Clean Heat Standard will have Vermonters paying 70¢/gal. more to heat their homes – at least.

A $500/year "carbon tax" for the average household.

Secretary of Natural Resources, Julie Moore, pulled back the veil on what the cost of the proposed Clean Heat Standard, S.5, would cost Vermonters, and it’s a really big check.

Moore calculates that the $2 billion-plus program over the remainder of the decade will mean an additional 70¢ per gallon for home heating fuels. Given that the average Vermont household uses 700 gallons of fuel oil per year, the Clean Heat Standard represents for the average family a $500 per year carbon tax to stay warm in winter. This Moore says will rise steadily as Vermonters use fewer fossil fuels as a result of the program, but she hasn’t modeled out what those future cost impacts might be.

Moore arrived at her figures by identifying the costs of actions that would need to take place under the law, should it pass, adding up those receipts, and, after accounting for federal money, and costs borne by private entities, and determined what the impact would be on the 250 million gallons of fossil-based heating fuels Vermonters use each year to raise that much revenue.

The Clean Heat requirements Moore cites are, by 2030: 85,000 homes weatherized at $10,500 each ($890 million), 145,000 heat pumps installed at $5000 each  ($725 million), and 125,000 heat pump hot water heaters at $3,000 each ($375 million) for an estimated gross cost: $2.0 billion.

But here is why Moore’s estimate is a low ball.

As she admits, it her numbers do not include administrative costs of running the Clean Heat Standard, which, given the complexity of the program and the credit system it imposes, will certainly run into the tens of millions annually.

Nor do her numbers reflect other categories of actions called for under the Clean Heat standard. Although weatherization, heat pumps, and water heat pumps are the big three, S.5 calls for measures to take place across eleven specific categories of action, including replacing appliances (gas stoves, etc.), installing solar water heating systems, advanced wood heating, and even using green hydrogen.

She assumes that fuel dealers will absorb 25 percent of the cost of the credits, passing on just 75 percent to customers. That seems like a lot to eat, especially for the small mom and pop fuel dealers in Vermont.

Additionally, and this is a considerable absence, Moore’s numbers don’t account for the cost of any social safety net programs that will be necessary to mitigate the impact of higher prices on low income Vermonters – either for those still using fossil fuels by choice or necessity or for those who will experience spiking electric bills as a result of switching.

S.5 is explicit in demanding that “it shall minimize adverse impacts to customers with low income and moderate income….” The bill doesn’t say how to do this, but it must be done. For fossil fuel customers the federal Low Income Heating Assistance Program (LIHEAP) already exists, though it would surely need companion state program to cover these increased costs. However, there is no LIHEAP equivalent for electric bills. That program would have to be created from whole cloth, and how much it would cost and where the money would come from is anybody’s guess. For the winter of 2021-22, LIHEAP subsidies in Vermont came to $47 million.

• Rob Roper is a freelance writer with over twenty years experience in Vermont politics and policy.