THE VERMONT CLEAN HEAT STANDARD
Here are the key takeaways from the PUC CHS Status Report:
"The Clean Heat Standard, as currently conceived, requires substantial additional costs and regulatory complexity above the funding needed to accomplish Vermont’s greenhouse gas emission reduction goals.”
“The Clean Heat Standard would require establishing a credit marketplace managed by what is likely to be a costly credit platform, the potential for fraud and market manipulation, the appointment of new or varied default delivery agents with administrative costs of their own, and the participation and regulatory engagement of hundreds of fuel dealers and other actors.”
“Our work over the past year and a half on the Clean Heat Standard demonstrates that it does not make sense for Vermont, as a lone small state, to develop a clean heat credit market and the associated clean heat credit trading system to register, sell, transfer, and trade credits."
“Because the Clean Heat Standard introduces these additional regulatory hurdles and costs, the Commission is considering other options to achieve Vermont’s greenhouse gas emission reduction goals for the thermal sector.”
In other words, the Clean Heat Standard may not be possible.
And if it is possible, it may be too costly and complicated to ever implement here in Vermont.
Watch "Understanding the Clean Heat Standard" below:
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CHS FAQ
What is the Clean Heat Standard?
The Clean Heat Standard is an attempt to get Vermonters to use less fossil fuels. A "Clean Heat Credit" is earned when something is done to reduce greenhouse gas emissions in the thermal sector. A “Clean Heat Fee” is paid when someone purchases propane, kerosene, heating oil or natural gas.
How much is the Clean Heat Fee?
The first official estimate was 70 cents per gallon. But a revised analysis shows it is likely to be much more. A taxpayer funded study by the consulting firm NV5 shows that $10 billon is needed over the next 25 years to comply with the Vermont Global Warming Solutions Act (GWSA). How much of that money will come from Vermonters who continue to heat with oil and gas will be determined by the legislature in January.
What is the GWSA?
The GWSA is a 2020 Vermont law that requires greenhouse gas emissions to be reduced by 40% by 2030 and 80% by 2050. The Conservation Law Foundation has already sued the state of Vermont for failure to meet these strict mandates.
When will Vermonters pay the fee?
The fee for heating your home with oil and gas will only apply if and when the Vermont Legislature allows the “Clean Heat Standard” to go into effect. They are expected to vote in January 2025. If that happens, the Public Utility Commission has determined that the earliest possible date that the Clean Heat Fee could go into effect is January 1, 2026.
How will the program work?
Vermonters who continue to use fuel oil, kerosene, natural gas, and propane to heat their home will pay the Clean Heat Fee. The fee will be collected and paid by whoever brought the fuel into Vermont. This is known as the “obligated party.”
Will all fuel dealers collect the fee?
The fee is paid by whoever brings the fuel into Vermont, regardless of the company's size or the amount of fuel sold. Nearly all of the “obligated parties” will be small retail providers of heating fuel. Since there are no refineries in Vermont and very few wholesale distributors, even the smallest fuel company will be considered “obligated” under the law.
What is a “Clean Heat Credit,” and what is it worth?
Sales of renewable liquid and solid fuels, weatherization, wood stoves, and electric-powered heat pumps are among the products and services that will generate credits. Nearly every fuel dealer will need them, but it isn’t clear where they will get them or what they are worth or until the program is fully designed.
What about those credits?
Ever since the Clean Heat Standard (CHS) was first contemplated, heating contractors and equipment supply houses have been using HCCV’s Clean Heat Credit Claim Form.Thousands of these forms are in the offices and garages of Vermont heating fuel and service contractors that have installed and delivered Clean Heat Measures. It is unclear whether these forms will have any value in the future. This is because a tremendous amount of work still needs to be done to create a complex and costly “Credit Exchange” before the CHS is implemented. And that decision could be made in just 90 days by the Vermont legislature. Read Meadow Hill’s comments on the need to establish a proper exchange for verifying, selling, and exchanging these credits. Read comments from Efficiency Vermont that reinforce the need for a highly regulated market and, if one cannot be created, a return to a simple fee to pay for thermal energy efficiency programs.
THE VERMONT CLEAN HEAT STANDARD