Clean Heat Mess Gets Even Messier
“We’re taxing the poor so that the rich can benefit.”
The last time we checked in on the Technical Advisory Group (TAG) as they come up with rule recommendations regarding the Clean Heat Standard (CHS) for the Public Utilities Commission (PUC), they couldn’t decide who should own a financially valuable Clean Heat Credit created by a Clean Heat Measure (installing a heat pump, weatherizing a building, switching to a cleaner biofuel, etc.). Two weeks later, they still don’t know.
There is a general consensus building that the property owner where the Clean Heat Measure takes place should own the credit. However, Efficiency Vermont, who is setting themselves up to be in the lucrative position of Default Delivery Agent (DDA), is making a case that they should own the credits. And, in fairness, if taxpayers and/or ratepayers are paying for the Clean Heat Measure through a grant through such organizations, why should the homeowner get the free stuff AND a monetary credit as a cherry on top? I tend to agree, whoever PAYS for the Clean Heat Measure should own the credits. Yeah, it’s quite the quagmire.
But it gets worse. Much, much worse. Enter into the discussion the issue of Early Action Credits.
In its infinite capacity to create confusion, our esteemed legislators decided that Clean Heat Measures that take place after January 1, 2023 (yup, a year and a half ago) can qualify for Clean Heat Credits. This, despite the fact that we still don’t know who owns them, no process has been established to document and verify that they have happened let alone a formula for determining how many credits a Measure translates into, there is no “exchange” in place where owners (whoever they turn out to be) can hold and eventually sell their credits to an obligated party (fuel dealers).
So, what this means is that if the property owner does own the credit, whoever installed the measure — hundreds of businesses — will have to go back to all those customers — thousands of them — explain to them that they own these things, produce official documentation that the measure took place, whatever that might be and assuming such paperwork exists, figure out how much greenhouse gas reduction the measure resulted in to determine the number of credits involved, buy or otherwise obtain said credits from the property owner, which can’t be done until it’s determined what a credit is actually worth (we have no idea), and then somehow turn around and sell the credits to an obligated party via a financial exchange that hasn’t been set up yet.
Ladies and gentlemen, there is not enough popcorn in the world!
The discussion of this issue prompted Mia Wharton, who chairs the TAG’s subcommittee on Credit Ownership to comment, “I am concerned about the logistics of going back and getting in touch with people after the fact and getting a release after the fact. I don’t know what you do with that. Quite frankly, like, I don’t have a great solution for how you make that happen. I’m also not sure what people are currently doing to verify incomes for people.” Oh yeah! I forgot someone (as of yet undetermined) also has to verify the incomes of the customers in another layer of impossible complication because Measures have to take place within percentage-based “equity formula.” It’s okay to laugh out loud at this point. Crying is also an acceptable reaction.
She concluded, “That just sounds like it’s going to be messy.” Yeah. A little bit. But the law says you’ve got to figure it out, so we wait with bated breath! Clock’s ticking.
One “solution” proposed by Pike Porter sounded a lot like just doing away with Early Action Credits all together. “For any measures that have occurred already,” he said, “we’re hard pressed to believe… that they were installed for the sole purpose of complying with the Clean Heat Standard…. I think a lot of the measures that have been installed would have happened anyway regardless. So, if people don’t get credit for them under this new statute, I’m fine with that.”
Well, you know what’s not fine with that? The law (Act 18). The intent of Early Action Credits was to ensure that people didn’t stop installing heat pumps, etc. until the Clean Heat Standard was in place in anticipation of getting a financial credit later on, and the existence of these credits is supposed to mitigate the cost impact to customers when the program starts. So, no.
And, as someone who did install a heat pump last fall, I personally have a few profane, anatomically challenging suggestions for Mr. Porter. Do your job and figure it out. And if you can’t, just say so and we can skip ahead to the part where we scrap this whole unworkable program.
Meanwhile in the land of Clean Heat Chaos, fuel dealers can’t pre-sell next winter’s fuel to customers who want the financial security of locking in prices because the PUC hasn’t figured out when the cost obligations to purchase credits begins, 2025 or 2026 – or what that cost will be so it can be incorporated into the pre-buy price. The legislature left that little detail out of the law, so thanks for that!
And why are we going through all these contortions anyway? It was neatly summed up by TAG member Christopher Trombly’s revelation, “We’re taxing the poor so that the rich can benefit.” Nice. Your government working for you. Not.
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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Thanks for these kind words from a new subscriber! "I like your attitude and indignation with the morons who control the Vermont legislature and impose their destructive, poisonous nonsense on the rest of us. How and why are these people given such power? Are Vermonters really stupid enough to keep voting them into office? They should be able to see the damage being done."
Reading about the lockdown at the statehouse I believe I read about a "Vermont Intelligence Center" that exists somewhere. It can't be at the statehouse where the IQs are somewhere near the square root of minus one. Your article proves that the legislature is truly mindless.
I share the above sentiments but remember this law has been passed. When the legislation returns for the mandated second vote next year, I predict it will be politically impossible for its ignorant proponents to admit they made a mistake and vote no on the measure. They will extend all the dates of implementation or come up with some Rube Goldberg slap-together to satisfy their rabid ideology of “saving” the planet….Vermont taxpayers be damned!