Rep. tells ANR Secretary to “lighten up” on informing citizens about cost of Clean Heat Standard

Vermont’s Secretary of Natural Resources, Julie Moore, incurred the ire of Clean Heat Standard (S.5) supporters when, in late January, she presented the Senate Committee on Natural Resources & Energy with her estimate that their bill would result in an additional $0.70 charge (carbon tax) on home heating fuels. Advocates for the program that would force sellers of oil, propane, natural gas, and kerosene to purchase “carbon credits” in order to sell their product – the cost of which will be passed along to customers – had been trying their best to hide that number from the public.

Now that the Clean Heat Standard bill has passed the senate and moved to the house, Moore is back defending her math, this time in the House Energy & Environment Committee – and once again she is incurring ire.

After Moore gave a detailed breakdown for the committee about how she arrived at the $0.70 per gallon number, which is if anything conservatively low, Representative Gabrielle Stebbins (D-Burlington) sternly admonished Moore to “lighten up on it.”

It is worth noting that Stebbins works for the Energy Futures Group, which would certainly benefit financially from passage of S.5.

Stebbins tried to take Moore to task on a few points. Her first admonishment was over why Moore would even have the nerve to do this cost analysis in the first place. “We have a Climate Council, which is an administrative entity, and we have a Climate Action Plan that has been doing analysis. I’m concerned with this analysis. I don’t know why you chose to take it when we have a Climate Council that has hired people to do analysis.”

The answer to this is, of course, that for two plus years the Climate Council, like pro-S.5 legislators and activists, has assiduously avoided any reference to what its policy recommendations, including the Clean Heat Standard, will cost. Senator Chris Bray (D-Addison), who chairs the senate committee that passed out S.5, repeatedly argued that we can’t know what S.5 will cost precisely because that analysis hasn’t been and (in his false assertion) it can’t be done until the details of the program have been established.

Just for an example of the Climate Council’s attitude regarding cost analysis, at the August 29 Transportation Task Group meeting Gina Campoli asked why they didn’t come up with an estimate of how much money the state would need to raise to fund the transportation recommendations in the Climate Action Plan. “For example,” Campoli said, “we need X amount of incentives and X amount of charging infrastructure. We’re spending X amount now. Then there’s a gap… to get to the numbers of electric vehicles that are necessary. This would be the easiest calculation. It’s going to require a certain investment on the part of the state both to underwrite the incentives and the cost of the infrastructure. … What’s the gap to get to the numbers we need?” The reaction to Campoli’s suggestion: crickets. And no action ever taken to find the answer.

But this is basically what Moore did for her calculations on thermal sector costs. She took the mandated actions in under the Clean Heat Standard, which are a known quantity, the average cost of these actions, for which we have good estimates, multiplied them together and divided by the number of gallons of fuel oil sold, which is another known quantity. After subtracting federal funds and individuals covering their own upfront costs, and some other adjustments, Moore came to the conclusion that this is going to cost Vermonters who heat with fossil fuels about $1.2 billion over four years, or $0.70 per gallon. Somebody needed to do this because nobody else dared. So, thank you, Julie Moore!

Next Stebbins attacked Moore’s assumption that it would take a 90% subsidy to get people to swap out their perfectly good furnaces for a cold climate heat pump.

Moore explained, “The way S.5 is structured, it needs to meet the 2030 requirements of the Global Warming Solutions Act…. What I am saying is that in order to incentivize enough Vermonters to weatherize their homes [and install heat pumps, etc.] a very high cost-share will need to be provided because we’re not meeting people where they’re at…. If you have a functional [fossil fuel burning furnace] or water heater in your basement that has years of useful life left, it will require a very high incentive to encourage you to change it out. The way we’re going to drive people to change it out is through the sale of ‘clean heat credits’ that we will be able to use [the revenue from forcing fossil fuel users to buy] to provide incentives. And because S.5 is required to meet these targets, it is effectively going to require incredibly generous incentives to achieve the rate of implementation that’s been established here.”

In fact, Richard Cowart, who is a principal architect of the Clean Heat Standard, testified to the senate committee about a similar British program that ultimately required cases of 100% subsidization of such projects in order to get people to participate and meet their mandates. So, again, Moore is being conservatively low in her estimates.

Stebbins’ last attack on Moore’s $0.70 number had to do with how the Secretary calculated the cost of heat pumps and other technologies over time. “We’ve seen what the cost of an iPhone has been market-wide in terms of decreased costs,” said Stebbins. “Did you factor in… all of those market externalities?”

Moore admitted she did not. Probably a good thing for Stebbins that she didn’t, both in terms of the iPhone comparison and the actual cost trends for things like heat pumps. The original high-end iPhone, the 3G, in 2008 cost $499.  The high-end iPhone 13 Pro Max cost $1099 in 2021. So, there’s that. And while many technologies do drop in price over time, heat-pumps and especially the labor necessary to install them are getting more expensive, not less.

Vermont is not the only state pushing people to adopt this technology. Subsidy fueled demand is rising and logistical issues are limiting supply. Strong demand coupled with low supply for both the products and the professional services necessary to install the products probably means Moore’s assumptions regarding future costs for swapping in heat pumps and heat pump water heaters in the foreseeable future are actually low.

So, Secretary Moore and everybody else out there, definitely do not “lighten up” on pressing for more and better answers on what a Clean Heat Standard will cost Vermonters. Right now we should all be able to agree it’s a lot.  

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