The bill creating the Clean Heat Standard, S.5, made it back to the Senate Floor on Thursday. Senator Bray went through the differences between the House and Senate versions of the bill:

• Impacts on health now more explicit.
• Now defines low-income as 60% below regional median income.
• Further specification (and flexibility) about how the Clean Heat Standard (CHS) process can be paused by the Public Utilities Commission (PUC) in case of market conditions.
• More details regarding annual registration and data required to be provided by fuel dealers to the PUC.
• Residents of manufactured homes are added to the Advisory Committee.
• Participation in government programs for weatherization, modernization programs, and others does not preclude someone from participating in the CHS.
• Provides latitude to the PUC to wave penalties for an obligated party that doesn’t fulfill its credit obligation if they tried in good faith.
• Assigns a date to June 2024 to contract with a Default Delivery Agent DDA.
  • NOTE: This is before the CHS is supposed to come back to the legislature for a vote, so a contract (potentially up to 12 years) will already be in place.
• The Potential Study is due in September 2024.
• Added a 12th qualifying measure to the clean heat measure list to extending an electricity line to businesses such as sugar shacks.
• The Technical Advisory Group (TAG) is now required to calculate the health benefits associated with the CHS. And the TAG is limited to 15 members.
• The Equity Advisory Group now includes a representative of manufactured homes and the Department Disabilities, Aging, and Independent Living. Further, the group will be dissolved after the CHS goes into effect.
• The PUC shall not file proposed rules with the Secretary of State, implementing the CHS without specific authorization and enactment by the legislature.
• Some specificity added to the language surrounding the greenhouse gas inventory registry.
• New Section 5 regarding the confidentiality of tax records.
• Requires the PUC to hire a consultant with expertise in environmental justice to run the public outreach requirements in the bill.
• Added specificity to the “check-back” provision – the final proposed rules must contain the first set of annual amounts for obligated parties as described in the bill, and the first set of annual requirements shall only be adopted through the rule making process, not through an order.
• An additional report on equity was called for.

Bray closed by saying that Natural Resources and Energy Committee recommended that the Senate concur with the House version of the bill.

Senator Ingalls noted that they “were assured” by the Senator Kitchel that this was a “study, and nothing would be implemented.” He complained that the bill “looks more like implementation than a study.”

Bray responded that he “wouldn’t call it either,” and characterized the bill as “a plan developed under the guidance of the legislature to put us in a position that, should we want to implement a CHS, we would have the design to consider.”

Ingalls argued that it “looks like we are implementing at the same time we are doing the study.”

Senator Sears highlighted section 8131 of the bill, noting that the House had struck the provision “issue any orders” relating to the restrictions on the PUC’s ability to implement the CHS. He questioned if this would allow the PUC to implement the CHS by order without legislative approval.

8131. RULEMAKING AUTHORITY

Notwithstanding any other provision of law to the contrary, the

Commission shall not file proposed rules with the Secretary of State

implementing the Clean Heat Standard without specific authorization enacted

by the General Assembly.

Bray did not think so, saying that the PUC has to be able to do “certain things in order to get us to 2025, and this gives them the ability to do those things, such as require the fuel dealers to register with the PUC.”

NOTE: If that was the case, it could have been spelled out that the PUC has the ability to enforce the requirements of the CHS that had implementation dates prior to the legislative check-back provision. However, the language used is much broader than that.

Sears commented that “some would argue that this has weakened the check-back provision of the bill,” saying that he was “concerned about striking those four words.” Bray responded with an analogy that the “PUC can build a car, but they can’t install the engine.”

NOTE: A more accurate analogy might be they are asking the PUC to build a bus and then legislators will decide whether or not they like the bus and want to get on it. The bus is fully functional.

Sears admitted that this was “a leap of faith more than I’m used to.”

Senator Starr asked for an explanation of section 8126 and what it meant:

8126. RULEMAKING

(a) The Commission shall adopt rules and may issue orders to implement

and enforce the Clean Heat Standard program.

(b) The requirements to adopt rules and any requirements regarding the

need for legislative approval before any part of the Clean Heat Standard goes

into effect do not in any way impair the Commission’s authority to issue

orders or take any other actions, both before and after final rules take effect, to

implement and enforce the Clean Heat Standard.

Starr pointed out that Bray had just said that the PUC “couldn’t do any of this stuff… Do they have permission or not?”

Bray admitted that his committee’s version of this bill did “fully implemented the CHS.” Concerns raised in the Appropriations Committee lead to the addition of the “check-back” provision. That provision had “notwithstanding” language in it that prevents the PUC from proceeding “all the way to implementation,” he claimed.

Starr responded, “so then why don’t we strike that language so there’s no confusion?”

Bray argued that “it would curtail the PUC’s ability to construct the back end of the program.”

Starr called this “a very confusing statement,” noting that requiring the PUC to adopt rules and issue orders is “not a check back.”

Senator Brock called out that the “notwithstanding clause” was in regard to filing rules, and even if the language did effectively prevent rulemaking, there is potentially nothing preventing the issuance of orders.

Senator Watson chimed in, arguing that “this program is not being fast tracked.” She believes that the “notwithstanding clause” in the check-back provision supersedes the entire bill and “there is no reason for confusion.”

Senator Kitchel (who introduced the check-back provision) noted that if she “had [her] way,” she would have started with a potential study instead. But, she continued, they were working with a bill that “got us out of sequence,” with how many would have preferred to proceed with the CHS. Even so, she had been assured “by legal people” that the current language in the bill is strong enough that “nothing can move forward without legislative action.”

Pro Tempore Baruth stepped in, saying that the Governor has “indicated he’s going to veto this so, we’re going to go through all this again in a veto session.” He argued that they were going to get another opportunity to vote on the bill this year and again in 2025 and that Senators should “trust legislative counsel and the committee of jurisdiction.”

 A roll call was asked for and the vote was 20-10 in favor.