By Rob Roper

When the clean heat standard bill, S.5, was in the Senate, Vermont fuel dealers who testified in committee were given a mere six minutes each to make their case. Now that the bill has moved over to the House Committee on Environment and Energy, they got a chance to try again with a new audience — and a little more time.

The concerns raised by the people whose job it is to keep Vermonters warm in winter haven’t changed much since February. They worry that the cost of the “carbon credit” system, which they will have to pass along to consumers in the form of higher prices, will be too expensive for too many people to afford. In addition, the trained labor force available to undertake the transition to new technologies, such as cold climate heat pumps, does not come close to being able to meet the goals set out in the bill. And fuel dealers worry the state will not be able to adequately enforce regulations and compliance on fuel deliveries that originate in other states and cross the border to serve their customers, creating an unfair playing field.

Matt Cota

Matt Cota, who’s firm MeadowHill represents Vermont Fuel Dealers, tried to dispel some misconceptions that the Senate debate seemed to perpetuate. One was the notion that the “obligated parties” — those who would be required under the clean heat standard to pay for or otherwise acquire “carbon credits” — are only large companies. This is not true. As Cota explained, the way the law is written, any company that owns title to the fuel when it crosses the border in advance of its first sale in Vermont is “obligated.” That could be a large company, but is more likely to be a small, mom-and-pop fuel dealer geographically located near a border, who buys fuel from a wholesale depot in New Hampshire, New York or Massachusetts.

Another misconception is the often cited talking point that the clean heat standard is based on similar programs that have been successfully launched in other states. While other states have put standards in place for motor fuels, Vermont would be the first to do so for thermal sector fuels. And, as Cota pointed out, these are vastly different business models.

“With motor fuels, the car comes to the dealer. With heating fuel, the dealer comes to you,” Cota said.

Cota raised the point that S.5 does not do a good enough job of segregating fuel use for thermal purposes from other uses, such as powering farm equipment, electricity generation (i.e. propane generators), and cooking. He recommended that the committee amend the bill to restrict the obligation to retire carbon credits only to fuel used in to thermal usage.

In a plea for compassion, Cota asked that kerosene be exempt from the clean heat standard. While kerosene is undeniably a fossil fuel, it is necessary for homes that don’t or can’t have an in-ground fuel tank. Other fuels used in above ground tanks “gum up” and don’t work in cold weather. In many cases these are the same homes owned by low income Vermonters, or in the case of mobile homes, homes that can’t have an electric heat pump because that technology creates a vulnerability to freezing pipes and or fire hazard. If the committee chose not to exempt kerosene from the bill, Cota suggested allowing credits to be generated when a dealer swaps the homeowner to a cleaner burning, more efficient fossil fuel system.

Cota also warned the committee that fuel assistance dollars for low-income people is calculated at the federal level, and that increasing the cost of fuel at the state level through the “carbon credit” system envisioned by S.5 would mean the state could not afford to subsidize as much winter fuel for vulnerable Vermonters.

Fuel dealers Tony James of James Plumbing & Heating, Fred Percy of Fred’s Energy, and Rob Stenger of Simple Energy added testimony from their experiences on the ground both with the fossil fuel heating market and the emerging market for electric cold climate heat pumps.

Their stories reinforced the notion that cold climate heat pumps are popular and in demand, but are not really ready for Vermont’s winter conditions. There are labor force issues in both heating sectors, but particularly for the more technically complicated installation maintenance of cold climate heat pumps. James noted that if dealers are expected to retire their carbon credit obligation by installing heat pumps, it won’t be logistically possible for them to do so.

Percy told the committee that his company not only installed a full heat pump system in their local library, but Fred’s Energy donated the heat pumps. However, Percy warned the library folks to retain a fossil fuel back up system, which they did not do because they wanted the liberty to be “totally green.”

“The first winter,” said Percy, “they called us up and said we can’t afford the electric bill.”

In another cautionary tale, Percy recalled, “We just did an estimate to put heat pumps in just the second floor of a nice, relatively new, 15-year-old house for four bedrooms and an office — $29,000.”

Rob Stenger discussed the challenges of developing a future workforce, pointing out that you can’t install or service heat pumps without year of training, noting that 40% of the heat pump installations his company performs require an electric panel upgrade. Stenger said it costs him an estimated $125,000 and three years to train a new employee before he or she is ready to install a heat pump on their own, including classroom and in the field apprenticeship.

“Someone said we would need 6,000 workers in Vermont do this work,” quipped Stenger. “I would argue that I can’t find six of them.”

At one point, state Rep. Brian Smith asked, “Can customers go into New Hampshire with 50 gallon drums, buy their heating fuels, and come back to Vermont? I’ve heard some folks say that’s what they’re going to do.”

The answer was yes, but what the dealers expect to be the more likely outcome of S.5 is that customers will switch to dealers based in border states, and Vermont dealers will move their operations out of state.

“My customers are up in arms about this,” said Tony James. “This is insane.”

Rob Roper is a freelance writer who has been involved with Vermont politics and policy for over 20 years. © Copyright True North Reports 2023. All rights reserved.