THE VERMONT CLEAN HEAT STANDARD
The Final Clean Heat Standard Report is here.
It is now up to the Vermont Legislature to determine whether or not to implement the most complex and consequential regulation ever considered anywhere.
The PUC recommends the Legislature find another way to reduce greenhouse gas emissions in the heating sector, something far more easier to implement and less expensive. The program will cost nearly a BILLION dollars to implement and is anticipated to cost Vermonters an extra 58-cents a gallon to heat their home.
A summary and details below.
The Public Utility Commission’s Check Back Report to the Vermont Legislature on the Clean Heat Standard
The Clean Heat Standard (CHS), outlined under Vermont’s Act 18 of 2023, aims to decarbonize the thermal sector in line with the state’s Global Warming Solutions Act targets. This complex regulatory framework mandates that obligated parties, including heating fuel dealers, procure and retire Clean Heat Credits (CHCs) tied to emissions reductions. These credits, representing greenhouse gas reductions from clean heat measures like biofuels, wood stoves, weatherization, and electric heat pumps, are expected to reduce overall carbon intensity in heating.
The Public Utility Commission has identified significant operational and financial challenges. Over its first decade, projected program costs total approximately $955 million. This high cost, passed to consumers, raises equity concerns as low-income households bear a proportionally higher burden. The program’s regressive cost structure necessitates targeted subsidies to mitigate financial impacts on vulnerable populations.
Technical and administrative complexity is another critical issue. The CHS requires a trading platform, credit verification, and coordination between default delivery agents, regulators, and participants. Modeling of impacts, which hinges on numerous assumptions, highlights uncertainties, particularly regarding cost containment and real-world adoption rates of clean heat technologies.
Ultimately, the Vermont Public Utility Commission questions the program’s suitability, advocating for streamlined approaches leveraging existing state initiatives. The CHS’s high costs and operational intricacies make it a contentious path toward decarbonization, warranting further legislative review and alternative proposals.
See specific quotes from the report below. Download all 274 pages here.
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THE VERMONT CLEAN HEAT STANDARD