House bill is confusing, redundant, state’s top energy official warns
By Guy Page
The State of Vermont’s top energy official warned the Senate Natural Resources & Energy Committee last Friday that H715, the Clean Heat Standard bill, has a serious structural problem: it would allow two energy-saving organizations to claim the same ‘clean heat credit.’
Public Service Dept. Commissioner June Tierney explained the looming regulatory snafu to committee Chair Chris Bray (D-Addison) in an April 15 letter:
Under H.715 as presently drafted, both distribution utilities [editor: such as Green Mountain Power and Vermont Electric Co-op] and fuel dealers will be able to claim Clean Heat Credit for the same measure, such as a heat pump. It is unclear whether there would need to be payment from the fuel dealers in order to claim that credit. It is also unclear whether the Department is intended to oversee those credit sharing agreements as it currently does with the distribution utilities and efficiency utilities.
The committee could solve the problem by including her proposed draft language. However, the committee has not done this. Instead, on Friday it sent to the Senate Appropriations Committee a bill that includes none of Tierney’s proposed language.
The whole point of the Clean Heat Standard bill is to get Vermonters to switch from oil and gas heat to lower-carbon options, including electrified heat pumps. Under a program envisioned by the bill, fuel dealers may earn newly-created “clean heat credits” by removing enough oil or gas burning furnaces and installing enough heat pumps, pellet furnaces, weatherization, etc. to avoid newly-created steep financial penalties of selling fossil fuels.
Tierney is pointing out – and according to her letter, not for the first time – that as written, electrical utilities and fuel dealers will be able to claim clean heat credits for the same heat pump. The arrangement is confusing to manage and counter-productive to the aim of carbon reduction if both fuel dealers and electrical utilities take ‘clean heat credit’ for the same carbon reductions.
The bill simply needs more work, Tierney explained: “these are material policy issues that require more debate and deliberation with a far more robust representation of the affected stakeholders than has been possible in the legislative process to date during this session.”
The Senate version also includes new legal covering language on severability (if one part of the bill is struck down in court, the rest still stands) and intent (the program should limit financial harm to low-income Vermonters).
Will Senate Appropriations pick up on Tierney’s suggestion? Will the full Senate, if the bill reaches them without solutions to the problems Tierney raises, still approve it with veto-proof confidence? And will Gov. Phil Scott chastise the Legislature in a veto statement, ‘you were warned there were problems with this bill?”
H715 passed the House 96-44 on March 16. It is not specifically on the Senate Appropriations Committee agenda this week. However, there is plenty of “To Be Determined” time on its schedule, which is to be expected at this time of year when many bills with spending allocations (including H715, including $600,000 for new Public Utilities Commission staff) await review.