Clean Heat Standard (S.5) - Feb. 7, 2023

The Senate Natural Resources Committee kicked off the week hearing from Kathy Beyer (Senior Vice President of Real Estate Development, Evernorth). Evernorth is working in ME, NH, and VT and consider themselves leaders in energy efficiency and renewables – connecting apartment units to advanced wood heating systems, solar hot water, solar PV, geothermal and heat pumps. They are focused on energy equity, which, according to Beyer, Vermont lags behind on implementation of energy equity. Other states in the region are ahead of us. 

The lowest income Vermonters have an energy burden out of proportion to people in other income brackets. She views the development of S.5 as a question of balance so that lower income people are not left behind.

The language in the bill spells out that 16% of credits generated by “obligated parties” should be from projects targeting low-income households and 16% from middle income households. Beyer thinks this is good, but even so some low-income households will be left at the back of the line due to significant costs.

She cautioned the Committee to be careful of how they define what is low income. The bill, as written, does not define what low or middle income is, and until someone defines it can’t be said that equity is being achieved.

Senator White said she doesn’t want to have the Committee decide what the low-income threshold is. She wants the Public Utility Commission (PUC) to do it (after the bill has been passed) so they can have flexibility.

Senator MacDonald preferred that the affordability conversation take place in Appropriations Committee

NOTE: This is a classic tactic for legislators to avoid accountability for legislation they pass. Handle sticky details through rulemaking.

Beyer identified a natural bias toward single family dwellings versus other structures. The predominant number of heat pumps have been added to single family homes because it is just easier. 

It took a lot of planning even for a new construction apartment complex in Montpelier be fitted with heat pumps. For older construction you can’t just add a heat pump. Often you have to insulate, upgrade the electrical panel, etc. Nearly two-thirds Vermont housing was built before 1970 and be challenging to retrofit. There are some buildings you just can’t retrofit for heat pumps at all. They need the option of advanced wood heat. 

Most low-income Vermonters live in rental housing. In situations where the tenant pays for the heat the renter is in an untenable situation. There is no incentive for the landlord to retrofit because the landlord doesn’t pay the heating bill, and there is no ability of the renter to do it because they don’t own the property.

During the implementation period some low-income people will see their costs go up. There is no way to avoid that. There are going to be people at the back of the line who can’t get off fossil fuels and their costs are going to go up.

Chairman Bray commented that as people move away from fuel, LIHEAP might need to increase to those left behind.

Maura Collins (Executive Director, Vermont Housing Finance Agency) echoed the comments of Beyer, it is important to hear more from the folks who are physically building these systems into new and existing housing projects. It is very difficult to access the grants and programs necessary to do this work. Most builders and contractors don’t know how to do this or even where to begin. It takes a lot of work. 

She also stressed that the Committee needs to discuss the reality of what happens when the technology just won’t work. Some existing buildings, particularly multi-unit housing, simply cannot be retrofitted with this technology.

She likes the bill, but the complexity is a little worrisome where some of the details are not finalized. She would like to see some of those details firmed up.

Bray disregarded many of the concerns, saying the goal is to have the bill out of committee next week.

 


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