger corporations will survive these recommendations. Smaller, Vermont family-owned fuel companies like Fyles Bros. Inc. would be at a disadvantage and some would be forced to sell to a larger corporation which would have a negative impact on rural and low income Vermonters by limiting the competitive market for heating fuels in the state.”
The State should just call it a tax, another dealer said. In fact, a straight tax might be preferable.
Thomas Johnson of Johnson Energy called out the crux of the problem, “The entire Clean Heat standard is nothing more than a ‘feel good’ money grab by the Vermont government simply called something other than a tax. If you intend to implement this craziness, why not deal with it like any other fuel tax and set a rate and force dealers to file tax reports post-sale like we already do? Complicating it with confusing language, fictitious heat credits and a system which the PUC can’t even design or figure out is not going to help anyone and hurt every consumer and small fuel business in Vermont.“
Johnson’s alternative suggestion of an increased fuel tax was proposed multiple times in committees. It went nowhere. Legislators who voted for this Clean Heat Standard/ Affordable Heat Act were warned of the dangerous repercussions to small businesses and the heating sector – yet appear to have ignored this reality.
The current PUC process offers a view of the inequities present in the Clean Heat Standard (Act 18) and its favoring of utilities and large companies like Vermont Gas Systems and Green Mountain Power, both of which lobbied hard for this ‘Affordable” Heat Act.
Beauregard pleaded with the PUC, “Please don’t make my job ensuring Vermonters have heat any harder than it already is. I will spend countless hours explaining how this works to my customers. The locally owned fuel providers talk to our customers; they are neighbors, we don’t have a call center in India and shareholders in Quebec. Yet this straw proposal appears to have been drafted by a utility to benefit a utility. The Legislature has asked the Public Utilities Commission to figure out how to eliminate local businesses that provide an essential commodity. On behalf of my employees and my customers, I ask you to reject that request.”
The PUC Clean Heat Standard information page can be found here.