by Wendy Wilton
It turns out the real long-term cost of The Affordable Heat Act, S.5, proposed by the Natural Resources and Energy Committee is $5 billion dollars over a 5-year period as demonstrated in a detailed financial analysis by the Ethan Allen Institute. Most of that cost will be on the backs of low- and moderate-income Vermonters who will pay for it through increased fuel costs in the range of $5 per gallon. Worse, hoped-for long-term energy savings will not occur.
The detailed financial analysis, which was presented in person and as a document, is available here: https://www.ethanallen.org/myers_mermel_testifies_on_affordable_heating_act
The Ethan Allen Institute analysis supersedes the administration’s previous estimate of $1.2 billion overall cost and a fuel increase of $0.70 to $1.00 per gallon to pay for it. The Ethan Allen Institute estimate was based on more complete and accurate assumptions including:
- The actual cost of weatherization, heat pumps and heat pump hot water systems for the average Vermont home is more than 3 times the cost presented in the earlier estimate, resulting in a $5 billion expense for the program
- Implementation of the program over the expected timeframe will require a rapid increase in fuel price of $5.05 per gallon for all customers to fund the passthrough costs of the fuel dealers
- The cost assumptions in the previous estimate did not take into account price inflation for goods and labor, and administrative costs, that would accrue during implementation
- The previous calculation for the costs of the changeovers overestimated the amount of federal funding that would likely be available for subsidies by 100%. Total federal and state subsidies only amount to 7% of the total cost
- The out-of-pocket costs for the average homeowner will be over $4,000 not $1,379 as envisioned in the earlier projection. The homeowner will pay another $33,000 over time through fuel surcharge because there aren’t sufficient government subsidies available
- Due to an increase in borrowing rates since 2022, impacting the discount rate applied to future costs and greater upfront costs, the CAP model now results in a net expense not $6.4 million in savings for the benefits of weatherization and heat pumps
The proponents of the bill themselves can’t or won’t tell Vermonters what it will cost and how much fuel will increase to pay for it, as no financial analysis has been requested or developed by the committee. Without a fiscal note of any kind the bill was passed by the committee on Friday, February 19.
Surely the Appropriations Committee, the next stop for this monumental legislation, will do a better job of examining “how much will it cost?” and “who will ultimately pay?”. Ethan Allen Institute’s thorough fiscal analysis should provide the foundation to answer these questions for the committee and the public.
The author is a Milton resident, Vice Chairperson of the Ethan Allen Institute, and former Rutland County state senator.
Categories: Commentary
Reminds me of the inflation reduction act. Control the language, control the narrative.
From what I gather, the aim of the bill is two things: 1) Reduce the carbon foot print of the heating sector in Vermont, and 2) ween consumers in Vermont off of fossil fuels as much as possible. Republicans don’t seem the give a crap about either. But, if they did, what their plan be to do that?
Ivan, I feel we should just pass the Affordable Heat Act. It is guaranteed to implode on itself. We live in a carbon neutral state, The pain and suffering this will cause it’s citizens, will far exceed any advancement of our population of 650,000 people in saving the planet. When our Senator Mark MacDonald was asked what kind of strain will this put on low income people, he responded with,””We don’t do things based on helping poor people, We do things to save the world”. When these people are done taxing our citizens to extinction, we will at some point have to assign someone to shut the lights out in Vermont.
The Left’s unprinted/unstated agenda is to ban the petrol industry, the same as they succeeded in doing with VT Yankee. They cannot control it, nor do they get their hands on any remaining funds the industry has in the till after the bills are paid, so the mindset is” We will ban it forever”!! Just like V Y!! Remember Shumlin and his warriors? Well the same concept is at work, just with different sponsors and prime movers!!
Sleeping Vermonters need to come out of hibernation and put these morons out to pasture once and for all. It can be done, it should be done, but will it be done?? Time will tell.
IPSmith: Perhaps the problem is the verbs… “Reduce…ween”? The aim here is to do stuff TO US not represent a CONSENUS FROM US…right? Bad move. And those of us who “don’t seem the give a crap”? Really? Well, be assured, We are watching for viable fossil fuel replacements in the COMPETITVE MARKETPLACE, not this heavy-handed government manipulation. And when we see realistic community initiatives, we’ll step up. So far we’ve gotten desperate utopian “WeGotADoSomeThing” nonsense. Not convincing! In the meantime I suspect our neighbors are becoming more aware of the carbon cycle. And prudently improving their own personal frugality with fossil fuels and their carbon foot print.
I am fortunately retired, I can leave for the winter and spend my money in some other state. While there, I will look at real estate. There are places that are 70% cheaper in proprty tax and have a lot cheaper houses. SD,WY, MO, AR, OK, GA, are but some interesting possibilities.
VT has become what I left NJ for 48 years ago. Time to say goodbye once again and find a non democrat run state.
Liberalism / collectivism is a mental disorder. We already have a clean and safe nuclear plant. What’s wrong with these mental midgets, besides they were educated in another state before they came to our state.
Jimofvt. I can’t believe that these folks in Montpelier are launching this program with no good data! Are the “electric,” (GMP) companies sponsoring this program? What money will EVT have to upgrade all the existing 100 amp house services to 200+ amps? That’s just the beginning!