The House Environment & Committee returned on Friday morning to hear from TJ Poor (Director of Planning, Department of Public Service). He was following up on a question from his last time in the Committee regarding the Comprehensive Energy Plan (CEP). The CEP actually calls for a full evaluation of the Clean Heat Standard (CHS) in terms of cost, societal impact, and equity. This didn’t happen in the Climate Action Plan (CAP) process due to the tight timelines.

He agreed that the state does need to act on Greenhouse Gas (GHG) emissions, and “we are acting.” The foundation of existing programs has been expanded due to an influx of federal funds, he noted. Realistically, he argued, it is not possible to do more than we are already doing due to issues with supply chain, labor, etc. “There’s just not enough workers out there to do the projects,” he claimed. The argument being that we can’t accelerate progress because we’re already maxed out. He believes the state should not impose “unnecessary costs” given this reality.

Representative Stebbins noted that the first two years are essentially putting together an “engineering plan” and argued that it doesn’t really “come into effect” until three years from now. She questioned the timeline he was pointing to. Poor responded that they are recommending that all the implications be studied BEFORE starting on “designing the engineering.”

Melissa Bailey (Director of Efficiency and Energy Resources Division, Department of Public Service) was up next and provided a PowerPoint outlining several initiatives they are moving forward:

• $67 million ARPA funds
• $3 million IIJA funds
• $2.2 million IJLA
• $8.5 million for Clean Heat Homes
• $58 million IRA

She asserted that they need to be focusing on directing funds to fill the gaps mentioned by Poor. In particular, she pointed to the weatherization efforts that are going to “drop off significantly” after 2026 when federal funding dries up. She identified this as a “critical gap.” However, on the heat pump forecast, they didn’t see much of a gap, as they were “on track to meet our heat pump deployments.”

Poor added that “Vermonters have not had opportunities for public engagement.” And questioned if the PUC public engagement process was really going to be meaningful. He argued that if it is going to be meaningful then the bill has to allow flexibility to change. As it is written now, he believes S.5 is too prescriptive.

He also pointed to cost as still being a “big issue.” There are things in the bill to “smooth” the cost, but there is nothing in the bill that actually lowers the cost for Vermonters. The total cost doesn’t change.

NOTE: This is an important point. The mandates in the GWSA are what they are. There is no flexibility in that regard. However, if we “throttle back” the CHS at any point, that would require a “throttle up” in some other place to reduce carbon emissions. This may not be a realistic expectation.

Poor argued that the legislature should consider whether there is a “maximum acceptable cost” to consumers for the Clean Heat Standard. He noted that this was in place when establishing Efficiency Vermont, but there’s nothing like it in this bill.

NOTE: A cap like this was also recommended by the Fuel Dealers Association.

Bailey reiterated that “we can’t have a bill” that says we’re going to do this no matter the cost. She believes we need to evaluate the costs and impacts overall and break them down by timeline (early adapters vs. late adapters) different demographics, etc. This bill is very complicated, she added, and that complication can add “significant costs” to this program. She argued that they need to evaluate if the “complications in S.5 are worth it.”

She also cautioned that the bill has a “foregone conclusion” and is “overly prescriptive.” They want to see a more nimble approach that allows for change by letting the thermal sector analysis (currently being conducted by the Agency of Natural Resources) play out, allowing the results to determine policy design.

Sibilia asked when the Agency of Natural Resources (ANR) thermal analysis will be complete; Poor responded that it would be in June. Adding that, the study will start from the point of “what is technically possible.” Then it takes a step down and looks at what is technically possible and cost effective. Then it looks at the societal impacts of those proposals.

Sibilia admitted that study is probably going to show we don’t have the workforce or supply chain, so the Secretary’s cost projections are looking at paying for more than what we can deliver on. Poor confirmed that we do not have the workforce to meet the 2030 goals.

On Friday afternoon the Committee met for a discussion of the bill. Representative Logan noted that they all got a letter from a constituent in Burlington about biomass. “I am persuaded that we don’t need to be concerned about it,” he said, as long as they still meet our emissions reduction goals. However, Representative Patt still wanted to hear from biomass experts, saying “there’s a place for it in home heating as an issue separate from electricity generation.”

Representative Torre opined that they should take up the changes asked for by the PUC. Representative Stebbins had also taken some time looking at the dates in the bill and agreed that some of the date changes asked for by the Fuel Dealers Association seemed reasonable.

Sibilia was interested in getting more testimony on the potential ANR study.

Representative Bongartz questioned that if we need 6,000 more people to do this work, “do we believe this will happen?” “That’s a fundamental question I’ve been thinking about,” he said. Sibilia noted that was her understanding of what the ANR study would to dig into. She noted that “it’s not a new concept” and we need to “put some parameters” around what the Legislature wants the Administration to consider and what they don’t want them to consider.

Representative Smith described it like “building a house” where you buy all the materials, and you don’t have anyone to build it. He recommended tabling S.5 until the workforce is available. Logan countered that “if there’s no market, there’s no work force.” Her point was that you have to do it at the same time to set the market conditions.

Patt wondered if they could add language around the study asking how much time is necessary for the workforce to develop. It already requires a determination of cost impact, he noted. However, Stebbins saw the “market approach” as the tool for filling the funding gap for the workforce after the federal money dries up in 2026.

Sibilia stated that she wanted to be “really clear” that when they see what is actually possible, they “won’t be in a position to pay for all the stuff that the CHS calls for.” If they don’t allocate more funds, she believes that Secretary Moore’s 70 cents per gallon cost will be wrong (presumable low?).

 “Am I the only one who thinks we need to know what a carbon credit costs before we pass this bill?” quipped Smith.

Torre wanted more insight into how public engagement is going to work, but Sibilia felt they were engaged in a “robust public discussion” already. However, Logan noted that the Racial Equity Office made recommendations about how to conduct the outreach in a more effective and more inclusive way. She wondered if they were going to “embrace these suggestions.”

Chairwoman Sheldon suggested that the next steps would be to have Legislative Counsel incorporate the recommended changes (not clear what they are) and have another walk through.