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Below are responses from the Clean Heat Working group to a number of Frequently Asked Questions.

Frequently Asked Questions

The Affordable Heat Act will help Vermonters reduce their dependence on high-cost, price-volatile, and polluting fossil heating fuels. Generally speaking, the most expensive heat is fossil heat and the most affordable, price-stable heat is clean heat. That is why, by 2030, the clean heat services that could result from the Act are estimated to reduce the overall heating costs of Vermonters by $2 billion, or an average of $7,500 per household. The Act does this by establishing a Clean Heat Standard that will require importers of fossil heating fuels to reduce pollution over time, in line with Global Warming Solutions Act requirements. To do so, fossil fuel importers will have to deliver or pay for cleaner heat options -- mostly for lower and middle income Vermonters -- and especially with solutions that cut costs over time, like weatherization, heat pumps, and advanced wood heat.

Source for cost savings estimate: Marginal Abatement Cost Curves Paper
Generally speaking, the most expensive heat is fossil heat (especially kerosene, fuel oil, and propane) and the most affordable, price-stable heat is clean heat (especially the heat you don't use as a result of weatherization, plus heat pumps and advanced wood heat). That is why, by 2030, the clean heat services that could result from the Act are estimated to reduce the overall heating costs of Vermonters by $2 billion, or an average of $7,500 per household. The cost of heating oil—which more Vermonters rely on to heat their homes than any other fuel—was at a near-record high of $5.48 a gallon in November of 2022. The impact of this price spike, comparing November 2022 prices to November 2021 prices ($3.13), for a household that uses 1,000 gallons a year amounts to an annual heating bill increase of over $2,000. This is not sustainable. The high costs and price volatility of fossil fuels are especially pronounced now but are consistent features of 100% imported commodity fossil fuels. The burden of these costs are especially high for lower-income and moderate-income Vermonters. To work toward a more affordable Vermont, we can’t continue to leave Vermonters – especially lower and middle income Vermonters – exposed to and dependent on these high cost, price-volatile fossil fuels. The only way to effectively cut energy cost burdens is to reduce exposure to fossil fuels and help Vermonters shift to lower-cost, more price-stable, and more efficient clean heating options. To take just one example, combining the up-front cost of equipment with the annual fuel or electricity it consumes, over a twelve year period it costs the average household less than $500 a year to use a heat pump water heater. The cost to use a propane water heater? More than twice as much, at about $1,000 a year. Whether an individual household saves money or not will depend on the choices they make. Those who take advantage of the expanded weatherization services and cleaner heat options that will result from this policy will almost certainly see their bills go down. Those who decide to continue depending on fossil fuels will continue to be exposed to the higher costs and price volatility that have been a feature of the 100% imported commodity fossil fuel market for decades.
Financially speaking, the Vermonters who will benefit the most will be those who take advantage of more affordable, cleaner heating options that the Affordable Heat Act will make available, especially lower- and middle-income Vermonters who are required to be served in the greatest numbers. And all Vermonters and future generations will benefit from reduced pollution and early adoption of more price stable energy systems. Additionally, the state economy will benefit as we move from 100% imported fossil fuels toward energy options that keep more dollars in-state and do more to contribute to local jobs and the Vermont economy.
The Affordable Heat Act requires that the majority of clean heat services in the residential sector go to lower- and middle-income Vermonters. It also requires that no less than half of heating services that lower- and middle-income Vermont households receive be “installed measures” that reduce heating costs over time, such as weatherization, heat pumps, and advanced wood heat. The Act also includes a consumer protection provision. This Act has been carefully designed to center and advance energy equity, prioritizing cost-saving benefits for lower and middle-income Vermonters in a progressive way. See: S.5 §8124 (d) (2)
By establishing a Clean Heat Standard, the Affordable Heat Act will deliver on the # 1 recommendation of the Vermont Climate Council in terms of reducing climate pollution. This policy will achieve more than a third of Vermont's legally required emissions reductions under the Global Warming Solutions Act by 2030. This policy is by far the biggest pollution reduction strategy in the Climate Action Plan passed by the Vermont Climate Council and will likely be the most important climate policy Vermont has ever adopted. By 2030, it will reduce climate pollution by more than twice as much as the recently adopted Advanced Clean Cars and Advanced Clean Trucks rules. The Climate Action Plan does not add up to the GHG reductions required under the GWSA without the Affordable Heat Act.

See: S.5 §8124 (a) (1)
The Affordable Heat Act would establish a Clean Heat Standard in Vermont, building on the Clean Heat Standard legislation that was developed during the 2021 legislative session. However, the new Affordable Heat Act goes even further to ensure affordability, including by requiring that the majority of clean heat services delivered to low and moderate income Vermonters lower energy costs long-term. The Affordable Heat Act creates a market-based solution that will provide structure, and clear benchmarks and signals that will guide fuel providers as they transition their business models to serve cleaner energy options.

See: S.5 §8124 (d) (2)
Nothing. The requirements of the Affordable Heat Act/Clean Heat Standard apply to the importers of fossil heating fuels. Individual Vermonters and Vermont households can make the heating choices they think are best for them and their families, depending on their unique circumstances. However, this policy assures that more affordable and clean heating options will be made available for Vermonters to choose from.
The Clean Heat Standard is a performance standard for the heating fuel sector. It holds importers of fossil heating fuels responsible for reducing climate pollution over time, in line with Global Warming Solutions Act requirements.

No. This policy is in no way, shape, or form a tax. A tax is when the government collects revenue and then decides how to spend it. No revenue is collected by the Clean Heat Standard. Labeling it a “tax” is simply untrue.

Instead, it requires fossil fuel providers to reduce their pollution over time in a gradual, predictable way. Whether or not fossil fuel prices increase will depend on how these fuel providers choose to adapt to the performance standard, and what types of services and energy they offer their customers. Any cost of compliance associated with the Clean Heat Standard will go toward making clean heat options more accessible and affordable for Vermonters. The goal is to help more and more Vermonters – especially lower and middle income Vermonters – save money over time by reducing dependence on high cost, price volatile fossil fuels as we move to lower cost and more price-stable heating options.

Yes. Performance standards are some of the most tried and true policies to effectively and equitably reduce climate pollution across the United States. A similar program was established over a decade ago in California to reduce pollution from transportation fuels. Similar "Clean Fuels Standards" are also now underway in Oregon and Washington, and a Clean Heat Standard is in place in Colorado.

Additionally, in Vermont, performance standards like this have existed for years in the efficiency and electricity sectors, including through Efficiency Vermont and the Renewable Energy Standard (RES). What is different about the Affordable Heat Act and Clean Heat Standard is that we will finally require fossil fuel importers to take similar responsibility and help their customers cut their heating costs and carbon pollution.
Importers of fossil heating fuel into Vermont.

See: S.5 §8123 (10) (A) (B); See: §8124 (a) (1)
They may, but they don't have to. The largest fossil fuel companies are some of the most profitable companies that exist right now. At the federal level, legislators are looking into windfall profits taxes on fossil fuel corporations and also investigating them for price gouging. Vermont can also explore ways to hold these companies responsible.

There is also no evidence that performance standard policies create large price increases in fossil fuels. The closest example is Oregon’s Clean Fuels Standard. Oregon’s experience shows that, for every 5% reduction in emissions achieved, the effect on fossil fuel prices has only been about a 1% increase. In the worst-case scenario, for those fossil fuel suppliers in Oregon who didn’t take their own action to reduce emissions and had to buy credits from others, the cost translated to about 5 cents a gallon. All of that money has gone directly into making clean fuel options more accessible and affordable. While there may be a price effect of some cents per gallon on fossil heating fuels, that is very minimal in comparison to the natural price swings of fossil fuels.

Source: OPB article: "Oregon has a plan to cap emissions from fuels"
The obligated parties under a Clean Heat Standard are the importers of fossil heating fuels into Vermont, so wood heating would not be regulated by the bill. Additionally, Advanced Wood Heating is explicitly named as an eligible clean heat measure. Like other clean heat measures, the Public Utility Commission (PUC) and the Technical Advisory Group (TAG) will have to assess how many credits wood heating measures will receive, depending on GHG emissions analysis.
There are many different kinds of biofuels. Some biofuels are more polluting than fossil fuels while other biofuels are far less polluting than fossil fuels. The only biofuels that will qualify for the Clean Heat Standard are those that are significantly lower emitting, as measured on a full lifecycle emissions basis, than fossil fuels. Biofuels that are more polluting than fossil fuels are ineligible for clean heat credits.

Lifecycle greenhouse gas emissions can be understood most simply via a carbon intensity scale, with #2 fuel oil having a carbon intensity value of 100. To qualify for clean heat credits, all liquid and gaseous fuels will have to have a carbon intensity below 80 as of 2025 (or be 20% lower emitting than fuel oil), below 60 as of 2030, and below 20 as of 2050. This declining carbon intensity threshold will ensure that, over time, only the lowest emitting heating solutions are eligible. Also, eligible biofuels will only receive clean heat credits in proportion to the degree that they reduce lifecycle greenhouse gas emissions.

See: S.5 See: §8125 (e)
Analysis done by the Vermont Climate Council and the Energy Action Network shows that we almost certainly cannot meet Vermont's emissions reduction requirements -- especially by 2030 -- with weatherization and heat pumps alone. Challenges include a) the number of fossil fuel heating systems that currently exist in Vermont homes and buildings; b) the age of Vermont's housing and building stock, and c) limited workforce. Let's take each of these in turn:

a) The number of fossil fuel heating systems that currently exist in Vermont homes and buildings

Currently, the leading source of space heating in VT homes is fuel oil boilers and furnaces. Specifically, 43% of Vermont households report that fuel oil is their primary heating source (compared to only 5% nationally). After fuel oil, other primary heating sources for Vermont homes include fossil gas (17.5%), wood (16.5%), and propane (16%).

A challenge is that the fuel oil, propane, or fossil gas boilers and furnaces that use these fuels often operate for 20 years or more -- so there are fewer opportunities to replace them than there are with shorter-lived equipment. And as long as these pieces of equipment exist in the basements of Vermonters and continue to be in use, they will either use fossil fuel or a biofuel. The Clean Heat Standard would incentivize Vermonters to use those biofuels that are cleaner than fossil fuels for as long as those pieces of equipment continue to be in operation. Even when a residence or business adds heat pumps, in a cold climate like ours where winter temperatures are frequently below zero, keeping a backup source of heat is often important for safety, reliability, and resilience -- and those backup or supplemental options should be as clean as possible.

Citation: Vermont Housing Needs Assessment: 2020-2024, page 31.

b) The age of Vermont's housing and building stock

Vermont's housing is older than the national average. The median home in Vermont was built nearly half a century ago (1974) and over a quarter of our homes were built before 1939. Less than a quarter of Vermont homes have been built since 1990. This means that many Vermont homes are not very energy efficient, leading to higher than necessary energy costs.

Vermont has the challenge -- and the opportunity -- to weatherize a lot of our homes and buildings as soon as possible, especially if we want to be able to make greater use of heat pump technology. However, there is a limited workforce currently available to do this work at scale. Currently Vermont is weatherizing only about 2,000 homes/ year. To help meet climate and affordability goals, Climate Council analysis suggests we should be comprehensively weatherizing closer to 10,000 homes/year -- but we don't yet have the workers to do so.

Citation: Vermont Housing Needs Assessment: 2020-2024, page 32.

c) Limited workforce

While weatherization and the installation of cleaner heat systems like heat pumps and advanced wood heat can cut costs and pollution, they are also labor-intensive activities that require available workforce to do the projects. To the extent that we face workforce limitations, having less labor-intensive options – such as simply switching to using less polluting fuels – is an important option to have on the table if we are to ensure that we can meet our emissions reduction requirements cost-effectively in the face of workforce shortages.
Modern cold climate heat pumps have been proven to work very well in Vermont. They can operate efficiently and effectively when the outside temperature is below zero, and provide substantial heat to Vermont homes all winter. Older models could not, and unfortunately some units that can only operate to around 0 degrees are still being installed. Efficient electric heat pumps should be a big part of cutting costs and cutting greenhouse gas pollution in Vermont, but they’re of course not a silver bullet. Many households installing heat pumps also weatherize, and most continue to use other fuels as well. That’s what the Affordable Heat Act and a Clean Heat Standard will continue to allow -- a variety of options, based on Vermonters preferences and unique circumstances.

It’s also of course true that no matter what your primary heating system is, it is best to have backup heating options. Many Vermonters who heat with heat pumps have backup of supplemental heat provided by wood heating options, or by their existing furnaces or boilers, whether those are fueled by fossil fuels or biofuels.

It’s also important to note that the Affordable Heat Act and the Clean Heat Standard that it would establish does not require heat pumps (or any technology). It simply makes heat pumps a more attractive option – alongside many other solutions that are cleaner than fossil fuels, from efficient wood heating to those biofuels that are significantly lower-emitting than fossil fuels, in addition to weatherization -- which reduces energy use no matter how a home or building is heated.
First, only fossil fuel importers are obligated to comply with the Clean Heat Standard. Fuel dealers that do not import fossil fuels into Vermont (but instead buy their fuel from Vermont-based wholesalers) do not have to acquire clean heat credits.

Additionally, many fuel dealers will be able to expand thanks to a Clean Heat Standard. The Clean Heat Standard will incentivize many fuel dealers to diversify their business and provide clean heat services to their customers. Many fuel dealers are already transitioning away from exclusively selling fossil fuels, expanding as “energy service providers,” with a full complement of weatherization services, deploying heat pumps, selling wood pellets, and selling biofuels. Examples include VGS, Bourne’s Energy, and the Energy Co-op of Vermont. The Stone age didn’t end because we ran out of stones – this is an opportunity to better serve customers with lower-cost and more price-stable heating options and to innovate and grow local businesses as we meet our social and environmental responsibility to move beyond fossil fuel dependence.

See: S.5 §8124 (b) (1)
No state, no country alone can solve the climate crisis. We all have to do our part. Reducing our own greenhouse gas pollution – which we create and have the ability to reduce – is our part. Vermont's per capita greenhouse gas emissions are the highest in the Northeast and are much higher, both currently and historically, than those of other people around the world. Vermonters are not the type to shirk responsibility – or miss an opportunity to make life better for their neighbors. Every state, country, nation doing “their part” is how we will impact global climate change. And here, in Vermont we can do that while also reducing the cost of heating.
Vermonters will continue to be exposed to high cost and price volatile fossil fuels without a plan to reduce fossil fuel dependence and costs from heating. It will also be next to impossible to meet our legally (and morally) binding requirements to reduce Vermont's climate pollution.

Without the Affordable Heat Act and the Clean Heat Standard -- the #1 pollution reduction strategy recommended by the Vermont Climate Council -- the Climate Action Plan simply does not add up. In that scenario, Vermont will likely be put under court order to meet our emissions reduction requirements -- but with less time, less flexibility, and at greater cost.

The worst possible scenario for Vermonters is for our state government to continue to do nothing with regard to heating sector policy and holding fossil fuel companies accountable. We’ve seen the price of oil spike over and over again due to forces outside of our control - often due to decisions made by dictators and autocrats like Vladimir Putin. The fossil fuels we primarily heat with in Vermont – every drop of which we import – are tied to global markets. That reality leaves Vermonters incredibly exposed and vulnerable. The only way we can truly insulate Vermonters from the oil price volatility that will inevitably keep happening in the future is to move away from those fuels to more affordable, price-stable, predictable options. At this particularly hard and tenuous time in Vermont and across the world, looking back, the best time to have passed this policy would’ve been a decade ago. The best time today is now.

Contact EAN

  • Jared Duval

    Jared Duval

    Executive Director
    802‑829‑7421   jduval@eanvt.org
  • Cara Robechek

    Cara Robechek

    Deputy Dir. & Network Manager
    802-552-8450   cara@eanvt.org
  • Lena Stier

    Lena Stier

    Data Manager
    802-735-3894   lena@eanvt.org
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