Already the State Can’t Afford the Clean Heat Standard

No funding to pay people to design the program, let alone run it!

The Democrat supermajority passed The Clean Heat Standard (Act 18/S.5) last year over the Governor’s veto. That law appropriated $850,000 from the General Fund to hire three new employees at the Public Utilities Commission (PUC) plus some cash for subcontracting out research and technical support – all for fiscal year 2024. FY24 ends in July of this year. There is no funding allocated for the PUC to continue work on the Clean Heat Standard after that. And, at present anyway, no place left to find it.

The PUC’s completed plan for implementing and operating the Clean Heat Standard – as of yet not started – is due in January 2025. Oopsie. Let the finger pointing begin!  

Here's how it played out in the House Appropriations Committee on Tuesday (February 13, 2023). Ed McNamara, the brand-new chair of the PUC, made the annual pilgrimage to the money committee, hat in hand. What he asked for was another General Fund appropriation of $875,000 for FY25 to keep the lights on at the Clean Heat Standard so they can, you know, get around to designing the program. This did not go over very well.

Representative Kari Dolan (D-Waitsfield) admonished McNamara, pointing to specific language in Act 18 instructing the PUC to use their FY2024 funding to research and recommend a new, non-General Fund source of revenue to pay for the program thereafter. “So,” Dolan said with an unenthusiastic wrist-flip at the budget document, “I’m a bit underwhelmed by this.” And, she scolded, the PUC should not look at the General Fund as an “easy way out.”

Of course, sluffing off responsibility for identifying revenue sources – aka politically unpopular taxes and/or fees – onto the PUC is a prime example of Dolan and her colleagues looking for and taking “an easy way out.” The intent of the law was to allow cowards like Dolan et al to hide behind the unelected bureaucrats at the PUC when the bills for this monstrosity of a Home Heating Carbon Tax come due. What this Clean Heat Standard will cost and where the money would come from should have been determined by the legislature before they passed this absurd law. Alas, that’s not how these jokers roll, so here we are….

Representative Jim Harrison (R-Chittenden) asked if the money for the PUC’s Clean Heat Standard was allocated for in the Governor’s budget. The answer was no; that the Administration instructed the PUC to get the money from their existing, dedicated funding stream which comes almost entirely from the gross receipts taxes on utilities (primarily electricity), plus a little from applications fees. The problem is that all of that revenue plus a dip into the PUC’s reserve fund is necessary to fund all the other stuff the PUC is supposed to do. There’s nothing left over to fund this new arena of mission creep into Clean Heat Standard too.

With the question “So, do we get the money?” (though not articulated exactly thus) hanging in the air during an awkward pause, Committee Chair Diane Lanpher (D-Vergennes) ended the testimony with by cryptically muttering, “It’s a hard year.”

A couple of observations….

First, this whole exchange drives home just how incompetent and cowardly the framers of the Clean Heat Standard law were/are. They wanted to hide the ultimate (going to be massive) cost of this Rube Goldberg Carbon Tax on home heating fuels from the public, so they tried to get away with piecemeal funding. Now that the next piece is needed, the cupboard is bare – and they still don’t want to stand by the cost of the program. Bad lawmaking.

Second, and most importantly, if the state can’t afford to fund a handful of eggheaded pencil pushers sitting in office cubicles simply writing the rules for the Clean Heat Standard, how in the world do they think we’ll be able to afford the cost of actually implementing this extremely complicated, bureaucracy heavy scheme with its Clean Heat Measures, Clean Heat Carbon Credits, Carbon Credit bank and trading floor, Default Delivery Agent(s)…. No way, no how.

Moreover, the PUC blew their whole $850,000 FY2024 wad on the relatively simple tasks of designing an online registry for a couple hundred fuel dealers and recruiting the Technical Advisory and Equity Advisory Groups. The results are a disaster! (See: Clean Heat Standard Exploding on the Launch Pad.) And these steps are far less complicated and labor intensive that creating a the rules and regulations for evaluating literally tens of thousands of “Clean Heat Measures”, converting them to “Clean Heat Credits” with a monetary value, and then managing their sales and tracking their ownership in a financial marketplace. Good luck with this. I’m gonna make popcorn.

I expect the Supermajority will find the $875,000 to fund the PUC’s Clean Heat Carbon Tax work going somewhere. Somewhere buried and out of sight. The alternative – firing the three people they just hired to construct the program and disbanding the Technical Advisory and Equity Advisory Groups they just corralled to oversee the process for lack of money – would be too politically embarrassing. It would be the right thing to do, of course. Kill this unaffordable, ill-conceived, incredibly unpopular piece of poo before it wastefully sucks up any more precious resources. But doing the right thing is not what this current crop of lawmakers has ever been about.

• Rob Roper is a freelance writer with 20 years of experience in Vermont politics including three years service as chair of the Vermont Republican Party and nine years as President of the Ethan Allen Institute, Vermont’s free market think tank.

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