Legislative Update- March 6, 2023
Friday, March 3, 2023
by: Matt Musgrave

Section: AGC/VT News

On Wednesday, March 1st Governor Phil Scott held his weekly press conference with the specific topic of the "affordable heat act" which has been debated in the Vermont Senate since 2020. The original version the "clean heat standard" was vetoed last session by the Governor due to the unknown cost and impacts of the program. Simply put, the bill if passed would ask the Public Utility Commission to create rules for a program that would require heating fossil fuel dealers to work with their customers to reduce their usage over time, or pay for "heating credits" to other companies to work towards emission goals. What many are calling a "carbon tax" would be handed down from the fuel dealers to customers in a surcharge that is estimated to be approximately 70 cents per gallon. Its estimated the average Vermont home would incur an additional $500-1000 in their annual heating bill. 

VIECA member and trustee Steve Richard from Richard Electric Inc. joined the Governor at the press conference to share challenges that will prevent many Vermonters from transitioning from fossil fuels to options like electric heat pumps. Richard explained that the varying age and condition of homes makes it difficult to come up with an average but with over 55 conversions his company has participated in the past year he had some good data. 

Richard explained to a packed room full of legislators, press and advocates that for simply dropping the cables and performing the connections of a heat pump would be $1500-2000 on top of the $4000-5000 cost of the mechanical equipment install. Unfortunately much of the old housing stock in Vermont has older service and some homes could have as low as a 60amp service which is insufficient. There are even homes on knob and tube wiring on fuse panel boxes. Updating the electrical service box, cabling and possibly needing additional service from the electric department. When all is said and done, for many this is a $10,000+ investment. Check out the WCAX story with Steve by CLICKING HERE.

Richard joined the Governor in the concern for Vermont’s most vulnerable. People living on fixed incomes, already getting financial assistance and other challenges simply won't have the extra finances available to make the transition to electric heating services. This inability to transition would leave only one option and that is to pay the carbon-based surcharge that will come as a result of the program. The concern of our friend from VIECA and our Governor is real because the very people who cant afford to pay for upgrades will be paying the $500-1000 surcharge on their bills. 

Currently the Governor and advocates of the "affordable heat act" have no evidence of facts that will say whether the surcharge would be 70 cents or $7 per gallon because the research hasn’t been done nor has a detailed plan. The Governor in his press conference echoed the Vermont Fuel Dealers Association and the Associated General Contractors of Vermont in demanding that a "look back" provision would be added to the bill. The "look back" would require the Public Utility Commission to craft the plan, decide on specifics including what the surcharge and carbon market would look like and what the overall economic impacts of the policy will have on Vermont. Then the legislature would have to vote again to authorize the program to move forward.

The Senate Committee on Appropriations added the "look back" clause to the bill and it was approved on Thursday, 3/2. The bill then came back on Friday, 3/3 for a final vote to send it to the House of Representatives to do their work. The bill passed with 19 voting 'yea' and 10 voting 'nay'. Depending on the actions in the House and what the Governors legal staff decide about the "look back" there may be a veto as happened in 2022. Its unknown at this point whether or not the Senate would have the votes needed to override a veto on this bill.